01—Abstract
Summary
Summary of the 10-Q filed December 30, 2025. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. reported solid financial results for the second quarter and the first six months of fiscal year 2026, demonstrating continued sales growth and improved profitability.
Total sales increased by 7.3%a for the quarter and 8.9% for the six-month period, driven by a combination of same-restaurant sales growth and the integration of the Chuy's acquisition. The company also saw an increase in diluted net earnings per share from continuing operations, rising by 11.5% for the quarter and 18.5% for the six-month period. Key operational highlights include consistent same-restaurant sales growth across most brands, with Olive Garden and LongHorn Steakhouse showing particularly strong performance.
The company is actively managing costs, with efforts to offset inflation in food and beverage and labor through pricing leverage and productivity gains. Darden also continues to execute on its capital allocation strategy, repurchasing shares and investing in new restaurant development, with capital expenditures projected between $750b and $775 million for the full fiscal year.
02—Key points
Key Highlights
- Total sales grew 7.3% in Q2 FY26 and 8.9% in the first six months of FY26, driven by same-restaurant sales and the Chuy's acquisition.
- Diluted EPS from continuing operations increased 11.5% for the quarter and 18.5% for the six-month period, reaching $2.03 and $4.23, respectively.
- Same-restaurant sales grew across major brands, with Olive Garden up 4.7% and LongHorn Steakhouse up 5.9% for the quarter.
- Profitability improved in operating income (up 9.7% for the quarter, 17.5% for six months) and net earnings (up 10.3% for the quarter, 17.2% for six months).
- The company is strategically managing costs, with efforts to offset inflation in food & beverage and labor through pricing and efficiency.
- Darden repurchased approximately $187.6 million of common stock in the quarter as part of its $1 billion repurchase program.
- Full-year capital expenditures are projected between $750 - $775 million, supporting new restaurant openings (65-70 planned) and remodels.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Darden Restaurants Inc kept $0.08.
- Revenue$3.10B100.0%
- Cost of revenue−$2.52B81.3%
- Gross profit$581.3M18.7%
- Operating costs−$260.9M8.4%
- Operating income$320.4M10.3%
- Interest, other & tax−$83.2M2.7%
- Net income$237.2M7.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed December 30, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $3.10B$2.89B | +7.3% |
| Gross Profit | $581.30M$569.40M | +2.1% |
| Operating Expenses | $2.78B$2.60B | +7.1% |
| Operating Income | $320.40M$292.10M | +9.7% |
| Net Income | $237.20M$215.10M | +10.3% |
| EPS (Basic) | $2.05$1.83 | +12.0% |
| EPS (Diluted) | $2.03$1.82 | +11.5% |
| Shares Outstanding (Basic) | 115.90M117.50M | −1.4% |
| Shares Outstanding (Diluted) | 116.70M118.30M | −1.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of sales growth in the second quarter and first six months of fiscal 2026?
Sales growth was primarily driven by same-restaurant sales increases across most brands, contributing to overall revenue growth. Additionally, the acquisition of Chuy's in the second quarter of fiscal 2025 and the opening of 30 net new restaurants also significantly contributed to the top-line performance.
How is Darden managing cost pressures, particularly from inflation in food and labor?
Darden is employing several strategies to combat inflation. For food and beverage costs, they are leveraging pricing strategies and cost-saving initiatives to offset inflationary impacts. For restaurant labor, productivity improvements and pricing leverage are being used to mitigate the effects of inflation. Despite these pressures, operating margins have seen improvement, indicating effective cost management.
What is Darden's outlook for the remainder of fiscal year 2026?
The company expects full-year fiscal 2026 sales growth to be between 8.5% and 9.3%, driven by a 53rd week, same-restaurant sales growth of 3.5% to 4.3%, and 65 to 70 new restaurant openings. Capital expenditures are expected to be between $750 and $775 million, supporting this growth strategy.
What impact did the sale of Olive Garden Canada locations have on the financial results?
The sale of the eight Olive Garden Canada locations in July 2025 resulted in a gain on disposal, which contributed to the 'Impairments and (gain) loss on disposal of assets, net' line item. While it impacted sales for the Olive Garden segment, the overall financial benefit from the disposal is reflected in the consolidated results.
06—Continue