Darden Restaurants Inc. (NYSE: DRI), the parent company of Olive Garden and LongHorn Steakhouse, reported better-than-expected earnings and revenue for its fiscal fourth quarter on Friday. Despite signs of consumer pullback, the company remains optimistic, projecting continued growth into fiscal 2026, thanks in part to strategic acquisitions and robust performance from its core brands.
Strong Q4 Performance Surpasses Wall Street Estimates
Darden posted fiscal fourth-quarter adjusted earnings per share of $2.98, slightly exceeding analysts’ expectations of $2.97, according to LSEG. Revenue for the quarter reached $3.27 billion, topping the forecast of $3.26 billion.
The company reported net income of $303.8 million, or $2.58 per share, which matched earnings from the same quarter a year ago. However, when adjusted for acquisition-related expenses, particularly its recent Chuy’s Tex-Mex deal, the earnings per share stood at $2.98.
Net sales jumped 10.6% year-over-year, reaching $3.3 billion, bolstered by the addition of 103 Chuy’s locations and 25 newly opened restaurants across various brands.
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Same-Store Sales Growth Beats Expectations
Darden’s same-store sales rose 4.6%, exceeding the 3.5% estimate provided by StreetAccount. This solid performance underscores the brand’s ability to attract consistent customer traffic, even amid broader economic uncertainty.
Among its restaurant portfolio, Olive Garden and LongHorn Steakhouse were the standout performers:
- Olive Garden saw same-store sales climb 6.9%, outperforming analyst projections of 4.6%.
- LongHorn Steakhouse reported a 6.7% increase, ahead of the expected 5.3%.
CEO Rick Cardenas credited the success to Darden’s focus on value and customer experience. Notably, Olive Garden’s reintroduction of its popular “Buy One, Take One” promotion after a five-year hiatus was a major draw.
“Our consumers want to go out and spend their hard-earned money,” said Cardenas. “We think we’re taking some wallet share from fast food and fast casual.”
2026 Outlook: Revenue and Earnings Growth Ahead
For fiscal 2026, Darden projects 7% to 8% revenue growth, including about 2% from having an extra week in the fiscal year. Adjusted earnings are expected to range between $10.50 and $10.70 per share, which includes a $0.20 boost from the additional week.
This forward-looking optimism suggests that Darden believes its strategic initiatives—including expansion, digital enhancements, and marketing promotions—will continue to drive both traffic and profitability.
Mixed Results Across Other Restaurant Brands
While flagship brands performed well, other segments of Darden’s portfolio showed more modest or even negative results.
Fine Dining Segment Declines
The company’s fine dining arm—which includes Ruth’s Chris Steak House and The Capital Grille—posted a 3.3% drop in same-store sales, worse than the 0.2% decline analysts had forecast. CFO Raj Vennam acknowledged challenges in the high-end dining space but noted improvement in foot traffic from households earning more than $150,000 annually.
Cheddar’s and Yard House Show Modest Growth
The Other Business segment, which includes Cheddar’s Scratch Kitchen and Yard House, saw same-store sales increase by 1.2%, narrowly beating expectations of 1.1%.
In March, Cheddar’s became the second Darden brand (after Olive Garden) to pilot on-demand delivery through a partnership with Uber Direct. As of June, delivery is now available at all but eight Cheddar’s locations.
Bahama Breeze Faces Uncertain Future
Darden announced it closed 15 Bahama Breeze restaurants during the quarter. CEO Cardenas indicated the company is exploring “strategic alternatives” for the brand, including a potential sale or conversion of remaining locations into other Darden-owned concepts.
“Bahama Breeze is not a strategic priority for Darden,” Cardenas said. “It may thrive better under new ownership.”
Share Repurchase Plan Boosts Investor Confidence
Darden also unveiled a $1 billion share repurchase program on Wednesday. The plan has no expiration date and replaces the previous repurchase authorization, signaling strong financial health and commitment to shareholder value.
Following the announcement, Darden stock rose more than 1% on Friday. As of Wednesday’s market close, the stock had gained about 19% year-to-date.
Frequently Asked Questions
What were Darden Restaurants’ Q4 earnings per share?
Darden reported adjusted earnings of $2.98 per share for the fourth quarter, slightly above the Wall Street estimate of $2.97.
Which Darden brands performed best in Q4 2025?
Olive Garden and LongHorn Steakhouse were the top performers, with same-store sales rising 6.9% and 6.7%, respectively.
What drove Darden’s revenue growth in Q4?
Revenue increased due to strong performance from its core brands and the acquisition of 103 Chuy’s Tex-Mex restaurants, along with 25 net new store openings.
Why is Darden considering selling Bahama Breeze?
The brand is no longer a strategic priority, and management believes it could perform better under new ownership or as part of a different Darden brand.
What is Darden’s outlook for fiscal 2026?
Darden expects 7% to 8% revenue growth and adjusted earnings between $10.50 and $10.70 per share.
How is Darden addressing challenges in fine dining?
While fine dining sales declined, Darden noted improvement in guest traffic among high-income households and continues to optimize its offerings.
Is Darden expanding its delivery services?
Yes, Cheddar’s Scratch Kitchen has rolled out Uber Direct delivery to nearly all of its locations, following a successful pilot program.
Has Darden announced any stock buybacks?
Yes, the board authorized a new $1 billion share repurchase program, replacing the previous plan and demonstrating strong shareholder support.
Conclusion
Darden Restaurants delivered a solid financial performance in Q4, demonstrating resilience amid shifting consumer trends. The company’s ability to exceed earnings expectations and drive same-store sales growth—particularly at Olive Garden and LongHorn Steakhouse—reinforces its position as a leader in the casual dining sector.
With strong guidance for fiscal 2026, ongoing digital initiatives like Uber Direct integration, and a renewed commitment to shareholders through a $1 billion buyback program, Darden is clearly poised for continued growth.