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A two-course alternative data meal of Darden Restaurants ahead of earnings

7 months ago by James Mattone in Features, Markets

To the average consumer who doesn't have an encyclopedic knowledge of stock tickers, Darden Restaurants ($NYSE:DRI) may not roll off the tip of the tongue as a well-known restaurant brand. But its holdings might:

Ever heard of Olive Garden? How about Bahama Breeze? Can't decide between getting a steak at The Capital Grille or Longhorn's Steakhouse? Rather head to get some upscale seafood at Eddie V's? Or does all this restaurant talk makes you want to grab a yard-long glass of beer at Yard House?

Well, Darden owns all of those restaurants — a full portfolio ranging from casual to high-end eateries — and more.

Hungry for the data now? We are too, so we dove in deep into an unlimited breadsticks' worth of data to pull out a two-course meal of trends you should know as the company gets set to report its earnings:

1. A growing footprint despite the retail apocalypse

When we talk about retail outlets on Thinknum, we must contextualize them within the retail apocalypse: closing stores, shrinking footprints, and ROI thinning out.

But Darden appears to be bucking the trend, with over 1,400 restaurants coast-to-coast its eyes on expansion.

According to reports from last year, Darden was expecting to open an additional 50 restaurants in the near future. Quarter-by-quarter, it's increased its footprint across all of its brands.

Given that competitors in the chain eatery space, such as DineEquity ($NYSE:DIN) and their cornerstone Applebee's, are contracting over the past few years, Darden's growth is attractive to investors, especially factoring in earnings growth as well. Zacks Equity Research pegs the company's earnings per share growth rate at 11.4%, more than double of the industry average.

2. Healthy hiring

Across multiple brands, job openings at Darden Restaurants signal growth for the company.

At the corporate level, openings remained steady, hovering around 300 per day since late 2017. But recently, those openings have spiked past the 350 mark, which hasn’t been done since June 2018 and isn't too common during its period of stability.

And at the restaurant level, which is usually a place for high turnover and therefore, high openings, there isn't too much out of the ordinary among its portfolio. Yard House is a good — dare we say — yardstick to measure up Darden's health and be used as an example, as there was a slight bit of opening growth. Not too much to show massive turnover, but also not a downwards trend that would indicate closing locations.

About the Data: 

Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

Further Reading: 

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James Mattone

James is the Associate Editor at Thinknum Media, mainly covering video games, food, and tech news, but not afraid to head into Sephora or beauty brands if need be...

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