With a market cap of around $25.1 billion, Darden Restaurants, Inc. (DRI) is one of the largest full-service restaurant operators in the United States, best known for brands such as Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, and The Capital Grille. Headquartered in Orlando, Florida, the company operates and franchises hundreds of locations across North America. DRI stock has risen 7.6% over the past year, lagging the broader S&P 500 Index ($SPX) has rallied 14.4%. However, ...

Group 1 - Darden Restaurants, Inc. is recognized as a leading operator in the full-service dining industry, managing well-known brands such as Olive Garden, Ruth's Chris Steak House, and others [2] - The company has established a competitive advantage through operational excellence, scale, and prudent capital allocation, positioning itself as a category-defining enterprise in the restaurant sector [2] - Olive Garden's performance has been highlighted positively, contributing to Darden's status as a "retail winner" in the current economic landscape [1] Group 2 - Darden's portfolio includes a diverse range of restaurant concepts, which enhances its market presence and appeal to various consumer segments [2] - The company is noted for its ability to compound shareholder value, indicating a strong focus on long-term growth and profitability [2]

Sales Performance - Darden Restaurants reported sales of $3.1 billion for Q2 FY2026, marking a 7.3% increase from the previous year [1] - Same-store sales grew by 4.3%, driven by strong performance across major brands, with Olive Garden and LongHorn Steakhouse reporting increases of 4.7% and 5.9% respectively [1] Financial Results - The company achieved a net income of $237.2 million in Q2 FY2026, or $2.03 per share, compared to $215.7 million or $1.82 per share in the same quarter last year [2] - On an adjusted basis, diluted earnings from continuing operations were $2.08 per share, excluding costs related to restaurant closures and the acquisition of Chuy's [2] Future Outlook - Darden raised its full-year same-restaurant sales growth forecast to a range of 3.5% to 4.3%, up from a previous estimate of 2.5% to 3.5% [3] - The guidance for adjusted diluted earnings per share for FY2026 remains unchanged at $10.50 to $10.70 [3] Operational Insights - Darden's president and CEO noted that all segments delivered positive same-restaurant sales, exceeding top-line expectations [4] - The company has been enhancing delivery options through a partnership with Uber, utilizing Uber Direct's network for nationwide on-demand delivery for Olive Garden [5] - An on-demand delivery trial with Uber Technologies was initiated at Cheddar's Scratch Kitchen in March [6]

Core Insights - Darden Restaurants, Inc. plans to release its fiscal 2026 second quarter financial results on December 18, 2025, before the market opens [1] - A conference call will follow at 8:30 am ET, where CEO Rick Cardenas and senior management will discuss the results and answer questions [1] Company Overview - Darden Restaurants operates a diverse portfolio of restaurant brands, including Olive Garden, LongHorn Steakhouse, and Ruth's Chris Steak House, among others [1]

Company Overview - Darden Restaurants, Inc. (DRI) has a market cap of approximately $20 billion and operates over 1,700 restaurants across multiple brands in the U.S. and Canada, including Olive Garden, LongHorn Steakhouse, The Capital Grille, and Cheddar's Scratch Kitchen [1] Stock Performance - DRI shares have underperformed the broader market over the past 52 weeks, rising only 5.1% compared to a 14.5% increase in the S&P 500 Index [2] - Year-to-date, DRI shares are down 5.9%, while the S&P 500 has gained 16.5% [2] - The company has also lagged behind the Consumer Discretionary Select Sector SPDR Fund's 9.9% return over the same period [3] Recent Financial Results - On September 18, DRI shares fell 7.7% after reporting Q1 2026 adjusted EPS of $1.97, which missed Wall Street estimates [4] - Quarterly sales reached $3.04 billion, meeting forecasts, but operating costs surged 8.8% to $2.71 billion due to increased ingredient and marketing expenses [4] - Management raised its annual sales growth outlook to 7.5% - 8.5%, but the midpoint fell slightly below analysts' average expectations, negatively impacting investor sentiment [4] Earnings Expectations - For the fiscal year ending in May 2026, analysts project DRI's adjusted EPS to grow 11.1% year-over-year to $10.61 [5] - The company's earnings surprise history is mixed, with one beat and three misses in the last four quarters [5] - Among 30 analysts covering the stock, the consensus rating is a "Moderate Buy," consisting of 17 "Strong Buy" ratings, two "Moderate Buy," and 11 "Holds" [5] Analyst Ratings - The current analyst configuration is slightly more bullish than three months ago, with 16 "Strong Buy" ratings [6] - On September 19, BMO Capital lowered Darden's price target to $205 while maintaining a "Market Perform" rating [6]

Core Insights - Darden Restaurants, Inc. reported strong financial results for the first quarter of fiscal 2026, with total sales increasing by 10.4% to $3.0 billion, driven by a same-restaurant sales increase of 4.7% and contributions from acquisitions [2][6][7]. Financial Performance - Consolidated sales for Q1 2026 were $3,044.7 million, compared to $2,757.0 million in Q1 2025, reflecting a growth of 10.4% [4]. - Same-restaurant sales growth was reported at 4.7%, with Olive Garden and LongHorn Steakhouse showing increases of 5.9% and 5.5%, respectively [2][4]. - Adjusted diluted net earnings per share from continuing operations increased by 12.6% to $1.97, up from $1.75 in the prior year [7][19]. Segment Performance - Olive Garden generated sales of $1,301.1 million in Q1 2026, with a segment profit of $267.6 million, compared to $1,209.1 million and $250.1 million in Q1 2025 [4]. - LongHorn Steakhouse reported sales of $776.4 million and a segment profit of $134.9 million, up from $713.5 million and $128.4 million, respectively [4]. - The Fine Dining segment experienced a slight decline in profit, with a segment profit of $38.7 million compared to $38.9 million in the previous year [4]. Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $1.50 per share, payable on November 3, 2025 [5]. - During the quarter, the company repurchased approximately 0.9 million shares for a total of $183 million, with $865 million remaining under the current $1 billion repurchase authorization [8][7]. Future Outlook - The company updated its full-year financial outlook for fiscal 2026, projecting total sales growth of 7.5% to 8.5%, including approximately 2% growth related to the addition of a 53rd week [14]. - Same-restaurant sales growth is expected to be between 2.5% to 3.5%, with plans to open approximately 65 new restaurants [14].

Group 1 - Darden Restaurants, Inc. plans to release its fiscal 2025 fourth quarter financial results on June 20, 2025, before the market opens [1] - A conference call will follow at 8:30 am ET, where CEO Rick Cardenas and senior management will discuss the results and conduct a Q&A session [1] - A replay of the conference call will be available shortly after the live broadcast for those unable to listen [1] Group 2 - Darden operates a diverse portfolio of restaurant brands, including Olive Garden, LongHorn Steakhouse, and Ruth's Chris Steak House, among others [2] - The company emphasizes its differentiated brands as a key aspect of its business strategy [2]