Darden Restaurants, Inc.

What they do

Darden owns and operates full-service restaurants in the United States under brands including Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Chuy's, Seasons 52, Eddie V's, Bahama Breeze, and The Capital Burger. It also franchises restaurants in the U.S. and internationally, and operates four restaurants under contractual agreements. The company's largest brand by restaurant count is Olive Garden with 949 company-owned locations, followed by LongHorn Steakhouse with 618.

Revenue drivers

• Olive Garden — Largest brand; fiscal 2026 sales of $5.59B, up from $5.21B in fiscal 2025; same-restaurant sales increased 4.0% for the full year and 2.4% in Q4.
• LongHorn Steakhouse — Second-largest brand; Q4 sales of $1.02B and segment profit of $215.2M; same-restaurant sales increased 9.5% in Q4 and 7.2% for the full year.
• Fine Dining — Includes The Capital Grille, Seasons 52, Eddie V's, and Ruth's Chris; Q4 sales of $371.0M and segment profit of $69.0M; same-restaurant sales grew 1.9% in Q4.
• Other Business — Includes Chuy's, Yard House, Cheddar's, Bahama Breeze, and The Capital Burger; Q4 sales of $793.3M and segment profit of $142.1M; same-restaurant sales grew 4.6% (excluding Chuy's and Bahama Breeze).

Recent performance

For fiscal 2026 (ended May 31, 2026), Darden reported total sales of $13.21B, up 9.4% from $12.08B in fiscal 2025, driven by a 4.5% increase in same-restaurant sales, a 53rd week, and 43 net new restaurants. Diluted EPS from continuing operations was $10.44 reported and $10.64 adjusted, up 11.4% year-over-year. In Q4, total sales rose 13.7% to $3.72B, with same-restaurant sales up 4.6% and adjusted diluted EPS of $3.66, up 22.8%. Net income for the full year rose to $1.21B from $1.05B, and operating cash flow reached $1.85B.

Strategy

Management emphasizes consistent execution across brands and leveraging scale to drive same-restaurant sales growth. The company completed the sale of eight Olive Garden restaurants in Canada to Recipe Unlimited in July 2025, and announced in June 2025 a strategic review of Bahama Breeze, with all locations expected to be closed or converted to other brands between Q3 fiscal 2026 and Q4 fiscal 2027. Darden continues to integrate Chuy's, acquired in fiscal 2025, and repurchased $138 million of stock in Q4 fiscal 2026. The company also declared an increased quarterly dividend and authorized a new $1.5 billion share repurchase program.

Risks

• Cost inflation — Inflationary pressures on food, labor, health care, and utilities could compress margins if Darden cannot offset with price increases or productivity gains.
• Commodity price volatility — Darden is exposed to price changes in beef, pork, chicken, seafood, cheese, butter, and produce, which could be exacerbated by tariffs or trade disputes.
• Labor market and wage increases — Minimum wage increases in states and localities could materially increase labor costs.
• Brand transition risk — The planned closure or conversion of all Bahama Breeze locations involves impairment charges and could disrupt operations or customer loyalty.

Outlook

Management provided fiscal 2027 outlook in the June 2026 earnings release, expecting continued growth driven by brand strength and disciplined execution. The company aims to maintain positive same-restaurant sales across all brands and continue expanding its restaurant base. Darden also plans to execute its new $1.5 billion share repurchase program while supporting its increased dividend.