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Key Takeaways Darden grew fiscal 2026 earnings and sales, supported by same-restaurant gains and 43 net new restaurants.DRI returned about $1.4B to shareholders while funding expansion and reducing long-term debt.Darden expects about 3% inflation as pricing below inflation may limit margin expansion. Darden Restaurants (DRI - Free Report) presents a balanced investment debate after fiscal 2026 results. Earnings grew, revenues increased and the company kept returning cash to shareholders while investing in new restaurants.

The counterpoint is clear. Estimate revisions, softer momentum indicators, cost inflation and consumer spending sensitivity keep the buy case from becoming automatic.

DRI Earnings Growth Supports the Bull CaseDarden’s fiscal 2026 adjusted earnings per share rose to $10.64 from $9.55 in fiscal 2025. Fourth-quarter adjusted earnings per share increased 22.8% year over year to $3.66, giving investors a clear earnings growth base to evaluate.

Sales also moved higher. Total fiscal 2026 sales increased to $13.21 billion from $12.08 billion, supported by same-restaurant sales growth, an extra operating week and contributions from 43 net new restaurants.

The strength was not limited to one metric. Blended same-restaurant sales rose 4.5% for fiscal 2026, with Olive Garden up 4% and LongHorn Steakhouse up 7.2%. That mix gives Darden a firmer foundation than a pure cost-cutting earnings story.

Darden Valuation Looks More Reasonable NowDRI trades at 17.6X forward 12-month earnings. That sits below the Zacks sub-industry multiple of 22.83X, the sector multiple of 22.59X and the S&P 500’s 20.8X, making valuation a more constructive part of the investment case.

The multiple is close to Darden’s five-year median of 17.53X and below the five-year high of 22.86X. That does not make the stock cheap in isolation, but it suggests the valuation reset has reduced the risk of paying peak multiples for steady growth.

Chipotle Mexican Grill (CMG - Free Report) remains a relevant fast-casual comparison for investors weighing restaurant growth and valuation trade-offs. Restaurant Brands International (QSR - Free Report) offers another peer reference, with a franchised restaurant model that differs from Darden’s company-owned full-service portfolio.

DRI Returns Cash While Funding ExpansionCapital allocation strengthens Darden’s investment profile. The company returned approximately $1.4 billion to shareholders in fiscal 2026 through dividends and share repurchases while continuing to fund restaurant development.

Darden also raised its quarterly dividend 8% to $1.62 per share and authorized a new $1.5 billion share repurchase program. Long-term debt declined to $1.64 billion at fiscal 2026-end from $2.13 billion at the end of fiscal 2025.

That balance matters because the company is not choosing between growth and shareholder returns. Fiscal 2027 guidance calls for 75 to 80 new restaurant openings and capital spending of approximately $875 million, keeping expansion active alongside cash returns.

Darden Has Reasons for Investor CautionThe caution case starts with revenue expectations. Fourth-quarter sales of $3.72 billion missed the consensus mark of $3.74 billion, even though sales increased 13.7% year over year.

Estimate trends are also not fully supportive. The current fiscal-year earnings estimate showed a negative 1% change over the past four weeks, which limits the case for a more aggressive near-term view.

Costs remain another issue. Management expects roughly 3% total inflation in fiscal 2027, with beef inflation highest early in the year. Darden is pricing below inflation to protect its value proposition, a strategy that can support traffic but may constrain margin expansion.

DRI Ratings Point to a Wait-and-See ViewThe bottom line is that DRI looks fundamentally steady, but not decisively attractive enough to remove the debate. Earnings growth, cash generation, restaurant expansion and a more reasonable valuation support the stock, while sales misses, estimate pressure and inflation risk keep expectations measured.

The stock currently carries a Zacks Rank #3 (Hold). That rank lines up with a wait-and-see stance rather than a clear buy signal, especially when near-term estimate revisions have not strengthened. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Darden has a VGM Score of B, supported by a Growth Score of A. Those scores point to favorable growth characteristics within the Zacks Style Scores framework.

The Value Score of C and Momentum Score of D keep the overall signal mixed. For investors, that combination suggests DRI has solid earnings support, but stronger estimate trends or better price momentum would make the investment case more convincing.

Darden Restaurants' NYSE: DRI stock price is on track to hit new highs because its high-quality business is outperforming peers, growing across brands, generating ample cash flows, and sustaining a robust capital return program. The capital return program is a significant factor in 2026, with investors reducing exposure to high-risk tech stocks in favor of safer havens. For Darden Investors, that means a reliable dividend with market-beating yield and aggressive share buybacks.

Darden Restaurants Today

DRI

Darden Restaurants

$213.79 +0.07 (+0.03%)

As of 06/26/2026 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$169.00▼

$222.56Dividend Yield2.81%

P/E Ratio20.60

Price Target$228.32

Dividends yield 2.8% with shares trading near record highs. The record highs are another significant factor in 2026, as DRI’s price action has been winding up within a range for the past 18 months. Assuming a break to new highs, the technical setup suggests a $60 upside from the critical resistance level, potentially reached within months. Triggers for the market include expected dividend increases, which have been growing at a double-digit annual rate, and buybacks.

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Darden’s management expressed high confidence in future cash flows by increasing its buyback allotment. The fiscal-year authorization of $1.5 billion represents more than 6% of the late-June market, keeping the company on track to sustain its aggressive pace. As it stands, the fiscal year 2026 (FY2026) activity reduced the count by an average of 1.7% for the year and by 2.2% for Q4 FY2026.

Darden Gobbles Up the Competition in Fiscal Q4Darden Restaurants had a solid quarter with revenue growing by 13.7% to $3.72 billion. Earnings results were strong, even accounting for an extra week in the quarter. Comps were up by 4.6% across the network. Longhorn Steakhouse led, growing by 9.5%, followed by a 4.6% increase in Other, a 2.4% increase at Olive Garden, and a 1.9% increase at Fine Dining establishments. New stores accounted for 2% of the growth.

Margin news was also good. The company managed to control costs and drive improved bottom-line results. Adjusted earnings grew by an accelerated 22.8%, nearly doubling the top-line advance, and outpaced the consensus despite a slim miss in revenue. Looking ahead, earnings strength is expected to continue, as reflected in the guidance. The only bad news is that the earnings-per-share mid-point of $11.225 was below the consensus estimate, which could produce a headwind for near-term price action.

Analysts and Institutions Support Darden Restaurants Stock in 2026Analysts' bullish trends provide support for the market. MarketBeat tracks 27 who rate the stock as a consensus Moderate Buy with 63% Buy-side bias in the data. The consensus price target assumes fair value near the current all-time high, but recent revisions are pushing the upper end of the range. Bank of America set a high target in early June of $276, well above the existing high and nearly a 30% gain from the pre-release close.

Overall MarketRank™76th Percentile

Analyst RatingModerate Buy

Upside/Downside6.8% Upside

Short Interest LevelBearish

Dividend StrengthModerate

News Sentiment0.62 Insider TradingSelling Shares

Proj. Earnings Growth9.56%

See Full Analysis

Institutional activity also reflects support and a high potential for this group to buy DRI shares upon price weakness. They own about 94% of the stock and have been aggressively accumulating at a $2-to-$1 pace over the trailing 12 months. Their activity ramped up in late 2025 and early 2026 as price action pulled back from near-record highs, and will likely do so again when a discount presents itself. Short interest is mildly elevated at nearly 5%, but not a problem at this time, more likely tied to hedging activity than bearish trading.

Darden’s stock price fell about 3% in premarket trading following earnings release, before recovering partially after the open. Long-term, the decline could extend further. The caveat is that this market pulled back to a congestion zone where buyers are likely waiting.

The more likely scenario is that the DRI price stock bottoms quickly, confirming support in the $190 to $200 range by summer’s end, while the less likely scenario is that price action falls significantly further. The critical support target is $190; a move below it could trigger a fall to $175 or lower.

Darden’s biggest risks this year are consumer trends and commodity prices. Consumer trends are sluggish, impaired by inflationary pressures, but not yet reflected in DRI results. Commodity pricing, specifically beef, is a more pressing issue impairing restaurant-level margins. The company’s solution is to increase prices slowly, trailing inflation, to keep consumers coming back while mitigating cost increases.

Other offsets include operational efficiencies, scaling purchase agreements across brands, and hedging activities in anticipation of future price changes. Catalysts include the integration and scaling of its acquisitions, the conversion of Bahama Breeze to new formats, and the expansion of its footprint. The 2027 guidance includes plans for up to 80 new stores, a 3.6% increase relative to 2026’s final count.

Should You Invest $1,000 in Darden Restaurants Right Now?Before you consider Darden Restaurants, you'll want to hear this.

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, /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the fourth quarter and fiscal year ended May 31, 2026, which included a 53rd week of operations compared to 52 weeks last year.

Fourth Quarter 2026 Financial Highlights

Total sales increased 13.7% to $3.72 billion driven by 7.6% in additional sales from an extra week of operations, a blended same-restaurant sales1 increase of 4.6%, and sales from 43 net new restaurants Same-restaurant sales:
               ‌

Consolidated Darden1

4.6 %

Olive Garden

2.4 %

LongHorn Steakhouse

9.5 %

Fine Dining

1.9 %

Other Business1

4.6 %

Reported diluted net earnings per share from continuing operations were $3.54 Excluding $0.12 of costs primarily related to restaurant closures and associated impairments and the Chuy's integration, adjusted diluted net earnings per share from continuing operations were $3.66, an increase of 22.8%2 The extra week of operations contributed $0.25 to both reported and adjusted diluted net earnings per share from continuing operations The Company repurchased $138 million3 of its outstanding common stock Fiscal 2026 Financial Highlights

Total sales increased 9.4% to $13.21 billion driven by 2.1% in additional sales from an extra week of operations, a blended same-restaurant sales4 increase of 4.5%, and sales from 43 net new restaurants Same-restaurant sales:
                ‌

Consolidated Darden4

4.5 %

Olive Garden

4.0 %

LongHorn Steakhouse

7.2 %

Fine Dining

1.2 %

Other Business4

3.9 %

Reported diluted net earnings per share from continuing operations were $10.44 Excluding $0.20 primarily related to restaurant closures and associated impairments, income tax adjustments and benefits, the Chuy's integration, and the Olive Garden Canada sale, adjusted diluted net earnings per share from continuing operations were $10.64, an increase of 11.4%2 The extra week of operations contributed $0.25 to both reported and adjusted diluted net earnings per share from continuing operations
1   Quarter same-restaurant sales is a 13-week metric and excludes the impact of Bahama Breeze as all locations are expected to be closed or converted to other brands (between Q3 fiscal 2026 and Q4 fiscal 2027).

2  See the "Non-GAAP Information" below for more details.

3  Inclusive of 1% excise tax incurred on net repurchases, resulting from the Inflation Reduction Act of 2022.

4   Annual same-restaurant sales is a 52-week metric and excludes the impact of Chuy's, as they were not owned and operated by Darden for a 16-month period prior to the beginning of Fiscal 2026, as well as Bahama Breeze as all locations are expected to be closed or converted to other brands (between Q3 fiscal 2026 and Q4 fiscal 2027).

"The fourth quarter was a strong finish to an excellent year, one in which we significantly outperformed the industry," said Darden President & CEO Rick Cardenas. "Our restaurant teams continued to execute at a high level and that consistent execution helped each of our brands deliver positive same-restaurant sales for the quarter.

"Our performance throughout the fiscal year reflects the strength of our brands, the discipline of our strategy, and the quality of our teams. With the right brands, strategy, and team in place, I am confident we are well positioned to continue growing the business and creating long-term shareholder value."

Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses. Sales and profits from Chuy's restaurants are included within the Other Business segment from the date of acquisition forward.

Q4 Sales

Q4 Segment Profit

($ in millions)

2026

2025

2026

2025

Consolidated Darden

$3,718.8

$3,271.7

Olive Garden

$1,538.0

$1,381.0

$373.0

$328.4

LongHorn Steakhouse

$1,016.5

$833.8

$215.2

$167.8

Fine Dining

$371.0

$334.6

$69.0

$62.9

Other Business

$793.3

$722.3

$142.1

$126.3

Annual Sales

Annual Segment Profit

($ in millions)

2026

2025

2026

2025

Consolidated Darden

$13,210.9

$12,076.7

Olive Garden

$5,594.8

$5,212.9

$1,257.9

$1,163.9

LongHorn Steakhouse

$3,423.0

$3,025.5

$635.1

$582.7

Fine Dining

$1,375.7

$1,304.8

$243.1

$242.5

Other Business

$2,817.4

$2,533.5

$446.9

$397.4

Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend of $1.62 per share on the Company's outstanding common stock, an 8.0% increase from the third quarter of fiscal 2026. The dividend is payable on August 3, 2026 to shareholders of record at the close of business on July 10, 2026.

Share Repurchase Program
During the quarter, the Company repurchased approximately 0.7 million shares of its common stock for a total of $138 million4. In addition, on Wednesday, June 24, 2026, Darden's Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $1.5 billion of its outstanding common stock. This repurchase program does not have an expiration and replaces the previously existing share repurchase authorization.

"Our strong operating model generates significant and durable cash flows," said Darden CFO Raj Vennam. "Since 2019, we have delivered 9% annualized adjusted EBITDA growth. This consistent cash generation provides more than sufficient capacity each year to fund the core requirements of the business, including maintenance capital to sustain our existing asset base, continued growth of our dividend, and investment in new restaurant development."

Fiscal 2027 Financial Outlook
Below is the full year financial outlook for fiscal 2027. We will provide more details during our investor conference call scheduled for this morning at 8:30 am ET.

Total sales of $13.60 billion to $13.75 billion Same-restaurant sales5 growth of 2.5% to 3.5% New restaurant openings of 75 to 80 Total capital spending of approximately $875 million Total inflation of approximately 3.0% An effective tax rate of approximately 13.5% Diluted net earnings per share from continuing operations of $11.10 to $11.35 EBITDA of $2.26 to $2.29 billion2 Approximately 114 million weighted average diluted shares outstanding
5    Annual same-restaurant sales is a 52-week metric and excludes the impact of Bahama Breeze as all locations are expected to be closed or converted to other brands (between Q3 fiscal 2026 and Q4 fiscal 2027).

Annual Meeting of Shareholders
Darden will hold its Annual Meeting of Shareholders on September 23, 2026. The meeting will be held in a virtual format only. The record date for shareholders to vote in the Annual Meeting is July 29, 2026.

Investor Conference Call
The Company will host a conference call today, Thursday, June 25, 2026 at 8:30 am ET to review its recent financial performance, which will be available via a live webcast through the Company's Investor Relations website at investor.darden.com.  Please allow extra time prior to the call to visit the site and download any software required to listen to the webcast. Supplemental materials will be available on the Investor Relations website prior to the start of the conference call. For those who are unable to listen to the live broadcast, a replay will be available shortly after the call.

About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Chuy's, Seasons 52, and Eddie V's. For more information, please visit www.darden.com.

Information About Forward-Looking Statements
Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "may," "will," "expect," "intend," "focus," "anticipate," "continue," "could," "estimate," "project," "believe," "plan," "outlook," or similar expressions. Any forward-looking statements speak only as of the date on which such statements are first made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden's Form 10-K, Form 10-Q and Form 8-K reports. These risks and uncertainties include: a failure to address cost pressures and a failure to effectively deliver cost management activities and achieve some economies of scale in purchasing, certain economic and business factors and their impacts on the restaurant industry and other general macroeconomic factors including unemployment, energy prices, tariffs and interest rates, the inability to hire, train, reward and retain restaurant team members and determine and maintain adequate staffing, a failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills that could impact our strategic direction, increased labor and insurance costs, health concerns arising from food-related pandemics, outbreaks of flu, viruses or other diseases, food safety and food-borne illness concerns, insufficient guest or employee facing technology or a failure to maintain a continuous and secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems,  risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to recognize, respond to and effectively manage the accelerated impact of social media, a failure to identify and execute innovative marketing and guest relationship tactics, ineffective or improper use of other marketing initiatives and increased advertising and marketing costs, climate change, adverse weather conditions and natural disasters, long-term and non-cancelable property leases, inability or failure to execute a business continuity plan following a major natural disaster, shortages, delays or interruptions in the delivery of food and other products and services from our third-party vendors and suppliers, failure to drive profitable sales growth, a lack of availability of suitable locations for new restaurants or a decline in the quality of locations of our current restaurants, higher-than-anticipated costs associated with the opening of new restaurants or with the closing, relocating or remodeling of existing restaurants, risks associated with doing business with franchisees, licensees and vendors in foreign markets, volatility in the market value of derivatives, volatility in the U.S. equity markets affecting our ability to efficiently hedge exposures, failure to protect our intellectual property, our reporting on environmental, social and governance matters or our sustainability ratings, litigation, unfavorable publicity or failure to respond effectively to adverse publicity, disruptions in the financial and credit markets, impairment of the carrying value of our goodwill or other intangible assets, changes in tax laws or unanticipated tax liabilities, failure of our internal controls over financial reporting and future changes in accounting standards, and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.

Non-GAAP Information
The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"), such as adjusted diluted net earnings per share from continuing operations and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. The Company believes that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP measures are included in this release.

(Analysts) Courtney Aquilla, (407) 245-5054; (Media) Rich Jeffers, (407) 245-4189

Fiscal Q4 Reported to Adjusted Earnings Reconciliation

Q4 2026

Q4 2025

$ in millions, except per share amounts

Earnings
Before
Income
Tax

Income
Tax
Expense

Net
Earnings

Diluted
Net
Earnings
Per
Share

Earnings
Before
Income
Tax

Income
Tax
Expense

Net
Earnings

Diluted
Net
Earnings
Per
Share

Reported Earnings from Continuing Operations

$ 465.6

$  57.8

$ 407.8

$  3.54

$ 336.5

$  32.5

$ 304.0

$  2.58

Adjustments:

Closed restaurant and other strategic review costs6

7.2

1.5

5.7

0.05

9.2

2.3

6.9

0.06

    General and administrative expenses

4.3

0.7

3.6

0.03

9.2

2.3

6.9

0.06

    Depreciation and amortization

2.9

0.8

2.1

0.02

—

—

—

—

Impairment due to restaurant closures7

9.7

2.4

7.3

0.06

47.7

11.9

35.8

0.30

Chuy's integration related one-time costs

1.1

0.3

0.8

0.01

7.0

2.1

4.9

0.04

Adjusted Earnings from Continuing Operations

$ 483.6

$  62.0

$ 421.6

$  3.66

$ 400.4

$  48.8

$ 351.6

$  2.98

% Change vs Prior Year

22.8 %

Fiscal YTD Reported to Adjusted Earnings Reconciliation

2026

2025

$ in millions, except per share amounts

Earnings
Before
Income
Tax

Income
Tax
Expense

Net
Earnings

Diluted
Net
Earnings
Per
Share

Earnings
Before
Income
Tax

Income
Tax
Expense

Net
Earnings

Diluted
Net
Earnings
Per
Share

Reported Earnings from Continuing Operations

$         1,388.6

$ 174.9

$         1,213.7

$ 10.44

$         1,187.2

$ 136.2

$         1,051.0

$  8.88

Adjustments:

Closed restaurant and other strategic review costs6

19.4

4.5

14.9

0.13

9.2

2.3

6.9

0.06

    General and administrative expenses

15.7

3.6

12.1

0.10

9.2

2.3

6.9

0.06

    Depreciation and amortization

3.7

0.9

2.8

0.03

—

—

—

—

Impairment due to restaurant closures7

34.8

8.6

26.2

0.22

47.7

11.9

35.8

0.30

Income tax adjustments and benefits

—

(7.1)

7.1

0.06

—

—

—

—

Chuy's integration related one-time costs

9.5

2.4

7.1

0.06

44.6

7.9

36.7

0.31

Gain on Olive Garden Canada sale

(42.1)

(10.5)

(31.6)

(0.27)

—

—

—

—

    Impairment and restaurant disposals, net

(42.3)

(10.5)

(31.8)

(0.27)

—

—

—

—

    General and administrative expenses

0.2

—

0.2

—

—

—

—

—

Adjusted Earnings from Continuing Operations

$         1,410.2

$ 172.8

$         1,237.4

$ 10.64

$         1,288.7

$ 158.3

$         1,130.4

$  9.55

% Change vs Prior Year

11.4 %

YTD Adjusted EBITDA Reconciliation

$ in millions

5/26/2019

5/31/2026

Net Earnings from Continuing Operations

$      718.6

$     1,213.7

Interest, Net

50.2

194.2

Income Tax Expense (Benefit)

63.7

174.9

Depreciation and Amortization

336.7

561.1

EBITDA

$    1,169.2

$     2,143.9

Adjustments:

Restaurant impairments7

14.6

34.8

Chuy's integration related one-time costs

—

9.5

Restaurant closing costs6

—

15.7

Gain on Olive Garden Canada sale

—

(42.1)

Adjusted EBITDA

$    1,183.8

$     2,161.8

Fiscal 2027 EBITDA Outlook Reconciliation

Net Earnings from Continuing Operations

$1.26 billion

to

$1.29 billion

Interest, Net

$0.21 billion

$0.20 billion

Income Tax Expense

$0.19 billion

$0.20 billion

Depreciation and Amortization

$0.60 billion

$0.60 billion

EBITDA

$2.26 billion

to

$2.29 billion

6  Closed restaurant costs and costs related to the exploration of strategic alternatives for the Bahama Breeze brand

7  Fiscal 2026 impairment costs due to non-cash asset impairment charges primarily related to the closures of Bahama Breeze locations and another underperforming location in the fourth quarter of fiscal 2026.  Fiscal 2025 impairment costs were due to restaurant closures primarily related to the closure of 22 underperforming restaurants that were permanently closed during the fourth quarter of fiscal 2025. Fiscal 2019 non-cash asset impairment charges related to four underperforming restaurants whose projected cash flows were not sufficient to cover their respective carrying values.

DARDEN RESTAURANTS, INC.

NUMBER OF COMPANY-OWNED RESTAURANTS

5/31/26

5/25/25

Olive Garden

949

935

LongHorn Steakhouse

618

591

Cheddar's Scratch Kitchen

184

181

Chuy's

110

108

Yard House

93

88

Ruth's Chris Steak House

83

82

The Capital Grille

74

71

Seasons 52

44

43

Eddie V's

31

29

Bahama Breeze

13

28

The Capital Burger

3

3

Darden Continuing Operations

2,202

2,159

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

5/31/2026

5/25/2025

5/31/2026

5/25/2025

Sales

$   3,718.8

$     3,271.7

$  13,210.9

$  12,076.7

Costs and expenses:

Food and beverage

1,119.3

983.9

4,038.8

3,657.0

Restaurant labor

1,147.4

1,022.0

4,182.4

3,833.1

Restaurant expenses

586.0

517.1

2,127.2

1,944.0

Marketing expenses

43.2

41.0

180.4

169.9

Pre-opening costs

11.7

8.7

34.5

24.8

General and administrative expenses

139.0

133.1

514.4

520.3

Depreciation and amortization

146.3

135.0

561.1

516.1

Impairments and disposal of assets, net

9.1

48.1

(10.7)

49.2

Total operating costs and expenses

$   3,202.0

$     2,888.9

$  11,628.1

$  10,714.4

Operating income

516.8

382.8

1,582.8

1,362.3

Interest, net

51.2

46.3

194.2

175.1

Earnings before income taxes

465.6

336.5

1,388.6

1,187.2

Income tax expense

57.8

32.5

174.9

136.2

Earnings from continuing operations

$     407.8

$       304.0

$   1,213.7

$   1,051.0

Losses from discontinued operations, net of tax benefit of $1.3, $0.1, $2.9 and
$0.8, respectively

(2.9)

(0.2)

(7.0)

(1.4)

Net earnings

$     404.9

$       303.8

$   1,206.7

$   1,049.6

Basic net earnings per share:

Earnings from continuing operations

$       3.57

$        2.60

$     10.51

$       8.94

Losses from discontinued operations

(0.03)

(0.01)

(0.06)

(0.01)

Net earnings

$       3.54

$        2.59

$     10.45

$       8.93

Diluted net earnings per share:

Earnings from continuing operations

$       3.54

$        2.58

$     10.44

$       8.88

Losses from discontinued operations

(0.03)

—

(0.06)

(0.02)

Net earnings

$       3.51

$        2.58

$     10.38

$       8.86

Average number of common shares outstanding:

Basic

114.3

117.1

115.5

117.5

Diluted

115.2

117.9

116.3

118.4

DARDEN RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions)

5/31/2026

5/25/2025

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$         219.5

$         240.0

Receivables, net

129.9

93.8

Inventories

326.3

311.6

Prepaid income taxes

139.8

135.6

Prepaid expenses and other current assets

127.4

156.7

Total current assets

$         942.9

$         937.7

Land, buildings and equipment, net

5,048.6

4,716.0

Operating lease right-of-use assets

3,433.1

3,555.9

Goodwill

1,658.2

1,659.4

Trademarks

1,346.4

1,346.4

Other assets

433.2

371.6

Total assets

$     12,862.4

$     12,587.0

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$         427.7

$         439.6

Short-term debt and current portion of long-term debt

693.6

—

Accrued payroll

236.1

207.5

Accrued taxes

87.0

87.7

Unearned revenues

606.0

599.4

Other current liabilities

955.0

913.3

Total current liabilities

$      3,005.4

$      2,247.5

Long-term debt

1,637.7

2,128.9

Deferred income taxes

343.6

278.8

Operating lease liabilities - non-current

3,722.3

3,816.9

Other liabilities

1,945.9

1,803.6

Total liabilities

$     10,654.9

$     10,275.7

Stockholders' equity:

Common stock and surplus

$      2,296.3

$      2,295.6

Retained earnings (deficit)

(108.4)

(16.1)

Accumulated other comprehensive income

19.6

31.8

Total stockholders' equity

$      2,207.5

$      2,311.3

Total liabilities and stockholders' equity

$     12,862.4

$     12,587.0

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Twelve Months Ended

5/31/2026

5/25/2025

Cash flows—operating activities

Net earnings

$      1,206.7

$      1,049.6

Losses from discontinued operations, net of tax

7.0

1.4

Adjustments to reconcile net earnings from continuing operations to cash flows:

Depreciation and amortization

561.1

516.1

Impairments and disposal of assets, net

(10.7)

49.2

Stock-based compensation expense

79.1

79.1

Change in current assets and liabilities and other, net

9.9

11.6

Net cash provided by operating activities of continuing operations

$      1,853.1

$      1,707.0

Cash flows—investing activities

Purchases of land, buildings and equipment

(734.0)

(644.6)

Proceeds from disposal of land, buildings and equipment

45.5

2.5

Cash used in business acquisitions, net of cash acquired

—

(613.7)

Purchases of capitalized software and changes in other assets, net

(22.9)

(22.5)

Net cash used in investing activities of continuing operations

$       (711.4)

$     (1,278.3)

Cash flows—financing activities

Net proceeds from issuance of common stock

25.0

55.6

Dividends paid

(693.0)

(658.5)

Repurchases of common stock

(671.7)

(418.2)

Proceeds from (repayments of) short-term debt, net

194.0

(86.8)

Proceeds from issuance of long-term debt, net

—

750.0

Principal payments on finance leases, net

(18.1)

(21.0)

Payments of debt issuance costs

—

(6.9)

Net cash used in financing activities of continuing operations

$     (1,163.8)

$       (385.8)

Cash flows—discontinued operations

Net cash used in operating activities of discontinued operations

(4.8)

(8.5)

Net cash used in discontinued operations

$          (4.8)

$          (8.5)

Increase (decrease) in cash, cash equivalents, and restricted cash

(26.9)

34.4

Cash, cash equivalents, and restricted cash - beginning of period

254.5

220.1

Cash, cash equivalents, and restricted cash - end of period

$         227.6

$         254.5

Reconciliation of cash, cash equivalents, and restricted cash:

5/31/2026

5/25/2025

Cash and cash equivalents

$         219.5

$         240.0

Restricted cash included in prepaid expenses and other current assets

8.1

14.5

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

$         227.6

$         254.5

SOURCE Darden Restaurants, Inc.: Financial

Key Takeaways Darden is set to report Q4 results, with EPS and revenue estimates implying sharp YoY growth.Olive Garden and LongHorn sales momentum is expected to support Darden's Q4 revenues.Productivity gains and sales leverage may aid margins, while beef costs and investments could weigh. Darden Restaurants, Inc. (DRI - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on June 25, before the opening bell.

In the last reported quarter, earnings met the Zacks Consensus Estimate, while revenues beat the same by 0.5%. DRI’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters, missed on two occasions, and met on one occasion, with an average surprise of negative 0.3%.

Trend in the Estimate Revision of DRIThe Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) is $3.63, up 21.8% from $2.98 in the year-ago quarter.

For revenues, the consensus estimate is $3.73 billion. The projection implies a 14.2% rise from the year-ago quarter’s reported figure.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape Darden’s Quarterly ResultsRevenues

Darden’s fiscal fourth-quarter performance is likely to have benefited from continued same-restaurant sales momentum across its portfolio, led by Olive Garden and LongHorn Steakhouse. Sales trends remained strong through the first three weeks of March, and management projected same-restaurant sales growth of 3.5%-5% for the quarter under review.

 Olive Garden’s initiatives are expected to have supported guest traffic and sales growth in the to-be-reported quarter. The recently expanded lighter-portion menu, which added seven dishes priced below $15, has been generating higher guest frequency, stronger value scores and improved portion-size satisfaction ratings. Management also highlighted positive guest response to the Buy One, Take One promotion, which was extended by an additional week this year and supported with increased media spending.

LongHorn Steakhouse is likely to have remained a major growth driver. The brand posted 7.2% same-restaurant sales growth in the fiscal third quarter, aided by strong traffic gains, consistent food quality and favorable consumer value perception. Management emphasized that LongHorn continues to benefit from operational excellence and strong guest loyalty, trends that likely continued into the fiscal fourth quarter.

Fine Dining is also expected to have remained strong, supported by robust private dining demand at The Capital Grille and Eddie V’s, as well as continued traction from Ruth’s Chris Steak House’s fixed-price menu. Additionally, delivery and catering initiatives, particularly at Olive Garden, are likely to have supported top-line growth. New restaurant openings are also expected to have contributed to revenue growth. Darden opened 16 restaurants during the fiscal third quarter and remains on track to open approximately 70 new locations in fiscal 2026. The company’s updated outlook calls for total sales growth of approximately 9.5% for the year.

Our model predicts revenues from Olive Garden and LongHorn Steakhouse to rise 11% and 16%, respectively, year over year to $1.53 billion and $967.1 million. We expect revenues from fine dining to increase 7.1% year over year to $358.4 million.

Margins

Darden’s earnings performance in the fiscal fourth quarter is expected to have benefited from productivity improvements, labor efficiencies and sales leverage. In the previous quarter, restaurant labor benefited from productivity gains, while strong same-restaurant sales growth helped offset inflationary pressures. Continued traffic gains and disciplined cost management are likely to have supported profitability in the to-be-reported quarter.

Darden’s pricing strategy may also have weighed on margins. Management expects commodity inflation of approximately 4% for fiscal 2026, with beef remaining the primary cost headwind. In addition, ongoing investments in marketing, delivery capabilities and menu initiatives, including Olive Garden’s lighter-portion offerings, are likely to have weighed modestly on restaurant-level margins.

What Our Model Says About DRI StockOur proven model does conclusively predict an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

Earnings ESP for DRI: Darden has an Earnings ESP of +0.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Darden’s Zacks Rank: The company currently has a Zacks Rank #3.

Other Stocks Poised to Beat on EarningsHere are some stocks from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these too have the right combination of elements to post an earnings beat.

CAVA Group, Inc. (CAVA - Free Report) currently has an Earnings ESP of +2.71% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, CAVA’s earnings are expected to rise 6.3% year over year. CAVA’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 16.6%.

Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, Sweetgreen’s earnings are expected to register 35% year-over-year growth. Sweetgreen’s earnings missed estimates in each of the trailing four quarters, with an average miss of 42.4%.

BJ's Restaurants, Inc. (BJRI - Free Report) has an Earnings ESP of +4.96% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, BJRI earnings are expected to register an 11.3% year-over-year decline. BJRI’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, with an average surprise of 136%.