Darden Restaurants (NYSE:DRI) Issues Earnings Results

Darden Restaurants (NYSE:DRI) released its 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 company had revenue of $3.20 billion during the quarter, compared to the consensus estimate of $3.21 billion. Darden Restaurants had a return on equity of 58.64% and a net margin of 8.85%.Darden Restaurants’s revenue was up 5.1% compared to the same quarter last year. During the same period in the previous 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 Stock Down 1.5%

Shares of DRI traded down $2.97 during mid-day trading on Monday, reaching $196.78. 579,839 shares of the stock traded hands, compared to its average volume of 1,340,081. Darden Restaurants has a 12-month low of $169.00 and a 12-month high of $229.76. The firm has a market cap of $22.45 billion, a price-to-earnings ratio of 19.23, a P/E/G ratio of 1.88 and a beta of 0.60. The company has a quick ratio of 0.20, a current ratio of 0.30 and a debt-to-equity ratio of 0.79. The stock has a fifty day simple moving average of $212.04 and a 200 day simple moving average of $204.74.

Darden Restaurants Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Monday, November 2nd. Investors of record on Friday, October 9th will be given a dividend of $1.62 per share. The ex-dividend date of this dividend is Friday, October 9th. This represents a $6.48 annualized dividend and a yield of 3.3%. Darden Restaurants’s payout ratio is 63.34%.

Wall Street Analysts Forecast Growth

DRI has been the subject of a number of research reports. Evercore cut shares of Darden Restaurants from an “outperform” rating to an “in-line” rating and set a $230.00 price target for the company. in a research report on Tuesday, June 23rd. BMO Capital Markets lowered their target price on shares of Darden Restaurants from $225.00 to $220.00 and set a “market perform” rating on the stock in a report on Friday. Robert W. Baird upgraded Darden Restaurants from a “neutral” rating to an “outperform” rating and increased their price objective for the stock from $220.00 to $250.00 in a research report on Monday, August 24th. Bank of America boosted their price target on Darden Restaurants from $272.00 to $276.00 and gave the stock a “buy” rating in a research note on Friday, June 5th. Finally, Seaport Research Partners initiated coverage on shares of Darden Restaurants in a report on Wednesday, September 16th. They set a “buy” rating and a $240.00 target price for the company. Eighteen analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. According to MarketBeat, Darden Restaurants currently has an average rating of “Moderate Buy” and a consensus price target of $232.38.

Insider Buying and Selling

In related news, insider Laura Williamson sold 1,110 shares of Darden Restaurants stock in a transaction on Friday, July 31st. The shares were sold at an average price of $204.32, for a total value of $226,795.20. Following the completion of the sale, the insider owned 10,754 shares in the company, valued at approximately $2,197,257.28. The trade was a 9.36% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider John Wilkerson sold 8,864 shares of the company’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $208.33, for a total transaction of $1,846,637.12. Following the completion of the sale, the insider owned 18,794 shares in the company, valued at approximately $3,915,354.02. This trade represents a 32.05% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 70,185 shares of company stock worth $14,636,984 over the last 90 days. 0.67% of the stock is currently owned by corporate insiders.

About Darden Restaurants

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.