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Investing.com - Darden Restaurants has reported a slide in fourth-quarter operating income and provided a weaker-than-anticipated outlook for its current fiscal year despite a surge in sales.
The group, whose portfolio includes popular eatery chains like LongHorn Steakhouse and Chuy’s, reported quarterly operating profit of $382.8 million, a slide of 3.2% versus a year earlier. Analysts had anticipated $444.1 million, according to Bloomberg consensus estimates.
But sales during the period jumped by 11% to $3.27 billion, compared with estimates of $3.26 billion, bolstered in part by stronger-than-anticipated performance at Olive Garden and LongHorn. Darden (NYSE:DRI) also noted a boost from the acquisition of 103 Chuy’s restaurants and 25 net new locations.
"Our strategy remains the right one for the company, and we will continue to execute it to drive growth and long-term shareholder value," said CEO Rick Cardenas in a statement.
For its 2026 fiscal year, Darden said it projects total sales growth of 7-8% and diluted net earnings per share from continuing operations of $10.50 to $10.70. Analysts had anticipated per-share income of $10.75.
Mirroring peers like Domino’s Pizza (NYSE:DPZ) and McDonald’s (NYSE:MCD), Darden has recently been rolling out promotional drives aimed at attracting price-conscious customers wary of spending heavily during a time of broad economic uncertainty.
Earlier this year, Cardenas told analysts that he expected consumers to continue to spend as long as incomes rise and outpace inflation. Recent data points have suggested that price pressures in the U.S. have been mostly benign, although economists have flagged that the impact of sweeping U.S. tariffs on inflation may still be coming.
CFO Raj Vennam has also said in March that, because Darden sources most of its products domestically, it is more likely to avoid President Donald Trump’s punishing import tariffs. The rest of its materials could easily be found in the U.S., he added.
Shares in Darden were higher in premarket trade on Friday, erasing some earlier losses. The stock has risen by over 19% so far this year.