Dec 18 (Reuters) - Darden Restaurants DRI.N raised its annual sales forecast on Thursday, betting on steady demand at its chains such as Olive Garden as its price restraint helps attract customers.
Shares of the parent of LongHorn Steakhouse rose about 5% in premarket trading after it also topped second-quarter sales expectations.
Darden, which runs full-service brands including Ruth's Chris Steak House, Cheddar's Scratch Kitchen and Yard House, has absorbed tariff-related cost pressure instead of raising prices as diners stay selective about restaurant spending.
The company now expects same-restaurant sales in fiscal 2026 to rise between 3.5% and 4.3%, up from its prior forecast of 2.5% to 3.5%.
Darden has fared better than other players such as McDonald's MCD.N and Mediterranean salad-bowl maker Cava CAVA.N during a tougher economic backdrop, even as higher beef costs have squeezed margins across the space.
The company reaffirmed its annual earnings per share forecast in the range of $10.50 to $10.70.
To drive demand, Darden expanded delivery through a partnership with Uber Direct, extended its "never-ending pasta bowl" promotion and added new menu items.
Same-store sales at its flagship Olive Garden rose 4.7% in the quarter, while LongHorn Steakhouse posted a 5.9% increase, fueled by menu innovation and value-focused promotions aimed at middle-income diners.
Overall same-store sales increased 4.3% in the second quarter, beating analysts' estimates for a 2.9% rise, according to data compiled by LSEG.
Darden posted earnings per share of $2.08 from continuing operations for the quarter ended November 23, compared with analysts' estimate of $2.10.
(Reporting by Sanskriti Shekhar and Savyata Mishra in Bengaluru; Editing by Tasim Zahid)
((Sanskriti.Shekhar@thomsonreuters.com))
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