Darden Restaurants surpassed Wall Street’s expectations for both earnings and revenue on Friday, while projecting robust growth for fiscal year 2026.
In premarket trading, Darden’s shares climbed more than 2% as investors reacted positively to the news.
The company’s reported figures compared to analysts’ predictions from LSEG are as follows:
- Earnings per share: $2.98 adjusted vs. $2.97 expected
- Revenue: $3.27 billion vs. $3.26 billion expected
For the fiscal fourth quarter, Darden recorded a net income of $303.8 million, or $2.58 per share, which parallels the previous year’s figures of $308.1 million and $2.58 per share.
When excluding acquisition-related expenses for Chuy’s Tex Mex, Darden’s earnings for the fourth quarter, which concluded on May 25, rose to $2.98 per share.
Net sales soared 10.6% to reach $3.3 billion, driven primarily by the addition of 103 Chuy’s restaurants along with 25 new restaurant openings.
The Orlando-based company also reported a same-store sales increase of 4.6%, surpassing expectations of 3.5%, according to StreetAccount.
Looking ahead to fiscal year 2026, Darden forecasts revenue growth between 7% and 8%, with approximately 2% attributed to an additional week in the fiscal year. The company anticipates adjusted earnings per share to range from $10.50 to $10.70, which includes an impact of 20 cents from the extra week.
Despite indications of a slowdown in consumer spending, Darden Restaurants CEO Rick Cardenas indicated during the third-quarter earnings call in March that dining out remains a favored choice for consumers wishing to indulge.
“Our strategy continues to be effective, and we will persist in executing it to foster growth and enhance long-term shareholder value,” Cardenas remarked in a statement released on Friday.
Darden’s flagship brands, Olive Garden and LongHorn Steakhouse, specifically demonstrated notable same-store sales growth, with Olive Garden, representing about 40% of Darden’s quarterly revenue, increasing by 6.9%—exceeding a 4.6% analyst projection. Meanwhile, LongHorn’s same-store sales grew by 6.7%, outpacing the predicted 5.3% growth.
However, the fine dining segment, which includes Ruth’s Chris Steak House and The Capital Grille, experienced a same-store sales decline of 3.3%, contrary to the expected slight drop of 0.2%.
Conversely, the remaining segment, encompassing Cheddar’s Scratch Kitchen and Yard House, enjoyed a same-store sales increase of 1.2%, slightly above the anticipated 1.1% growth.
In March, Cheddar’s Scratch Kitchen became the latest Darden brand, following Olive Garden, to test on-demand delivery through a collaboration with Uber Direct, piloting the service in ten of its restaurants.
Darden also revealed on Wednesday that its board of directors has authorized a $1 billion share repurchase program, which has no set expiration and replaces the previous authorization.
Year-to-date, Darden’s stock has appreciated by approximately 19%.
