Darden Q3 Earnings Meet Estimates, Revenues Top, Both Rise Y/Y

Core Insights - Darden Restaurants, Inc. (DRI) reported third-quarter fiscal 2026 results, with earnings meeting the Zacks Consensus Estimate and revenues exceeding expectations, showing year-over-year growth in both metrics [1][9] Financial Performance - Adjusted earnings per share (EPS) for the fiscal third quarter was $2.95, consistent with the Zacks Consensus Estimate, compared to $2.80 in the prior-year quarter [2] - Total sales for the quarter reached $3.35 billion, surpassing the consensus mark of $3.33 billion, reflecting a 5.9% increase from the previous year, driven by a 4.2% increase in same-restaurant sales and contributions from 31 net new restaurants [3][9] Segment Performance - Sales at Olive Garden increased 4.7% year over year to $1.39 billion, exceeding the estimate of $1.36 billion, with comparable sales rising 3.2% [4] - LongHorn Steakhouse saw an 11.2% year-over-year sales increase to $854.2 million, surpassing the estimate of $828.6 million, with comparable sales up 7.2% [5] - Fine Dining segment sales rose 4.3% year over year to $402 million, above the estimate of $392.3 million, with comparable sales increasing 2.1% [5] - Other Business segment sales increased 3.2% year over year to $696.1 million, slightly below the estimate of $719.9 million, with comparable sales rising 3.9% [6] Operating Costs - Total operating costs and expenses increased 7.3% year over year to $2.93 billion, primarily due to higher food and beverage expenses, restaurant expenses, labor costs, and marketing expenses, exceeding the estimate of $2.87 billion [7] Balance Sheet - As of February 22, 2026, cash and cash equivalents were $240.4 million, slightly up from $240 million as of May 25, 2025 [8] - Inventories were reported at $345.3 million, down from $354.5 million in the previous quarter, while long-term debt increased to $2.14 billion from $2.13 billion [8] Future Outlook - For fiscal 2026, Darden expects total sales growth of approximately 9.5%, up from the prior estimate of 8.5% to 9.3%, with same-restaurant sales growth anticipated at approximately 4.5% [10] - The company plans to open approximately 70 net new restaurants and has set total capital spending between $750 million and $775 million for fiscal 2026 [11]