Darden Restaurants (DRI) Tops Q2 Revenue Estimates But Misses EPS

Darden Restaurants, Inc. (NYSE:DRI) has released its financial results for the second quarter of fiscal 2026, revealing a mixed performance. While the company fell short of earnings per share expectations, it exceeded revenue projections, demonstrating strong sales growth across its various brands.

Same-Restaurant Sales and New Openings Fuel Revenue Outperformance

Darden Restaurants, Inc. has announced its financial results for the second quarter of fiscal 2026, which ended on November 23, 2025. The company reported an adjusted diluted earnings per share (EPS) from continuing operations of $2.08, falling short of the anticipated $2.11. Despite this miss, Darden’s total sales reached $3.1 billion, surpassing the expected $3.07 billion. This revenue growth was bolstered by a 7.3% increase in total sales, driven by a 4.3% rise in same-restaurant sales and the addition of 30 net new restaurants.

The company’s performance varied across its brands, with Olive Garden and LongHorn Steakhouse leading the charge in same-restaurant sales growth at 4.7% and 5.9%, respectively. Fine Dining, however, saw a modest increase of 0.8%. The overall growth in sales was attributed to effective management and strategic investments, despite facing significant commodity headwinds.

Darden’s President and CEO, Rick Cardenas, expressed satisfaction with the quarter’s top-line results, highlighting the outstanding performance of their restaurant teams in achieving high guest satisfaction scores.

The company also repurchased $222 million of its outstanding common stock, reflecting its commitment to delivering shareholder value. Nevertheless, the EPS miss indicates challenges in managing costs, possibly due to inflationary pressures and other economic factors.

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Fiscal 2026 Outlook Highlights Expansion Plans and Revenue Growth

Looking ahead, Darden Restaurants has updated its financial outlook for fiscal 2026, incorporating the impact of a 53rd week. The company forecasts total sales growth between 8.5% and 9.3%, with approximately 2% attributed to the additional week. Same-restaurant sales are expected to grow between 3.5% and 4.3%, while new restaurant openings are projected to range from 65 to 70.

The fiscal 2026 guidance also outlines an adjusted diluted EPS from continuing operations between $10.50 and $10.70, including approximately $0.20 related to the 53rd week. Darden anticipates total capital spending of $750 to $775 million and an effective tax rate of around 13%. These projections reflect the company’s strategic focus on expansion and investment in its brands.

Darden’s management remains optimistic about the company’s future, emphasizing its commitment to long-term growth and shareholder value. The company plans to leverage its competitive advantages and continue making strategic investments to navigate economic challenges and capitalize on growth opportunities. As Darden moves forward, its ability to manage costs and sustain sales momentum will be crucial in achieving the outlined financial targets.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.