Core Insights - Darden Restaurants Inc reported earnings of $1.97 per share, missing expectations, while revenue of $3.04 billion met forecasts, leading to a 9.7% drop in shares to $188.61 [1] - The company experienced strong same-store sales growth across its portfolio but faced challenges in the fine dining segment due to rising costs [1] - Despite the current struggles, Darden raised its 2026 forecast, indicating confidence in a potential rebound [1] Stock Performance - If the current trend continues, the stock will log its fifth consecutive daily loss and the steepest post-earnings drop in at least nine quarters, reaching its lowest levels since April [2] - Year-to-date, the stock is up 1.3% and reached an all-time high in June, but is now relying on its 320-day moving average to prevent further losses [2] Analyst Sentiment - Analysts remain bullish, with 18 out of 29 brokerages maintaining a "buy" or better rating, while 11 have a "hold" rating [3] - Following the earnings report, there was a significant number of price-target adjustments, but the 12-month consensus price target stands at $232.94, indicating a substantial premium to current levels [3] Options Market Activity - In the options market, sentiment is leaning bearish, with 7,865 puts traded compared to 1,885 calls, and overall volume at 24 times the average intraday amount [4] - The most active contracts include the monthly September puts with strike prices of 200, 195, 190, and 185, with new positions being opened at the last [4]

Financial Performance - Darden Restaurants reported revenue of $3.04 billion for the quarter ended August 2025, reflecting a year-over-year increase of 10.4% [1] - Earnings per share (EPS) for the quarter was $1.97, up from $1.75 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate by 0.17%, while the EPS fell short of the consensus estimate of $2.00 by 1.5% [1] Key Metrics - Total company-owned restaurants stood at 2,165, slightly below the average estimate of 2,167 by nine analysts [4] - Same-restaurant sales for LongHorn Steakhouse increased by 5.5%, compared to the average estimate of 5.8% [4] - Same-restaurant sales for Olive Garden rose by 5.9%, slightly below the average estimate of 6.1% [4] - Consolidated same-restaurant sales increased by 4.7%, surpassing the average estimate of 4.4% [4] Sales Breakdown - Olive Garden generated sales of $1.3 billion, close to the average estimate of $1.31 billion, marking a year-over-year increase of 7.6% [4] - Other Business sales reached $680.7 million, exceeding the average estimate of $664.65 million, representing a year-over-year change of 22.5% [4] - Fine Dining sales were reported at $286.5 million, slightly below the average estimate of $289.03 million, with a year-over-year increase of 2.7% [4] - LongHorn Steakhouse sales amounted to $776.4 million, compared to the average estimate of $782.66 million, reflecting an 8.8% year-over-year increase [4] Stock Performance - Darden Restaurants' shares returned +0.6% over the past month, while the Zacks S&P 500 composite increased by +2.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Darden Restaurants' stock price fell significantly by 8.1% following the release of mixed quarterly results, with performance from Olive Garden and LongHorn Steakhouse offsetting weakness in its fine dining segment [1] Company Performance - Darden Restaurants reported mixed quarterly earnings, indicating that while some segments performed well, others struggled [1] - The performance of Olive Garden and LongHorn Steakhouse was strong enough to counterbalance the underperformance in the high-end dining sector [1]

Darden Restaurants (NYSE:DRI) Q1 2026 Earnings Call September 18, 2025 08:30 AM ET Company ParticipantsRick Cardenas - President and CEOCourtney Aquilla - Director of Corporate Finance and Investor RelationsRaj Vennam - CFOConference Call ParticipantsDennis Geiger - AnalystJim Salera - AnalystJeffrey Bernstein - AnalystJacob Aiken-Phillips - AnalystChris O'Cull - AnalystPeter Saleh - AnalystSara Senatore - AnalystDavid Tarantino - AnalystDanilo Gargiulo - AnalystJohn Ivanko - AnalystEric Gonzalez - AnalystB ...

Darden Restaurants (NYSE:DRI) Q1 2026 Earnings Call September 18, 2025 08:30 AM ET Company ParticipantsCourtney Aquilla - Senior Director - Corporate Finance & IRRick Cardenas - President, CEO & DirectorRaj Vennam - SVP & CFOJon Tower - Director - Equity Research - Consumer & RestaurantsDavid Palmer - Senior MDJacob Aiken-Phillips - VP - Equity ResearchPeter Saleh - MD - RestaurantsLauren Silberman - DirectorDennis Geiger - Equity Research - RestaurantsChris O’Cull - MD - Restaurants, Franchised BusinessesB ...

Financial Data and Key Metrics Changes - The company reported total sales of $3 billion, which is 10% higher than last year, driven by same restaurant sales growth of 4.7% and the acquisition of 103 Chuy's restaurants [15][16] - Adjusted diluted net earnings per share from continuing operations were $1.97, reflecting a 12.6% increase year-over-year [16] - Adjusted EBITDA reached $439 million, with a return of $358 million to shareholders through dividends and share repurchases [16][18] Business Line Data and Key Metrics Changes - Olive Garden's same restaurant sales grew by 5.9%, supported by culinary innovations and effective marketing strategies [5][19] - LongHorn Steakhouse achieved same restaurant sales growth of 5.5%, maintaining a strong focus on quality and operational consistency [8][20] - The fine dining segment experienced slightly negative same restaurant sales, but Ruth's Chris Steak House's limited-time offer helped offset challenges [11][20] Market Data and Key Metrics Changes - The casual dining industry saw average same restaurant sales growth of 5% and guest counts increased by 2.6% [4] - Olive Garden's sales momentum continued, outperforming the industry benchmark by 90 basis points [19] - The other business segment, including Yard House and Cheddar's, reported a 22.5% increase in sales, driven by the acquisition of Chuy's and positive same restaurant sales of 3.3% [21] Company Strategy and Development Direction - The company aims to leverage its competitive advantages, including significant scale and extensive data insights, to drive long-term growth [5][12] - A focus on affordability and menu innovation is evident, with Olive Garden testing lighter portion sizes to attract more guests [8][40] - The company plans to open approximately 65 new restaurants in fiscal 2026, reflecting confidence in its development pipeline [22][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the consumer spending environment, noting that retail sales were strong and the company is ahead of expectations [58] - The company anticipates total sales growth for the year to be between 7.5% and 8.5%, with same restaurant sales growth of 2.5% to 3.5% [22] - Management acknowledged challenges with beef costs but remains optimistic about navigating through these pressures while maintaining pricing discipline [26][60] Other Important Information - The company is actively involved in philanthropic efforts, including supporting Feeding America with refrigerated trucks for food banks [14] - The acquisition of Chuy's restaurants is expected to enhance the company's market position and profitability [15][21] Q&A Session Summary Question: Can you discuss the visibility on food cost outcomes? - Management indicated that coverage for beef is currently at 25% for the next six months, with significant price increases observed, particularly in tenders and rib eyes [26] Question: What are the early indications of the new portion sizes at Olive Garden? - Early indications suggest that the new portion sizes may drive traffic, although there could be some dilution in check size [28] Question: Can you provide a breakdown of LongHorn's comp split between traffic and ticket? - LongHorn's traffic was up 3.2%, with same restaurant sales of 5.5%, indicating a check increase of 2.3% [45] Question: How is the delivery business performing? - Delivery accounted for about 5% of Olive Garden's sales in the first quarter, exiting at about 4%, still 40% above pre-promotion levels [85] Question: What is the company's outlook on consumer spending? - Management believes there have been no dramatic changes in consumer spending, with positive retail sales trends observed [58]

Financial Data and Key Metrics Changes - For Q1 2026, Darden Restaurants reported total sales of $3 billion, a 10% increase compared to the previous year, driven by same restaurant sales growth of 4.7% and the acquisition of 103 Chuy's restaurants [16][17] - Adjusted diluted net earnings per share from continuing operations were $1.97, reflecting a 12.6% increase year-over-year [17] - Adjusted EBITDA for the quarter was $439 million, with a return of $358 million to shareholders through dividends and share repurchases [17] Business Line Data and Key Metrics Changes - Olive Garden's same restaurant sales grew by 5.9%, supported by successful marketing initiatives and first-party delivery growth [5][19] - LongHorn Steakhouse achieved same restaurant sales growth of 5.5%, maintaining a strong focus on quality and operational consistency [9][19] - The other business segment, which includes brands like Yard House and Cheddar's, saw a sales increase of 22.5% due to the Chuy's acquisition and positive same restaurant sales of 3.3% [21] Market Data and Key Metrics Changes - The casual dining industry experienced average same restaurant sales growth of 5% and guest count growth of 2.6% during the quarter [4] - Darden's same restaurant sales outperformed the industry benchmark by 90 basis points, placing them in the top decile of the industry [19] Company Strategy and Development Direction - Darden continues to leverage its competitive advantages, including significant scale and extensive data insights, to drive long-term growth [5] - The company is focusing on affordability and menu innovation to attract a broader customer base, particularly through initiatives like lighter portion sizes at Olive Garden [8][9] - Darden plans to open approximately 65 new restaurants in fiscal 2026, reflecting confidence in its development pipeline [22][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the consumer spending environment, noting that sales momentum from the previous quarter continued into Q1 2026 [16][56] - The company anticipates total sales growth for the year to be between 7.5% and 8.5%, with same restaurant sales growth projected at 2.5% to 3.5% [22] - Management acknowledged challenges related to rising beef costs but emphasized a disciplined approach to pricing and cost management [22][88] Other Important Information - Darden's philanthropic efforts include supporting Feeding America by funding refrigerated trucks for food banks, highlighting the company's commitment to community engagement [15] - The company is testing a new lighter portion menu at Olive Garden, which has shown promising initial responses from guests [9] Q&A Session Summary Question: Can you discuss the visibility on food cost outcomes for the remainder of the year? - Management indicated that beef coverage is currently at 25% for the next six months, with significant price increases expected to be unsustainable [25][26] Question: What are the early indications regarding the new portion sizes at Olive Garden? - Management believes the new portion sizes may drive traffic, although it could slightly dilute check averages [27][28] Question: How did the affordability pivot and UberDirect impact costs during the quarter? - Management noted that the segment profit margin was only down 10 basis points, indicating strong business model resilience despite cost pressures [30][31] Question: What is the outlook for casual dining performance? - Management believes casual dining is performing well due to lower pricing compared to other dining segments, with a focus on value and connection [39][40] Question: How is the delivery business performing? - Delivery accounted for about 5% of Olive Garden's sales in Q1, with a strong exit rate post-promotion [80] Question: What are the dynamics driving recent beef price increases? - Supply constraints due to packer cutbacks and import issues are driving prices higher, but management believes these levels are not sustainable [86][88]

Earnings Performance - Darden Restaurants reported quarterly earnings of $1.97 per share, missing the Zacks Consensus Estimate of $2 per share, but showing an increase from $1.75 per share a year ago, representing an earnings surprise of -1.50% [1] - The company posted revenues of $3.04 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.17%, and an increase from year-ago revenues of $2.76 billion [2] Stock Performance and Outlook - Darden Restaurants shares have increased approximately 11.8% since the beginning of the year, compared to the S&P 500's gain of 12.2% [3] - The current consensus EPS estimate for the upcoming quarter is $2.20 on revenues of $3.08 billion, and for the current fiscal year, it is $10.64 on revenues of $13.08 billion [7] Industry Context - The Retail - Restaurants industry, to which Darden Restaurants belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Earnings Call Fiscal 2026: First Quarter Results September 18, 2025 Disclaimer/Non-GAAP Information IMPORTANT NOTICE The following slides are part of a presentation by Darden Restaurants, Inc. (the "Company") and are intended to be viewed as part of that presentation (the "Presentation"). No representation is made that the Presentation is a complete description of the Company's performance, financial condition or outlook. Forward-looking statements in this communication regarding our expected earnings perfo ...

Darden Restaurants shares dropped after adjusted earnings per share missed expectations. Same-store sales growth for Olive Garden also came in below consensus estimates. https://t.co/Nf2sgIsF4b ...