Darden Restaurants (DRI) Q1 2026 earnings summary

Executive summary

• Total sales rose 10.4% year-over-year to $3.04 billion, driven by a 4.7% blended same-restaurant sales increase, new restaurant openings, and the Chuy's acquisition.

• Net earnings from continuing operations increased 24.2% to $257.9 million, with adjusted diluted net EPS up 12.6% to $1.97.

• Olive Garden and LongHorn Steakhouse led segment performance, with Olive Garden's same-restaurant sales up 5.9% and LongHorn up 5.5%.

• The quarter included the sale of eight Olive Garden Canada locations and integration of 103 Chuy's restaurants.

• Delivery initiatives, menu innovation, and philanthropic efforts, such as funding refrigerated trucks for food banks, supported guest engagement and community impact.

Financial highlights

• Operating income grew 26% to $339.2 million, with adjusted EBITDA at $439 million and adjusted diluted net EPS at $1.97.

• Restaurant-level EBITDA margin was 18.9%, down 10 basis points year-over-year.

• Net cash provided by operating activities increased to $342.5 million, and capital expenditures rose to $174.1 million.

• $358 million was returned to shareholders via $175 million in dividends and $183 million in share repurchases.

• Segment profit margins: Olive Garden 20.6%, LongHorn 17.4%, Fine Dining 13.5%-18.0%, Other Business 13.9%-16.1%.

Outlook and guidance

• Fiscal 2026 total sales growth expected at 7.5%-8.5%, same-restaurant sales growth at 2.5%-3.5%, and approximately 65 new restaurant openings.

• Adjusted diluted net EPS guidance reiterated at $10.50-$10.70, including $0.20 from the 53rd week.

• Capital spending projected at $700–$750 million, with an effective tax rate anticipated at 13%.

• Margin pressure expected to peak in Q2 due to commodity inflation, especially beef.