Darden Posts 10.4% Sales Growth—Acquisition of Chuy’s and Core Brand Strength Drive Results
Darden Restaurants started fiscal 2026 on a strong note, reporting total sales of $3.04 billion for its first quarter—a 10.4% increase compared to the same period last year. This performance was driven by a 4.7% blended same-restaurant sales gain, complemented by the addition of 103 Chuy’s Tex Mex locations and 22 net new restaurants across its portfolio.
Olive Garden and LongHorn Steakhouse Lead Same-Restaurant Sales Growth
The company’s largest brands, Olive Garden and LongHorn Steakhouse, continued to outperform with same-restaurant sales growth of 5.9% and 5.5% respectively. The only segment to see a minor contraction was Fine Dining, which dipped by 0.2%. Below is a summary of same-restaurant sales by segment:
| Segment | Q1 2026 Same-Restaurant Sales Growth (%) |
|---|---|
| Consolidated Darden | 4.7 |
| Olive Garden | 5.9 |
| LongHorn Steakhouse | 5.5 |
| Fine Dining | -0.2 |
| Other Business | 3.3 |
Profitability Boosted by Adjusted EPS and Operating Performance
Darden’s adjusted diluted net earnings per share from continuing operations hit $1.97, a 12.6% year-over-year increase after accounting for transaction, integration, and one-time gains. Net earnings for the quarter reached $257.9 million, with reported diluted EPS of $2.19.
| Quarter | Reported EPS | Adjusted EPS | Adjusted EPS Growth (%) |
|---|---|---|---|
| Q1 2026 | 2.19 | 1.97 | 12.6 |
| Q1 2025 | 1.74 | 1.75 | — |
Operating income for the quarter reached $339.2 million, up from $269.2 million a year earlier. The company also reported net cash from operating activities of $342.5 million for the quarter.
Dividend Declared and Active Share Repurchases Highlight Commitment to Shareholders
Alongside strong operating results, Darden’s Board declared a quarterly dividend of $1.50 per share, payable on November 3, 2025. The company repurchased approximately 0.9 million shares in the quarter, returning $183 million to shareholders, and retains $865 million of its current repurchase authorization.
Guidance for 2026 Signals Ongoing Expansion and Margin Discipline
Darden updated its fiscal 2026 guidance, forecasting total sales growth of 7.5% to 8.5%, supported by approximately 2% growth from a 53rd week and about 65 new restaurant openings. The outlook calls for 2.5% to 3.5% same-restaurant sales growth, with adjusted EPS projected in the $10.50 to $10.70 range—including $0.20 per share benefit from the additional week. Capital spending is slated to range from $700 million to $750 million as Darden invests in both new units and upgrades across its portfolio.
| Outlook Metric | 2026 Guidance |
|---|---|
| Total Sales Growth (%) | 7.5 – 8.5 |
| Same-Restaurant Sales Growth (%) | 2.5 – 3.5 |
| Adjusted Diluted EPS | $10.50 – $10.70 |
| New Restaurant Openings | ~65 |
| Capital Spending ($ millions) | 700 – 750 |
Brand Portfolio Expands as Restaurant Count Tops 2,100 Locations
Darden ended the quarter with 2,165 company-owned restaurants, a gain of 125 locations from the prior year thanks to the Chuy’s acquisition and organic growth across its brands. Olive Garden leads with 933 locations, while LongHorn Steakhouse counts 595 restaurants. Other key brands include Cheddar’s Scratch Kitchen, Yard House, and Ruth’s Chris Steak House.
Key Takeaways for Investors
Between robust top-line momentum, active capital returns, and upbeat full-year guidance, Darden’s results demonstrate both the resiliency and growth opportunity in the casual dining space. With continued margin focus and ongoing portfolio expansion—including the successful integration of Chuy’s—investors will be watching for whether Darden can sustain this pace and deliver on its ambitious fiscal 2026 goals.
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