01—Abstract
Summary
Summary of the 10-Q filed September 26, 2025. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. reported a strong first quarter for fiscal year 2026, with total sales increasing by 10.4% to $3.04 billiona year-over-year.
This growth was driven by a combination of new restaurant openings, including the significant acquisition of Chuy's in the prior quarter, and a healthy same-restaurant sales increase of 4.7%. Net earnings from continuing operations rose by 24.2% to $257.9 millionb, translating to a diluted EPS of $2.19, up from $1.74 in the prior year.
The company is strategically divesting certain assets, evidenced by the sale of eight Olive Garden locations in Canada, and exploring strategic alternatives for the Bahama Breeze brand. Darden also provided a positive outlook for the full fiscal year 2026, projecting sales growth between 7.5%c and 8.5%, with continued same-restaurant sales growth expected, supported by approximately 65 new restaurant openings.
02—Key points
Key Highlights
- Total sales grew 10.4% to $3.04 billion, driven by new units and a 4.7% same-restaurant sales increase.
- Net earnings from continuing operations increased 24.2% to $257.9 million.
- Diluted EPS from continuing operations was $2.19, a 25.9% increase year-over-year.
- The company completed the acquisition of 103 Chuy's restaurants, contributing to growth in the 'Other Business' segment.
- Strategic divestiture of eight Olive Garden Canada locations was completed, generating a gain on disposal.
- Darden is exploring strategic alternatives for the Bahama Breeze brand.
- Full fiscal year 2026 sales growth is projected between 7.5% and 8.5%, with same-restaurant sales growth expected between 2.5% and 3.5%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Darden Restaurants Inc kept $0.08.
- Revenue$3.04B100.0%
- Cost of revenue−$2.47B81.1%
- Gross profit$574.3M18.9%
- Operating costs−$235.1M7.7%
- Operating income$339.2M11.1%
- Interest, other & tax−$81.4M2.7%
- Net income$257.8M8.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed September 26, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $3.04B$2.76B | +10.4% |
| Gross Profit | $574.30M$522.60M | +9.9% |
| Operating Expenses | $2.71B$2.49B | +8.8% |
| Operating Income | $339.20M$269.20M | +26.0% |
| Net Income | $257.80M$207.20M | +24.4% |
| EPS (Basic) | $2.21$1.75 | +26.3% |
| EPS (Diluted) | $2.19$1.74 | +25.9% |
| Shares Outstanding (Basic) | 116.70M118.50M | −1.5% |
| Shares Outstanding (Diluted) | 117.60M119.20M | −1.3% |
05—Questions
Frequently Asked Questions
What were the key drivers of the sales growth in the first quarter?
Sales growth was primarily driven by 125 net new restaurants (including the acquisition of 103 Chuy's restaurants) and a blended same-restaurant sales increase of 4.7%. The Olive Garden and LongHorn Steakhouse segments showed particularly strong same-restaurant sales growth.
What is the company's strategy regarding the Bahama Breeze brand?
Darden is exploring strategic alternatives for the Bahama Breeze brand, which could include a sale of the brand or conversion of some locations to other Darden brands. The brand's assets were not classified as held for sale as of the end of the first fiscal quarter.
How did the acquisition of Chuy's impact the financial results?
The acquisition of 103 Chuy's restaurants in October 2024 contributed significantly to the 'Other Business' segment's sales growth and overall company expansion. The integration costs were noted in general and administrative expenses.
What is the company's outlook for the remainder of fiscal year 2026?
Darden expects full fiscal year 2026 sales growth to be between 7.5% and 8.5%. This is anticipated to be driven by a 2.0% growth from the 53rd week, same-restaurant sales growth between 2.5% and 3.5%, and approximately 65 new restaurant openings. Capital expenditures are projected between $700 and $750 million.
06—Continue