[Executive Summary](index=1&type=section&id=Executive%20Summary) Darden Restaurants reported strong Q1 2026 results with increased sales and EPS, alongside an updated positive fiscal 2026 outlook [Q1 2026 Performance Overview](index=1&type=section&id=Q1%202026%20Performance%20Overview) Darden reported a strong Q1 2026, with total sales up 10.4% to $3.0 billion and blended same-restaurant sales increasing by 4.7% | Metric | Q1 2026 Performance | | :-------------------------- | :------------------ | | Total Sales Increase | 10.4% | | Total Sales Value | $3.0 billion | | Blended Same-Restaurant Sales Increase | 4.7% | | Same-Restaurant Sales | Growth Rate | | :-------------------- | :---------- | | Consolidated Darden | 4.7% | | Olive Garden | 5.9% | | LongHorn Steakhouse | 5.5% | | Fine Dining | (0.2)% | | Other Business | 3.3% | - The strength of results is attributed to the company's strategy, focusing on "**being brilliant with the basics**" and leveraging **competitive advantages** to position brands for long-term success, enabling sales and market share growth while investing in the business and returning capital to shareholders[3](index=3&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Segment profit reporting was adjusted to exclude pre-opening costs, with 'Other Business' showing significant sales and profit growth - Segment profit reporting changed to exclude pre-opening costs, with fiscal 2025 figures recast for comparability. Segment profit is defined as sales less costs for food and beverage, restaurant labor, restaurant expenses, and marketing expenses, excluding non-cash real estate related expenses[4](index=4&type=chunk) | ($ in millions) | Q1 2026 Sales | Q1 2025 Sales | Q1 2026 Segment Profit | Q1 2025 Segment Profit | | :---------------- | :------------ | :------------ | :--------------------- | :--------------------- | | Consolidated Darden | $3,044.7 | $2,757.0 | | | | Olive Garden | $1,301.1 | $1,209.1 | $267.6 | $250.1 | | LongHorn Steakhouse | $776.4 | $713.5 | $134.9 | $128.4 | | Fine Dining | $286.5 | $278.9 | $38.7 | $38.9 | | Other Business | $680.7 | $555.5 | $109.3 | $84.3 | [Earnings Per Share & Shareholder Returns](index=1&type=section&id=Earnings%20Per%20Share%20%26%20Shareholder%20Returns) Diluted net EPS reached $2.19, with adjusted EPS up 12.6% to $1.97, alongside a $1.50 quarterly dividend and $183 million in share repurchases | Metric | Value | | :------------------------------------------------ | :---- | | Reported diluted net earnings per share (continuing operations) | $2.19 | | Adjusted diluted net earnings per share (continuing operations) | $1.97 | | Adjusted EPS Increase (YoY) | 12.6% | - The Board of Directors declared a quarterly cash dividend of **$1.50 per share**, payable on November 3, 2025, to shareholders of record on October 10, 2025[8](index=8&type=chunk) - The Company repurchased approximately **0.9 million shares** of its common stock for a total of **$183 million** during the quarter. As of the end of the fiscal first quarter, **$865 million** remained under the current **$1 billion** repurchase authorization[6](index=6&type=chunk)[9](index=9&type=chunk) [Fiscal 2026 Financial Outlook](index=3&type=section&id=Fiscal%202026%20Financial%20Outlook) Darden updated its fiscal 2026 outlook, projecting total sales growth of 7.5-8.5% and adjusted diluted net EPS of $10.50-$10.70 [Updated Outlook Details](index=3&type=section&id=Updated%20Outlook%20Details) The fiscal 2026 outlook projects total sales growth of 7.5-8.5%, same-restaurant sales growth of 2.5-3.5%, and adjusted diluted net EPS of $10.50-$10.70 | Metric | Fiscal 2026 Outlook | | :------------------------------------------------ | :------------------ | | Total sales growth | 7.5% to 8.5% | | Same-restaurant sales growth | 2.5% to 3.5% | | New restaurant openings | Approximately 65 | | Total capital spending | $700 to $750 million | | Total inflation | 3.0% to 3.5% | | Effective tax rate | Approximately 13% | | Adjusted diluted net earnings per share (continuing operations) | $10.50 to $10.70 | | Weighted average diluted shares outstanding | Approximately 117 million | - The total sales growth outlook includes approximately **2% growth** related to the 53rd week. The adjusted diluted net earnings per share outlook includes approximately **$0.20** related to the addition of the 53rd week[14](index=14&type=chunk) [Reconciliation of Adjusted Earnings Outlook](index=7&type=section&id=Reconciliation%20of%20Adjusted%20Earnings%20Outlook) A reconciliation details fiscal 2026 adjusted diluted net EPS outlook, accounting for Chuy's transaction costs, closed restaurant costs, and Olive Garden Canada sale gain | Reconciliation Item | 2026 Outlook Range | | :------------------------------------------------ | :----------------- | | Reported diluted net earnings per share from continuing operations | $10.64 to $10.84 | | Chuy's transaction and integration related costs | $0.06 | | Closed restaurants costs | $0.06 | | Gain on Olive Garden Canada sale | $(0.26) | | Adjusted diluted net earnings per share from continuing operations | $10.50 to $10.70 | [Company Information](index=3&type=section&id=Company%20Information) Darden Restaurants operates a diverse portfolio of restaurant brands and provides important disclosures regarding forward-looking statements [About Darden Restaurants](index=3&type=section&id=About%20Darden%20Restaurants) Darden Restaurants is a restaurant company with a diverse portfolio of differentiated brands, including well-known names like Olive Garden, LongHorn Steakhouse, and Ruth's Chris Steak House, among others - Darden's portfolio of differentiated brands includes Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Chuy's, Seasons 52, Eddie V's, and Bahama Breeze[12](index=12&type=chunk) [Information About Forward-Looking Statements](index=5&type=section&id=Information%20About%20Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, detailed in SEC filings, cautioning investors against undue reliance due to potential material differences - Forward-looking statements are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of their initial date, with no obligation to update[13](index=13&type=chunk) - Risks and uncertainties include cost pressures, economic factors impacting the restaurant industry, labor challenges, increased costs, health concerns, cybersecurity risks, integration challenges (Chuy's), regulatory changes, intense competition, changing consumer preferences, climate change, supply chain disruptions, and litigation[13](index=13&type=chunk)[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Darden utilizes non-GAAP financial measures, such as adjusted diluted net EPS, to supplement GAAP results for performance analysis [Explanation of Non-GAAP Measures](index=5&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures, like adjusted diluted net EPS, offer supplemental performance insights but are not GAAP substitutes and may not be comparable - Non-GAAP measures, like **adjusted diluted net earnings per share**, are used by management for performance analysis and provide useful supplemental information for understanding operating results[17](index=17&type=chunk) - These non-GAAP disclosures should not be viewed as a substitute for GAAP operating results and may not be comparable to non-GAAP measures presented by other companies[17](index=17&type=chunk) [Q1 Reported to Adjusted Earnings Reconciliation](index=5&type=section&id=Q1%20Reported%20to%20Adjusted%20Earnings%20Reconciliation) This reconciliation details Q1 2026 and Q1 2025 earnings adjustments, including acquisition costs, closed restaurant costs, and Olive Garden Canada sale gain | $ in millions, except per share amounts | Q1 2026 Reported | Q1 2026 Adjustments | Q1 2026 Adjusted | Q1 2025 Reported | Q1 2025 Adjustments | Q1 2025 Adjusted | | :-------------------------------------- | :--------------- | :------------------ | :--------------- | :--------------- | :------------------ | :--------------- | | Earnings Before Income Tax | $293.8 | $(35.3) | $258.5 | $232.1 | $1.5 | $233.6 | | Income Tax Expense | $35.9 | $(8.8) | $27.1 | $24.5 | $0.3 | $24.8 | | Net Earnings | $257.9 | $(26.5) | $231.4 | $207.6 | $1.2 | $208.8 | | Diluted Net Earnings Per Share | $2.19 | $(0.22) | $1.97 | $1.74 | $0.01 | $1.75 | | % Change vs Prior Year | 25.9% | | 12.6% | | | | | **Adjustments Detail:** | | | | | | | | Acquisition transaction and integration related costs | | $3.6 (EBIT) / $2.7 (Net) / $0.02 (EPS) | | | $1.5 (EBIT) / $1.2 (Net) / $0.01 (EPS) | | | Closed restaurants | | $3.1 (EBIT) / $2.3 (Net) / $0.02 (EPS) | | | — | | | Gain on Olive Garden Canada sale | | $(42.0) (EBIT) / $(31.5) (Net) / $(0.26) (EPS) | | | — | | [Restaurant Portfolio](index=7&type=section&id=Restaurant%20Portfolio) Darden's restaurant portfolio expanded, increasing total company-owned restaurants from 2,040 to 2,165 by August 2025 [Number of Company-Owned Restaurants](index=7&type=section&id=Number%20of%20Company-Owned%20Restaurants) Darden's restaurant portfolio shows an increase in total company-owned restaurants from 2,040 in August 2024 to 2,165 in August 2025, primarily driven by the addition of Chuy's restaurants and growth in Olive Garden and LongHorn Steakhouse | Brand | 8/24/2025 | 8/25/2024 | | :---------------------- | :-------- | :-------- | | Olive Garden | 933 | 923 | | LongHorn Steakhouse | 595 | 577 | | Cheddar's Scratch Kitchen | 182 | 181 | | Chuy's | 108 | — | | Yard House | 89 | 88 | | Ruth's Chris Steak House | 82 | 82 | | The Capital Grille | 73 | 68 | | Seasons 52 | 43 | 44 | | Eddie V's | 29 | 29 | | Bahama Breeze | 28 | 44 | | The Capital Burger | 3 | 4 | | **Darden Continuing Operations** | **2,165** | **2,040** | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements reflect strong Q1 2026 performance with increased sales, operating income, and cash flow [Consolidated Statements of Earnings](index=8&type=section&id=Consolidated%20Statements%20of%20Earnings) The consolidated statements of earnings show a significant increase in sales and net earnings for the three months ended August 24, 2025, compared to the prior year. Operating income grew substantially, and diluted net earnings per share from continuing operations rose from $1.74 to $2.19 | (In millions, except per share data) | Three Months Ended 8/24/2025 | Three Months Ended 8/25/2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Sales | $3,044.7 | $2,757.0 | | Total operating costs and expenses | $2,705.5 | $2,487.8 | | Operating income | $339.2 | $269.2 | | Earnings before income taxes | $293.8 | $232.1 | | Income tax expense | $35.9 | $24.5 | | Earnings from continuing operations | $257.9 | $207.6 | | Net earnings | $257.8 | $207.2 | | Diluted net earnings per share (continuing operations) | $2.19 | $1.74 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of August 24, 2025, shows an increase in total assets to $12,759.6 million from $12,587.0 million at May 25, 2025. Total liabilities also increased, while total stockholders' equity saw a slight decrease | (In millions) | 8/24/2025 (Unaudited) | 5/25/2025 | | :-------------------------------- | :-------------------- | :-------- | | **ASSETS** | | | | Total current assets | $932.8 | $937.7 | | Land, buildings and equipment, net | $4,826.6 | $4,716.0 | | Operating lease right-of-use assets | $3,608.0 | $3,555.9 | | Goodwill | $1,658.2 | $1,659.4 | | Trademarks | $1,346.4 | $1,346.4 | | Other assets | $387.6 | $371.6 | | **Total assets** | **$12,759.6** | **$12,587.0** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $2,346.8 | $2,247.5 | | Long-term debt | $2,135.1 | $2,128.9 | | Operating lease liabilities - non-current | $3,878.3 | $3,816.9 | | Other liabilities | $1,840.8 | $1,803.6 | | **Total liabilities** | **$10,534.0** | **$10,275.7** | | Total stockholders' equity | $2,225.6 | $2,311.3 | | **Total liabilities and stockholders' equity** | **$12,759.6** | **$12,587.0** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate that net cash provided by operating activities of continuing operations increased to $342.5 million for the three months ended August 24, 2025. However, net cash used in financing activities also increased significantly, leading to a decrease in cash and cash equivalents | (In millions) | Three Months Ended 8/24/2025 | Three Months Ended 8/25/2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided by operating activities of continuing operations | $342.5 | $273.2 | | Net cash used in investing activities of continuing operations | $(159.3) | $(149.7) | | Net cash used in financing activities of continuing operations | $(212.2) | $(126.7) | | Increase (decrease) in cash, cash equivalents, and restricted cash | $(29.0) | $(3.2) | | Cash, cash equivalents, and restricted cash - end of period | $225.5 | $216.9 |

Core Insights - Darden Restaurants, Inc. reported strong financial results for the first quarter of fiscal 2026, with total sales increasing by 10.4% to $3.0 billion, driven by a same-restaurant sales increase of 4.7% and contributions from acquisitions [2][6][7]. Financial Performance - Consolidated sales for Q1 2026 were $3,044.7 million, compared to $2,757.0 million in Q1 2025, reflecting a growth of 10.4% [4]. - Same-restaurant sales growth was reported at 4.7%, with Olive Garden and LongHorn Steakhouse showing increases of 5.9% and 5.5%, respectively [2][4]. - Adjusted diluted net earnings per share from continuing operations increased by 12.6% to $1.97, up from $1.75 in the prior year [7][19]. Segment Performance - Olive Garden generated sales of $1,301.1 million in Q1 2026, with a segment profit of $267.6 million, compared to $1,209.1 million and $250.1 million in Q1 2025 [4]. - LongHorn Steakhouse reported sales of $776.4 million and a segment profit of $134.9 million, up from $713.5 million and $128.4 million, respectively [4]. - The Fine Dining segment experienced a slight decline in profit, with a segment profit of $38.7 million compared to $38.9 million in the previous year [4]. Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $1.50 per share, payable on November 3, 2025 [5]. - During the quarter, the company repurchased approximately 0.9 million shares for a total of $183 million, with $865 million remaining under the current $1 billion repurchase authorization [8][7]. Future Outlook - The company updated its full-year financial outlook for fiscal 2026, projecting total sales growth of 7.5% to 8.5%, including approximately 2% growth related to the addition of a 53rd week [14]. - Same-restaurant sales growth is expected to be between 2.5% to 3.5%, with plans to open approximately 65 new restaurants [14].

Group 1 - Darden Restaurants Inc. (DRI) is expected to report quarterly earnings of $2.00 per share with revenue of $3.04 billion [2] - Bullish BLSH reported a profit of 93 cents per share for the second quarter, recovering from a loss of $1.03 per share a year ago, with revenue increasing to $58.63 million from $49.57 million [2] - Factset Research Systems Inc. (FDS) is anticipated to post quarterly earnings of $4.13 per share on revenue of $593.45 million [2] - 89bio Inc. (ETNB) has agreed to be acquired by Roche for $14.50 per share, representing a 79% premium to its closing stock price on September 17 [2] - FedEx Corp. (FDX) is expected to report quarterly earnings of $3.62 per share with revenue of $21.67 billion [2]

Core Viewpoint - The company is scheduled to report its earnings for the first quarter of fiscal 2026 on Thursday before the market opens [1] Group 1 - The earnings report will provide insights into the company's financial performance for the first quarter [1]

Core Insights - Darden Restaurants, Inc. is a significant player in the full-service restaurant industry, operating 1,867 restaurants in the U.S. and Canada, with popular brands like Olive Garden and LongHorn Steakhouse [1] - The consensus price target for Darden has increased from $200.21 last year to $245.67, reflecting a positive shift in analysts' expectations regarding the company's growth prospects [3][6] - Darden's strategic initiatives, including closing underperforming concepts and pursuing capital-light franchising, aim for a revenue growth of 7-8% and a 7% increase in dividends, alongside a new $1 billion buyback authorization [5][6] Financial Performance - Darden's upcoming first-quarter earnings report is highly anticipated, with expectations for strong performance driven by margin expansion and robust same-store sales [4] - Credit Suisse analyst Lauren Siberman has set a lower price target of $152, indicating a more cautious outlook compared to the consensus price target [2][6] - The company's strong sales momentum from Olive Garden and LongHorn supports the optimistic outlook, although challenges like beef inflation and higher leverage compared to peers could impact profitability [3]

Core Insights - Darden Restaurants is expected to announce fiscal Q1 2025 results on September 18, with analysts predicting earnings of $2.01 per share and revenue of $3.04 billion, reflecting a 15% growth in EPS and a 10% increase in sales compared to the previous year [2] Financial Performance - In Q4 FY2024, Darden's sales rose by 7% to $2.96 billion, while same-store sales remained unchanged, with Olive Garden showing weakness and LongHorn performing well [3] - EPS for Q4 FY2024 increased to $2.65 due to cost control and lower food inflation, alongside a dividend increase and $97 million in stock buybacks enhancing shareholder engagement [3] - For FY2025, management forecasts 1-2% growth in same-store sales, with projected revenue between $11.8 billion and $11.9 billion, and EPS expected to be between $9.40 and $9.60 [3] Market Position and Historical Performance - Darden Restaurants has a market capitalization of $25 billion, with trailing twelve-month revenue of $12 billion, operating profit of $1.4 billion, and net income of $1.0 billion [3] - Historically, Darden stock has advanced 55% of the time following earnings announcements, with an average one-day gain of 5.8% and a maximum increase of 15% [2][4] Trading Strategies - Investors can choose to position themselves before the earnings announcement based on historical probabilities or wait to capitalize on post-earnings movements [3] - The correlation between 1D, 5D, and 21D returns post-earnings indicates that a positive 1D return may lead to favorable 5D returns, suggesting a potential trading strategy [5]

Core Viewpoint - Darden Restaurants is expected to report strong quarterly earnings, with significant growth in EPS and revenue despite facing challenges like beef inflation [2][5][6] Financial Performance - Analysts estimate an EPS of $1.99 to $2.01, reflecting a year-over-year increase of 13.7% from $1.75 [2][6] - Revenue is projected to rise by 10.2% to approximately $3.04 billion, compared to $2.76 billion a year ago [2][6] Market Reaction - Darden's shares recently declined by 0.6%, trading at $210.83, despite exceeding fourth-quarter expectations [3] - Keybanc analyst Eric Gonzalez maintained an Overweight rating, adjusting the price target from $245 to $240, indicating cautious optimism [3] Financial Metrics - The company has a P/E ratio of 23.44 and a price-to-sales ratio of 2.04, suggesting favorable market valuation [4] - A debt-to-equity ratio of 2.57 indicates a higher level of debt, which may affect financial flexibility [4] - The current ratio of 0.42 suggests potential challenges in covering short-term liabilities [4] Strategic Outlook - Darden must demonstrate resilience in its growth strategy as it faces higher leverage and unpredictable input costs [5] - Investors are closely monitoring the upcoming earnings release to assess the company's ability to navigate the current economic environment [5]

Group 1 - Darden Restaurants, Inc. is set to release its first-quarter earnings on September 18, with analysts expecting earnings of $2.01 per share, an increase from $1.75 per share in the same period last year [1] - The company projects quarterly revenue of $3.04 billion, compared to $2.76 billion a year earlier [1] Group 2 - On June 20, Darden reported better-than-expected fourth-quarter financial results, although shares fell by 0.6% to $210.83 [2] - Analysts have provided various ratings and price targets for Darden, with Keybanc maintaining an Overweight rating and lowering the price target from $245 to $240 [6] - Truist Securities reiterated a Buy rating with a price target of $252, while BMO Capital increased its price target from $190 to $215 [6] - JP Morgan raised its price target from $218 to $240, and Raymond James increased its target from $230 to $240, with respective ratings of Overweight and Outperform [6]

Earnings Report - Darden Restaurants, Inc. is set to release its first-quarter earnings on September 18, with analysts expecting earnings of $2.01 per share, an increase from $1.75 per share in the same period last year [1] - The company projects quarterly revenue of $3.04 billion, up from $2.76 billion a year earlier [1] Dividend Information - Darden currently offers an annual dividend yield of 2.83%, translating to a semi-annual dividend of $1.50 per share, or $6.00 annually [2] - To achieve a monthly income of $500 from dividends, an investment of approximately $212,160 or around 1,000 shares is required; for a more modest $100 per month, an investment of $42,432 or around 200 shares is needed [2][3] Stock Performance - Darden's shares fell 0.2% to close at $212.16 on Monday [5] - Analyst Jim Salera from Stephens & Co. maintained an Equal-Weight rating on Darden and raised the price target from $212 to $215 [5]

Group 1 - Beef prices are threatening the profitability of steakhouses, leading to a 6% decline in Texas Roadhouse's stock price after earnings report [1] - Texas Roadhouse missed earnings expectations, indicating potential challenges in maintaining margins amidst rising beef costs [1] Group 2 - The focus on sustained profitability is emphasized, highlighting the importance of strong margins, stable free cash flow, and high returns on invested capital as key drivers of investment returns [1]