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Darden's quarter was lifted by 4.6% same-restaurant sales growth, 43 net new restaurants and an extra week.
Darden expects fiscal 2027 sales of $13.60B-$13.75B and same-restaurant sales growth of 2.5-3.5%.
Darden Restaurants, Inc. (DRI - Free Report) reported fourth-quarter fiscal 2026 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. Following the results, the stock inched down 3.4% in today's pre-market trading session, likely reflecting the revenue miss and fiscal 2027 guidance that calls for moderating same-restaurant sales growth following the benefit of a 53rd week in fiscal 2026.
The quarter benefited from a blended same-restaurant sales increase of 4.6%, an extra week of operations and contributions from 43 net new restaurants.
DRI's Q4 Earnings & Revenues
During the fiscal fourth quarter, Darden reported adjusted earnings per share (EPS) of $3.66, which beat the Zacks Consensus Estimate of $3.63. In the prior-year quarter, DRI reported adjusted EPS of $2.98.
Darden Restaurants, Inc. Price, Consensus and EPS Surprise
Total sales during the quarter were $3.72 billion, missing the consensus mark of $3.74 billion. Sales increased 13.7% from the prior-year quarter's level. This upside was backed by a blended same-restaurant sales increase of 4.6%. Also, contributions from 43 net new restaurants and an extra week of operations 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 fourth quarter, sales at Olive Garden increased 11.4% year over year to $1.54 billion. Our estimate for the metric was $1.53 billion. Same-restaurant sales in the segment increased 2.4% year over year compared with 3.2% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 21.9% year over year to $1.02 billion. Our estimate for the metric was $967.1 million. Same-restaurant sales in the segment rose 9.5% year over year compared with 7.2% growth reported in the previous quarter.
Sales in Fine Dining increased 10.9% year over year to $371 million. Our estimate for the metric was $358.4 million. Same-restaurant sales in the segment rose 1.9% year over year compared with 2.1% growth reported in the previous quarter.
Sales in Other Business increased 9.8% year over year to $793.3 million. Our estimate for the metric was $875.9 million. Same-restaurant sales in the segment rose 4.6% year over year compared with a 3.9% increase reported in the previous quarter.
DRI's Q4 Operating Highlights
In the fiscal fourth quarter, total operating costs and expenses increased 10.8% year over year to $3.20 billion. The increase was primarily due to higher food and beverage costs, restaurant labor expenses, restaurant expenses, marketing expenses, pre-opening costs and depreciation and amortization.
Operating income increased to $516.8 million from $382.8 million reported in the prior-year quarter. Excluding charges primarily related to restaurant closures, associated impairments and the Chuy's integration, adjusted earnings per share from continuing operations increased 22.8% year over year to $3.66.
Darden's Balance Sheet
As of May 31, 2026, cash and cash equivalents were $219.5 million compared with $240 million as of May 25, 2025.
Inventories were $326.3 million compared with $311.6 million reported a year ago. Long-term debt declined to $1.64 billion from $2.13 billion at the end of fiscal 2025.
During the quarter, the company repurchased approximately 0.7 million shares for $138 million. Darden also increased its quarterly cash dividend by 8% to $1.62 per share and authorized a new $1.5 billion share repurchase program.
Fiscal 2026 Highlights
Total sales in fiscal 2026 amounted to $13.21 billion compared with $12.08 billion in fiscal 2025.
Operating income in fiscal 2026 totaled $1.58 billion compared with $1.36 billion reported in fiscal 2025.
In fiscal 2026, adjusted earnings per share from continuing operations were $10.64 compared with $9.55 reported in the previous year. Blended same-restaurant sales increased 4.5% during the year, supported by gains of 4% at Olive Garden, 7.2% at LongHorn Steakhouse, 1.2% in Fine Dining and 3.9% in Other Business.
Darden's Fiscal 2027 Outlook
For fiscal 2027, the company expects total sales in the range of $13.60-$13.75 billion. Same-restaurant sales growth is anticipated to be between 2.5% and 3.5%.
Darden expects to open 75-80 new restaurants and incur total capital spending of approximately $875 million. The company projects earnings per share from continuing operations between $11.10 and $11.35, EBITDA in the range of $2.26-$2.29 billion, an effective tax rate of approximately 13.5% and about 114 million weighted average shares outstanding.
DRI’s Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.
FIVE has a trailing four-quarter earnings surprise of 70.1%, on average. The Zacks Consensus Estimate for FIVE’s 2026 sales and EPS indicates growth of 14.7% and 34.3%, respectively, from the year-ago period’s levels.
Starbucks Corporation (SBUX - Free Report) presently flaunts a Zacks Rank of 1. SBUX has a trailing four-quarter negative average earnings surprise of 4.6%.
The consensus estimate for Starbucks’ fiscal 2026 sales and EPS indicates growth of 12.7% and 2.9%, respectively, from the year-ago period’s levels.
On Holding (ONON - Free Report) currently holds a Zacks Rank of 2 (Buy). ONON has a trailing four-quarter negative average earnings surprise of 11.3%.
The Zacks Consensus Estimate for On Holding’s 2026 sales and EPS indicates growth of 24.5% and 80.4%, respectively, from the year-ago period’s levels.
View the Zacks #1 Rank List
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Darden Q4 Earnings Beat Estimates, Revenues Miss, Both Rise Y/Y
Key Takeaways
Darden Restaurants, Inc. (DRI - Free Report) reported fourth-quarter fiscal 2026 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. Following the results, the stock inched down 3.4% in today's pre-market trading session, likely reflecting the revenue miss and fiscal 2027 guidance that calls for moderating same-restaurant sales growth following the benefit of a 53rd week in fiscal 2026.
The quarter benefited from a blended same-restaurant sales increase of 4.6%, an extra week of operations and contributions from 43 net new restaurants.
DRI's Q4 Earnings & Revenues
During the fiscal fourth quarter, Darden reported adjusted earnings per share (EPS) of $3.66, which beat the Zacks Consensus Estimate of $3.63. In the prior-year quarter, DRI reported adjusted EPS of $2.98.
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 $3.72 billion, missing the consensus mark of $3.74 billion. Sales increased 13.7% from the prior-year quarter's level. This upside was backed by a blended same-restaurant sales increase of 4.6%. Also, contributions from 43 net new restaurants and an extra week of operations 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 fourth quarter, sales at Olive Garden increased 11.4% year over year to $1.54 billion. Our estimate for the metric was $1.53 billion. Same-restaurant sales in the segment increased 2.4% year over year compared with 3.2% growth reported in the previous quarter.
At LongHorn Steakhouse, sales were up 21.9% year over year to $1.02 billion. Our estimate for the metric was $967.1 million. Same-restaurant sales in the segment rose 9.5% year over year compared with 7.2% growth reported in the previous quarter.
Sales in Fine Dining increased 10.9% year over year to $371 million. Our estimate for the metric was $358.4 million. Same-restaurant sales in the segment rose 1.9% year over year compared with 2.1% growth reported in the previous quarter.
Sales in Other Business increased 9.8% year over year to $793.3 million. Our estimate for the metric was $875.9 million. Same-restaurant sales in the segment rose 4.6% year over year compared with a 3.9% increase reported in the previous quarter.
DRI's Q4 Operating Highlights
In the fiscal fourth quarter, total operating costs and expenses increased 10.8% year over year to $3.20 billion. The increase was primarily due to higher food and beverage costs, restaurant labor expenses, restaurant expenses, marketing expenses, pre-opening costs and depreciation and amortization.
Operating income increased to $516.8 million from $382.8 million reported in the prior-year quarter. Excluding charges primarily related to restaurant closures, associated impairments and the Chuy's integration, adjusted earnings per share from continuing operations increased 22.8% year over year to $3.66.
Darden's Balance Sheet
As of May 31, 2026, cash and cash equivalents were $219.5 million compared with $240 million as of May 25, 2025.
Inventories were $326.3 million compared with $311.6 million reported a year ago. Long-term debt declined to $1.64 billion from $2.13 billion at the end of fiscal 2025.
During the quarter, the company repurchased approximately 0.7 million shares for $138 million. Darden also increased its quarterly cash dividend by 8% to $1.62 per share and authorized a new $1.5 billion share repurchase program.
Fiscal 2026 Highlights
Total sales in fiscal 2026 amounted to $13.21 billion compared with $12.08 billion in fiscal 2025.
Operating income in fiscal 2026 totaled $1.58 billion compared with $1.36 billion reported in fiscal 2025.
In fiscal 2026, adjusted earnings per share from continuing operations were $10.64 compared with $9.55 reported in the previous year. Blended same-restaurant sales increased 4.5% during the year, supported by gains of 4% at Olive Garden, 7.2% at LongHorn Steakhouse, 1.2% in Fine Dining and 3.9% in Other Business.
Darden's Fiscal 2027 Outlook
For fiscal 2027, the company expects total sales in the range of $13.60-$13.75 billion. Same-restaurant sales growth is anticipated to be between 2.5% and 3.5%.
Darden expects to open 75-80 new restaurants and incur total capital spending of approximately $875 million. The company projects earnings per share from continuing operations between $11.10 and $11.35, EBITDA in the range of $2.26-$2.29 billion, an effective tax rate of approximately 13.5% and about 114 million weighted average shares outstanding.
DRI’s Zacks Rank & Key Picks
Darden currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.
Five Below, Inc. (FIVE - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
FIVE has a trailing four-quarter earnings surprise of 70.1%, on average. The Zacks Consensus Estimate for FIVE’s 2026 sales and EPS indicates growth of 14.7% and 34.3%, respectively, from the year-ago period’s levels.
Starbucks Corporation (SBUX - Free Report) presently flaunts a Zacks Rank of 1. SBUX has a trailing four-quarter negative average earnings surprise of 4.6%.
The consensus estimate for Starbucks’ fiscal 2026 sales and EPS indicates growth of 12.7% and 2.9%, respectively, from the year-ago period’s levels.
On Holding (ONON - Free Report) currently holds a Zacks Rank of 2 (Buy). ONON has a trailing four-quarter negative average earnings surprise of 11.3%.
The Zacks Consensus Estimate for On Holding’s 2026 sales and EPS indicates growth of 24.5% and 80.4%, respectively, from the year-ago period’s levels.