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Case In Point: Olive Garden
How deep is the economic hole the U.S. has suddenly fallen into? No one knows.
And that’s the problem. We keep saying this complete lack of visibility about the future of the economy, is like going over a waterfall without having any idea of how distant a drop it is into the icy waters below.
And we had a very good example of that when Olive Garden released its earnings today. Or rather Darden Restaurants, which also owns LongHorn Steakhouse and some others. Olive Garden accounts for about 1/2 of Darden’s revenue.
Let’s point out that we are not singling out Olive Garden because we think it’s an unusual case, or they’re doing anything egregious, or anything particularly differently compared to other companies. In fact, Olive Garden’s parent company seems to be one of the “good guys”: they’ve already promised paid sick leave and emergency pay in reaction to COVID-19. And the CEO isn’t taking his own salary for now.
We’re bringing this up because their parent company’s earnings came out today, and they made a pretty good amount of money recently. (Those endless breadsticks paid off!) And in fact, their stock surged today to close more than 8% higher.
Earnings announcements usually also involve a little guesswork, because companies are supposed…
