Darden Restaurants' Earnings Fall Short, Yet Sales Forecast Increases

Darden Restaurants, the parent company of Olive Garden, recently released their quarterly performance results, which demonstrated a blend of positive and negative outcomes. Influence from Olive Garden and LongHorn Steakhouse partly counterbalanced the underperforming fine-dining sector.

While adjusting its expectations for annual revenue growth upward, Darden confirmed its previous earnings predictions. This news led to a 6% decline in the company's stock during premarket trades.

The financial figures for the latest quarter showcased a net income of $257.8 million, translating to earnings of $2.19 for each share. This is a step up from the prior year's $207.2 million, or $1.74 per share.

When excluding extraordinary items like the gains from offloading Canadian Olive Garden locations and costs from some closures, the adjusted earnings per share stood at $1.97.

A significant increase of 10.4% brought net sales to $3.04 billion. This spike was fueled by Darden's strategic acquisition of Chuy's Tex Mex, finalized in the previous October.

The same-store sales, monitoring outlets operational for over one year, experienced a growth of 4.7%. However, these figures don't reflect Chuy's or Bahama Breeze, the latter of which is set for divestiture before the year's end.

For the fiscal year of 2026, Darden anticipates a revenue expansion ranging between 7.5% and 8.5%, an increase from the earlier forecast of 7% to 8% growth. Their adjusted earnings expectations remain at $10.50 to $10.70 per share.