Darden recovers losses from COVID

Myles Udland, Brian Sozzi, and Julie Hyman breakdown the new surroundings Darden shares going up after reporting a profit in Q4 and disclosing the news that they have been able to fully all recoup losses from COVID

Video transcript

MYLES UDLAND: Now, as we've mentioned many times, we are done with first quarter earnings season. But that does not mean there are no earnings coming out. And we were just talking with Dirk Izzo of NCR Hospitality about the state of the restaurant recovery. And Brian Sozzi, you flagged [INAUDIBLE] Darden out with their latest results this morning. And that company, the Olive Garden parent company, also parent company of Red Lobster, talking about their sales fully recovering from their COVID losses.

JULIE HYMAN: Yeah, I'm going to hop in here because I think Brian Sozzi is having some technical difficulties. Oh, wait, is he back? Brian Sozzi, are you there? Oh, it doesn't seem that way. OK, so--

MYLES UDLAND: Well, we've got the whole story. We've got the whole story. Darden recovered all their losses. There we go.

BRIAN SOZZI: I think I'm back. There we go. No, Darden, you know, I'm looking at Darden--

MYLES UDLAND: Oh, there he is, a ghost.

BRIAN SOZZI: Yeah, I'm here. I'm here. I know, I know. It's a tough life. But I mean, looking at Darden here, interesting quarter out of them. So Olive Garden same store sales versus 2019, we continue to do that comparison. Their same store sales at Olive Garden down 1 and 1/2%. Where the big gain is interesting. It's Longhorn Steakhouse. A lot of folks appear to be trading up. They've had enough of Olive Garden here. They want that big juicy steak here after not being allowed out of the house for over a year.

Also worth noting here, cool thing is that Darden puts out monthly sales. And their monthly sales for Olive Garden in May were up 1%, Longhorn Steakhouse, up 15 and 1/2%. People really appear to want their steak right now. If you're a trader, you definitely want to take a look at Outback Steakhouse right now off a quarter like this.

MYLES UDLAND: Yeah, big quarter for Darden. And again, that restaurant recovery continues. And I think Darden's portfolio is going to be in general better set up to take share perhaps from mom and pop closures, which we hope that wave of closures is done for smaller restaurants. But we know how hard those businesses were hit last year.