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An Olive Backyard restaurant in Milpitas, California, US, on Tuesday, Dec. 16, 2025.
David Paul Morris | Bloomberg | Getty Photos
Darden Eating places on Thursday reported sturdy gross sales progress, fueled by demand at Olive Backyard and LongHorn Steakhouse as thrifty diners search for good offers.
For the second straight quarter, the corporate hiked its full-year outlook for income progress, though it solely reiterated its projections for its earnings.
“The second quarter exceeded our top-line expectations as each section delivered constructive same-restaurant gross sales,” Darden CEO Rick Cardenas mentioned in a press release.
Shares of the corporate rose almost 3% in morning buying and selling.
Here is what the corporate reported in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: $2.08 adjusted vs. $2.10 anticipated
- Income: $3.1 billion vs. $3.07 billion anticipated
Darden reported fiscal second-quarter internet earnings of $237.2 million, or $2.03 per share, up from $215.1 million, or $1.82 per share, a 12 months earlier.
Increased ingredient prices, notably for near-record costs for beef, weighed on the corporate’s restaurant-level margin, CFO Raj Vennam mentioned on the corporate’s convention name.
Excluding restaurant closure prices and bills associated to its acquisition of Chuy’s, the restaurant firm earned $2.08 per share.
Internet gross sales rose 7.3% to $3.1 billion.
Darden’s same-store gross sales elevated 4.3% within the quarter, topping Wall Avenue estimates of three%, in line with StreetAccount.
Whereas the broader restaurant business has seen sluggish gross sales progress, Darden has discovered success by elevating its menu costs by lower than inflation and including promotions aimed toward diners searching for worth.
“Weaker client sentiment would not essentially translate into lowered spending in the course of the quarter,” Cardenas mentioned in the course of the convention name.
He mentioned the corporate noticed high-income shoppers commerce into its casual-dining chains, though demand from diners making lower than $50,000 fell barely. Darden additionally received a site visitors bump from shoppers who’re not less than 55 years outdated.
Restaurant outcomes
Olive Backyard, which accounted for roughly 44% of Darden’s quarterly gross sales, reported same-store gross sales progress of 4.7%. Executives credited the recognition of the Italian chain’s $13.99 By no means Ending Pasta Bowl promotion that ran in the course of the quarter, plus Olive Backyard’s rising supply enterprise.
In an attraction to inflation-weary shoppers, Olive Backyard can be including the choice of smaller parts at a lower cost for choose menu gadgets. Cardenas mentioned the change is enhancing its worth notion amongst some diners. About 40% of the chain’s areas supplied the lighter parts menu in the course of the quarter, and one other 20% added it early within the fiscal third quarter.
LongHorn Steakhouse noticed same-store gross sales progress of 5.9%. Whereas Olive Backyard nonetheless outnumbers LongHorn based mostly on its restaurant footprint, the steakhouse chain’s gross sales are rising quicker.
Cardenas mentioned LongHorn noticed larger site visitors from shoppers who make lower than $50,000, regardless of the chain’s larger common examine relative to Olive Backyard. He credited larger beef costs, which imply {that a} steak at LongHorn might be the identical worth or cheaper than shopping for one from the grocery retailer.
The corporate’s different enterprise section reported same-store gross sales progress of three.1%, fueled by sturdy demand at Yard Home, in line with Cardenas.
Darden’s fine-dining enterprise, which incorporates Ruth’s Chris and The Capital Grille, noticed same-store gross sales progress of 0.8%, bucking the malaise of the sector.
The broader fine-dining section has struggled as shoppers spend much less when eating out and plenty of corporations have in the reduction of on enterprise lunches and different bills. Darden tried to attraction to these budget-conscious diners by bringing again a deal at Ruth’s Chris for a three-course meal priced at $55 per particular person.
“It is a worthwhile deal for us,” Cardenas mentioned.
For fiscal 2026, Darden now expects whole gross sales progress of 8.5% to 9.3%, up from its prior forecast of seven.5% to eight.5%. The fiscal 12 months features a 53rd week, which is predicted to contribute about 2%.
Darden additionally adjusted its expectations for inflation to three.5%, on the excessive finish of its prior vary of three% to three.5%. Increased prices will weigh on the corporate’s margins, main the corporate to reiterate its forecast for adjusted earnings in a variety of $10.50 to $10.70 per share.
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