Darden’s Third Quarter: Same-Restaurant Sales Climb, Earnings Beat, and Shareholder Returns Stand Out in Fiscal 2026
Stronger-Than-Industry Same-Restaurant Sales Growth Drives Momentum
Darden Restaurants (NYSE: DRI) reported sales growth of 5.9% in its third quarter ended February 22, 2026, reaching $3.35 billion. The results were driven by a robust 4.2% blended increase in same-restaurant sales and contributions from 31 net new restaurant openings. Notably, flagship brands LongHorn Steakhouse and Olive Garden posted impressive year-over-year sales increases of 7.2% and 3.2%, respectively, consistently outpacing industry benchmarks. Fine Dining and Other Businesses segments also contributed positive growth.
| Brand | Same-Restaurant Sales Growth (%) | Q3 2026 Sales ($M) | Q3 2026 Segment Profit ($M) |
|---|---|---|---|
| Consolidated Darden | 4.2 | 3,345.3 | - |
| Olive Garden | 3.2 | 1,393.0 | 320.0 |
| LongHorn Steakhouse | 7.2 | 854.2 | 159.0 |
| Fine Dining | 2.1 | 402.0 | 88.5 |
| Other Business | 3.9 | 696.1 | 108.8 |
Earnings Edge Higher and Capital Return Accelerates
Adjusted diluted net earnings per share from continuing operations rose 5.4% from a year prior to $2.95, excluding one-time expenses and adjustments. This exceeded the reported EPS of $2.68, which reflected impairment and strategic review costs. The company also returned $127 million to shareholders through stock repurchases and declared a quarterly dividend of $1.50 per share. Darden retains $516 million authorized for additional buybacks, highlighting its steady commitment to shareholder returns.
| Metric | Q3 2026 Value | Q3 2025 Value | % Change |
|---|---|---|---|
| Reported Diluted EPS (cont. ops) | 2.68 | 2.74 | -2.2% |
| Adjusted Diluted EPS (cont. ops) | 2.95 | 2.80 | +5.4% |
| Shares Repurchased ($M) | 127 | n/a | n/a |
| Dividend Declared ($/share) | 1.50 | n/a | n/a |
Portfolio Shift: Expansion, Closures, and Operational Highlights
Darden continued to optimize its portfolio during the quarter. While opening 31 net new locations since last year, it continued shuttering underperforming Bahama Breeze outlets—down to 27 from 43. A total of approximately 70 restaurant openings are projected for fiscal 2026. These calculated shifts and historically high retention among staff and managers are keeping execution sharp and guest satisfaction high.
| Brand | Restaurants (2/22/26) | Restaurants (2/23/25) |
|---|---|---|
| Olive Garden | 944 | 927 |
| LongHorn Steakhouse | 608 | 586 |
| Cheddar's Scratch Kitchen | 184 | 182 |
| Chuy's | 108 | 106 |
| Bahama Breeze | 27 | 43 |
| Darden Continuing Ops Total | 2,196 | 2,165 |
Outlook: Fiscal 2026 Guidance Projects Steady Growth
Looking ahead, Darden raised its fiscal 2026 full-year sales growth outlook to approximately 9.5%, including a benefit from a 53rd week. Same-restaurant sales are expected to rise around 4.5%, with roughly 2% of growth attributed to the extra week. Adjusted diluted EPS from continuing operations is guided to a range of $10.57 to $10.67. Darden projects $750 million–$775 million in capital expenditures and continues to forecast moderate inflation and a low effective tax rate.
Key Takeaway: Consistent Execution and Strong Shareholder Value
Darden’s third-quarter results underscore its balance of same-restaurant growth, disciplined earnings management, rigorous cost control, and a focus on capital return to shareholders. Its portfolio optimization, expansion plans, and robust FY26 guidance reflect confidence in operational strategy and ongoing industry outperformance. Investors will want to follow the upcoming conference call and evolving details on portfolio transitions, especially regarding the closure of Bahama Breeze and integration of new acquisitions.
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