Part I [Business](index=4&type=section&id=Item%201.%20Business) Darden Restaurants operates 2,159 full-service restaurants, focusing on operational excellence and strategic brand management Company-Owned and Franchised Restaurants as of May 25, 2025 | Brand | Owned & Operated | Franchised | Total | | :--- | :--- | :--- | :--- | | Olive Garden | 935 | 52 | 987 | | LongHorn Steakhouse | 591 | 20 | 611 | | Cheddar's Scratch Kitchen | 181 | 3 | 184 | | Chuy's | 108 | 0 | 108 | | Yard House | 88 | 0 | 88 | | Ruth's Chris | 82 | 76 | 158 | | The Capital Grille | 71 | 2 | 73 | | Seasons 52 | 43 | 0 | 43 | | Eddie V's | 29 | 0 | 29 | | Bahama Breeze | 28 | 1 | 29 | | The Capital Burger | 3 | 0 | 3 | | **Total** | **2,159** | **154** | **2,313** | - On October 11, 2024, Darden acquired **Chuy's Holdings, Inc. for $649.1 million** in total consideration, financed through the issuance of senior notes[18](index=18&type=chunk) - In the fourth quarter of fiscal 2025, Darden agreed to sell its **eight Canadian Olive Garden restaurants** to Recipe Unlimited, which will operate them as franchises[20](index=20&type=chunk) - The company announced its decision to explore strategic alternatives for the Bahama Breeze brand, including a potential sale or conversion of its **28 locations**[21](index=21&type=chunk) Restaurant Count and Sales Growth (Last 5 Fiscal Years) | Fiscal Year | Total Restaurants | Total Sales (in millions) | | :--- | :--- | :--- | | 2021 | 1,834 | $7,196.1 | | 2022 | 1,867 | $9,630.0 | | 2023 | 1,914 | $10,487.8 | | 2024 | 2,031 | $11,390.0 | | 2025 | 2,159 | $12,076.7 | - Darden's human capital strategy focuses on employee retention, with **197,924 team members** in fiscal 2025 and an **hourly turnover rate of 67%**, one of the industry's lowest[74](index=74&type=chunk)[75](index=75&type=chunk)[84](index=84&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from macroeconomic factors, human capital, health and safety, cybersecurity, and competitive pressures - **Inflation and Macroeconomic Risks**: The company faces pressure from rising costs for food commodities, labor, healthcare, and utilities, with economic slowdowns potentially reducing consumer discretionary spending[125](index=125&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - **Human Capital Risks**: The ability to attract and retain qualified team members is critical, facing challenges from a competitive labor market, rising minimum wages, and potential changes in immigration laws[133](index=133&type=chunk)[134](index=134&type=chunk) - **Health, Safety, and Cybersecurity Risks**: The business is vulnerable to food-borne illness outbreaks and cybersecurity breaches, which could lead to data loss, operational disruption, and legal liability under evolving privacy laws[138](index=138&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) - **Integration and Strategic Risks**: The successful integration of the Chuy's brand is complex and may not yield anticipated synergies, alongside risks from intense competition, changing consumer preferences, and adverse social media impacts[144](index=144&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - **Operational and Financial Risks**: A majority of restaurants are in leased properties, creating long-term obligations, with additional exposures to supply chain disruptions, goodwill impairment, tax law changes, and derivative market volatility[157](index=157&type=chunk)[160](index=160&type=chunk)[180](index=180&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[186](index=186&type=chunk) [Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) Darden manages cybersecurity risk through an ERM framework overseen by the Audit Committee, reporting no material incidents to date - Cybersecurity risk management is integrated into the company's overall ERM program, with oversight provided by the Audit Committee and the Board of Directors[187](index=187&type=chunk)[192](index=192&type=chunk) - The company employs a multi-faceted strategy including an incident response plan, regular third-party audits based on the NIST Framework, penetration testing, and cybersecurity awareness training for employees[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - The cybersecurity program is led by the Chief Information Officer (CIO), who has over 20 years of experience and provides periodic updates to the Audit Committee and the full Board[193](index=193&type=chunk)[195](index=195&type=chunk) - As of the filing date, Darden is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[191](index=191&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) As of May 25, 2025, Darden operated 2,159 restaurants, primarily on leased sites, across the U.S. and Canada Restaurant Property Ownership (as of May 25, 2025) | Property Type | Count | | :--- | :--- | | Owned Sites | 94 | | Leased Sites | 2,065 | | **Total Company-Owned** | **2,159** | Lease Classification | Lease Type | Count | | :--- | :--- | | Land-Only Leases | 1,102 | | Ground and Building Leases | 666 | | Space/In-Line/Other Leases | 297 | | **Total Leased Sites** | **2,065** | [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company faces ordinary course legal proceedings, which management believes will not materially impact its financial position or operations - Darden is subject to ordinary course litigation common to the restaurant industry, including claims from guests and employees[468](index=468&type=chunk) - The company believes that the resolution of current legal matters will not have a material adverse effect on its financial condition or results of operations[468](index=468&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[198](index=198&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Darden's common stock trades on the NYSE (DRI), with recent share repurchases and a new $1 billion program, outperforming market indices - The company's common stock is traded on the NYSE under the symbol **DRI**[200](index=200&type=chunk) Share Repurchases for Quarter Ended May 25, 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Maximum Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | Feb 24 - Mar 30, 2025 | 157,368 | $193.77 | $517.7M | | Mar 31 - Apr 27, 2025 | 53,445 | $196.72 | $507.2M | | Apr 28 - May 25, 2025 | 49,251 | $203.32 | $497.2M | | **Quarter-to-Date** | **260,064** | **$196.19** | **$497.2M** | - On June 18, 2025, the Board of Directors authorized a new share repurchase program for up to **$1 billion** of its common stock, replacing the previous authorization[202](index=202&type=chunk) - Over the five-year period ending May 2025, a $100 investment in Darden stock grew to **$307.28**, outperforming the S&P 500 (**$205.63**) and the S&P Restaurant Sub-Index (**$179.37**)[203](index=203&type=chunk)[205](index=205&type=chunk) [Reserved](index=34&type=section&id=Item%206.%20Reserved) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2025, Darden's sales grew 6.0% to $12.08 billion with diluted EPS up 4.1%, projecting continued growth and strong liquidity Fiscal 2025 Financial Highlights vs. Fiscal 2024 | Metric | Fiscal 2025 | Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Sales | $12.08 billion | $11.39 billion | +6.0% | | Diluted EPS (Continuing Ops) | $8.88 | $8.53 | +4.1% | | Net Earnings (Continuing Ops) | $1.05 billion | $1.03 billion | +2.0% | | Blended Same-Restaurant Sales | - | - | +2.0% | - **Fiscal 2026 Outlook**: Total sales growth projected at **7.0% to 8.0%**, same-restaurant sales growth at **2.0% to 3.5%**, and **60 to 65 new restaurant openings**[210](index=210&type=chunk) Segment Sales and Same-Restaurant Sales (SRS) - Fiscal 2025 vs. 2024 | Segment | Sales (FY25, in millions) | % Change from FY24 | SRS % Change | | :--- | :--- | :--- | :--- | | Olive Garden | $5,212.9 | 2.9% | 1.7% | | LongHorn Steakhouse | $3,025.5 | 7.8% | 5.1% | | Fine Dining | $1,304.8 | 1.0% | (3.0)% | | Other Business | $2,533.5 | 13.8% | 0.2% | Segment Profit Margin - Fiscal 2025 vs. 2024 | Segment | FY25 Profit Margin | FY24 Profit Margin | Change (BP) | | :--- | :--- | :--- | :--- | | Olive Garden | 22.3% | 22.1% | +20 BP | | LongHorn Steakhouse | 19.3% | 18.4% | +90 BP | | Fine Dining | 18.6% | 19.0% | -40 BP | | Other Business | 15.7% | 15.3% | +40 BP | - The company's adjusted debt to EBITDAR ratio was **2.1** as of May 25, 2025, well below the financial covenant requirement of **3.50 to 1.00**[261](index=261&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Darden manages market risks from interest rates, currency, and commodities using derivatives, with a one-year value at risk of $63.3 million for net earnings - The company is exposed to market risks including interest rates, foreign currency, compensation, and commodity prices[271](index=271&type=chunk) - Darden uses derivative instruments like swaps and forwards to hedge these risks[271](index=271&type=chunk) - As of May 25, 2025, the one-year value at risk (95% confidence) for net earnings from changes in equity forwards, commodity instruments, currencies, and floating-rate debt was approximately **$63.3 million**[272](index=272&type=chunk) - The one-year value at risk for the fair value of long-term fixed-rate debt was approximately **$121.1 million**[273](index=273&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Darden's consolidated financial statements, including auditor reports and detailed notes on accounting policies, acquisitions, and debt [Reports of Management and Independent Registered Public Accounting Firm](index=47&type=section&id=Reports%20of%20Management%20and%20Independent%20Registered%20Public%20Accounting%20Firm) Management asserts effective internal controls, and KPMG issued an unqualified opinion on financial statements, with long-lived asset impairment as a critical audit matter - Management concluded that the company's internal control over financial reporting was effective as of May 25, 2025[282](index=282&type=chunk) - KPMG LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[285](index=285&type=chunk)[291](index=291&type=chunk) - The critical audit matter identified by KPMG was the evaluation of long-lived assets for impairment, noting the subjective auditor judgment required to evaluate assumptions about future cash flows and useful life[297](index=297&type=chunk) [Consolidated Financial Statements](index=51&type=section&id=Consolidated%20Financial%20Statements) Darden's FY2025 consolidated financial statements show $12.08 billion in sales, $1.05 billion net earnings, and strong cash flow from operations Consolidated Statements of Earnings (in millions, except per share data) | | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Sales | $12,076.7 | $11,390.0 | $10,487.8 | | Operating Income | $1,362.3 | $1,314.2 | $1,201.8 | | Earnings from Continuing Operations | $1,051.0 | $1,030.5 | $983.5 | | Net Earnings | $1,049.6 | $1,027.6 | $981.9 | | Diluted Net EPS | $8.86 | $8.51 | $7.99 | Consolidated Balance Sheets (in millions) | | May 25, 2025 | May 26, 2024 | | :--- | :--- | :--- | | Total Current Assets | $937.7 | $822.8 | | Total Assets | $12,587.0 | $11,323.0 | | Total Current Liabilities | $2,247.5 | $2,192.5 | | Total Liabilities | $10,275.7 | $9,080.5 | | Total Stockholders' Equity | $2,311.3 | $2,242.5 | Consolidated Statements of Cash Flows (in millions) | | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,707.0 | $1,621.7 | | Net Cash used in Investing Activities | $(1,278.3) | $(1,324.6) | | Net Cash used in Financing Activities | $(385.8) | $(483.4) | [Notes to Consolidated Financial Statements](index=57&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the Chuy's acquisition, segment results, debt, leases, stock-based compensation, and commitments - The acquisition of Chuy's for **$649.1 million** resulted in the recognition of **$268.4 million** in goodwill and **$198.4 million** for the trademark intangible asset[372](index=372&type=chunk)[375](index=375&type=chunk)[377](index=377&type=chunk) Long-Term Debt Components (as of May 25, 2025, in millions) | Note Description | Amount | | :--- | :--- | | 3.850% senior notes due May 2027 | $500.0 | | 4.350% senior notes due October 2027 | $400.0 | | 4.550% senior notes due October 2029 | $350.0 | | 6.300% senior notes due October 2033 | $500.0 | | Other senior notes (2035, 2037, 2048) | $439.1 | | **Total Long-Term Debt** | **$2,189.1** | Lease Liabilities (as of May 25, 2025, in millions) | Lease Type | Current Liability | Non-Current Liability | Total Liability | | :--- | :--- | :--- | :--- | | Operating Leases | $220.1 | $3,816.9 | $4,037.0 | | Finance Leases | $23.8 | $1,583.8 | $1,607.6 | | **Total** | **$243.9** | **$5,400.7** | **$5,644.6** | - Total stock-based compensation expense for fiscal 2025 was **$79.1 million**, up from **$68.5 million** in fiscal 2024[452](index=452&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=85&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - There were no disagreements with accountants on accounting and financial disclosure[470](index=470&type=chunk) [Controls and Procedures](index=85&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting in the last quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the fiscal year[471](index=471&type=chunk) - No material changes were made to the internal control over financial reporting during the last fiscal quarter[472](index=472&type=chunk) [Other Information](index=85&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the fourth quarter - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the fourth quarter[473](index=473&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=85&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement - This section incorporates by reference information from the company's 2025 Proxy Statement[475](index=475&type=chunk) [Executive Compensation](index=85&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the company's 2025 Proxy Statement - This section incorporates by reference information from the company's 2025 Proxy Statement[478](index=478&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=86&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2025 Proxy Statement - This section incorporates by reference information from the company's 2025 Proxy Statement[479](index=479&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=86&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2025 Proxy Statement - This section incorporates by reference information from the company's 2025 Proxy Statement[480](index=480&type=chunk) [Principal Accountant Fees and Services](index=86&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the company's 2025 Proxy Statement - This section incorporates by reference information from the company's 2025 Proxy Statement[481](index=481&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including financial statements under Item 8 and an index of exhibits - All required financial statements are included in Item 8 of the report[484](index=484&type=chunk) - No financial statement schedules are filed with this report[485](index=485&type=chunk) - An index of exhibits filed as part of the Form 10-K is provided, including key agreements and compensatory plans[486](index=486&type=chunk)

Core Viewpoint - The article highlights two notable exceptions in dividend raises during a typically quiet period for income investors, focusing on Target and Darden Restaurants as key examples of companies increasing their dividends despite broader market trends [2]. Group 1: Target - Target has raised its quarterly dividend by nearly 2% to $1.14 per share, extending its streak of annual increases to 54 years, qualifying it as a Dividend King [4]. - The company has faced challenges, including a 3% year-over-year decline in first-quarter net sales to just under $24 billion and a significant 36% drop in non-GAAP adjusted net earnings to $1.30 per share [6]. - To address these issues, Target has established an "enterprise acceleration office" aimed at improving operational efficiency and positioning the company for growth [7]. - Online comparable sales have shown resilience, growing nearly 5% in the first quarter, indicating potential for recovery [8]. - The stock is currently undervalued with a PEG ratio slightly over 1, suggesting it may be a strong recovery opportunity [9]. - The new dividend will be paid on September 1 to investors of record as of August 13, offering a yield of 4.7% at the current share price [10]. Group 2: Darden Restaurants - Darden has increased its quarterly dividend by 7% to $1.50 per share, marking a return to regular dividend raises since cutting payouts during the pandemic [11][12]. - The company has shown strong recovery, with total sales rising by 11% year-over-year, aided by the acquisition of Chuy's Tex Mex chain, while same-restaurant sales increased by nearly 5% [14]. - Darden's non-GAAP adjusted net income grew by 9% to over $400 million, exceeding analyst estimates [14]. - For fiscal 2026, Darden anticipates total sales growth of 7% to 8% and same-restaurant sales improvement of 2% to 3.5%, with net income projected between $10.50 and $10.70 per share [15]. - The company has authorized a new stock buyback initiative of up to $1 billion, indicating a commitment to returning capital to shareholders [13]. - The raised dividend will be distributed on August 1 to stockholders of record as of July 10, yielding almost 2.8% at the most recent closing price [16].

Core Insights - Darden Restaurants, referred to as the 'Jewel of FSRs', has been performing exceptionally well recently [1] Financial Performance - Darden Restaurants concluded FY 2025 on a positive note, which began in June 2024 [1]

Core Insights - Darden Restaurants Inc. reported better-than-expected fourth-quarter financial results, with adjusted earnings per share of $2.98, surpassing the analyst consensus estimate of $2.97, and quarterly sales of $3.27 billion, exceeding the consensus estimate of $3.26 billion [1][2] Financial Performance - The company experienced a consolidated same-restaurant sales increase of 4.6%, with Olive Garden and LongHorn Steakhouse rising by 6.9% and 6.7%, respectively. However, Fine Dining saw a decline of 3.3%, while Other Business grew by 1.2% [2] - Darden expects fiscal 2026 adjusted EPS to be between $10.50 and $10.70, which is below the consensus estimate of $10.75. The company projects total sales growth of 7% to 8% for the year [3] Market Reaction - Following the earnings announcement, Darden shares fell by 5.1% to trade at $214.17 [4] Analyst Ratings and Price Targets - Analysts have made various adjustments to their price targets for Darden Restaurants: - Stephens & Co. raised the price target from $200 to $212 while maintaining an Equal-Weight rating - Baird raised the price target from $218 to $230 with a Neutral rating - Keybanc increased the price target from $230 to $245 with an Overweight rating - B of A Securities raised the price target from $252 to $253 while maintaining a Buy rating - TD Securities boosted the price target from $215 to $235 with a Hold rating - Barclays raised the price target from $235 to $255 with an Overweight rating - Citigroup increased the price target from $245 to $253 while maintaining a Buy rating [6]

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. (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 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]

Financial Performance - Fiscal Year 2025 - Total sales reached $12.1 billion, representing a 6.0% increase[49] - Same-restaurant sales grew by 2.0%[49] - Adjusted diluted net earnings per share from continuing operations were $9.55[49] - Adjusted EBITDA amounted to $2.0 billion[49] - The company returned $1.1 billion in cash to shareholders[49] Financial Performance - Fourth Quarter Fiscal Year 2025 - Total sales were $3.3 billion, a 10.6% increase[38] - Same-restaurant sales increased by 4.6%[38] - Adjusted diluted net earnings per share from continuing operations were $2.98[38] - Adjusted EBITDA was $582 million[38] - Cash return totaled $215 million[38] Fiscal Year 2026 Outlook - Total sales growth is projected to be between 7.0% and 8.0%, which includes approximately 2% total sales growth for the extra week[56] - Same-restaurant sales growth is expected to be between 2.0% and 3.5%[56] - Diluted net earnings per share are forecasted to be between $10.50 and $10.70[56]

Core Insights - Darden Restaurants exceeded Wall Street's earnings and revenue expectations, predicting solid growth for fiscal year 2026 [1][2] - The company's stock rose over 2% in premarket trading following the earnings report [1] Financial Performance - Darden reported fiscal fourth-quarter net income of $303.8 million, or $2.58 per share, compared to $308.1 million, or $2.58 per share, a year earlier [1] - Excluding costs from the Chuy's Tex Mex acquisition, adjusted earnings were $2.98 per share for the fiscal fourth quarter [2] - Net sales increased by 10.6% to $3.3 billion, driven by the acquisition of 103 Chuy's restaurants and 25 net new restaurants [2] - Same-store sales rose 4.6%, surpassing StreetAccount estimates of 3.5% [2] Future Outlook - For fiscal year 2026, Darden forecasts revenue growth of 7% to 8%, including approximately 2% growth from an extra week in the year [3] - Adjusted earnings are expected to be in the range of $10.50 to $10.70 per share, including 20 cents related to the additional week [3] Brand Performance - Olive Garden, accounting for roughly 40% of Darden's quarterly revenue, reported same-store sales growth of 6.9%, exceeding expectations of 4.6% [5] - LongHorn Steakhouse's same-store sales increased by 6.7%, beating the anticipated growth of 5.3% [5] - The fine dining segment, including Ruth's Chris Steak House and The Capital Grille, experienced a same-store sales decline of 3.3%, compared to the expected decline of 0.2% [6] - The remaining segment, which includes Cheddar's Scratch Kitchen and Yard House, saw same-store sales growth of 1.2%, slightly above estimates of 1.1% [6] Strategic Initiatives - Cheddar's Scratch Kitchen is piloting on-demand delivery through a partnership with Uber Direct in 10 of its restaurants [7] - Darden's board of directors authorized a $1 billion share repurchase program, replacing the previous authorization [7] Stock Performance - Darden Restaurants' stock has increased approximately 19% year-to-date [8]

[Fiscal 2025 Performance and 2026 Outlook](index=1&type=section&id=Darden%20Restaurants%20Reports%20Fiscal%202025%20Fourth%20Quarter%20and%20Full%20Year%20Results) [Fourth Quarter 2025 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202025%20Financial%20Highlights) In the fourth quarter of fiscal 2025, Darden reported a 10.6% increase in total sales to $3.3 billion, driven by a 4.6% rise in same-restaurant sales and contributions from the Chuy's acquisition, with adjusted diluted net earnings per share growing by 12.5% to $2.98 Q4 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Total Sales | $3.3 billion | +10.6% | | Adjusted Diluted EPS | $2.98 | +12.5% | | Reported Diluted EPS | $2.58 | 0.0% | | Blended Same-Restaurant Sales | +4.6% | N/A | Q4 2025 Same-Restaurant Sales by Brand | Brand | Same-Restaurant Sales Growth | | :--- | :--- | | Olive Garden | 6.9% | | LongHorn Steakhouse | 6.7% | | Fine Dining | (3.3)% | | Other Business | 1.2% | - Sales growth was primarily driven by a blended same-restaurant sales increase of **4.6%**, sales from the acquisition of 103 Chuy's restaurants, and 25 net new restaurants[4](index=4&type=chunk) - The company repurchased **$51 million** of its outstanding common stock during the quarter[4](index=4&type=chunk) [Full Year Fiscal 2025 Financial Highlights](index=1&type=section&id=Fiscal%202025%20Financial%20Highlights) For the full fiscal year 2025, total sales increased by 6.0% to $12.1 billion, supported by a 2.0% increase in same-restaurant sales, while adjusted diluted net earnings per share from continuing operations rose by 7.5% to $9.55 Fiscal Year 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Total Sales | $12.1 billion | +6.0% | | Adjusted Diluted EPS | $9.55 | +7.5% | | Reported Diluted EPS | $8.88 | +4.1% | | Blended Same-Restaurant Sales | +2.0% | N/A | Fiscal Year 2025 Same-Restaurant Sales by Brand | Brand | Same-Restaurant Sales Growth | | :--- | :--- | | Olive Garden | 1.7% | | LongHorn Steakhouse | 5.1% | | Fine Dining | (3.0)% | | Other Business | 0.2% | - CEO Rick Cardenas stated the company had a successful year due to adherence to its strategy, anchored in four competitive advantages and being 'brilliant with the basics'[3](index=3&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) For fiscal year 2025, Olive Garden and LongHorn Steakhouse were the primary drivers of profitability, with segment profits of $1.16 billion and $582.7 million, respectively, while the 'Other Business' segment, now including Chuy's, also saw significant growth Q4 Segment Performance ($ in millions) | Segment | Q4 2025 Sales | Q4 2024 Sales | Q4 2025 Profit | Q4 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Olive Garden | $1,381.0 | $1,277.5 | $328.4 | $291.4 | | LongHorn Steakhouse | $833.8 | $762.7 | $167.8 | $147.2 | | Fine Dining | $334.6 | $327.1 | $62.9 | $64.6 | | Other Business | $722.3 | $590.0 | $126.3 | $102.5 | Annual Segment Performance ($ in millions) | Segment | FY 2025 Sales | FY 2024 Sales | FY 2025 Profit | FY 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Olive Garden | $5,212.9 | $5,067.0 | $1,163.9 | $1,117.4 | | LongHorn Steakhouse | $3,025.5 | $2,806.2 | $582.7 | $516.8 | | Fine Dining | $1,304.8 | $1,291.5 | $242.5 | $245.0 | | Other Business | $2,533.5 | $2,225.3 | $397.4 | $340.3 | - The company changed its segment profit reporting to exclude pre-opening costs starting in Q4 2025, with prior year figures recast for comparability, and sales and profits from Chuy's are included in the Other Business segment[6](index=6&type=chunk) [Shareholder Returns and Capital Allocation](index=3&type=section&id=Shareholder%20Returns%20and%20Capital%20Allocation) Darden increased its quarterly dividend by 7.1% to $1.50 per share and authorized a new $1 billion share repurchase program, underscoring its commitment to delivering 10-15% total shareholder return - The Board of Directors declared a quarterly cash dividend of **$1.50** per share, a **7.1%** increase from the previous quarter[8](index=8&type=chunk) - A new share repurchase program was authorized, allowing the company to buy back up to **$1 billion** of its common stock with no expiration date[9](index=9&type=chunk) - During Q4, the company repurchased approximately **0.2 million** shares for a total of **$51 million**[9](index=9&type=chunk) [Fiscal 2026 Financial Outlook](index=3&type=section&id=Fiscal%202026%20Financial%20Outlook) For fiscal 2026, which includes a 53rd week, Darden projects total sales growth of 7% to 8% and same-restaurant sales growth of 2% to 3.5%, anticipating diluted net EPS between $10.50 and $10.70 Fiscal 2026 Projections | Metric | Projected Value | | :--- | :--- | | Total Sales Growth | 7% to 8% | | Same-Restaurant Sales Growth | 2% to 3.5% | | New Restaurant Openings | 60 to 65 | | Diluted Net EPS | $10.50 to $10.70 | | Total Capital Spending | $700 to $750 million | | Total Inflation | 2.5% to 3.0% | | Effective Tax Rate | ~13% | - The fiscal 2026 outlook includes an extra (53rd) week, which is expected to contribute approximately **2%** to total sales growth and **$0.20** to diluted net EPS[10](index=10&type=chunk)[15](index=15&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Consolidated Statements of Earnings](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS) For the twelve months ended May 25, 2025, Darden's sales increased to $12.08 billion from $11.39 billion in the prior year, with operating income rising to $1.36 billion and earnings from continuing operations reaching $1.05 billion, or $8.88 per diluted share Annual Earnings Summary (in millions, except per share data) | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Sales | $12,076.7 | $11,390.0 | | Operating Income | $1,362.3 | $1,314.2 | | Earnings from Continuing Operations | $1,051.0 | $1,030.5 | | Diluted EPS from Continuing Operations | $8.88 | $8.53 | Q4 Earnings Summary (in millions, except per share data) | Metric | Q4 2025 | Q4 2024 | | :--- | :--- | :--- | | Sales | $3,271.7 | $2,957.3 | | Operating Income | $382.8 | $395.4 | | Earnings from Continuing Operations | $304.0 | $310.0 | | Diluted EPS from Continuing Operations | $2.58 | $2.58 | [Consolidated Balance Sheets](index=10&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of May 25, 2025, Darden's total assets grew to $12.59 billion from $11.32 billion the previous year, primarily due to increases in Goodwill, Trademarks, and property, while total liabilities also increased to $10.28 billion from $9.08 billion Balance Sheet Summary (in millions) | Account | May 25, 2025 | May 26, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $240.0 | $194.8 | | Total current assets | $937.7 | $822.8 | | Total assets | $12,587.0 | $11,323.0 | | **Liabilities & Equity** | | | | Total current liabilities | $2,247.5 | $2,192.5 | | Long-term debt | $2,128.9 | $1,370.4 | | Total liabilities | $10,275.7 | $9,080.5 | | Total stockholders' equity | $2,311.3 | $2,242.5 | [Consolidated Statements of Cash Flows](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For fiscal year 2025, net cash from operating activities increased to $1.71 billion, with $1.28 billion used in investing activities, including $613.7 million for business acquisitions, and $385.8 million used in financing activities Annual Cash Flow Summary (in millions) | Activity | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,707.0 | $1,621.7 | | Net cash used in investing activities | $(1,278.3) | $(1,324.6) | | Net cash used in financing activities | $(385.8) | $(483.4) | | **Increase (decrease) in cash** | **$34.4** | **$(196.1)** | - Key uses of cash in financing activities for FY 2025 included **$658.5 million** for dividends and **$418.2 million** for common stock repurchases[32](index=32&type=chunk) - Investing activities were dominated by **$644.6 million** in property and equipment purchases and **$613.7 million** used for business acquisitions[32](index=32&type=chunk) [Reconciliation of GAAP to Non-GAAP Earnings](index=6&type=section&id=Non-GAAP%20Information) The company provides non-GAAP earnings to offer a clearer understanding of its core operating results, with Q4 2025 reported diluted EPS of $2.58 adjusted to $2.98 and full fiscal year 2025 reported EPS of $8.88 adjusted to $9.55 Q4 2025 EPS Reconciliation (per share) | Item | Value | | :--- | :--- | | Reported Diluted EPS | $2.58 | | Transaction/integration costs | +$0.04 | | Impairment on restaurant disposition | +$0.30 | | Restaurant closing costs | +$0.06 | | **Adjusted Diluted EPS** | **$2.98** | Full Year 2025 EPS Reconciliation (per share) | Item | Value | | :--- | :--- | | Reported Diluted EPS | $8.88 | | Transaction/integration costs | +$0.31 | | Impairment on restaurant disposition | +$0.30 | | Restaurant closing costs | +$0.06 | | **Adjusted Diluted EPS** | **$9.55** | - Adjustments in fiscal 2025 primarily relate to Chuy's transaction costs and impairment charges for **22** underperforming restaurants that were permanently closed[22](index=22&type=chunk) [Other Information](index=4&type=section&id=Other%20Information) [Company-Owned Restaurant Count](index=8&type=section&id=NUMBER%20OF%20COMPANY-OWNED%20RESTAURANTS) As of May 25, 2025, Darden operated a total of 2,159 restaurants, an increase from 2,031 in the prior year, primarily driven by the acquisition of 108 Chuy's locations and net new openings for LongHorn Steakhouse and The Capital Grille Restaurant Count by Brand | Brand | 5/25/2025 | 5/26/2024 | | :--- | :--- | :--- | | Olive Garden | 935 | 920 | | LongHorn Steakhouse | 591 | 575 | | Chuy's | 108 | — | | The Capital Grille | 71 | 66 | | **Total Darden** | **2,159** | **2,031** | [Corporate Information](index=4&type=section&id=Corporate%20Information) Darden will host an investor conference call on June 20, 2025, to discuss its financial results, and the Annual Meeting of Shareholders will be held virtually on September 17, 2025 - The company will host an investor conference call and slide presentation on **June 20, 2025**, at **8:30 am ET**[12](index=12&type=chunk) - The Annual Meeting of Shareholders is scheduled for **September 17, 2025**, in a virtual-only format[11](index=11&type=chunk)