Darden Restaurants, Inc. (NYSE:DRI) stock rose Thursday after the company posted solid second-quarter sales growth and reaffirmed full-year earnings guidance.
The company reported second-quarter adjusted earnings per share of $2.08, missing the analyst consensus estimate of $2.10.
Metrics
Quarterly sales of $3.102 billion (+7.3% year over year) outpaced the Street view of $3.071 billion.
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The firm said that the sales growth was driven by a blended same-restaurant sales increase of 4.3% and sales from 30 net new restaurants.
Consolidated Darden same-restaurant sales were driven by Olive Garden, which posted a 4.7% increase. LongHorn Steakhouse increased 5.9%, while Fine Dining grew 0.8%. Other Business posted a 3.1% same-restaurant sales gain.
“Our restaurant teams did a great job of being brilliant with the basics, driving record, or near-record, guest satisfaction scores across all our brands,” said Darden President & CEO Rick Cardenas.
Quarterly sales at Olive Garden stood at $1.362 billion, higher than $1.292 billion a year ago. LongHorn Steakhouse sales rose to $775.9 million from $710.1 million a year ago.
Darden’s board declared a quarterly cash dividend of $1.50 per share. The dividend is payable Feb. 2, 2026, to shareholders of record as of Jan. 9, 2026.
The company repurchased about 1.1 million shares for $222 million, leaving $643 million under its $1 billion authorization.
“Despite facing significant commodity headwinds, we leveraged our four competitive advantages to provide strong value for our guests and we made appropriate investments in the business to ensure long-term success,” Cardenas added.
Earnings Call Commentary
During the earnings conference call, Darden Restaurants said it saw record Thanksgiving reservations across its brands, with holiday bookings tracking strong.
Management noted that pricing trends have begun to improve in recent weeks, allowing the company to take some pricing coverage in the back half of the fiscal year, while the gap between pricing and inflation is expected to narrow by about half by the third quarter.
Executives also addressed shifting consumer behavior, saying the company continues to monitor the impact of GLP-1 usage, particularly on alcohol consumption, and highlighted that lighter-portion menu options are helping offset those changes.
Looking ahead, Darden acknowledged some macro uncertainty in the first half of the year but pointed to a potential boost to consumer spending from fiscal stimulus expected in early 2026.
Darden Restaurants said beef costs are expected to remain elevated into the third quarter, with some relief anticipated in the fourth quarter.
Despite the ongoing cost pressures, management said it expects fiscal third-quarter earnings per share to grow in the mid-single-digit range compared with last year.
Outlook
Darden Restaurants reaffirmed its fiscal 2026 adjusted EPS outlook of $10.50 to $10.70. The guidance compares with the analyst consensus estimate of $10.60.
Darden expects total sales growth of 8.5% to 9.3%, including about 2% from a 53rd week. It projects same-restaurant sales growth of 3.5% to 4.3%.
The company plans to open 65 to 70 new restaurants.
Darden Restaurants raised its fiscal 2026 sales outlook to $13.104 billion to $13.200 billion. The new range compares with the prior forecast of $12.983 billion to $13.104 billion and a Street estimate of $13.071 billion.
DRI Price Action: Darden Restaurants shares were up 1.51% at $192.39 at the time of publication on Thursday, according to Benzinga Pro data.
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