Key Moments
- Darden Restaurants reported fiscal Q4 2026 adjusted EPS of $3.66, slightly above the $3.63 consensus, while revenue of $3.72 billion narrowly missed the $3.73 billion estimate.
- Comparable sales at Olive Garden and the fine-dining segment came in below expectations, offsetting strong outperformance at LongHorn Steakhouse.
- Despite issuing fiscal 2027 EPS guidance above Street forecasts and announcing a $1.5 billion buyback plus an 8% dividend increase, the stock traded down to $207 in pre-market from a prior close of $213.45.
Mixed Quarter Pressures Darden Stock
Darden Restaurants (NYSE:DRI) traded lower in pre-market action, sliding 3.0% after the company released fiscal fourth-quarter 2026 results that reflected a mixed operating picture. Adjusted earnings per share came in at $3.66, modestly ahead of the consensus estimate of $3.63. However, revenue totaled $3.72 billion, falling just shy of analysts’ expectations of $3.73 billion.
The slight revenue shortfall weighed on investor sentiment, particularly as it was accompanied by softer-than-expected comparable sales at some of the company’s largest brands.
Comparable-Sales Performance by Segment
Two key segments underperformed relative to market forecasts, undermining the impact of the earnings beat.
| Segment | Reported Same-Store Sales Growth | Analyst Expectation |
|---|---|---|
| Olive Garden | 2.4% | 3.2% |
| Fine Dining (incl. The Capital Grille and Ruth’s Chris) | 1.9% | 3.1% |
| LongHorn Steakhouse | 9.5% | 7.1% |
Olive Garden delivered same-store sales growth of 2.4%, below the 3.2% increase that analysts had projected. The fine-dining division, which includes The Capital Grille and Ruth’s Chris, posted comparable-sales growth of 1.9%, missing the 3.1% consensus forecast.
By contrast, LongHorn Steakhouse was a clear bright spot. The brand reported same-store sales growth of 9.5%, significantly exceeding the 7.1% expectation and standing out as a key driver of strength within the portfolio.
Capital Returns: Buyback Authorization and Dividend Increase
Alongside its quarterly results, Darden’s board approved additional capital-return initiatives. The company authorized a new $1.5 billion share repurchase program, signaling continued commitment to buybacks. In addition, the quarterly dividend was increased by 8% to $1.62 per share.
These shareholder-return measures provided some support for the investment case but were not enough to fully offset concerns around top-line and traffic trends implied by the comparable-sales figures.
Outlook for Fiscal 2027
Darden also issued guidance for fiscal year 2027. The company projected EPS in a range of $11.10–$11.35, above the analyst consensus of $10.62. This stronger-than-expected earnings outlook underscored management’s confidence in profitability going forward.
However, the midpoint of the company’s revenue guidance was viewed as roughly in line with expectations, which muted the potential upside investors might otherwise have taken from the stronger EPS outlook.
Analyst Actions and Market Backdrop
Sentiment ahead of the report had already been tempered by a rating change. On June 23, Evercore ISI downgraded Darden shares to In Line from Outperform. At the same time, Guggenheim raised its price target on the stock to $235 from $230 while maintaining a Buy rating, illustrating divided analyst perspectives heading into the earnings release.
The broader equity market provided little tailwind. The S&P 500 was down 0.1% and the Nasdaq was lower by 0.4% in pre-market trading, reflecting a mildly risk-off tone ahead of the regular session. The restaurant industry was not experiencing a sector-specific catalyst, leaving Darden’s move largely tied to its own results and guidance.
Stock Reaction
Overall, the negative elements of the release – including the modest revenue miss, weaker-than-expected comparable-sales growth at Olive Garden and in fine dining, and the prior downgrade from Evercore ISI – outweighed the positives from the EPS beat, LongHorn’s strong performance, and the new shareholder-return initiatives.
As a result, Darden shares traded at $207 in pre-market activity, down from the previous close of $213.45 and near the lower end of the day’s trading range.
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