Darden Restaurants (DRI) Q2 2026 earnings

Darden Restaurants, the parent company of Olive Garden and LongHorn Steakhouse, has reported strong sales growth in its latest quarter, driven by demand from thrifty diners looking for good deals. The company’s ability to balance price increases with value-driven promotions has helped it outperform the broader restaurant industry, which has seen sluggish sales growth in recent times.

The company’s CEO, Rick Cardenas, stated that the second quarter exceeded top-line expectations, with every segment delivering positive same-restaurant sales. This positive trend has led Darden to hike its full-year outlook for revenue growth for the second straight quarter, although it has reiterated its projections for earnings. The company’s shares rose nearly 3% in morning trading, reflecting the market’s optimism about its performance.

Key Financial Highlights

Darden reported fiscal second-quarter net income of $237.2 million, or $2.03 per share, up from $215.1 million, or $1.82 per share, a year earlier. The company’s revenue rose 7.3% to $3.1 billion, with same-store sales increasing 4.3% in the quarter. This growth surpassed Wall Street estimates of 3%, according to StreetAccount. Excluding restaurant closure costs and expenses related to its acquisition of Chuy’s, the company earned $2.08 per share, slightly below the expected $2.10.

The company’s success can be attributed to its strategic approach to pricing and promotions. By raising menu prices by less than inflation and introducing value-driven promotions, Darden has managed to attract price-conscious consumers without compromising on profitability. The popularity of Olive Garden’s $13.99 Never Ending Pasta Bowl promotion and the growing delivery business are notable examples of this strategy.

Segment Performance

Olive Garden, which accounts for roughly 44% of Darden’s quarterly sales, reported same-store sales growth of 4.7%. The introduction of smaller portions at a lower price for select menu items has improved the chain’s value perception among some diners. LongHorn Steakhouse saw same-store sales growth of 5.9%, driven by higher traffic from consumers who make less than $50,000. The company’s other business segment reported same-store sales growth of 3.1%, fueled by strong demand at Yard House.

Darden’s fine-dining business, which includes Ruth’s Chris and The Capital Grille, saw same-store sales growth of 0.8%, defying the challenges faced by the broader fine-dining segment. The company’s efforts to appeal to budget-conscious diners, such as the three-course meal deal at Ruth’s Chris priced at $55 per person, have contributed to this positive performance.

Outlook and Projections

For fiscal 2026, Darden now expects total sales growth of 8.5% to 9.3%, up from its prior forecast of 7.5% to 8.5%. The company has also adjusted its expectations for inflation to 3.5%, on the high end of its prior range of 3% to 3.5%. While higher costs will weigh on the company’s margins, Darden has reiterated its forecast for adjusted earnings in a range of $10.50 to $10.70 per share. As the company continues to navigate the challenges of the restaurant industry, its focus on delivering value to customers and managing costs effectively will be crucial to its long-term success.