Darden Restaurants Stock Earnings Reports

Darden reported a strong fiscal Q2 with broad-based same-restaurant sales outperformance versus the industry. Key growth drivers were Olive Garden (Never Ending Pasta Bowl, first-party delivery) and LongHorn (food quality and guest loyalty); Yard House and Ruth's Chris also contributed positive trends. First‑party delivery via Uber Direct is gaining traction (Olive Garden ~4% of sales, about half incremental) and is being rolled out selectively to other brands. Elevated beef costs were a meaningful headwind in the quarter, pressuring margins, but management intentionally priced below inflation (investing in value and guest frequency), which reduced near‑term margins. Adjusted diluted EPS from continuing operations was $2.80 for the quarter (+2.5% y/y). Management updated fiscal 2026 guidance: total sales growth 8.5%–9.3%, same‑restaurant sales +3.5%–4.3%, 65–70 new restaurants, capex $750M–$775M, total inflation ~3.5% (commodities 4%–5%), ~116.5M diluted shares, and unchanged adjusted diluted EPS guidance of $10.60–$10.70 (approx. $0.20 from a 53rd week). They repurchased $222M of shares and paid $174M in dividends in the quarter. Beef costs peaked in Q2 and management expects gradual relief into Q4 (they have ~45% coverage for the back half and are adding coverage), with EPS growth expected to sequentially improve through the year (Q3 mid‑single digits y/y). Management emphasized the portfolio advantage, disciplined capital allocation, and continued investment in value and operations despite near‑term margin pressure.