Darden Restaurants (NYSE:DRI) Issues Earnings Results, Hits Expectations

Darden Restaurants (NYSE:DRI) announced its quarterly earnings results on Thursday. The restaurant operator reported $2.05 earnings per share for the quarter, meeting the consensus estimate of $2.05, Zacks reports. The business had revenue of $3.20 billion during the quarter, compared to analysts’ expectations of $3.21 billion. Darden Restaurants had a net margin of 8.85% and a return on equity of 58.64%. The firm’s revenue for the quarter was up 5.1% compared to the same quarter last year. During the same quarter in the prior year, the company posted $1.97 EPS. Darden Restaurants updated its FY 2027 guidance to 11.100-11.350 EPS.

Here are the key takeaways from Darden Restaurants’ conference call:

• Solid first-quarter performance: Darden generated $3.2 billion in sales, up 5.1%, while comparable-calendar same-restaurant sales rose 3.2% and adjusted EPS increased 4.1% to $2.05. Management reaffirmed its fiscal 2027 EPS outlook of $11.10–$11.35.
• LongHorn and Yard House led growth: LongHorn Steakhouse posted 6.8% same-restaurant sales growth and its 22nd consecutive positive-comp quarter, while Yard House grew 10%. Darden plans 13 Yard House openings this year and expects higher-single-digit annual unit growth for the brand over time.
• Olive Garden trends improved but remain an opportunity: The brand’s comparable sales increased 1%, pressured by World Cup comparisons, lettuce concerns, lighter-portion mix, and lapping prior promotions. Management said traffic improved through the quarter and early results from the Never-Ending Pasta Bowl were better than expected, while renewed lunch marketing and new value platforms are intended to drive growth.
• Margins faced cost and investment pressures: Consolidated restaurant-level EBITDA margin was flat at 18.8%, with food and beverage costs up 30 basis points and additional investment at Olive Garden. Bahama Breeze closures also weighed on the other-business segment, whose margin declined 30 basis points to 15.8%.
• Costs and calendar timing remain watch items: Darden expects approximately 3% commodity inflation for the year, including low-single-digit beef inflation, and noted potential fuel-surcharge exposure of roughly 10–15 basis points under elevated diesel prices. Thanksgiving’s shift into the fiscal second quarter is expected to reduce Q2 sales by about 1%, with an offsetting benefit in Q3.

Darden Restaurants Trading Down 3.8%

NYSE:DRI opened at $199.42 on Friday. The company has a 50-day moving average price of $212.04 and a 200-day moving average price of $204.72. Darden Restaurants has a 12 month low of $169.00 and a 12 month high of $229.76. The company has a current ratio of 0.30, a quick ratio of 0.21 and a debt-to-equity ratio of 0.79. The stock has a market cap of $22.75 billion, a price-to-earnings ratio of 19.49, a P/E/G ratio of 1.95 and a beta of 0.60.

Darden Restaurants Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Monday, November 2nd. Shareholders of record on Friday, October 9th will be issued a $1.62 dividend. The ex-dividend date is Friday, October 9th. This represents a $6.48 annualized dividend and a yield of 3.2%. Darden Restaurants’s dividend payout ratio is 62.43%.

Insider Activity

In other Darden Restaurants news, insider Laura B. Williamson sold 443 shares of the firm’s stock in a transaction dated Friday, July 31st. The shares were sold at an average price of $204.89, for a total value of $90,766.27. Following the completion of the sale, the insider directly owned 5,536 shares in the company, valued at $1,134,271.04. This trade represents a 7.41% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at this link. Also, SVP Susan M. Connelly sold 2,226 shares of the firm’s stock in a transaction dated Wednesday, July 29th. The stock was sold at an average price of $208.17, for a total transaction of $463,386.42. Following the completion of the sale, the senior vice president owned 4,165 shares of the company’s stock, valued at $867,028.05. This trade represents a 34.83% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 70,185 shares of company stock worth $14,636,984. 0.67% of the stock is owned by company insiders.

Wall Street Analyst Weigh In

A number of research firms have issued reports on DRI. Citigroup decreased their price objective on shares of Darden Restaurants from $248.00 to $247.00 and set a “buy” rating on the stock in a research report on Friday. Oppenheimer raised their target price on Darden Restaurants from $235.00 to $245.00 and gave the stock an “outperform” rating in a research note on Tuesday, September 15th. BMO Capital Markets reduced their price target on Darden Restaurants from $225.00 to $220.00 and set a “market perform” rating on the stock in a report on Friday. BTIG Research reaffirmed a “buy” rating and set a $235.00 price target on shares of Darden Restaurants in a research report on Friday. Finally, Guggenheim reaffirmed a “buy” rating and set a $235.00 price target on shares of Darden Restaurants in a research report on Friday. Eighteen research analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $232.38.

Trending Headlines about Darden Restaurants

Here are the key news stories impacting Darden Restaurants this week:

• Positive Sentiment: Fiscal 2027 first-quarter revenue rose 5.1% year over year to $3.20 billion, while blended same-restaurant sales increased 3.1%. LongHorn Steakhouse and Yard House were cited as stronger performers, and management said it continues to gain market share. Darden revenue rises but misses estimates in fiscal first quarter
• Positive Sentiment: Darden reaffirmed fiscal 2027 adjusted EPS guidance of $11.10–$11.35 and maintained its broader full-year outlook. The company also highlighted plans for 13 new Yard House locations, supporting its longer-term growth strategy. Darden reaffirms fiscal 2027 guidance
• Positive Sentiment: Darden declared a quarterly dividend of $1.62 per share, equal to $6.48 annually and an approximately 3.1% yield. Analysts at Mizuho, Bernstein, Guggenheim and BTIG remained constructive, with price targets generally above the current trading level.
• Neutral Sentiment: Shareholders approved the board and maintained the company’s existing governance structure, removing a potential source of uncertainty. Darden shareholders back board and governance status quo
• Negative Sentiment: Adjusted EPS of $2.05 was roughly in line with estimates but revenue narrowly missed forecasts of about $3.21 billion. Reported net income declined to approximately $233.4 million from $257.8 million a year earlier as higher food and labor expenses compressed profitability. Darden stock falls as Olive Garden reports slower growth
• Negative Sentiment: Olive Garden, Darden’s largest brand, delivered only 1.1% same-store sales growth, raising concerns about slowing customer traffic and consumer sensitivity in casual dining. Analysts also described the stock as fairly valued, limiting the upside from an otherwise resilient quarter. Darden is winning share but stock is fairly priced

Darden Restaurants Company Profile

Darden Restaurants, Inc (NYSE: DRI) is a full-service restaurant company headquartered in Orlando, Florida. It operates and franchises a portfolio of dining brands serving a range of cuisines, price points and occasions, with restaurants primarily located in the United States and select international markets.

Its restaurant portfolio includes Olive Garden, an Italian-American dining chain; LongHorn Steakhouse; Cheddar’s Scratch Kitchen; Yard House; The Capital Grille; Seasons 52; Bahama Breeze; Eddie V’s; Ruth’s Chris Steak House; and Chuy’s.