Darden Restaurants (DRI) Q1 2026 Earnings Report
- Olive Garden and LongHorn Steakhouse performance buoyed Darden Restaurants, but a weaker fine-dining segment and lower-then-expected earnings per share sent shares tumbling.
- Darden Restaurants, the parent company of Olive Garden, LongHorn Steakhouse, and othre restaurant chains, reported mixed results for its fiscal first quarter on Thursday.
- The company's net income for the quarter reached $257.8 million,or $2.19 per share, a meaningful increase from $207.2 million, or $1.74 per share, in the same period last...
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Darden Restaurants Reports Mixed Results, Raises Revenue Outlook
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Olive Garden and LongHorn Steakhouse performance buoyed Darden Restaurants, but a weaker fine-dining segment and lower-then-expected earnings per share sent shares tumbling. The company increased its full-year revenue growth forecast, signaling continued optimism despite short-term headwinds.
Key Takeaways
Darden Restaurants, the parent company of Olive Garden, LongHorn Steakhouse, and othre restaurant chains, reported mixed results for its fiscal first quarter on Thursday. While revenue met expectations at $3.04 billion, adjusted earnings per share (EPS) came in at $1.97, falling short of the $2.00 anticipated by analysts surveyed by LSEG. This discrepancy triggered a more than 9% drop in the company’s stock price during morning trading.
The company’s net income for the quarter reached $257.8 million,or $2.19 per share, a meaningful increase from $207.2 million, or $1.74 per share, in the same period last year. However, this figure includes gains from the sale of Canadian Olive Garden restaurants and excludes costs associated with restaurant closures.
Financial Performance Breakdown
net sales increased by 10.4% to $3.04 billion, largely driven by the recent acquisition of Chuy’s Tex Mex restaurants in October 2023. Same-store sales, a crucial metric for established restaurants, rose 4.7% during the quarter. Notably, this figure excludes both Chuy’s and Bahama Breeze locations, as the latter is slated for divestiture before the end of the fiscal year.
| Metric | Actual | Expected |
|---|---|---|
| Earnings Per Share (Adjusted) | $1.97 | $2.00 |
| Revenue | $3.04 Billion | $3.04 Billion |
| Same-store Sales Growth | 4.7% | N/A |
Segment Performance: A Tale of Two Sides
The strong performance of olive Garden and LongHorn Steakhouse was a key driver of Darden’s overall revenue growth. Olive Garden, in particular, benefited from successful promotional campaigns and a continued focus on value. LongHorn Steakhouse saw increased demand for its steak entrees and a positive response to menu innovations.
However,Darden’s fine-dining segment experienced weakness,impacting overall profitability. The company did not provide specific details on the underperforming brands, but analysts speculate that higher prices and a shift in consumer spending towards more affordable options contributed to the slowdown.This highlights a growing trend in the restaurant industry: consumers are becoming more price-sensitive.
Outlook and Strategic Initiatives
Despite the mixed quarterly results, Darden Restaurants raised its