Core Viewpoint - Darden Restaurants' stock price is expected to trend higher due to strong financial performance, guidance, growth prospects, dividends, and share buybacks [1][5][7]. Financial Performance - Darden Restaurants reported $3.3 billion in revenue for Q4 2025, reflecting a 10.6% increase year-over-year and surpassing consensus estimates by 120 basis points [5]. - Comparable store sales increased across major segments: Olive Garden by 6.9%, LongHorn Steakhouse by 6.7%, while Fine Dining contracted by 3.3% [5]. Margin and Capital Returns - Despite experiencing margin pressures, the company managed to maintain earnings growth, supporting a healthy balance sheet and capital return plans [6]. - The company has authorized an additional $1 billion in share buybacks, which is nearly 4% of the pre-release market capitalization [6]. Guidance and Outlook - The full-year outlook suggests high single-digit growth and substantial margins, with an expected adjusted EPS of $10.60, sufficient to cover $6 per share in dividends [7]. - Analysts maintain a Moderate Buy rating, with a projected earnings growth of 11.76% [9]. Balance Sheet Health - Darden's balance sheet shows increased cash and assets, with a 3% rise in shareholder equity and low leverage, as long-term debt is less than 1x equity [8]. Market Sentiment - Following the earnings release, Darden's stock price surged over 3%, indicating strong market sentiment and potential for further gains [10].

Core Viewpoint - Darden Restaurants has shown strong performance, with shares increasing by 46% over the past year, indicating resilience against consumer slowdown fears [1]. Company Performance - The stock of Darden Restaurants continued its upward momentum, reflecting positive market sentiment and operational strength [1]. Market Context - The restaurant chain's performance is notable in the context of broader economic concerns, suggesting effective management and strategic positioning [1].

Company Performance - Darden Restaurants Inc. reported fourth-quarter adjusted earnings per share of $2.98, exceeding the analyst consensus estimate of $2.97 [2] - The company's quarterly sales reached $3.27 billion, surpassing the analyst consensus estimate of $3.26 billion [2] - For fiscal 2026, Darden expects adjusted EPS between $10.50 and $10.70, which is below the consensus estimate of $10.75 [2] - Darden projects total sales growth of 7% to 8% for the year [2] Stock Movements - Gorilla Technology Group Inc. shares increased by 36% to $25.51 following a strong first-quarter earnings report indicating significant revenue growth and a return to profitability [8] - Couchbase, Inc. shares surged 30% to $24.69 after agreeing to be acquired by Haveli Investments for $1.5 billion [8] - Innovative Eyewear, Inc. shares rose by 81% to $4.12 after announcing a partnership with Smartech Retail Group [8] - Accenture plc shares fell by 6% to $287.53 after releasing its third-quarter results [8] - Moleculin Biotech, Inc. shares dropped 47% to $0.31 due to a $5.9 million public offering announcement [8] - Smith & Wesson Brands, Inc. shares declined by 18% to $8.89 after reporting worse-than-expected fourth-quarter EPS and sales [8]

Core Insights - Darden Restaurants, Inc. (DRI) reported strong fourth-quarter fiscal 2025 results, with earnings and revenues exceeding expectations, leading to a 4.1% increase in stock price during pre-market trading [1][8] Financial Performance - Adjusted earnings per share (EPS) for Q4 were $2.98, surpassing the Zacks Consensus Estimate of $2.96, and up from $2.65 in the prior-year quarter [2] - Total sales for the quarter reached $3,271.7 million, exceeding the consensus estimate of $3,266 million, and reflecting a 10.6% year-over-year increase, driven by a 4.6% rise in same-restaurant sales [2][8] Segment Performance - Olive Garden's sales increased by 8.1% year-over-year to $1.38 billion, with comparable sales rising 6.9% [3] - LongHorn Steakhouse saw a 9.3% year-over-year sales increase to $833.8 million, with comparable sales up 6.7% [4] - Fine Dining segment sales rose 2.3% year-over-year to $334.6 million, although comparable sales fell 3.3% [4] - Other Business segment sales surged 22.4% year-over-year to $722.3 million, with comparable sales increasing by 1.2% [5] Operating Costs - Total operating costs and expenses for Q4 increased by 12.8% year-over-year to $2.89 billion, primarily due to higher food and beverage expenses, labor costs, and marketing expenses, surpassing projections of $2.82 billion [6] Balance Sheet Highlights - As of May 25, 2025, cash and cash equivalents stood at $240 million, up from $194.8 million a year earlier [7] - Long-term debt increased to $2.13 billion from $1.37 billion year-over-year [9] Share Repurchase Program - Darden repurchased approximately 0.2 million shares worth $51 million during Q4 and authorized a new $1 billion share repurchase program on June 18, 2025, with no expiration date [10] Fiscal 2025 Overview - Total revenues for fiscal 2025 were nearly $12.08 billion, compared to $11.39 billion in fiscal 2024, with operating income rising to $1.36 billion from $1.31 billion [11] - Adjusted EPS for fiscal 2025 was $9.55, up from $8.88 in the previous year [11] Fiscal 2026 Outlook - For fiscal 2026, Darden anticipates total sales growth of 7% to 8%, with same-restaurant sales growth projected between 2% to 3.5% year-over-year [12] - Adjusted diluted EPS is expected to be in the range of $10.50 to $10.70, with plans to open 60-65 net new restaurants and total capital spending projected at $700-$750 million [12]

Financial Performance - Darden's same store sales increased by 46%, with Olive Garden leading at 69% [1] - Darden's EPS was slightly below consensus for the full year [1] Market Trends & Dynamics - Casual dining is currently strong due to demographic exposure and the perception of value [3] - The proposition of "getting more for your money" is resonating more in casual dining than in fast food [3] - Bankruptcies in the casual dining space (TGI Fridays, Red Lobster, Hooters) have positioned remaining chains better [3] Stock Performance - Darden's stock is up approximately 20% year-to-date, performing well in the sector [2] - Darden outperformed Bloomin' Brands, which is down over 25% year-to-date, and Texas Roadhouse, which is up about 6% [2] Consumer Behavior - Darden is experiencing income cohort growth in all income brackets except those making $50,000 annually and under [4] - Darden is seeing particularly strong growth from households making $150,000 and up [4]

Core Insights - Darden Restaurants, Inc. (NYSE:DRI) stock reached a record high of $228.27 and was last seen at $226.29, reflecting a 1.6% increase following a positive earnings report and a new share repurchase program [1] - The company reported adjusted earnings of $2.98 per share and revenue of $3.27 billion for the fiscal fourth quarter, surpassing Wall Street estimates of $2.97 and $3.26 billion respectively [1] - Darden announced a new $1 billion share repurchase program, indicating a shareholder-friendly approach [1] Options Activity - Options trading activity has increased, with 1,674 calls and 1,705 puts traded, which is seven times the average intraday pace [2] - The most popular options contracts are the June 220 put and 230 call [2] Stock Performance - DRI stock has increased by 44.7% year over year and 19.6% in 2024 alone [2] - The stock's rally has faced resistance near the $229 level, which may act as a technical ceiling in the short term [2] - A cluster of rising short-term moving averages continues to provide support for the stock [2]

Financial Data and Key Metrics Changes - In the fourth quarter, total sales reached $3.3 billion, a 10.6% increase compared to the prior year, driven by same restaurant sales growth of 4.6% and positive traffic growth [16][24] - Adjusted diluted net earnings per share from continuing operations increased by 12.5% to $2.98, with adjusted EBITDA of $582 million [16][24] - For fiscal year 2025, same restaurant sales growth was 2%, outperforming the industry by 170 basis points, with total sales surpassing $12 billion for the first time [23][24] Business Line Data and Key Metrics Changes - Olive Garden's total sales increased by 8.1% with same restaurant sales growth of 6.9%, outperforming the industry benchmark by 390 basis points [19][20] - LongHorn Steakhouse saw total sales increase by 9.3%, driven by same restaurant sales growth of 6.7% [20] - The Fine Dining segment experienced a 2.3% increase in total sales, but same restaurant sales were negative for the quarter [21] Market Data and Key Metrics Changes - The casual dining industry saw average same restaurant sales grow by 30% and guest counts increase by 0.9% [6] - The company noted that casual dining is gaining market share as consumers perceive it as a better value compared to fast food [44][45] Company Strategy and Development Direction - The company is focusing on disciplined execution of its strategy, emphasizing sales growth while maintaining margins [15][26] - A five-year strategic planning process was completed, with each brand developing plans to enhance their competitive positioning [32] - The company plans to open 60 to 65 new restaurants in fiscal 2026, with a focus on Olive Garden and LongHorn as the primary contributors [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the casual dining sector's recovery, attributing it to consumer preferences shifting towards dining out [44][45] - The company anticipates total sales growth of 7% to 8% for fiscal 2026, with same restaurant sales growth projected at 2% to 3.5% [25][26] - Management acknowledged macroeconomic uncertainties but remains optimistic about maintaining strong sales momentum [69] Other Important Information - The company announced a 7% increase in dividends to $1.50 per share, implying an annual dividend of $6 [25] - Strategic alternatives for the Bahama Breeze brand are being considered, including a potential sale [33][34] - The company is expanding its international franchising efforts, with new agreements for Olive Garden locations in various countries [36] Q&A Session Summary Question: Why is casual dining performing well currently? - Management believes consumers are recognizing casual dining as a great value, leading to increased patronage [44][45] Question: What is the outlook for unit growth? - The company expects to ramp up unit growth to over 3% in the next five years, with Olive Garden and LongHorn leading the way [46][48] Question: How does the updated long-term framework affect margin expansion? - The new framework reflects a more holistic view of margins, with a focus on sales growth and reinvestment [51] Question: What is the impact of Uber Direct on Olive Garden's sales? - Uber Direct contributed approximately 3.5% to total sales at Olive Garden, with a positive mix impact of about 40 basis points [54][56] Question: How is the company addressing fine dining challenges? - Management stated that fine dining has faced challenges due to changing consumer behaviors post-COVID, but they are confident in their leadership and strategies [81][82]

Financial Data and Key Metrics Changes - In Q4, total sales reached $3.3 billion, a 10.6% increase year-over-year, driven by a same restaurant sales growth of 4.6% and positive traffic growth [15][19] - Adjusted diluted net earnings per share from continuing operations increased by 12.5% to $2.98, with adjusted EBITDA of $582 million [15][23] - For the full fiscal year, same restaurant sales growth was 2%, outperforming the industry by 170 basis points, with total sales surpassing $12 billion for the first time [22][23] Business Line Data and Key Metrics Changes - Olive Garden's total sales increased by 8.1% with same restaurant sales growth of 6.9%, outperforming the industry benchmark by 390 basis points [19][20] - LongHorn Steakhouse saw total sales increase by 9.3%, with same restaurant sales growth of 6.7%, exceeding the industry benchmark by 370 basis points [20] - The Fine Dining segment experienced a 2.3% increase in total sales, but same restaurant sales were negative, resulting in a lower segment profit margin [21] Market Data and Key Metrics Changes - The casual dining industry saw average same restaurant sales growth of 30% and guest counts grew by 0.9% [5] - Olive Garden's delivery service, Uber Direct, contributed approximately 3.5% of total sales, with a mix impact of about 40 basis points [55][56] Company Strategy and Development Direction - The company remains committed to a long-term financial framework targeting 10-15% total shareholder return, with an increased emphasis on sales growth and margin maintenance [26][29] - Strategic planning has led to the decision to close 15 Bahama Breeze locations, focusing on higher-performing brands and considering strategic alternatives for Bahama Breeze [32][82] - The company is expanding its international presence, with agreements for new Olive Garden locations in Canada and other countries [34][36] Management's Comments on Operating Environment and Future Outlook - Management noted that casual dining is perceived as a great value, leading to increased consumer interest and market share from fast food and fast casual [46] - The outlook for fiscal 2026 anticipates total sales growth of 7-8%, with same restaurant sales growth of 2-3.5% [24][25] - Management expressed caution regarding macroeconomic uncertainties impacting future performance, despite strong momentum observed in Q4 [70][72] Other Important Information - The company announced a 7% increase in dividends to $1.50 per share, implying an annual dividend of $6 [24] - Leadership transitions were discussed, including the retirement of Dan Kiernan as President of Olive Garden and the appointment of John Wilkerson as his successor [36][37] Q&A Session Summary Question: Why is casual dining performing well currently? - Management believes consumers are recognizing casual dining as a great value, leading to increased patronage and market share from fast food [46] Question: What is the outlook for unit growth? - The company expects to open 60-65 new restaurants, with Olive Garden and LongHorn contributing significantly to this growth [48] Question: How does the updated long-term framework affect margin expansion? - The new framework reflects a more holistic view of margin opportunities, with a focus on sales growth and reinvestment [51] Question: What is the impact of Uber Direct on sales? - Uber Direct contributed about 3.5% of total sales at Olive Garden, with a significant portion of new customers using the delivery service [55][90] Question: What are the expectations for inflation in fiscal 2026? - The company anticipates total inflation of 2.5-3%, with food inflation around 2.5% and labor inflation at approximately 3.5% [65]

Financial Performance - Darden Restaurants reported quarterly earnings of $2.98 per share, exceeding the Zacks Consensus Estimate of $2.96 per share, and up from $2.65 per share a year ago [1] - The company posted revenues of $3.27 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.18%, compared to $2.96 billion in the same quarter last year [3] - The earnings surprise for the quarter was 0.68%, while the previous quarter saw a surprise of -0.36% with actual earnings of $2.80 against an expectation of $2.81 [2] Market Performance - Darden Restaurants shares have increased approximately 19.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.7% [4] - The current Zacks Rank for Darden Restaurants is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.93 on revenues of $3.04 billion, and for the current fiscal year, it is $10.70 on revenues of $13.16 billion [8] - The estimate revisions trend for Darden Restaurants is mixed, and changes in earnings expectations may occur following the recent earnings report [5][7] Industry Context - The Retail - Restaurants industry, to which Darden Restaurants belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Earnings Call Fiscal 2025: Fourth Quarter Results June 20, 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 performan ...