Darden Restaurants reported fiscal first-quarter results for the period ended August 30 that fell short of analyst projections. The company posted net income of $233.4 million, or $2.04 per share, compared with $257.8 million, or $2.19 per share, in the prior year. Net sales increased 5.1% to $3.20 billion.
The company’s stock declined sharply in premarket trading, falling as much as 5%, though losses narrowed during the session to approximately 2% in morning trading. Management attributed the shortfall partly to external factors, including consumer concerns related to cyclospora outbreaks tied to fresh produce and the impact of the World Cup tournament early in the quarter, which reduced same-store sales by roughly 80 basis points. CEO Rick Cardenas noted that performance trends had begun to improve in September and that commodity costs were expected to become more favorable later in the fiscal year.
Same-store sales across the company’s portfolio grew 3.1%, though growth rates varied significantly by chain. LongHorn Steakhouse emerged as the strongest performer with 6.2% same-store sales growth, surpassing Olive Garden as the company’s top-performing chain. Olive Garden, which remains Darden’s largest chain by location count and overall sales, posted modest same-store sales growth of 1.1% as consumers became more selective with spending. The company delayed a planned Olive Garden marketing campaign centered on its unlimited soup, salad, and breadsticks offering in response to consumer concerns about lettuce. Management indicated the campaign would resume during the current quarter, alongside efforts to drive weekday lunch traffic through value-oriented initiatives.
Other segments showed varied performance. Fine dining, which includes The Capital Grille and Ruth’s Chris, reported 1.6% same-store sales growth, with traffic remaining below pre-pandemic levels despite improving trends and lower price increases relative to other portfolio brands. The remaining business division, which includes Yard House, achieved 3.8% same-store sales growth, with Yard House specifically posting 10% growth bolstered by the World Cup. Yard House recently achieved billion-dollar brand status and is slated to open 13 locations in fiscal 2027, including five conversions from the shuttered Bahama Breeze chain.
Darden reiterated its fiscal 2027 guidance, projecting total sales between $13.60 billion and $13.75 billion and net earnings per share from continuing operations ranging from $11.10 to $11.35.
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