Core Insights - Darden Restaurants, known for Olive Garden, operates a total of 10 restaurant concepts, including LongHorn Steakhouse and Yard House, which diversifies its portfolio and enhances its market presence [1] Company Overview - Darden Restaurants is a significant player in the restaurant industry, owning multiple brands that cater to different dining preferences, thus providing a broad customer base [1] Investment Perspective - The company is viewed as a long-term investment opportunity, with a focus on growth potential and valuation metrics within the restaurant sector [1]

Company Overview - Darden Restaurants, Inc. (DRI) has a market cap of $22.5 billion and operates over 1,700 locations in North America under brands like Olive Garden and LongHorn Steakhouse [1][2] Stock Performance - Darden's shares have decreased 16.4% over the past three months, underperforming the Consumer Discretionary Select Sector SPDR Fund (XLY), which increased by 14.7% in the same period [3] - Year-to-date, DRI stock is down slightly, while XLY has risen by 7.6% [4] - Over the past 52 weeks, Darden's shares gained 8.1%, compared to XLY's 22.5% return [4] Recent Financial Results - In Q1 2026, Darden reported adjusted EPS of $1.97, missing Wall Street estimates, while quarterly sales of $3.04 billion met forecasts [5] - Operating costs surged by 8.8% to $2.71 billion, influenced by higher ingredient and marketing expenses [5] - Management raised its annual sales growth outlook to 7.5% - 8.5%, but the midpoint fell slightly below analysts' expectations, affecting investor sentiment [5] Competitive Landscape - Rival Yum! Brands, Inc. (YUM) has outperformed DRI, with shares increasing by 11.5% over the past 52 weeks and 8.9% year-to-date [6] - Despite Darden's underperformance, analysts maintain a "Moderate Buy" consensus rating, with a mean price target of $234.64, indicating a potential upside of 26.2% from current levels [6]

Core Insights - Darden Restaurants Inc. (NYSE:DRI) experienced a significant decline of 7.69% on Thursday, closing at $192.74, following a miss on analyst earnings estimates for Q1 of fiscal year 2026 [1][2] - The company reported earnings per share of $1.97, falling short of the expected $2.00 [1][2] Financial Performance - Net income for Darden Restaurants increased by 24% to $257.8 million, up from $207.2 million in the same period last year [2] - Sales rose by 10.4% to $3.04 billion, compared to $2.76 billion year-on-year, driven 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] Management Commentary - The President and CEO of Darden Restaurants, Rick Cardenas, stated that the company had a strong start to the fiscal year, with same-restaurant sales and earnings growth exceeding expectations [3] - Cardenas emphasized that the strength of the results reflects the effectiveness of the company's strategy, which focuses on operational excellence and leveraging competitive advantages for long-term success [4]

Core Viewpoint - Darden Restaurants, Inc. is facing mixed sentiments ahead of its fiscal 2026 first-quarter earnings report, with a recommendation to buy shares cautiously before the results are announced [1][2]. Group 1: Company Overview - Darden Restaurants, Inc. operates a network of full-service restaurants in the U.S. and Canada, owning popular brands such as Olive Garden and LongHorn Steakhouse [2]. - The company has a history of strong financial performance, with recent quarters showing consistent results [2]. Group 2: Market Sentiment and Recommendations - Jim Cramer noted that the restaurant sector has recently fallen out of favor, suggesting a cautious approach to investing in Darden [1]. - Cramer advised potential investors to consider buying shares of Olive Garden ahead of the earnings report, with a strategy to increase holdings if the stock price declines post-results [1]. - The company is recognized for its solid dividend, which adds to its appeal despite the unpredictability in the restaurant industry [1]. Group 3: Future Outlook - Darden's management provided a positive full-year forecast during a recent conference call, indicating confidence in the company's future performance [2]. - CEO Rick Cardenas introduced a new five-year plan that was well-received, suggesting a strategic direction that could enhance long-term growth [2].

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]

Core Insights - Darden Restaurants, Inc. reported first-quarter fiscal 2026 results with earnings missing estimates but revenues exceeding expectations, leading to an 8% decline in stock price during pre-market trading [1] Financial Performance - Adjusted earnings per share (EPS) for the fiscal first quarter were $1.97, below the Zacks Consensus Estimate of $2.00, compared to $1.75 in the prior-year quarter [2] - Total sales reached $3,044.7 million, surpassing the consensus mark of $3,040 million, reflecting a 10.4% increase from the previous year, supported by a 4.7% increase in same-restaurant sales [3] Segment Performance - Sales at Olive Garden increased 7.6% year over year to $1.3 billion, matching estimates, with same-restaurant sales up 5.9% [4] - LongHorn Steakhouse saw an 8.8% year-over-year sales increase to $776.4 million, though below the estimate of $811.5 million, with comps rising 5.5% [5] - Fine Dining segment sales rose 2.7% to $286.5 million, slightly above the estimate of $285 million, but comps fell 0.2% [5] - Other Business segment sales surged 22.5% year over year to $680.7 million, exceeding the estimate of $628.5 million, with comps up 3.3% [6] Operating Costs - Total operating costs and expenses increased 8.8% year over year to $2.7 billion, primarily due to higher food and beverage expenses, labor costs, and marketing expenses, missing the projection of $2.72 billion [7] Balance Sheet - As of August 24, 2025, cash and cash equivalents were $211 million, down from $240 million as of May 25, 2025, while inventories decreased slightly to $309.6 million [8] Future Outlook - For fiscal 2026, Darden raised its total sales growth outlook to 7.5% to 8.5%, including approximately 2% growth related to the 53rd week, with same-restaurant sales growth anticipated between 2.5% to 3.5% [11] - The company plans to open approximately 65 net new restaurants and allocate $700-$750 million for capital spending in fiscal 2026 [12]

Core Insights - Darden Restaurants Inc reported earnings of $1.97 per share, missing expectations, while revenue of $3.04 billion met forecasts, leading to a 9.7% drop in shares to $188.61 [1] - The company experienced strong same-store sales growth across its portfolio but faced challenges in the fine dining segment due to rising costs [1] - Despite the current struggles, Darden raised its 2026 forecast, indicating confidence in a potential rebound [1] Stock Performance - If the current trend continues, the stock will log its fifth consecutive daily loss and the steepest post-earnings drop in at least nine quarters, reaching its lowest levels since April [2] - Year-to-date, the stock is up 1.3% and reached an all-time high in June, but is now relying on its 320-day moving average to prevent further losses [2] Analyst Sentiment - Analysts remain bullish, with 18 out of 29 brokerages maintaining a "buy" or better rating, while 11 have a "hold" rating [3] - Following the earnings report, there was a significant number of price-target adjustments, but the 12-month consensus price target stands at $232.94, indicating a substantial premium to current levels [3] Options Market Activity - In the options market, sentiment is leaning bearish, with 7,865 puts traded compared to 1,885 calls, and overall volume at 24 times the average intraday amount [4] - The most active contracts include the monthly September puts with strike prices of 200, 195, 190, and 185, with new positions being opened at the last [4]

Financial Performance - Darden Restaurants reported revenue of $3.04 billion for the quarter ended August 2025, reflecting a year-over-year increase of 10.4% [1] - Earnings per share (EPS) for the quarter was $1.97, up from $1.75 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate by 0.17%, while the EPS fell short of the consensus estimate of $2.00 by 1.5% [1] Key Metrics - Total company-owned restaurants stood at 2,165, slightly below the average estimate of 2,167 by nine analysts [4] - Same-restaurant sales for LongHorn Steakhouse increased by 5.5%, compared to the average estimate of 5.8% [4] - Same-restaurant sales for Olive Garden rose by 5.9%, slightly below the average estimate of 6.1% [4] - Consolidated same-restaurant sales increased by 4.7%, surpassing the average estimate of 4.4% [4] Sales Breakdown - Olive Garden generated sales of $1.3 billion, close to the average estimate of $1.31 billion, marking a year-over-year increase of 7.6% [4] - Other Business sales reached $680.7 million, exceeding the average estimate of $664.65 million, representing a year-over-year change of 22.5% [4] - Fine Dining sales were reported at $286.5 million, slightly below the average estimate of $289.03 million, with a year-over-year increase of 2.7% [4] - LongHorn Steakhouse sales amounted to $776.4 million, compared to the average estimate of $782.66 million, reflecting an 8.8% year-over-year increase [4] Stock Performance - Darden Restaurants' shares returned +0.6% over the past month, while the Zacks S&P 500 composite increased by +2.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Darden Restaurants reported mixed quarterly results, with Olive Garden and LongHorn Steakhouse performing well, offsetting weaknesses in the fine-dining segment [1] - The company raised its full-year revenue growth forecast while maintaining its earnings projections, leading to a 6% drop in shares during premarket trading [1] Financial Performance - Darden's fiscal first-quarter net income was $257.8 million, or $2.19 per share, an increase from $207.2 million, or $1.74 per share, year-over-year [2] - Adjusted earnings per share, excluding certain gains and costs, were $1.97, slightly below the expected $2 [5] Sales and Growth Metrics - Net sales increased by 10.4% to $3.04 billion, driven by the acquisition of Chuy's Tex Mex restaurants [3] - Same-store sales rose by 4.7% in the quarter, not including Chuy's or Bahama Breeze locations, which are expected to be divested [3] Future Projections - For fiscal 2026, Darden projects revenue growth of 7.5% to 8.5%, an increase from the previous forecast of 7% to 8% [4] - The company reiterated its adjusted earnings forecast in the range of $10.50 to $10.70 per share [4]

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].