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An Olive Backyard restaurant in Milpitas, California, US, on Tuesday, Dec. 16, 2025.
David Paul Morris | Bloomberg | Getty Photos
Darden Eating places on Thursday reported robust gross sales progress, fueled by demand at Olive Backyard and LongHorn Steakhouse as thrifty diners search for good offers.
For the second straight quarter, the corporate hiked its full-year outlook for income progress, though it solely reiterated its projections for its earnings.
“The second quarter exceeded our top-line expectations as each phase delivered optimistic same-restaurant gross sales,” Darden CEO Rick Cardenas mentioned in an announcement.
Shares of the corporate rose practically 3% in morning buying and selling.
Here is what the corporate reported in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG:
- Earnings per share: $2.08 adjusted vs. $2.10 anticipated
- Income: $3.1 billion vs. $3.07 billion anticipated
Darden reported fiscal second-quarter internet revenue of $237.2 million, or $2.03 per share, up from $215.1 million, or $1.82 per share, a 12 months earlier.
Larger ingredient prices, significantly for near-record costs for beef, weighed on the corporate’s restaurant-level margin, CFO Raj Vennam mentioned on the corporate’s convention name.
Excluding restaurant closure prices and bills associated to its acquisition of Chuy’s, the restaurant firm earned $2.08 per share.
Web gross sales rose 7.3% to $3.1 billion.
Darden’s same-store gross sales elevated 4.3% within the quarter, topping Wall Road estimates of three%, based on StreetAccount.
Whereas the broader restaurant business has seen sluggish gross sales progress, Darden has discovered success by elevating its menu costs by lower than inflation and including promotions aimed toward diners searching for worth.
“Weaker shopper sentiment would not essentially translate into lowered spending through the quarter,” Cardenas mentioned through the convention name.
He mentioned the corporate noticed high-income shoppers commerce into its casual-dining chains, though demand from diners making lower than $50,000 fell barely. Darden additionally acquired a site visitors bump from shoppers who’re at the least 55 years previous.
Restaurant outcomes
Olive Backyard, which accounted for roughly 44% of Darden’s quarterly gross sales, reported same-store gross sales progress of 4.7%. Executives credited the recognition of the Italian chain’s $13.99 By no means Ending Pasta Bowl promotion that ran through the quarter, plus Olive Backyard’s rising supply enterprise.
In an enchantment to inflation-weary shoppers, Olive Backyard can also be including the choice of smaller parts at a lower cost for choose menu gadgets. Cardenas mentioned the change is bettering its worth notion amongst some diners. About 40% of the chain’s areas provided the lighter parts menu through the quarter, and one other 20% added it early within the fiscal third quarter.
LongHorn Steakhouse noticed same-store gross sales progress of 5.9%. Whereas Olive Backyard nonetheless outnumbers LongHorn primarily based on its restaurant footprint, the steakhouse chain’s gross sales are rising quicker.
Cardenas mentioned LongHorn noticed larger site visitors from shoppers who make lower than $50,000, regardless of the chain’s larger common examine relative to Olive Backyard. He credited larger beef costs, which imply {that a} steak at LongHorn might be the identical worth or cheaper than shopping for one from the grocery retailer.
The corporate’s different enterprise phase reported same-store gross sales progress of three.1%, fueled by robust demand at Yard Home, based on Cardenas.
Darden’s fine-dining enterprise, which incorporates Ruth’s Chris and The Capital Grille, noticed same-store gross sales progress of 0.8%, bucking the malaise of the sector.
The broader fine-dining phase has struggled as shoppers spend much less when eating out and plenty of corporations have in the reduction of on enterprise lunches and different bills. Darden tried to enchantment to these budget-conscious diners by bringing again a deal at Ruth’s Chris for a three-course meal priced at $55 per particular person.
“It is a worthwhile deal for us,” Cardenas mentioned.
For fiscal 2026, Darden now expects complete gross sales progress of 8.5% to 9.3%, up from its prior forecast of seven.5% to eight.5%. The fiscal 12 months features a 53rd week, which is predicted to contribute about 2%.
Darden additionally adjusted its expectations for inflation to three.5%, on the excessive finish of its prior vary of three% to three.5%. Larger prices will weigh on the corporate’s margins, main the corporate to reiterate its forecast for adjusted earnings in a variety of $10.50 to $10.70 per share.
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