On Thursday, Darden Restaurants announced its quarterly earnings, meeting analysts’ expectations and reporting impressive same-store sales growth at both Olive Garden and LongHorn Steakhouse.
The company’s stock rose by 14% at the close of trading on Thursday.
Here’s a look at Darden’s performance compared to Wall Street projections, according to analysts surveyed by LSEG:
- Earnings per share: Adjusted $2.03 vs. $2.02 expected
- Revenue: $2.89 billion vs. $2.9 billion expected
For its fiscal second quarter, Darden recorded a net income of $215.1 million, or $1.82 per share, up from $212.1 million, or $1.76 per share, the previous year. When excluding expenses related to the acquisition of Chuy’s, the earnings per share stood at $2.03. The company saw its net sales increase by 6% to reach $2.89 billion. Darden’s same-store sales grew by 2.4%, surpassing the predicted 1.5% from StreetAccount.
"It appears that consumers are feeling slightly more optimistic than in previous quarters," CEO Rick Cardenas noted during a conference call. He highlighted that while diners with annual incomes between $50,000 and $100,000 are visiting more frequently, those with higher incomes haven’t increased their visits.
Cardenas also mentioned "meaningful impacts" from hurricanes Helene and Milton, noting that only a Cheddar’s Scratch Kitchen in Asheville, North Carolina, remains closed but is expected to reopen next year.
LongHorn Steakhouse reported a robust same-store sales growth of 7.5%, significantly outpacing the 4.1% anticipated by Wall Street. The chain continues to excel within Darden’s portfolio, attracting patrons with its quality offerings and competitive pricing.
For Olive Garden, which generates over 40% of Darden’s quarterly revenue, same-store sales rose by 2%. This was better than the 1.4% growth anticipated by analysts. The chain reintroduced its popular Never Ending Pasta Bowl promotion, which saw a boost in spending as customers opted to add protein to their meals. Olive Garden is also testing Uber delivery services at 100 locations, aiming for a broader rollout post-holidays.
Meanwhile, Darden’s fine-dining segment, including The Capital Grille and Ruth’s Chris Steak House, faced a same-store sales dip of 5.8%, greater than the 2.8% decline that analysts expected. The segment has been hit by high prices deterring budget-conscious diners. Darden’s CFO, Raj Vennam, pointed out that the shift of Thanksgiving from the fiscal second quarter to the third this year also negatively impacted fine-dining sales. Excluding these factors, the segment’s sales were only down 3.8%, which is an improvement compared to the previous quarter’s 6% decline.
Finally, the segment encompassing Cheddar’s Scratch Kitchen and Yard House experienced same-store sales growth of 0.7%, aligning with estimates.
Darden expanded its portfolio by adding 39 new locations and acquiring 103 Chuy’s restaurants during the quarter, completing the $605 million acquisition of the Tex-Mex chain in October. While Chuy’s figures won’t be included in same-store sales metrics until the fiscal fourth quarter of 2026, Darden has adjusted its fiscal 2025 outlook to reflect this acquisition. The company now anticipates total sales of $12.1 billion, upping its previous estimate of between $11.8 billion and $11.9 billion. Darden also reaffirmed its projection for net earnings per share from continuing operations to be between $9.40 and $9.60.
