ORLANDO, Fla. - Darden Restaurants, Inc. (NYSE: NYSE:DRI), the parent company of Olive Garden, has announced a new partnership with Uber Technologies, Inc. (NYSE: NYSE:UBER) to offer on-demand delivery services. The collaboration, exclusive for multiple years, is set to commence with a pilot program at select Olive Garden locations in late 2024, with a broader rollout expected by May 2025.
This initiative will allow customers to place delivery orders directly through Olive Garden's digital platforms, utilizing Uber Direct's logistics network for the actual delivery process. More than 900 Olive Garden outlets in the United States will eventually provide this service, aiming to maintain the dining chain's operational simplicity and customer experience while addressing the growing demand for home delivery options.
Rick Cardenas, President and CEO of Darden, emphasized the importance of integrating delivery services in a way that does not disrupt the current restaurant operations or compromise the brand's competitive edge. He expressed confidence in Uber's commitment to a custom integration and their ability to fulfill on-demand delivery at a national scale.
Sarfraz Maredia, Vice President of Delivery, Head of Americas at Uber Eats, also commented on the partnership, highlighting the shared goal of both companies to offer a seamless and reliable home delivery experience that matches the quality expected from Olive Garden's in-restaurant service.
The partnership is anticipated to benefit Olive Garden by catering to customer convenience without sacrificing valuable guest data and insights, which will remain within the company's proprietary channels.
This collaboration marks a significant step for Darden Restaurants as it continues to expand its service offerings and for Uber as it strengthens its position in the delivery market through Uber Direct.
The information for this article is based on a press release statement.
In other recent news, Darden Restaurants, a leading full-service restaurant company, reported an 8.6% increase in total sales, reaching $11.4 billion for fiscal year 2024, along with adjusted diluted net earnings per share of $8.88. The company also acquired Chuy's, a chain of full-service Tex-Mex restaurants, for $605 million, a move expected to be neutral to Darden's earnings per share for fiscal year 2025. Several analysts have provided their perspectives on these developments. BTIG reiterated its Buy rating on Darden shares, maintaining a price target of $175.00, while Baird maintained a Neutral rating with a steady price target of $156.00. On the other hand, Citi kept its Buy rating but slightly lowered the price target to $191.00, and KeyBanc Capital Markets upheld its Overweight rating and $170.00 price target. However, TD Cowen downgraded its rating to hold due to concerns about sales drivers and potential distractions from Darden's involvement with Chuy's. These are recent developments that provide insight into Darden's business strategy and financial performance.
InvestingPro Insights
As Darden Restaurants (NYSE: DRI) gears up for its innovative partnership with Uber Technologies to enhance Olive Garden's delivery services, the company's financial health remains a focal point for investors. With a robust market capitalization of $18.92 billion, Darden showcases its substantial presence in the restaurant industry. The company's commitment to shareholder returns is evident, as it has not only maintained but also increased its dividend payments for 30 consecutive years, a testament to its financial stability and investor-friendly approach.
According to InvestingPro data, Darden's price-to-earnings (P/E) ratio stands at 18.78, reflecting investor confidence in its earnings potential. Despite a slightly elevated price-to-book (P/B) ratio of 8.44, which suggests a premium valuation, the company's revenue growth over the last twelve months is notable at 8.6%, indicating a healthy expansion in its business operations.
InvestingPro Tips highlight that while some analysts have revised their earnings expectations downwards for the upcoming period, the company is still predicted to remain profitable this year. This profitability, coupled with a high return over the last decade, positions Darden as a potentially attractive investment for those looking for consistent performance.
For those seeking a deeper dive into Darden's financial metrics and strategic forecasts, additional InvestingPro Tips are available on the platform, offering comprehensive analysis to inform investment decisions. (https://www.investing.com/pro/DRI)
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