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Darden Q1 Earnings Miss Estimates, Revenues Top, Stock Down
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Key Takeaways
{\"0\":\"DRI posted Q1 EPS of $1.97, below estimates, though sales rose 10.4% to $3.04B.\\r\\n\",\"1\":\"Same-restaurant sales grew 4.7%, led by Olive Garden and LongHorn Steakhouse gains.\\r\\n\",\"2\":\"For fiscal 2026, DRI raised sales growth outlook to 7.5-8.5% and sees up to 65 new restaurants.\\r\\n\"}
Darden Restaurants, Inc. ((DRI - Free Report) ) reported first-quarter fiscal 2026 results, with earnings missing the Zacks Consensus Estimate, but revenues beat the same. Following the results, the stock declined 8% in today’s pre-market trading session.
DRI’s Fiscal Q1 Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.97, missing the Zacks Consensus Estimate of $2.00. In the prior-year quarter, DRI reported an adjusted EPS of $1.75.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Total sales during the quarter were $3,044.7 million, surpassing the consensus mark of $3,040 million. Sales increased 10.4% from the prior-year quarter’s level. This upside was backed by a blended same-restaurant sales increase of 4.7%. Also, contributions from 103 Chuy's restaurants and 22 net new restaurants added to the positives.
DRI’s Sales by Segments
Darden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's, and Other Business.
During the fiscal first quarter, sales at Olive Garden increased 7.6% year over year to $1.3 billion. Our estimate for the metric was $1.3 billion. Comps in the segment increased 5.9% year over year compared with a 6.9% rise reported in the previous quarter.
At LongHorn Steakhouse, sales were up 8.8% year over year to $776.4 million. Our estimate for the metric was $811.5 million. Comps in the segment rose 5.5% year over year compared with 6.7% growth reported in the previous quarter.
Sales in Fine Dining increased 2.7% year over year to $286.5 million. Our estimate for the metric was $285 million. Comps in the segment fell 0.2% year over year compared with a 3.3% drop reported in the previous quarter.
Sales in Other Business increased 22.5% year over year to $680.7 million. Our estimate for the metric was $628.5 million. Comps in the Other Business rose 3.3% year over year compared with a 1.2% rise reported in the previous quarter.
DRI’s Q1 Operating Highlights
In the fiscal first quarter, total operating costs and expenses inched up 8.8% year over year to $2.7 billion. The upside was primarily due to increased food and beverage expenses, restaurant expenses, labor costs and marketing expenses. The figure missed our projection of $2.72 billion.
DRI’s Balance Sheet
As of Aug. 24, 2025, cash and cash equivalents were $211 million compared with $240 million as of May 25, 2025.
During the fiscal first quarter, inventories were $309.6 million compared with $311.6 million reported in the previous quarter. As of Aug. 24, 2025, long-term debt was $2.13 billion compared with $2.12 billion as of May 25, 2025.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 0.9 million shares of its common stock, worth approximately $183 million.
Darden’s Fiscal 2026 Outlook
For fiscal 2026, the company expects total sales growth of 7.5% to 8.5% (compared with the prior estimate of 7% to 8%), including approximately 2% growth related to the 53rd week. Same-restaurant sales growth in fiscal 2026 is anticipated to be between 2.5% to 3.5% year over year, compared with the earlier estimate of 2% to 3.5%. Adjusted diluted EPS from continuing operations continues to be anticipated in the band of $10.50-$10.70.
The company expects to open approximately 65 net new restaurants and a total capital spending of $700-$750 million in fiscal 2026.
The company delivered a trailing four-quarter earnings surprise of 30.9%, on average. BJ's Restaurants stock has gained 23.1% in the year-to-date period. The Zacks Consensus Estimate for BJ's Restaurants' 2025 sales and EPS indicates growth of 3.1% and 21.1%, respectively, from the year-ago period’s levels.
Groupon sports a Zacks Rank of #1 at present. The company delivered a trailing four-quarter earnings surprise of 230.5%, on average. Groupon stock has surged 101.7% year to date.
The Zacks Consensus Estimate for Groupon’s 2025 sales and EPS indicates growth of 2.2% and 153%, respectively, from the prior-year levels.
Dutch Bros presently carries a Zacks Rank #2 (Buy). The stock has inched up 10.6% in the year-to-date period. Dutch Bros delivered a trailing four-quarter earnings surprise of 91.9%, on average.
The Zacks Consensus Estimate for Dutch Bros’ 2025 sales and EPS implies growth of 25% and 38.8%, respectively, from the year-ago levels.
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Darden Q1 Earnings Miss Estimates, Revenues Top, Stock Down
Key Takeaways
Darden Restaurants, Inc. ((DRI - Free Report) ) reported first-quarter fiscal 2026 results, with earnings missing the Zacks Consensus Estimate, but revenues beat the same. Following the results, the stock declined 8% in today’s pre-market trading session.
DRI’s Fiscal Q1 Earnings & Revenues
During the fiscal first quarter, Darden reported adjusted earnings per share (EPS) of $1.97, missing the Zacks Consensus Estimate of $2.00. In the prior-year quarter, DRI reported an adjusted EPS of $1.75.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. Quote
Total sales during the quarter were $3,044.7 million, surpassing the consensus mark of $3,040 million. Sales increased 10.4% from the prior-year quarter’s level. This upside was backed by a blended same-restaurant sales increase of 4.7%. Also, contributions from 103 Chuy's restaurants and 22 net new restaurants added to the positives.
DRI’s Sales by Segments
Darden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's, and Other Business.
During the fiscal first quarter, sales at Olive Garden increased 7.6% year over year to $1.3 billion. Our estimate for the metric was $1.3 billion. Comps in the segment increased 5.9% year over year compared with a 6.9% rise reported in the previous quarter.
At LongHorn Steakhouse, sales were up 8.8% year over year to $776.4 million. Our estimate for the metric was $811.5 million. Comps in the segment rose 5.5% year over year compared with 6.7% growth reported in the previous quarter.
Sales in Fine Dining increased 2.7% year over year to $286.5 million. Our estimate for the metric was $285 million. Comps in the segment fell 0.2% year over year compared with a 3.3% drop reported in the previous quarter.
Sales in Other Business increased 22.5% year over year to $680.7 million. Our estimate for the metric was $628.5 million. Comps in the Other Business rose 3.3% year over year compared with a 1.2% rise reported in the previous quarter.
DRI’s Q1 Operating Highlights
In the fiscal first quarter, total operating costs and expenses inched up 8.8% year over year to $2.7 billion. The upside was primarily due to increased food and beverage expenses, restaurant expenses, labor costs and marketing expenses. The figure missed our projection of $2.72 billion.
DRI’s Balance Sheet
As of Aug. 24, 2025, cash and cash equivalents were $211 million compared with $240 million as of May 25, 2025.
During the fiscal first quarter, inventories were $309.6 million compared with $311.6 million reported in the previous quarter. As of Aug. 24, 2025, long-term debt was $2.13 billion compared with $2.12 billion as of May 25, 2025.
During the fiscal first quarter, Darden’s board of directors repurchased approximately 0.9 million shares of its common stock, worth approximately $183 million.
Darden’s Fiscal 2026 Outlook
For fiscal 2026, the company expects total sales growth of 7.5% to 8.5% (compared with the prior estimate of 7% to 8%), including approximately 2% growth related to the 53rd week. Same-restaurant sales growth in fiscal 2026 is anticipated to be between 2.5% to 3.5% year over year, compared with the earlier estimate of 2% to 3.5%. Adjusted diluted EPS from continuing operations continues to be anticipated in the band of $10.50-$10.70.
The company expects to open approximately 65 net new restaurants and a total capital spending of $700-$750 million in fiscal 2026.
DRI’s Zacks Rank
Darden currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the Zacks Retail-Wholesale sector are BJ's Restaurants, Inc. ((BJRI - Free Report) ), Groupon, Inc. ((GRPN - Free Report) ) and Dutch Bros Inc. ((BROS - Free Report) ).
BJ's Restaurants currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
The company delivered a trailing four-quarter earnings surprise of 30.9%, on average. BJ's Restaurants stock has gained 23.1% in the year-to-date period. The Zacks Consensus Estimate for BJ's Restaurants' 2025 sales and EPS indicates growth of 3.1% and 21.1%, respectively, from the year-ago period’s levels.
Groupon sports a Zacks Rank of #1 at present. The company delivered a trailing four-quarter earnings surprise of 230.5%, on average. Groupon stock has surged 101.7% year to date.
The Zacks Consensus Estimate for Groupon’s 2025 sales and EPS indicates growth of 2.2% and 153%, respectively, from the prior-year levels.
Dutch Bros presently carries a Zacks Rank #2 (Buy). The stock has inched up 10.6% in the year-to-date period. Dutch Bros delivered a trailing four-quarter earnings surprise of 91.9%, on average.
The Zacks Consensus Estimate for Dutch Bros’ 2025 sales and EPS implies growth of 25% and 38.8%, respectively, from the year-ago levels.