Darden Restaurants Inc.: Q1 FY2027 earnings call

What management said about Q1 FY2027, from the documents filed with the SEC on 24 September 2026: press release. Guidance figures: 9 kept. The quarter’s numbers.

Key takeaways

Sales rose 5.1% year over year: Sales were $3,200.3 million against $3,044.7 million. Sales by all four segments rose, and each segment reported positive same-restaurant sales. Source
Reported EPS fell on prior-year gain: Reported diluted EPS from continuing operations was $2.05, against $2.19 a year earlier. The prior year included a $0.26 gain on the Olive Garden Canada sale; adjusted EPS rose 4.1% from $1.97. Source
LongHorn led same-restaurant growth: LongHorn Steakhouse same-restaurant sales rose 6.2% on the fiscal calendar and 6.8% on the comparable calendar, the highest rate among the brands reported. Olive Garden rose 1.1% and 1.0%. Source
Food and labor costs rose: Food and beverage costs were $984.9 million against $929.1 million. Restaurant labor was $1,028.9 million against $988.0 million. Source
Operating cash flow fell: Net cash from operating activities of continuing operations was $279.0 million against $342.5 million. The change in current assets and liabilities was a use of $122.2 million, against $33.5 million. Source
Buybacks of $222.3 million: The company repurchased about 1.1 million shares for $222.3 million, inclusive of the 1% excise tax. It has $1.3 billion remaining under the $1.5 billion authorization. Source
Full-year targets reaffirmed: Management reaffirmed all aspects of the fiscal 2027 targets, which were first set in the June 25, 2026 release. Source

“The first quarter was a solid start to our fiscal year with each of our segments delivering positive same-restaurant sales,”
Darden President & CEO Rick Cardenas

Guidance

Area	Period	Figure	Against last quarter
Diluted EPS from continuing operations Source	fiscal 2027	$11.10 to $11.35	Kept
Total sales Source	fiscal 2027	$13.60 billion to $13.75 billion	Kept
Same-restaurant sales growth Source	fiscal 2027 (52-week basis)	2.5% to 3.5%	Kept
New restaurant openings Source	fiscal 2027	75 to 80	Kept
Total capital spending Source	fiscal 2027	approximately $875 million	Kept
Total inflation Source	fiscal 2027	approximately 3.0%	Kept
Effective tax rate Source	fiscal 2027	approximately 13.5%	Kept
EBITDA Source	fiscal 2027	$2.26 to $2.29 billion	Kept
Weighted average diluted shares outstanding Source	fiscal 2027	approximately 114 million	Kept

What changed from last quarter

Guidance kept: The full-year fiscal 2027 targets were reaffirmed in full, with no figure changed from the June 25, 2026 release. Source
New: Same-restaurant sales are now also given on a comparable calendar basis, alongside the fiscal calendar; the prior release gave fiscal-calendar figures only. Source

Sales and earnings growth

Sales rose 5.1% year over year: Sales were $3,200.3 million against $3,044.7 million. Sales by all four segments rose, and each segment reported positive same-restaurant sales. Source
Reported EPS fell on prior-year gain: Reported diluted EPS from continuing operations was $2.05, against $2.19 a year earlier. The prior year included a $0.26 gain on the Olive Garden Canada sale; adjusted EPS rose 4.1% from $1.97. Source
Operating income and net earnings lower: Operating income was $319.3 million against $339.2 million. Interest, net rose to $50.3 million from $45.4 million, and earnings from continuing operations were $234.3 million against $257.9 million. Source

Brands, segments and footprint

LongHorn led same-restaurant growth: LongHorn Steakhouse same-restaurant sales rose 6.2% on the fiscal calendar and 6.8% on the comparable calendar, the highest rate among the brands reported. Olive Garden rose 1.1% and 1.0%. Source
Olive Garden sales and profit rose: Olive Garden sales were $1,329.8 million against $1,301.1 million, and segment profit was $270.8 million against $267.6 million. Source
LongHorn sales and profit rose: LongHorn Steakhouse sales were $860.9 million against $776.4 million, with segment profit of $154.6 million against $134.9 million. Source
Fine Dining and Other Business rose: Fine Dining sales were $304.2 million against $286.5 million. Other Business sales were $705.4 million against $680.7 million, with segment profit of $111.5 million against $109.3 million. Source
Olive Garden and LongHorn units added: Olive Garden had 953 company-owned restaurants at August 30, 2026, up from 949 at May 31, 2026, and LongHorn had 624, up from 618. Bahama Breeze fell to 10 from 13. Source

“Looking ahead, our focus remains the same: operate our restaurants at a high level, strengthen guest loyalty, invest in our people and brands, and deploy capital in ways that support long-term shareholder value.”
Darden President & CEO Rick Cardenas

Costs and margins

Food and labor costs rose: Food and beverage costs were $984.9 million against $929.1 million. Restaurant labor was $1,028.9 million against $988.0 million. Source
Restaurant expenses and marketing rose: Restaurant expenses were $530.5 million against $504.2 million, and marketing expenses were $53.1 million against $49.1 million. Source
Pre-opening costs rose: Pre-opening costs were $8.5 million against $5.9 million in the prior-year quarter. Source
Depreciation rose; impairment gain smaller: Depreciation and amortization was $144.2 million against $135.1 million. The impairment line was a $3.9 million gain, against a $42.0 million gain in the prior-year quarter. Source
Income tax expense slightly lower: Income tax expense was $34.7 million against $35.9 million in the prior-year quarter. Source

Cash flow and balance sheet

Operating cash flow fell: Net cash from operating activities of continuing operations was $279.0 million against $342.5 million. The change in current assets and liabilities was a use of $122.2 million, against $33.5 million. Source
Capital spending held steady: Purchases of land, buildings and equipment were $175.3 million against $174.1 million. Proceeds from disposals were $8.8 million against $20.3 million. Source
Short-term debt rose: Short-term debt and the current portion of long-term debt was $979.7 million, up from $693.6 million at May 31, 2026. Net short-term borrowing added $285.9 million in the quarter. Source
Cash and equity balances: Cash and cash equivalents were $220.5 million. Total stockholders’ equity was $2,068.4 million, against $2,207.5 million at May 31, 2026, with retained earnings at a deficit of $259.5 million. Source

Capital returns and dividend

Buybacks of $222.3 million: The company repurchased about 1.1 million shares for $222.3 million, inclusive of the 1% excise tax. It has $1.3 billion remaining under the $1.5 billion authorization. Source
Dividends and buybacks paid in cash: Dividends paid were $184.2 million against $175.1 million, and repurchases of common stock in cash were $220.8 million against $182.7 million. Diluted shares averaged 114.4 million against 117.6 million. Source
Quarterly dividend held at $1.62: The board declared a quarterly cash dividend of $1.62 per share, the same amount declared in the June 25, 2026 release. Source

Full-year targets, calendar and strategy

Full-year targets reaffirmed: Management reaffirmed all aspects of the fiscal 2027 targets, which were first set in the June 25, 2026 release. Source
Fiscal calendar offset by one week: The company moved from a 53-week to a 52-week fiscal year. The fiscal period runs June 1 to August 30, 2026, against May 26 to August 24, 2025. Source
Comparable calendar added for comparison: Comparable-calendar periods run June 1 to August 30, 2026, against June 2 to August 31, 2025. The company said this is intended to give a clearer year-over-year comparison. Source
Distinct brands cited as advantage: Management attributed the portfolio results to distinctive brands, each with a clear strategy, supported by Darden’s scale and other competitive advantages. Source

Coming up, as management said on 24 September 2026

Dividend payable November 2: The $1.62 quarterly dividend is payable on November 2, 2026, to holders of record at the close of business on October 9, 2026. Source
Bahama Breeze exit targeted by Q4 fiscal 2027: Management expects all Bahama Breeze locations to be closed or converted to other brands by Q4 fiscal 2027. Source

Figures management reported

Figure	Reported
Comparable sales Source	blended same-restaurant sales up 3.1% on fiscal calendar; up 3.2% on comparable calendar
Inventory Source	$321.0 million at August 30, 2026, against $326.3 million at May 31, 2026
Store count Source	2,218 company-owned restaurants at August 30, 2026, against 2,165 at August 24, 2025

Earlier plans management reported on

Not stated: Management reaffirmed the fiscal 2027 targets set earlier; the release does not state progress against them. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Darden Restaurants Reports Fiscal 2027 First Quarter Results;

Declares Quarterly Dividend;

and Reaffirms Fiscal 2027 Outlook

ORLANDO, Fla., September 24, 2026 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the first quarter ended August 30, 2026.

First Quarter 2027 Financial Highlights

Total sales increased 5.1% to $3.2 billion.
Blended same-restaurant sales for the quarter increased 3.1% on a fiscal calendar basis and increased 3.2% on a comparable calendar basis.

	Fiscal Calendar	Comparable Calendar
Consolidated Darden	3.1%	3.2%
Olive Garden	1.1%	1.0%
LongHorn Steakhouse	6.2%	6.8%
Fine Dining	1.6%	1.0%
Other Business	3.8%	4.5%

Note: Due to the transition from a 53-week to a 52-week fiscal year, year-over-year fiscal period comparisons are offset by one week. Fiscal calendar is June 1, 2026 - August 30, 2026 vs. May 26, 2025 - August 24, 2025. Using comparable calendar periods helps account for the one-week shift and is intended to provide a clearer year-over-year comparison. Comparable calendar is June 1, 2026 - August 30, 2026 vs. June 2, 2025 - August 31, 2025.

Reported diluted net earnings per share from continuing operations were $2.05, an increase of 4.1% from last year's adjusted diluted net earnings per share from continuing operations
The Company repurchased $222.3 million of its outstanding common stock

“The first quarter was a solid start to our fiscal year with each of our segments delivering positive same-restaurant sales,” said Darden President & CEO Rick Cardenas. “The performance across our portfolio reinforces the importance of having distinctive brands, each with a clear strategy, supported by Darden’s scale and other competitive advantages. Looking ahead, our focus remains the same: operate our restaurants at a high level, strengthen guest loyalty, invest in our people and brands, and deploy capital in ways that support long-term shareholder value.”

Segment Performance

Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses.

	Q1 Sales		Q1 Segment Profit
($ in millions)	2027	2026	2027	2026
Consolidated Darden	$3,200.3	$3,044.7
Olive Garden	$1,329.8	$1,301.1	$270.8	$267.6
LongHorn Steakhouse	$860.9	$776.4	$154.6	$134.9
Fine Dining	$304.2	$286.5	$39.6	$38.7
Other Business	$705.4	$680.7	$111.5	$109.3

Quarter same-restaurant sales is a 13-week metric and excludes the impact of Bahama Breeze as all locations are expected to be closed or converted to other brands by Q4 fiscal 2027.

See the "Non-GAAP Information" below for more details.

Inclusive of 1% excise tax incurred on net repurchases, resulting from the Inflation Reduction Act of 2022.

Dividend Declared

Darden’s Board of Directors declared a quarterly cash dividend of $1.62 per share on the Company’s outstanding common stock. The dividend is payable on November 2, 2026 to shareholders of record at the close of business on October 9, 2026.

Share Repurchase Program

During the quarter, the Company repurchased approximately 1.1 million shares of its common stock for a total of $222.3 million. As of the end of the fiscal first quarter, the Company had $1.3 billion remaining under the current $1.5 billion repurchase authorization.

Fiscal 2027 Financial Outlook

The Company reaffirmed all aspects of its full year financial outlook for fiscal 2027, culminating in diluted net earnings per share from continuing operations of $11.10 to $11.35.

Investor Conference Call

The Company will host a conference call today, Thursday, September 24, 2026 at 8:30 am ET to review its recent financial performance, which will be available via a live webcast through the Company’s Investor Relations website at investor.darden.com. Please allow extra time prior to the call to visit the site and download any software required to listen to the webcast. Supplemental materials will be available on the Investor Relations website prior to the start of the conference call. For those who are unable to listen to the live broadcast, a replay will be available shortly after the call.

About Darden

Darden is a full-service restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, The Capital Grille, Chuy’s, Seasons 52, and Eddie V’s. For more information, please visit www.darden.com.

Information About Forward-Looking Statements

Forward-looking statements notice

Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “may,” “will,” “expect,” “intend,” "focus," “anticipate,” “continue,” “could,” “estimate,” “project,” “believe,” “plan,” “outlook,” "seek," or similar expressions. Any forward-looking statements speak only as of the date on which such statements are first made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden’s Form 10-K, Form 10-Q, and Form 8-K reports. These risks and uncertainties include: a failure to address cost pressures and a failure to effectively deliver cost management activities and achieve some economies of scale in purchasing, certain economic and business factors, and their impacts on the restaurant industry, and other general macroeconomic factors including unemployment, energy prices, tariffs and interest rates, the inability to hire, train, reward, and retain restaurant team members and determine and maintain adequate staffing, a failure to recruit, develop, and retain effective leaders or the loss or shortage of personnel with key capacities and skills that could impact our strategic direction, increased labor and insurance costs, health concerns arising from food-related pandemics, outbreaks of flu, viruses, or other diseases, food safety and food-borne illness concerns, insufficient guest or employee facing technology or a failure to maintain a continuous and secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems, risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to recognize, respond to, and effectively manage the accelerated impact of social media, a failure to identify and execute innovative marketing and guest relationship tactics, ineffective or improper use of other marketing initiatives, and increased advertising and marketing costs, climate change, adverse weather conditions, and natural disasters, long-term and non-cancelable property leases, inability or failure to execute a business continuity plan following a major natural disaster, shortages, delays, or interruptions in the delivery of food and other products and services from our third-party vendors and suppliers, failure to drive profitable sales growth, a lack of availability of suitable locations for new restaurants or a decline in the quality of locations of our current restaurants, higher-than-anticipated costs associated with the opening of new restaurants or with the closing, relocating, or remodeling of existing restaurants, risks associated with doing business with franchisees, licensees, and vendors in foreign markets, volatility in the market value of derivatives, volatility in the U.S. equity markets affecting our ability to efficiently hedge exposures, failure to protect our intellectual property, our reporting on environmental, social, and governance matters or our sustainability ratings, litigation, unfavorable publicity or failure to respond effectively to adverse publicity, disruptions in the financial and credit markets, impairment of the carrying value of our goodwill or other intangible assets, changes in tax laws or unanticipated tax liabilities, failure of our internal controls over financial reporting and future changes in accounting standards, and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.

Non-GAAP Information

The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”), such as adjusted diluted net earnings per share from continuing operations. The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. The Company believes that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of the Company’s businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP measures are included in this release.

(Analysts) Courtney Aquilla, (407) 245-5054; (Media) Rich Jeffers, (407) 245-4189

	Q1 2027					Q1 2026
Fiscal Q1 Reported to Adjusted Earnings Reconciliation
$ in millions, except per share amounts	Earnings Before Income Tax	Income Tax Expense	Net Earnings	Diluted Net Earnings Per Share		Earnings Before Income Tax	Income Tax Expense	Net Earnings	Diluted Net Earnings Per Share
Reported Earnings from Continuing Operations	$269.0	$34.7	$234.3	$2.05		$293.8	$35.9	$257.9	$2.19
Adjustments:
Chuy's transaction and integration related costs	-	-	-	-		3.6	0.9	2.7	0.02
Closed restaurants	-	-	-	-		3.1	0.8	2.3	0.02
Gain on Olive Garden Canada Sale	-	-	-	-		(42.0)	(10.5)	(31.5)	(0.26)
Adjusted Earnings from Continuing Operations	$269.0	$34.7	$234.3	$2.05		$258.5	$27.1	$231.4	$1.97
% Change vs Prior Year					4.1%

Costs related to the closure of 22 underperforming restaurants that were permanently closed during the fourth quarter of fiscal 2025

NUMBER OF COMPANY-OWNED RESTAURANTS

	8/30/26	8/24/25
Olive Garden	953	933
LongHorn Steakhouse	624	595
Cheddar’s Scratch Kitchen	187	182
Chuy’s	112	108
Yard House	95	89
Ruth’s Chris Steak House	83	82
The Capital Grille	75	73
Seasons 52	44	43
Eddie V’s	32	29
Bahama Breeze	10	28
The Capital Burger	3	3
Darden Continuing Operations	2,218	2,165

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share data)

(Unaudited)

	Three Months Ended
	8/30/2026	8/24/2025
Sales	$3,200.3	$3,044.7
Costs and expenses:
Food and beverage	984.9	929.1
Restaurant labor	1,028.9	988.0
Restaurant expenses	530.5	504.2
Marketing expenses	53.1	49.1
Pre-opening costs	8.5	5.9
General and administrative expenses	134.8	136.1
Depreciation and amortization	144.2	135.1
Impairments and (gain) loss on disposal of assets, net	(3.9)	(42.0)
Total operating costs and expenses	$2,881.0	$2,705.5
Operating income	319.3	339.2
Interest, net	50.3	45.4
Earnings before income taxes	269.0	293.8
Income tax expense	34.7	35.9
Earnings from continuing operations	$234.3	$257.9
Losses from discontinued operations, net of tax benefit of $0.3 and $0.4, respectively	(0.9)	(0.1)
Net earnings	$233.4	$257.8
Basic net earnings per share:
Earnings from continuing operations	$2.06	$2.21
Losses from discontinued operations	(0.01)	-
Net earnings	$2.05	$2.21
Diluted net earnings per share:
Earnings from continuing operations	$2.05	$2.19
Losses from discontinued operations	(0.01)	-
Net earnings	$2.04	$2.19
Average number of common shares outstanding:
Basic	113.6	116.7
Diluted	114.4	117.6

CONSOLIDATED BALANCE SHEETS

(In millions)

	8/30/2026		5/31/2026
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$220.5		$219.5
Receivables, net	118.0		129.9
Inventories	321.0		326.3
Prepaid income taxes	146.3		139.8
Prepaid expenses and other current assets	147.3		127.4
Total current assets	$953.1		$942.9
Land, buildings and equipment, net	5,122.2		5,048.6
Operating lease right-of-use assets	3,713.8		3,433.1
Goodwill	1,658.2		1,658.2
Trademarks	1,346.4		1,346.4
Other assets	432.9		433.2
Total assets	$13,226.6		$12,862.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$470.0		$427.7
Short-term debt and current portion of long-term debt		979.7	693.6
Accrued payroll and employee benefits	596.6		648.1
Accrued taxes		95.9		87.0
Unearned revenues	571.5		606.0
Other current liabilities	485.3		543.0
Total current liabilities	$3,199.0		$3,005.4
Long-term debt	1,636.1		1,637.7
Deferred income taxes	367.6		343.6
Operating lease liabilities - non-current	4,009.7		3,722.3
Other liabilities	1,945.8		1,945.9
Total liabilities	$11,158.2		$10,654.9
Stockholders’ equity:
Common stock and surplus	$2,307.5		$2,296.3
Retained earnings (deficit)	(259.5)		(108.4)
Accumulated other comprehensive income	20.4		19.6
Total stockholders’ equity	$2,068.4		$2,207.5
Total liabilities and stockholders’ equity	$13,226.6		$12,862.4

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Three Months Ended
	8/30/2026	8/24/2025
Cash flows - operating activities
Net earnings	$233.4	$257.8
Losses from discontinued operations, net of tax	0.9	0.1
Adjustments to reconcile net earnings from continuing operations to cash flows:
Depreciation and amortization	144.2	135.1
Impairments and (gain) loss on disposal of assets, net	(3.9)	(42.0)
Stock-based compensation expense	26.6	25.0
Change in current assets and liabilities and other, net	(122.2)	(33.5)
Net cash provided by operating activities of continuing operations	$279.0	$342.5
Cash flows - investing activities
Purchases of land, buildings and equipment	(175.3)	(174.1)
Proceeds from disposal of land, buildings and equipment	8.8	20.3
Purchases of capitalized software and changes in other assets, net	(4.8)	(5.5)
Net cash used in investing activities of continuing operations	$(171.3)	$(159.3)
Cash flows - financing activities
Net proceeds from issuance of common stock	20.0	8.8
Dividends paid	(184.2)	(175.1)
Repurchases of common stock, inclusive of excise taxes paid	(220.8)	(182.7)
Proceeds from (repayments of) short-term debt, net	285.9	142.0
Principal payments on finance leases, net	(5.3)	(5.2)
Net cash used in financing activities of continuing operations	$(104.4)	$(212.2)
Cash flows - discontinued operations
Net cash used in operating activities of discontinued operations	(2.3)	-
Net cash used in discontinued operations	$(2.3)	$ -
Increase (decrease) in cash, cash equivalents, and restricted cash	1.0	(29.0)
Cash, cash equivalents, and restricted cash - beginning of period	227.6	254.5
Cash, cash equivalents, and restricted cash - end of period	$228.6	$225.5

Reconciliation of cash, cash equivalents, and restricted cash:	8/30/2026	8/24/2025
Cash and cash equivalents	$220.5	$211.0
Restricted cash included in prepaid expenses and other current assets	8.1	14.5
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$228.6	$225.5