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Darden Issues Weak Full-Year Earnings Outlook as Fourth-Quarter Sales Miss Views

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Darden Issues Weak Full-Year Earnings Outlook as Fourth-Quarter Sales Miss Views

Darden Restaurants (DRI) issued a full-year earnings outlook below market estimates on Thursday, while the restaurant operator's fiscal fourth-quarter sales fell short of expectations.

The Olive Garden and LongHorn Steakhouse parent anticipates per-share earnings from continuing operations to come in between $11.10 and $11.35 for fiscal 2027. The current consensus on FactSet is for EPS of $11.39. In the previous fiscal year, profit increased to $10.44 from $8.88 on an annual basis.

Shares of the company were down 3.4% in the most recent premarket activity.

Sales are pegged to be in a range of $13.6 billion to $13.75 billion for the ongoing fiscal year, while same-restaurant sales are projected to grow by 2.5% to 3.5%. The Street is looking for sales of $13.71 billion and same-store sales to increase by 2.9%.

In fiscal 2026, sales improved 9.4% to $13.21 billion and same-restaurant sales inclined 4.5%.

For the three months through May, Darden's sales rose to $3.72 billion from $3.27 billion the year before, but were just shy of the average analyst estimate of $3.73 billion. Same-restaurant sales advanced 4.6%, ahead of the market's forecast for growth of 4.2%.

Same-restaurant sales increased 2.4% for Olive Garden and 9.5% at LongHorn Steakhouse. The fine dining segment moved 1.9% higher.

"The fourth quarter was a strong finish to an excellent year, one in which we significantly outperformed the industry," Chief Executive Rick Cardenas said in a statement. "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."

Adjusted EPS from continuing operations jumped 23% year over year to $3.66 in the fourth quarter, exceeding the Street's view for $3.63. The result excluded a $0.12 headwind mainly related to restaurant closures and the integration of Tex-Mex restaurant chain Chuy's, according to the company.

"I am confident we are well positioned to continue growing the business and creating long-term shareholder value," Cardenas said.

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