Darden Posts Mixed Q4 as LongHorn Steakhouse Surges, Olive Garden Lags; Fiscal 2027 Outlook Misses Estimates

Darden Restaurants Inc. on Thursday reported mixed fiscal fourth-quarter results, beating adjusted earnings estimates but falling short on revenue, while its full-year forecast for fiscal 2027 landed on the lower end of analyst expectations.

Shares of the Olive Garden and LongHorn Steakhouse parent fell more than 1% in morning trading and were down 3.35% in premarket action, according to Benzinga Pro and CNBC.

For the quarter ended May 31, Darden posted adjusted earnings of $3.66 per share, topping the analyst consensus estimate of $3.63 per share, according to Benzinga Pro and LSEG data cited by CNBC. Revenue came in at $3.719 billion to $3.72 billion, missing the consensus estimate of $3.728 billion to $3.73 billion.

Net income rose to $404.9 million, or $3.51 per share, from $303.8 million, or $2.58 per share, a year earlier. Excluding costs related to restaurant closures, impairments and the Chuy’s integration, adjusted net earnings were $3.66 per share, including a 25-cent benefit from an extra week of operations during the fiscal year.

Total sales jumped 13.7% to $3.72 billion, driven by a 7.6% lift from the 53rd week, a 4.6% increase in blended same-restaurant sales and contributions from 43 net new restaurants. Blended same-store sales growth of 4.6% topped StreetAccount estimates of 4.1% growth, CNBC reported.

**LongHorn Outpaces Olive Garden**

Segment performance showed a sharp divergence. LongHorn Steakhouse led the portfolio with same-store sales growth of 9.5%, beating StreetAccount projections of 7.1%, CNBC reported. Executives noted that the chain bought more lamb than the previous year but sold out in half the time during the annual return of its lamb chops.

Olive Garden, Darden’s largest chain, reported same-store sales growth of just 2.4%, missing expectations of 3.2% growth, according to CNBC. The fine-dining segment, which includes The Capital Grille and Ruth’s Chris, posted same-store sales growth of 1.9%, falling short of the 3.1% estimate. Darden’s “other business” segment, comprising Yard House, Chuy’s and others, saw same-store sales rise 4.6%, beating the 3.0% forecast.

Speaking on the company’s earnings conference call, CEO Rick Cardenas said consumer spending remains “pretty resilient overall” but noted that “the mood with consumers is still a little cautious.” He added that the weaker sentiment “hasn’t necessarily translated into reduced spending.” Some casual-dining brands saw increased visits across all income cohorts, possibly boosted by tax refunds. However, traffic from consumers under age 35 weakened slightly, according to CNBC.

**Fiscal 2027 Outlook Falls Short; Share Buyback Authorized**

Darden issued its full-year fiscal 2027 forecast, projecting total sales of $13.60 billion to $13.75 billion, compared with the analyst consensus of $13.718 billion to $13.72 billion. Diluted earnings per share from continuing operations are expected to range from $11.10 to $11.35, versus analyst estimates of $11.37 per share (Benzinga) or $11.40 (CNBC).

The company expects same-store sales growth of 2.5% to 3.5% for the year and plans to open 75 to 80 new restaurants. Capital spending is pegged at roughly $875 million, with total inflation of 3% and an effective tax rate of 13.5%. EBITDA is forecast between $2.26 billion and $2.29 billion.

“We’re not expecting any material change to industry performance,” CFO Raj Vennam said on the call, as reported by CNBC.

Darden’s board declared a quarterly cash dividend of $1.62 per share, an 8% increase from the prior quarter, payable Aug. 3 to holders of record July 10. During the quarter, the company repurchased 0.7 million shares for $138 million. On June 24, the board authorized a new $1.5 billion share repurchase program, replacing the previous authorization with no expiration date.

“Our strong operating model generates significant and durable cash flows,” Vennam said in a statement.

**Analysts Raise Price Targets**

Following the earnings release, several analysts updated their price targets on Darden shares, Benzinga reported. BTIG analyst Peter Saleh maintained a Buy rating and raised the target from $225 to $235. Stephens & Co. analyst Jim Salera kept an Equal-Weight rating and lifted the target from $210 to $216. Baird analyst David Tarantino held a Neutral rating and raised the target from $210 to $220.

**Chuy’s Integration and Bahama Breeze Wind-Down**

Darden noted that the quarter included 12 cents per share in costs related to restaurant closures, impairments and the integration of Chuy’s, which it acquired in 2024. The company also plans to convert 11 of its Bahama Breeze restaurants into locations for its other brands, following the February announcement that it was winding down the struggling Caribbean-inspired chain, CNBC reported.