DRI Reports Strong Q1 Results, Updates Fiscal 2026 Guidance

Darden Restaurants, Inc. (NYSE:DRI) has released its financial results for the first quarter of fiscal 2026, marking a solid start to the year. The company also provided an updated financial outlook for the remainder of the fiscal year.

DRI Q1 Sales Reach $3.0B as Olive Garden and LongHorn Lead Growth

In the first quarter of fiscal 2026, Darden Restaurants reported total sales of $3.0 billion, marking a 10.4% increase from the same period last year. This growth was driven by a 4.7% increase in same-restaurant sales and contributions from the acquisition of Chuy’s Tex Mex restaurants. The company’s reported diluted net earnings per share from continuing operations were $2.19, exceeding the expected EPS of $2.0. However, when adjusted for certain costs and gains, the diluted net earnings per share were $1.97, representing a 12.6% increase from the prior year.

The performance of Darden’s individual brands varied, with Olive Garden and LongHorn Steakhouse showing notable same-restaurant sales growth of 5.9% and 5.5%, respectively. In contrast, the Fine Dining segment experienced a slight decline of 0.2%. The company’s segment profit also reflected these trends, with Olive Garden and LongHorn Steakhouse contributing significantly to the overall profit increase.

Compared to expectations, Darden’s first-quarter results were robust. The company’s ability to surpass earnings expectations is attributed to its strategic focus on operational excellence and leveraging competitive advantages. This strong performance sets a positive tone for the rest of the fiscal year, as Darden continues to invest in its brands and return capital to shareholders.

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Darden Restaurants Updates 2026 Guidance, Plans 65 New Restaurants

Looking ahead, Darden Restaurants has updated its financial outlook for fiscal 2026, which now includes a 53rd week. The company anticipates total sales growth of 7.5% to 8.5%, with approximately 2% of this growth attributed to the additional week. Same-restaurant sales are expected to grow by 2.5% to 3.5%, and the company plans to open approximately 65 new restaurants during the year.

Darden’s capital spending for the fiscal year is projected to be between $700 million and $750 million, reflecting its commitment to growth and infrastructure improvements. The company also expects total inflation to range from 3.0% to 3.5%, with an effective tax rate of around 13%. Adjusted diluted net earnings per share from continuing operations are anticipated to be between $10.50 and $10.70, including the impact of the 53rd week.

With a strong start to the fiscal year and a positive outlook, Darden Restaurants is poised for continued success. The company’s strategic initiatives, including new restaurant openings and capital investments, are expected to drive growth and enhance shareholder value. As Darden navigates the remainder of fiscal 2026, it remains focused on executing its strategy and delivering on its financial commitments.

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.