Darden Restaurants' Earnings Miss But Revenue Forecast Increases
Orlando, Thursday, 18 September 2025.
Darden Restaurants, owner of Olive Garden, missed Q1 earnings expectations but raised its revenue forecast, reflecting strategic confidence despite economic pressures.
Earnings Shortfall Amid Economic Pressures
On September 17, 2025, Darden Restaurants, Inc. (NYSE:DRI), the parent company of Olive Garden and LongHorn Steakhouse, reported its fiscal first-quarter earnings for 2026, which fell short of analysts’ expectations. The company announced a net income of $257.8 million, translating to earnings per share of $1.97, adjusted from one-time gains and costs, against the anticipated $2 per share by analysts. While the revenue of $3.04 billion met market forecasts, the earnings miss was attributed to higher operational costs and shifting consumer behaviors due to economic pressures [1][2].
Revenue Growth Forecast Reflects Strategic Optimism
Despite the earnings shortfall, Darden Restaurants has expressed optimism by raising its revenue growth forecast for fiscal 2026. The company now projects revenue growth of 7.5% to 8.5%, up from the previous forecast of 7% to 8%. This decision underscores the company’s confidence in its strategic initiatives, which include maintaining menu price hikes below the inflation rate to attract price-conscious customers. Furthermore, the company reported a 4.7% increase in same-store sales, with Olive Garden and LongHorn Steakhouse showing significant growth at 5.9% and 5.5%, respectively [1][3].
Market Reactions and Strategic Initiatives
Following the earnings announcement, Darden’s stock experienced a decline of nearly 10% as investors reacted to the missed earnings expectations. The company’s efforts to navigate the current economic environment include acquiring 103 Chuy’s Tex Mex locations, which contributed to a 10.4% increase in total sales. Darden’s strategy to expand its portfolio and optimize its operations highlights its adaptability in a competitive market [4][5].
Outlook and Strategic Focus
Looking forward, Darden Restaurants plans to open approximately 65 new locations, with total capital spending estimated between $700 and $750 million. The company’s leadership remains focused on sustaining growth through strategic expansion and operational efficiency. Despite the short-term market pressures and rising costs, Darden aims to leverage its diverse brand portfolio to secure its position in the restaurant industry [2][6].