01—Abstract
Summary
Summary of the 10-Q filed October 2, 2026. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. (DRI) reported its first-quarter fiscal year 2027 results, showcasing a 5.1% increase in total sales to $3.20 billiona, driven by both new restaurant openings and a 3.1% blended same-restaurant sales growth.
Despite the top-line growth, net earnings from continuing operations saw a decrease of 9.2% to $234.3 millionb, resulting in diluted EPS from continuing operations of $2.05, down from $2.19 in the prior year's comparable period. This decline in profitability was impacted by increased costs, particularly in food and beverage and restaurant labor, partly due to inflation, though offset by sales leverage and pricing strategies. The company continues to invest in growth, with plans for 75 to 80 new restaurant openings in fiscal 2027 and projected capital expenditures of approximately $875 million.
The company also announced a new $1.5 billionc share repurchase program, underscoring a commitment to returning capital to shareholders. Management remains confident in the company's liquidity and financial stability, projecting sufficient resources to fund operations and capital needs. Key areas of focus for investors will be the ongoing management of cost pressures, the success of new restaurant openings, and the effectiveness of strategies to drive traffic and average check, particularly in light of varying same-restaurant sales performance across its brands.
02—Key points
Key Highlights
- Total sales increased by 5.1% to $3.20 billion, driven by 53 net new restaurants and a 3.1% blended same-restaurant sales increase.
- Net earnings from continuing operations decreased by 9.2% to $234.3 million, with diluted EPS from continuing operations at $2.05 compared to $2.19 in the prior year.
- Food and beverage costs as a percentage of sales increased primarily due to 1.0% inflation, while restaurant labor costs decreased as a percentage of sales due to sales leverage.
- The company plans to open 75 to 80 new restaurants in fiscal 2027 and anticipates capital expenditures of approximately $875 million.
- A new $1.5 billion share repurchase program was authorized, demonstrating a commitment to shareholder returns.
- Bahama Breeze brand continues its strategic repositioning, with approximately half of its restaurants closed and the remainder being converted to other Darden brands.
- LongHorn Steakhouse showed strong performance with a 10.9% sales increase and a 6.2% same-restaurant sales growth, driven by both average check and guest counts.
03—Questions
Frequently Asked Questions
What is the overall financial performance of Darden Restaurants for the first quarter of fiscal year 2027?
Darden Restaurants reported a 5.1% increase in total sales to $3.20 billion for the first quarter of fiscal year 2027, compared to $3.04 billion in the prior year period. However, net earnings from continuing operations decreased by 9.2% to $234.3 million, leading to a diluted EPS from continuing operations of $2.05, down from $2.19 in the previous year.
How is Darden managing rising costs, especially in food and labor?
The company experienced an increase in food and beverage costs as a percentage of sales, attributed to 1.0% inflation. Restaurant labor costs as a percentage of sales decreased, primarily due to sales leverage and productivity improvements, although inflation also impacted this category. Darden is using pricing leverage and sales strategies to help offset these cost pressures.
What are Darden's growth strategies for the upcoming fiscal year?
Darden plans to open 75 to 80 new restaurants in fiscal year 2027 and has allocated approximately $875 million for capital expenditures, which includes new restaurant construction, remodels, and technology initiatives. The company is also continuing its strategic review of the Bahama Breeze brand, with closures and conversions underway.
What is the company's approach to returning capital to shareholders?
Darden announced a new $1.5 billion share repurchase program, replacing the previous authorization. Additionally, the company paid dividends totaling $1.62 per share in the first quarter. These actions reflect a commitment to enhancing shareholder value.
04—Continue