Core Insights - Darden Restaurants, which operates Olive Garden and LongHorn Steakhouse, experienced a significant increase in same-restaurant sales growth [1] Company Summary - Darden Restaurants reported a notable rise in same-restaurant sales, indicating strong performance in its key brands [1]

Core Viewpoint - Darden Restaurants, Inc. reported solid second-quarter sales growth and reaffirmed its full-year earnings guidance, despite a slight miss in adjusted earnings per share compared to analyst expectations [1][9]. Financial Performance - The company achieved quarterly sales of $3.102 billion, reflecting a year-over-year increase of 7.3%, surpassing the analyst consensus of $3.071 billion [2]. - Adjusted earnings per share for the second quarter were reported at $2.08, slightly below the consensus estimate of $2.10 [1]. Sales Growth Drivers - Sales growth was attributed to a blended same-restaurant sales increase of 4.3% and contributions from 30 net new restaurants [3]. - Key brands driving same-restaurant sales included Olive Garden with a 4.7% increase, LongHorn Steakhouse with a 5.9% increase, and Fine Dining with a 0.8% increase [3]. Dividend and Share Repurchase - The board declared a quarterly cash dividend of $1.50 per share, payable on February 2, 2026, to shareholders of record as of January 9, 2026 [5]. - The company repurchased approximately 1.1 million shares for $222 million, with $643 million remaining under its $1 billion share repurchase authorization [5]. Earnings Call Insights - Management noted record Thanksgiving reservations and strong holiday bookings, with improving pricing trends allowing for some pricing coverage in the latter half of the fiscal year [6]. - The company is monitoring the impact of GLP-1 usage on consumer behavior, particularly regarding alcohol consumption, and is adapting its menu to include lighter-portion options [7]. Cost and Outlook - Beef costs are expected to remain high into the third quarter, with some relief anticipated in the fourth quarter [8]. - Darden expects fiscal third-quarter earnings per share to grow in the mid-single-digit range compared to the previous year [8]. - The company reaffirmed its fiscal 2026 adjusted EPS outlook of $10.50 to $10.70, with total sales growth projected at 8.5% to 9.3% [9][10].

Financial Data and Key Metrics Changes - The company generated $3.1 billion in total sales, a 7% increase compared to the previous year, driven by same restaurant sales growth of 4.3% and the addition of 30 net new restaurants [15][16] - Adjusted diluted net earnings per share from continuing operations were $2.08, up 2.5% from last year [16] - Adjusted EBITDA was $466 million, with a restaurant-level EBITDA margin of 18.7% [16][17] Business Line Data and Key Metrics Changes - Olive Garden reported a 5.4% increase in total sales, with same restaurant sales growth of 4.7% and a segment profit margin of 21.8% [18][19] - LongHorn Steakhouse achieved a 9.3% increase in total sales, with same restaurant sales growth of 5.9% and a segment profit margin of 16.2% [19][20] - The fine dining segment saw a 3.3% increase in total sales, with a segment profit margin of 14.8%, impacted by high beef costs [21] Market Data and Key Metrics Changes - The average same restaurant sales for the industry grew 1.3%, while guest counts decreased by 0.4% [4] - Darden's same restaurant sales exceeded the industry benchmark by 300 basis points, with performance in the top decile of the industry [16] Company Strategy and Development Direction - The company plans to open 65-70 new restaurants and has a total capital spending forecast of $750 million-$775 million for the fiscal year [22] - Darden continues to leverage its competitive advantages, including scale and brand portfolio, to manage costs and provide value to guests [6][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged commodity headwinds, particularly high beef prices, but emphasized a commitment to underpricing inflation to maintain guest value [15][23] - The company expects total sales growth for the year to be between 8.5%-9.3% and same restaurant sales growth of 3.5%-4.3% [22][23] Other Important Information - The company has seen a double-digit increase in affordability perceptions among guests ordering from the lighter portions menu at Olive Garden [9] - Management highlighted the importance of maintaining guest satisfaction and operational excellence during the busy holiday season [29] Q&A Session Summary Question: Impact of lighter portions menu on sales - Management indicated that the lighter portions menu will positively impact sales in the long term, with higher frequency among guests ordering these options [31][32] Question: Labor margin challenges despite sales growth - Management explained that labor margins improved in comparable restaurants, but total Darden level margins were affected by brand mix and the acquisition of Chuy's [34][35] Question: Olive Garden's same store sales guidance - Management anticipates a range of 2.5%-4% for the back half of the year, factoring in macroeconomic uncertainties and potential consumer spending benefits from fiscal stimulus [38][39] Question: Pricing strategy in relation to inflation - Management expects pricing to catch up to inflation by the fourth quarter, with a modest increase anticipated at LongHorn [40][41] Question: Confidence in beef price reduction - Management noted that beef prices peaked in the second quarter and are expected to ease due to increased production and demand changes [44][45] Question: Incrementality of first-party delivery - Management expressed confidence that incrementality from delivery will remain strong as it attracts younger, more affluent guests [50] Question: Marketing strategy for Uber Direct - Management did not conduct marketing for Uber Direct in Q2 but plans to evaluate future marketing efforts based on performance [96]

Financial Data and Key Metrics Changes - Total sales for the second quarter reached $3.1 billion, a 7% increase compared to the previous year, driven by same restaurant sales growth of 4.3% and the addition of 30 net new restaurants [13][17] - Adjusted diluted net earnings per share from continuing operations were $2.08, up 2.5% from last year [15] - Adjusted EBITDA for the quarter was $466 million, with an adjusted effective tax rate of 13.2% [15][17] Business Line Data and Key Metrics Changes - Olive Garden reported a 5.4% increase in total sales, with same restaurant sales growth of 4.7% and a strong segment profit margin of 21.8% [17][18] - LongHorn Steakhouse achieved a 9.3% increase in total sales, driven by same restaurant sales growth of 5.9% and a segment profit margin of 16.2% [18] - The fine dining segment saw a 3.3% increase in total sales, with a segment profit margin of 14.8%, impacted by high beef costs [19] Market Data and Key Metrics Changes - Average same restaurant sales for the casual dining industry grew 1.3%, while guest counts decreased by 0.4% [3] - Darden's same restaurant sales exceeded the industry benchmark by 300 basis points, with performance in the top decile of the industry [14][17] Company Strategy and Development Direction - The company plans to open 65-70 new restaurants in fiscal 2026, with total capital spending projected between $750 million and $775 million [20] - Darden continues to leverage its competitive advantages, including scale and a diverse portfolio, to manage costs and provide value to guests [4][24] - The company is focusing on long-term growth through strategic investments and maintaining a disciplined approach to capital stewardship [24][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged commodity headwinds, particularly high beef prices, but emphasized a commitment to underpricing inflation to provide value to guests [13][21] - The company expects total sales growth for the year to be between 8.5% and 9.3%, with same restaurant sales growth of 3.5% to 4.3% [20] - Management remains confident in the ability to grow sales and manage costs despite near-term margin pressures [21] Other Important Information - The company opened 17 new restaurants during the quarter, contributing to a total of 30 net new openings for the year [5] - The lighter portion menu at Olive Garden has seen a double-digit increase in affordability perceptions among guests, with plans for a system-wide rollout by January [8][17] Q&A Session Summary Question: Impact of the lighter portions menu on sales - Management indicated that while the lighter portions menu impacts internal metrics like value perception, it is expected to drive higher frequency among guests ordering these items [28][30] Question: Labor margin challenges despite sales growth - Management explained that labor margins improved in comparable restaurants, but total Darden level margins were affected by brand mix and the acquisition of Chuy's [31][32] Question: Olive Garden's same-store sales guidance - Management anticipates same-restaurant sales growth in the back half of the year to be around 2.5% to 4%, factoring in potential consumer spending benefits from fiscal stimulus [35][36] Question: Pricing strategy in relation to inflation - Management expects pricing to catch up to inflation by the fourth quarter, with a modest increase anticipated at LongHorn [38][39] Question: Consumer behavior and traffic trends - Management noted that higher income households are driving traffic growth, while there has been a slight pullback in lower income segments [49][50] Question: Marketing strategy for Uber Direct - Management did not conduct marketing for Uber Direct in Q2 but plans to evaluate marketing efforts in the back half of the year [81][82]

Core Insights - Darden Restaurants reported quarterly earnings of $2.08 per share, slightly missing the Zacks Consensus Estimate of $2.09 per share, but showing an increase from $2.03 per share a year ago, resulting in an earnings surprise of -0.48% [1] - The company posted revenues of $3.1 billion for the quarter ended November 2025, exceeding the Zacks Consensus Estimate by 0.60% and up from $2.89 billion year-over-year, having surpassed consensus revenue estimates three times in the last four quarters [2] Earnings Performance - Over the last four quarters, Darden Restaurants has only surpassed consensus EPS estimates once, indicating a mixed performance in earnings expectations [2] - The stock has added approximately 1.5% since the beginning of the year, underperforming compared to the S&P 500's gain of 14.3% [3] Future Outlook - The company's earnings outlook will be crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $2.99 on revenues of $3.3 billion, and for the current fiscal year, it is $10.59 on revenues of $13.1 billion [7] Industry Context - The Retail - Restaurants industry, to which Darden Restaurants belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Historical data indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1, highlighting the importance of industry performance on individual stock outcomes [8]

Financial Performance - Total sales reached $3.1 billion, reflecting a 7.3% increase[10] - Same-restaurant sales grew by 4.3%[10] - Adjusted EBITDA amounted to $466 million[10] - Adjusted diluted net earnings per share from continuing operations were $2.08[10] Margin Analysis - Food and beverage expenses accounted for 31.1% of sales, a decrease of 90 basis points compared to the prior year[13] - Restaurant labor expenses represented 32.2% of sales, a decrease of 10 basis points compared to the prior year[13] - Restaurant expenses accounted for 16.4% of sales, a decrease of 10 basis points compared to the prior year[13] - Marketing expenses accounted for 1.6% of sales, an increase of 10 basis points compared to the prior year[13] Fiscal Year 2026 Outlook - The company projects total sales growth of 8.5% to 9.3%, which includes approximately 2% total sales growth for the extra week[19, 20] - Same-restaurant sales growth is expected to be between 3.5% and 4.3%[19] - Adjusted diluted net earnings per share are projected to be $10.50 to $10.70[19]

Core Insights - Darden Restaurants reported an increase in fiscal second-quarter sales and profit, indicating strong performance despite external pressures [1] - The company raised its full-year sales-growth guidance, reflecting confidence in its business outlook [1] - Darden successfully managed to mitigate the impact of rising beef prices on its operations [1] Financial Performance - The fiscal second-quarter sales and profit figures were higher compared to previous periods, showcasing robust financial health [1] - The specific numerical data regarding sales and profit growth was not detailed in the provided content [1] Future Outlook - Darden's decision to raise its full-year sales-growth guidance suggests an optimistic view of market conditions and consumer demand [1] - The company appears well-positioned to navigate challenges in the industry, particularly those related to commodity price fluctuations [1]

Darden Restaurants, Inc. (DRI) updated its fiscal 2026 financial outlook, which includes a 53rd week. The updated outlook includes the impact of the additional week. Total sales growth is projected in a range of 8.5% to 9.3%, including approximately 2% growth related to the 53rd week. Same-restaurant sales growth is expected in a range of 3.5% to 4.3%. The company expects adjusted net earnings per share from continuing operations of $10.50 to $10.70, including: approximately $0.20 related to the addition o ...

Core Insights - Darden Restaurants reported strong sales growth driven by demand at Olive Garden and LongHorn Steakhouse [1][2] - The company raised its full-year revenue growth outlook for fiscal 2026 to 8.5% to 9.3% while maintaining its earnings projections [1] - Fiscal second-quarter net income increased to $237.2 million, or $2.03 per share, compared to $215.1 million, or $1.82 per share, a year earlier [2] Financial Performance - Excluding restaurant closure costs and acquisition-related expenses, the adjusted earnings per share were $2.08 [2] - Net sales rose by 7.3% to reach $3.1 billion [2] - The company's shares rose more than 4% in premarket trading following the earnings report [2]

Financial Performance - Total sales increased by 7.3% to $3.1 billion, driven by a blended same-restaurant sales increase of 4.3% and sales from 30 net new restaurants[5] - Reported diluted net earnings per share from continuing operations were $2.03, while adjusted diluted net earnings per share increased by 2.5% to $2.08[5][16] - Year-to-date consolidated sales for fiscal 2026 reached $6.1 billion, up from $5.6 billion in fiscal 2025[6] - Olive Garden's sales increased to $1.36 billion in Q2 2026, up from $1.29 billion in Q2 2025[4] - LongHorn Steakhouse reported Q2 2026 sales of $775.9 million, an increase from $710.1 million in Q2 2025[4] - Operating income for the six months ended November 23, 2025, was $659.6 million, up 17.5% from $561.3 million in the prior year[19] - Net earnings for the six months ended November 23, 2025, reached $495.0 million, representing a 17.2% increase compared to $422.3 million for the same period last year[24] - Basic net earnings per share for the three months ended November 23, 2025, were $2.05, an increase of 11.4% from $1.84 in the same quarter last year[19] Shareholder Returns - The company declared a quarterly cash dividend of $1.50 per share, payable on February 2, 2026[7] - The company repurchased approximately 1.1 million shares of its common stock for a total of $222 million, with $643 million remaining under the current $1 billion repurchase authorization[8] - The company repurchased common stock totaling $407.1 million during the six months ended November 23, 2025[24] Future Outlook - Fiscal 2026 financial outlook includes total sales growth of 8.5% to 9.3%, with same-restaurant sales growth of 3.5% to 4.3%[11] - New restaurant openings are projected to be between 65 to 70, with total capital spending estimated at $750 to $775 million[11] Assets and Liabilities - Total current assets increased to $1,043.4 million as of November 23, 2025, compared to $937.7 million on May 25, 2025[21] - Total liabilities rose to $10,859.8 million as of November 23, 2025, up from $10,275.7 million on May 25, 2025[21] - The company reported a decrease in cash and cash equivalents to $224.1 million as of November 23, 2025, from $240.0 million on May 25, 2025[21] Share Statistics - The average number of diluted shares outstanding was 116.7 million for the three months ended November 23, 2025, compared to 118.3 million in the same period last year[19] - Cash flows from operating activities for the six months ended November 23, 2025, were $663.2 million, slightly up from $661.8 million in the prior year[24]