Investors could eat up the restaurant industry and sector-related exchange traded fund as the dining sector gains momentum, with Darden Restaurants (NYSE: DRI) revealing better-than-expected earnings.
Year-to-date, the Restaurant ETF (NasdaqGM: BITE), a dedicated restaurant-related ETF, rose 3.9%.
On Tuesday, Darden Restaurants, which owns a group of dining names like Olive Garden, posted better than earnings and topped earnings in each of the past six quarters, reports Trevir Nath for CNBC.
Darden expects sales for the year to expand 3% to 3.5% at established restaurants, with adjusted earnings of $3.48 to $3.58 per share, compared to previous guidance for same-restaurant sales to grow 2.5% to 3% on adjusted earnings of $3.25 to $3.35 per share, the Wall Street Journal reports.
Darden Restaurants makes up 2.8% of BITE’s underlying portfolio.
The hospitality group’s growth may reflect consumer’s changing preferences. Data from JPMorgan Chase Institute revealed that people are spending on experiences rather than shopping, according to the Business Journal. Specifically, most consumers were spending money on restaurants and “other services,” forgoing durable goods and choosing small- and medium-sized businesses over larger ones.