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ORLANDO - Darden Restaurants, Inc. (NYSE:DRI) reported Friday that its fourth-quarter sales increased 10.6% to $3.3 billion, driven by same-restaurant sales growth of 4.6% and the acquisition of 103 Chuy’s Tex Mex restaurants. The company, which maintains a "GOOD" financial health score according to InvestingPro analysis, has demonstrated strong momentum with a 49% total return over the past year.
The company, which operates restaurant chains including Olive Garden and LongHorn Steakhouse, posted adjusted diluted earnings per share of $2.98 for the quarter ended May 25, representing a 12.5% increase when excluding transaction and integration costs related to acquisitions and restaurant closures. With a market capitalization of $26 billion and trading near its 52-week high, InvestingPro analysis suggests the stock is slightly overvalued at current levels.
Olive Garden and LongHorn Steakhouse led the company’s same-restaurant sales growth with increases of 6.9% and 6.7% respectively, while Fine Dining experienced a 3.3% decline.
"We had a strong quarter with same-restaurant sales and earnings growth that exceeded our expectations," said Darden President & CEO Rick Cardenas in the press release.
For fiscal 2025, Darden reported total sales growth of 6.0% to $12.1 billion and adjusted diluted earnings per share of $9.55, up 7.5% from the previous year.
The company’s board declared a quarterly cash dividend of $1.50 per share, a 7.1% increase from the previous quarter. The dividend will be payable on August 1 to shareholders of record as of July 10. According to InvestingPro data, Darden has maintained dividend payments for 31 consecutive years, with a current yield of 2.5% and a dividend growth rate of 6.9% over the last twelve months.
Darden also announced a new $1 billion share repurchase program, which replaces its previous authorization. During the fourth quarter, the company repurchased approximately 0.2 million shares for $51 million.
Looking ahead to fiscal 2026, which includes a 53rd week, Darden forecasts total sales growth of 7% to 8%, same-restaurant sales growth of 2% to 3.5%, and diluted earnings per share of $10.50 to $10.70. Notably, 19 analysts have revised their earnings estimates upward for the upcoming period, reflecting growing confidence in the company’s outlook. For deeper insights into Darden’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
The company plans to open 60 to 65 new restaurants in fiscal 2026 and expects total inflation of 2.5% to 3.0%.
In other recent news, Darden Restaurants is set to release its fiscal fourth-quarter earnings report soon, with analysts projecting varied outcomes. Truist Securities anticipates a strong performance, expecting Olive Garden’s same-store sales to surpass consensus estimates, and has raised its price target for Darden to $252. Meanwhile, Morgan Stanley has increased its price target to $235, noting the improved performance at Olive Garden and a strengthened casual dining segment. Stifel also maintains a Buy rating with a $215 price target, forecasting earnings per share to be slightly below the consensus but noting robust sales momentum at Olive Garden and LongHorn Steakhouse.
Evercore ISI has raised its price target to $250, citing the strength of Olive Garden and LongHorn Steakhouse as key factors in its optimistic outlook. The firm also highlights the restaurant’s focus on profitable sales growth and improved value perception compared to fast food. Analysts from various firms expect Darden’s fiscal 2026 guidance to reflect its long-term framework, with some projecting earnings per share estimates slightly below the Street consensus. Despite challenges such as commodity inflation, Darden’s operational strategies are expected to mitigate margin pressures. These developments reflect a positive sentiment shift for Darden, with analysts generally maintaining optimistic outlooks for the company’s future performance.
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