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Introduction & Market Context
Darden Restaurants Inc (NYSE:DRI) presented its fourth quarter and full-year fiscal 2025 results on June 20, 2025, showcasing accelerated sales growth and ambitious international expansion plans. The restaurant group’s shares jumped 3.7% in premarket trading to $231, building on recent momentum that has seen the stock trade near its 52-week high of $226.98.
The company, which operates popular chains including Olive Garden, LongHorn Steakhouse, and The Capital Grille, reported stronger-than-expected fourth-quarter results, continuing the positive trajectory seen in its third-quarter performance when the stock rose 5.71% despite slightly missing analyst expectations.
Quarterly Performance Highlights
Darden’s fourth quarter showed significant acceleration in both total sales and same-restaurant sales growth compared to its full-year performance. Total (EPA:TTEF) sales reached $3.3 billion, representing 10.6% growth, while same-restaurant sales increased by 4.6%. The company also reported adjusted EBITDA of $582 million and returned $215 million to shareholders.
As shown in the following quarterly financial highlights:
Breaking down performance by segment, Olive Garden remained the largest contributor with $1,381 million in quarterly sales, followed by LongHorn Steakhouse at $834 million. The Fine Dining segment, which includes The Capital Grille and Eddie V’s, generated $335 million, while the Other segment, which includes Cheddar’s Scratch Kitchen, Yard House, and the recently acquired Chuy’s, contributed $722 million.
The segment performance data reveals the strength across Darden’s diverse portfolio:
The company highlighted several successful promotional initiatives during the quarter, including Olive Garden’s "buy one, take one" pasta promotion starting at $14.99 and new Uber (NYSE:UBER) Direct Delivery partnerships with both Olive Garden and Cheddar’s Scratch Kitchen, which maintain in-restaurant pricing for delivery orders.
Full-Year Results
For the full fiscal year 2025, Darden reported total sales of $12.1 billion, representing 6.0% growth year-over-year, with same-restaurant sales growth of 2.0%. The company generated adjusted EBITDA of $2.0 billion and adjusted diluted net EPS from continuing operations of $9.55. Darden returned a total of $1.1 billion to shareholders throughout the year.
The following slide illustrates the full-year financial performance:
Darden’s business model has demonstrated consistent cash flow generation over the past several years, with adjusted EBITDA showing an impressive 8.9% compound annual growth rate from fiscal 2019 through fiscal 2025. This strong cash flow performance has allowed the company to maintain its capital expenditure plans while returning significant cash to shareholders.
The following chart illustrates Darden’s cash flow generation trajectory:
Strategic Initiatives
A major focus of Darden’s presentation was its accelerating international expansion strategy. The company announced new development agreements with partners in India and Spain for 40 Olive Garden locations each, along with a new agreement in Asia for six Capital Grille locations.
The company’s global franchise strategy is illustrated in this map showing current and upcoming locations:
In Canada, Darden is repositioning its market approach by transitioning Canadian Olive Garden locations to franchise ownership, with a new development agreement to open 30 additional restaurants over the next decade.
Darden also highlighted its portfolio of differentiated and iconic brands, showcasing the scale and diversity of its restaurant concepts. Olive Garden leads with $5.2 billion in total sales across 935 restaurants, while LongHorn Steakhouse generates $3.0 billion from 591 locations. The company’s fine dining concepts, including The Capital Grille and Eddie V’s, deliver higher average annual restaurant sales despite their smaller footprints.
The following slide details the performance metrics across Darden’s restaurant portfolio:
Forward-Looking Statements
Looking ahead to fiscal 2026, Darden provided an optimistic outlook, projecting total sales growth of 7.0% to 8.0% and same-restaurant sales growth of 2.0% to 3.5%. The company plans to open 60 to 65 new restaurants and expects capital spending between $700 million and $750 million. Management forecasts diluted net earnings per share between $10.50 and $10.70, representing continued growth from the $9.55 reported for fiscal 2025.
The detailed fiscal 2026 outlook is presented in the following slide:
Darden also updated its long-term financial framework, adjusting several key targets to reflect current market conditions and strategic priorities. The updated framework maintains ambitious growth targets while acknowledging the evolving restaurant industry landscape.
The revised long-term targets are outlined in this slide:
Notably, Darden has achieved or exceeded most of its long-term framework targets over the past six years, delivering a total shareholder return of 11.6% annually during this period. This consistent performance underscores management’s ability to execute its strategic vision while navigating industry challenges.
The six-year performance against long-term targets is illustrated here:
CEO Rick Cardenas, who had previously noted during the Q3 earnings call that changes in consumer sentiment had not significantly affected spending, maintained his optimistic outlook for the business. The company’s focus on being "brilliant with the basics" and delivering outstanding food, drinks, and service continues to drive customer loyalty across its restaurant brands.
With its strong fourth-quarter performance, successful brand portfolio, ambitious international expansion plans, and positive outlook for fiscal 2026, Darden appears well-positioned to maintain its growth trajectory and market leadership in the full-service restaurant sector.
Full presentation:
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