Olive Garden Parent's Stock Tanks After Quarterly Miss Even As Outlook Remains Strong

Core Viewpoint - Darden Restaurants, Inc. experienced a nearly 10% decline in share price following weaker-than-expected quarterly earnings and revenue, despite reporting double-digit sales growth driven by acquisitions and steady same-restaurant gains [1] Financial Performance - The company reported first-quarter adjusted earnings per share of $1.97, missing the analyst consensus estimate of $2.00 [1] - Quarterly sales totaled $3.004 billion, falling short of the expected $3.040 billion [1] - Total sales increased by 10.4%, supported by a same-restaurant sales increase of 4.7% and contributions from the acquisition of 103 Chuy's Tex Mex restaurants and 22 net new restaurants [2] Segment Performance - Olive Garden sales reached $1.301 billion, up from $1.209 billion a year ago, with segment profit rising to $267.6 million from $250.1 million [3] - Same-restaurant sales at Olive Garden increased by 5.9%, while LongHorn Steakhouse saw a 5.5% rise; Fine Dining same-restaurant sales decreased by 0.2%, and Other Business grew by 3.3% [2] Cash and Dividend - The company ended the quarter with cash and equivalents of $211 million and inventories valued at $309.6 million [4] - Darden declared a quarterly cash dividend of $1.50 per share, payable on November 3 [4] - During the quarter, approximately 0.9 million shares were repurchased for a total of $183 million, with $865 million remaining under the current $1 billion repurchase authorization [4] Outlook - Darden reaffirmed its fiscal 2026 adjusted EPS guidance at $10.50–$10.70, slightly above the consensus estimate of $10.68 [5] - The fiscal 2026 sales outlook was raised to $12.983 billion–$13.104 billion from a previous range of $12.922 billion–$13.043 billion, compared to the Street estimate of $13.078 billion [5]