Restaurant chain operator Darden Restaurants (NYSE:) recently turned in its Q1 earnings report.

Although there are many headwinds facing the industry at large, this company managed some significant surprises.

Darden is attractive for its resilience. Add to that the flexibility of Darden’s various chain members and I am even more positive about Darden.

Share prices have been steadily rising since Darden’s 2021 earnings. Although there were some losses along the way, overall trends have been positive. Darden stock closed January 4th at $116.24 The stock is now worth $158.74 a share. This shows that there’s clear momentum. (See Darden stock charts on TipRanks)

Darden’s latest earnings report, meanwhile, demonstrates its remarkable resiliency. Still, the company posted earnings of $1.76 per share. Wall Street estimates, however, were for $1.64 per share in earnings. Darden’s numbers are a notable beat. Also, revenue came in strongly. Earnings from continued operations amounted to $232 millions.

The same-store sales forecasts also disappointed analysts. Darden saw a 47.5% increase in sales at its same stores, and total sales increased 51%. Darden reported a net gain of 34 restaurants in its different brands. The overall sales increase was slightly greater than the same-store sales.

Investors will be pleased to know that the stock buyback program continues. Already, the company has repurchased approximately $186million worth of common stock. The company plans to purchase another $750million worth of shares.

Wall Street’s Take

TipRanks’ analyst rating consensus calls Darden a Moderate Buy, based on 15 Buys, and five Holds. An average DRI price target value of $171.29 indicates 7.9% upside potential.

Tasty Set of Results

Darden’s results are like a greasy spoon’s menu. It’s a terrible atmosphere, but the food is amazing.

Restaurants have suffered from poor market conditions over the past weeks and even months. Openings were finally restored to the public, but what then? Then comes the labor shortage. It can be difficult to obtain certain food items at specific times due to supply chain issues. It’s not fun or easy to tell customers why their favorite food is no longer available despite being in stock for so many years.

Darden has been a major winner despite these challenges. The 2020 numbers will be used as a reference, which may affect the results.

When several stores are closed due to government orders, it’s difficult not to see gains in the same-store sales.

Darden’s figures here aren’t just about customers returning to the restaurant, they also show Darden’s overall operations.

Concluding Views

Darden’s versatility is a big help here. Looking at the sheer scope of Darden’s operations makes it clear it’s got a menu — and a restaurant — for almost every taste.

Olive Garden is often the first place people think about when they think Darden. It also has upscale restaurants like Eddie V’s Prime Seafood and The Capital Grille.

Darden has a wide range of dining options to suit all budgets and tastes. It is also resistant to economic downturns, so people can enjoy nice dining out regardless of how they are doing. Darden should be attractive for investors if you add a vigorous stock buyback program.

Disclosure: Steve Anderson didn’t hold any positions in the securities discussed in this article at the time it was published.

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