Jim Cramer Says "I Don't Want to Give Up on Darden's Stock"

Darden Restaurants, Inc. (NYSE:DRI) is one of the stocks Jim Cramer offered insights on. Cramer defended the stock after its quarterly report and explained his bullish stance. He remarked:

“It’s funny, when you look at the numbers, the results don’t seem all that bad, more of a mix of positive and negative… However, thanks to inflation, their margins came under pressure… So sure, it’s a mixed quarter, but does that justify the stock’s decline from 208 to below 185? Come on. Look, I think Wall Street got freaked out by Darden’s higher-than-expected costs…But the investors that are selling the stock down on cost issues, I think they might be missing all the things that Darden’s doing right to attract customers in this tricky environment.

I keep telling you that only value-oriented restaurant chains like value-oriented retailers, that’s who’s attracting lots of customers in this economy, and Darden’s definitely focused on value… In the end, I get why so many people sold Darden in response to those higher-than-expected costs. If food inflation’s really out of control, then this is a very tough business to be in. It really is. But the bottom line: I also don’t want to overlook what Darden’s been doing right. The company’s been able to resonate with consumers at a time when they’re increasingly discerning about where to spend their money.

That’s why I don’t want to get too hung up on rising costs that, as management sees it, are temporary. And it’s why I don’t want to give up on Darden’s stock, especially now that it’s sold all the way down here. 17 times earnings, 3.25% yield. You could certainly do a lot worse than owning shares in Darden, which I believe will come through… this bout of inflation just fine. It always has. Maybe that’s why, in the end, people like it so much.”

Darden Restaurants, Inc. (NYSE:DRI) owns and operates full-service restaurants under brands such as Olive Garden, Ruth’s Chris Steak House, The Capital Grille, Cheddar’s Scratch Kitchen, Yard House, LongHorn Steakhouse, and others.

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Disclosure: None. This article is originally published at Insider Monkey.