Darden's latest quarter landed just a hair shy of Wall Street's targets from an LSEG survey. EPS registered $2.05 against a $2.06 consensus, and revenue reached $3.20 billion versus a $3.21 billion estimate. For the fiscal first quarter, net income totaled $233.4 million, which works out to $2.04 per share, versus $257.8 million, or $2.19 per share, in the year-ago period. The stock slid up to 5% before the open, then recovered some ground after the earnings call, leaving shares lower by roughly 2% in the morning.
Executives cited near term pressures that clipped demand, including consumers' cyclospora worries and the World Cup. CFO Raj Vennam said the tournament reduced early quarter comp sales by 80 basis points, or 0.8%. CEO Rick Cardenas said the brands are seeing better momentum in September, and that costs for key inputs such as beef are expected to look better later in the fiscal year.
Olive Garden had to change course on a big message. "During the quarter, Olive Garden was prepared to communicate about one of its core brand equities, unlimited soup, salad and breadsticks, but quickly pivoted away from their planned marketing support in response to external events that led to broader consumer concern about lettuce," Cardenas told analysts. That campaign is now slated to run in the current quarter. He also said the team is leaning into weekday lunches and working on "several opportunities" centered on value to bring in more traffic during that slower daypart.
Companywide, Darden delivered $3.20 billion in net sales, a 5.1% increase, and same-store sales climbed 3.1%, with every business unit growing. LongHorn Steakhouse again set the pace with 6.2% comp growth. It now outperforms Olive Garden on that metric, though it still contributes a smaller slice of overall revenue.
Olive Garden comps edged up 1.1%. It remains Darden's biggest brand by store count and sales, but growth has cooled as diners get choosier. The fine-dining group, which includes The Capital Grille and Ruth's Chris, posted a 1.6% comp gain.
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Management said traffic there is still below pre-pandemic levels but trending better, and those concepts have taken smaller price hikes than the rest of the portfolio. "We are seeing that business spending is still low," Cardenas said. "We're starting to see some growth in private dining."
The "other business" segment rose 3.8% on comps. Yard House was the standout, up 10% and uniquely helped by the World Cup. "Yard House is a high potential growth brand," Cardenas said, adding that as of last week it became the company's third brand to surpass the billion-dollar mark.
Yard House is set to open 13 new locations in fiscal 2027, with five coming from conversions of the now-closed Bahama Breeze chain. Darden reaffirmed its fiscal 2027 targets, forecasting revenue between $13.60 billion and $13.75 billion, and projecting $11.10 to $11.35 in EPS for continuing operations.
The picture is mixed but readable: comps are growing, LongHorn is carrying more weight, Olive Garden is stabilizing with fresh marketing and lunch value plays, and Yard House is flexing its sports bar advantage. Management says September is looking better and input costs could ease later this year, while longer term targets remain intact. If you follow restaurant names, watch how those lunch initiatives land and whether beef prices actually cooperate.
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