Darden Restaurants, Inc.

Darden reported Q4 total sales of $3.7 billion, up 13.7% year over year, with same-restaurant sales up 4.6% and positive traffic. Adjusted diluted EPS from continuing operations was $3.66, up 22.8%, including a $0.25 benefit from the extra fiscal week. Adjusted EBITDA was $678 million, and restaurant-level EBITDA margin improved 50 basis points to 22.1%. For FY2026, total sales rose 9.4% to more than $13 billion, same-restaurant sales grew 4.5%, and adjusted diluted EPS increased 11.4% to $10.64. FY2027 guidance is for total sales of $13.6 billion to $13.75 billion, same-restaurant sales growth of 2.5% to 3.5%, adjusted EBITDA of $2.26 billion to $2.29 billion, and diluted EPS of $11.10 to $11.35. Management also guided to about 3% total inflation, about $875 million of capital spending, an annual effective tax rate of approximately 13.5%, and about 114 million diluted average shares outstanding.

Rick Cardenas said the quarter capped an excellent year in which Darden significantly outperformed the industry, with each brand posting positive same-restaurant sales. He emphasized the company’s portfolio breadth, scale advantages in supply chain, technology, and marketing, and the role of people and operating discipline in sustaining long-term growth. His tone was confident but measured, highlighting continued investment in brands like Olive Garden while keeping a long-term view on value and guest relevance.

Raj Vennam said FY2026 results benefited from stronger-than-expected sales and faster new restaurant openings, even as beef inflation was higher than expected. In Q4, food and beverage expense was flat, labor was 40 basis points lower, marketing was 10 basis points lower, and restaurant-level EBITDA reached 22.1%; for the year, restaurant-level EBITDA compressed 20 basis points, offset by leverage elsewhere. He detailed FY2027 guidance drivers, including about $875 million of capex, roughly $25 million tied to Bahama Breeze conversions, about $350 million for maintenance and IT, about $500 million for new unit growth, and an expected 10 basis point increase in marketing expense.

Analysts focused on consumer health, LongHorn’s outperformance, beef and commodity inflation, Olive Garden pricing and margins, delivery, and the outlook for traffic and EPS in FY2027. Management said consumer spending has remained resilient but cautious, with some softness among guests under 35 and stronger visits from lower-income cohorts in the quarter. They also said the FY2027 guidance assumes flat to modestly positive traffic, higher first-quarter inflation, no third-party delivery in the guidance, and that LongHorn’s strength is driven by food quality, service, and relative value.