01—Abstract
Summary
Summary of the 10-Q filed March 27, 2026. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. reported solid sales growth for the nine months ended February 22, 2026, with total sales increasing by 7.8% to $9.49 billiona, driven by the acquisition of Chuy's and a same-restaurant sales increase of 4.4%.
While sales momentum is positive, net earnings from continuing operations saw a slight decrease of 4.0% in the third quarter to $310.6 millionb, though they increased by 7.9% for the nine-month period to $805.9 million. Diluted EPS from continuing operations reflects a similar trend, down 2.2% in the quarter but up 9.7% year-to-date. The company is actively managing its portfolio, including the sale of Olive Garden Canada restaurants and the strategic decision to close or convert Bahama Breeze locations.
These actions, alongside investments in new restaurant openings and technology, indicate a focus on portfolio optimization and long-term growth. Management anticipates continued sales growth for fiscal 2026, projecting approximately 9.5%c growth driven by same-restaurant sales and new openings, with significant capital expenditures planned.
02—Key points
Key Highlights
- Total sales for the nine months ended February 22, 2026, grew by 7.8% to $9.49 billion, compared to $8.81 billion in the prior year period.
- Net earnings from continuing operations for the nine months ended February 22, 2026, increased by 7.9% to $805.9 million.
- Diluted EPS from continuing operations for the nine months ended February 22, 2026, rose by 9.7% to $6.91.
- The company is executing a portfolio transformation, including the sale of Olive Garden Canada and plans to close/convert Bahama Breeze locations.
- The company plans for fiscal 2026 sales growth of approximately 9.5%, driven by same-restaurant sales growth of 4.5% and approximately 70 new restaurant openings.
- Capital expenditures are projected to be between $750 million and $775 million for fiscal 2026, reflecting investments in new restaurants, remodels, and technology.
- Share repurchases remain a significant use of capital, with $534.4 million spent in the first nine months of fiscal 2026 under a new $1 billion authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Darden Restaurants Inc kept $0.09.
- Revenue$3.35B100.0%
- Cost of revenue−$2.64B79.0%
- Gross profit$703.6M21.0%
- Operating costs−$297.2M8.9%
- Operating income$406.4M12.1%
- Interest, other & tax−$99.6M3.0%
- Net income$306.8M9.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed March 27, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $3.35B$3.16B | +5.9% |
| Gross Profit | $703.60M$673.00M | +4.5% |
| Operating Expenses | $2.94B$2.74B | +7.3% |
| Operating Income | $406.40M$418.20M | −2.8% |
| Net Income | $306.80M$323.40M | −5.1% |
| EPS (Basic) | $2.67$2.76 | −3.3% |
| EPS (Diluted) | $2.65$2.74 | −3.3% |
| Shares Outstanding (Basic) | 115.00M117.20M | −1.9% |
| Shares Outstanding (Diluted) | 115.80M118.00M | −1.9% |
05—Questions
Frequently Asked Questions
What drove the sales growth in the reported period?
Sales growth was primarily driven by the acquisition of Chuy's restaurants during the second quarter of fiscal year 2025, contributing to an increase in total restaurant count. Additionally, same-restaurant sales across various brands showed positive growth, indicating healthy consumer demand for Darden's offerings.
What is the company's strategy regarding its restaurant brands?
Darden is actively managing its brand portfolio. This includes the sale of Olive Garden Canada restaurants and a strategic decision to close approximately 14 Bahama Breeze restaurants while converting the remaining ones to other Darden brands. This indicates a focus on optimizing the portfolio for performance and growth.
What is the outlook for the remainder of fiscal year 2026?
Darden expects fiscal 2026 sales growth of approximately 9.5%, fueled by an anticipated same-restaurant sales increase of about 4.5% and the opening of approximately 70 new restaurants. The company also plans significant capital expenditures of $750-$775 million for restaurant development and maintenance.
How is Darden managing costs and profitability?
While food and beverage costs saw some inflation, Darden is leveraging pricing and cost-saving initiatives to mitigate these pressures. Labor costs are being managed through pricing and sales leverage, with some offset from inflation. The company also reported efficiencies in restaurant expenses and general and administrative costs, partly due to synergies from the Chuy's acquisition and reduced transaction costs compared to the prior year.
06—Continue