Darden Restaurants Earnings Preview: What to Expect

Core Insights - Darden Restaurants, Inc. is a major player in the North American full-service restaurant industry, with a market capitalization of $21.4 billion and a portfolio of well-known brands including Olive Garden and LongHorn Steakhouse [1] Financial Performance - Darden is expected to report an adjusted EPS of $2.10 for Q2, reflecting a 3.5% increase from $2.03 in the same quarter last year [2] - For the full fiscal year 2026, the adjusted EPS is projected to be $10.61, an 11.1% increase from $9.55 in 2025, with further growth expected in fiscal 2027 to $11.37 per share, a 7.2% year-over-year increase [3] Stock Performance - Darden's stock has increased by 11.8% over the past 52 weeks, which is lower than the Consumer Discretionary Select Sector SPDR Fund's 19.8% and the S&P 500 Index's 18.3% gains during the same period [4] Recent Developments - Following the release of mixed Q2 results, Darden's stock fell by 7.7%. The company reported a 4.7% year-over-year increase in same-store sales, driven by 5.9% growth at Olive Garden and 5.5% at LongHorn Steakhouse. Overall revenue grew 10.4% year-over-year to $3 billion, slightly exceeding consensus estimates [5] - Despite the revenue growth, Darden's profit margins were below expectations, resulting in an adjusted EPS of $1.97, which missed consensus estimates by 1.5% [6] Analyst Sentiment - Analysts maintain a consensus "Moderate Buy" rating for Darden, with 17 "Strong Buys," 2 "Moderate Buys," and 10 "Holds" among the 29 analysts covering the stock. The mean price target of $224.61 indicates a potential upside of 23.9% from current levels [6]