How strong was the underlying performance excluding one-time items?

On an adjusted basis, diluted EPS from continuing operations was $1.97, up 12.6% from $1.75 in the prior-year period. The adjustments removed a $0.26 gain on the Olive Garden Canada sale and about $0.04 of Chuy's transaction/integration and closed-restaurant costs, so the adjusted figure better reflects core operating results.

What is driving sales growth and is it broad-based?

Growth was driven primarily by same-restaurant sales (+4.7% blended), led by Olive Garden (+5.9%) and LongHorn (+5.5%). The Chuy's acquisition and 22 net new restaurants added further growth. Fine Dining was essentially flat (-0.2%), so the strength is concentrated in the casual dining brands.

What does the fiscal 2026 guidance imply for investors?

Management expects total sales growth of 7.5%-8.5% and same-restaurant sales growth of 2.5%-3.5% for the full year, with adjusted EPS of $10.50-$10.70. The guidance includes a 53rd week worth roughly 2 points of sales growth and about $0.20 of EPS, so investors should adjust for that extra week when comparing to prior-year growth rates. Capital spending is guided to $700-$750 million and roughly 65 new restaurants are planned.

Is the dividend and buyback program secure?

The $1.50 quarterly dividend was declared and cash dividends paid in the quarter were $175 million, while $183 million was spent on repurchases. Remaining authorization of $865 million provides room for continued buybacks. However, operating cash flow of $342.5 million covered these outflows only alongside new short-term borrowing of $142 million, so sustaining current payout levels depends on continued cash generation.

What risks should investors monitor from this report?

Key risks include rising restaurant labor and food costs, which grew faster than sales, and the flat performance of the Fine Dining segment. Investors should also watch the increase in short-term debt and the integration of Chuy's, as well as macroeconomic pressures such as tariffs, energy prices and consumer spending, which the company flagged in its forward-looking statements.

DRI 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed September 18, 2025. Cited figures are marked; the original filing is the authoritative source.

Darden Restaurants (DRI) reported fiscal 2026 first-quarter results (quarter ended August 24, 2025) that beat expectations on both sales and earnings.

Total sales rose 10.4% to $3.04 billion^a, driven by a 4.7% blended same-restaurant sales increase and contributions from the 103 Chuy's restaurants acquired and 22 net new restaurants. Olive Garden (+5.9%) and LongHorn Steakhouse (+5.5%) led comparable growth, while Fine Dining was roughly flat (-0.2%). Reported diluted EPS from continuing operations was $2.19, but this included a $0.26 gain on the sale of Olive Garden Canada restaurants.

Excluding that gain and other one-time items (Chuy's integration costs and closed-restaurant costs), adjusted diluted EPS was $1.97^b, up 12.6% year over year. Management raised or reaffirmed a fiscal 2026 outlook that includes a 53rd week (about 2 points of sales growth and roughly $0.20 of EPS). Total sales growth is guided to 7.5%-8.5%, same-restaurant sales growth to 2.5%-3.5%, and adjusted diluted EPS from continuing operations to $10.50-$10.70.

The board declared a quarterly dividend of $1.50^c per share, payable November 3, 2025, and the company repurchased $183 million of stock during the quarter, leaving $865 million under its $1 billion authorization. For investors, the key takeaways are solid underlying traffic-driven comparable growth at the core brands, margin support from the Chuy's acquisition and cost discipline, and continued capital returns.

Watch-points include rising restaurant labor and food costs (both grew faster than sales), a meaningful increase in net debt-funded liquidity (short-term debt of $142 million^d drawn in the quarter), and the Fine Dining segment's flat performance. Note that the EPS guidance is adjusted, and the GAAP-to-adjusted reconciliation is material for the outlook.

02—Key points

Key Highlights

Total sales up 10.4% to $3.04 billion; blended same-restaurant sales up 4.7%, with Olive Garden +5.9% and LongHorn +5.5%
Reported diluted EPS from continuing operations of $2.19 (up from $1.74), inflated by a $0.26 gain on the Olive Garden Canada sale
Adjusted diluted EPS of $1.97, up 12.6% year over year, excluding Chuy's integration costs, closed-restaurant costs and the Canada gain
Fiscal 2026 outlook: total sales growth of 7.5%-8.5% (including ~2 points from the 53rd week) and adjusted EPS of $10.50-$10.70
Quarterly dividend declared at $1.50 per share, payable November 3, 2025; $183 million repurchased in the quarter with $865 million remaining under the $1 billion program
Restaurant labor (+11.1%) and food and beverage costs (+9.7%) grew faster than sales, pressuring margins despite the top-line gains
Short-term debt rose to $142 million from zero at fiscal year-end, while cash declined to $211 million

03—Questions

Frequently Asked Questions

How strong was the underlying performance excluding one-time items?
On an adjusted basis, diluted EPS from continuing operations was $1.97, up 12.6% from $1.75 in the prior-year period. The adjustments removed a $0.26 gain on the Olive Garden Canada sale and about $0.04 of Chuy's transaction/integration and closed-restaurant costs, so the adjusted figure better reflects core operating results.
What is driving sales growth and is it broad-based?
Growth was driven primarily by same-restaurant sales (+4.7% blended), led by Olive Garden (+5.9%) and LongHorn (+5.5%). The Chuy's acquisition and 22 net new restaurants added further growth. Fine Dining was essentially flat (-0.2%), so the strength is concentrated in the casual dining brands.
What does the fiscal 2026 guidance imply for investors?
Management expects total sales growth of 7.5%-8.5% and same-restaurant sales growth of 2.5%-3.5% for the full year, with adjusted EPS of $10.50-$10.70. The guidance includes a 53rd week worth roughly 2 points of sales growth and about $0.20 of EPS, so investors should adjust for that extra week when comparing to prior-year growth rates. Capital spending is guided to $700-$750 million and roughly 65 new restaurants are planned.
Is the dividend and buyback program secure?
The $1.50 quarterly dividend was declared and cash dividends paid in the quarter were $175 million, while $183 million was spent on repurchases. Remaining authorization of $865 million provides room for continued buybacks. However, operating cash flow of $342.5 million covered these outflows only alongside new short-term borrowing of $142 million, so sustaining current payout levels depends on continued cash generation.
What risks should investors monitor from this report?
Key risks include rising restaurant labor and food costs, which grew faster than sales, and the flat performance of the Fine Dining segment. Investors should also watch the increase in short-term debt and the integration of Chuy's, as well as macroeconomic pressures such as tariffs, energy prices and consumer spending, which the company flagged in its forward-looking statements.

04—Continue

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