Darden Restaurants Inc. reported fiscal second‑quarter 2026 results that included a $3.10 billion revenue increase of 7.3% year‑over‑year, driven by a 4.7% rise in same‑restaurant sales at Olive Garden, a 5.9% lift at LongHorn Steakhouse, and a 3.1% gain in the Other Business segment that now includes Chuy’s. The company’s reported diluted earnings per share were $2.03, slightly below the consensus estimate of $2.09–$2.13, while the adjusted EPS of $2.08 also missed analyst expectations. The revenue beat was largely a result of strong demand across all brands and a pricing strategy that kept menu prices 30–100 basis points below overall inflation, allowing Darden to capture market share even as commodity costs rose.
The segment‑level breakdown shows Olive Garden generated $1.36 billion in sales, LongHorn Steakhouse $775.9 million, Fine Dining $316.4 million, and Other Business $647.3 million. Same‑restaurant sales across the company grew 4.3% versus 3.5% in the prior year, outpacing the casual‑dining industry average of 1.3%. The mix shift toward higher‑margin Olive Garden and the continued integration of Chuy’s contributed to the overall sales lift, while the Other Business segment’s growth reflects the incremental contribution of the newly acquired brand.
Margin performance was mixed. Food and beverage expenses rose 90 basis points and labor costs increased 10 basis points year‑over‑year, compressing the overall operating margin. LongHorn experienced a 60‑basis‑point margin contraction due to beef cost inflation, the most significant commodity headwind for the quarter. Despite these pressures, Olive Garden’s margin expanded slightly, reflecting effective cost control and pricing power in its core market.
Management highlighted the results in a statement. President and CEO Rick Cardenas said, "Our restaurant teams did a great job of being brilliant with the basics, driving record, or near‑record, guest satisfaction scores across all our brands," and added, "Despite facing significant commodity headwinds, we leveraged our four competitive advantages to provide strong value for our guests and we made appropriate investments in the business to ensure long‑term success." Chief Financial Officer Raj Vennam noted, "Our bias is to minimize pricing, and we’ll do what we think is right to protect the guest."
Guidance was raised for the full year. Darden now expects total sales growth of 8.5%–9.3% for fiscal 2026, up from the prior 7.5%–8.5% range, and maintains adjusted EPS guidance of $10.50–$10.70. The upward revision signals management’s confidence in sustained demand and the effectiveness of its pricing strategy, even as commodity costs remain elevated. The company also reiterated its focus on scaling first‑party delivery through the Uber Direct partnership and on portfolio optimization, including the ongoing integration of Chuy’s.
Market reaction was positive, driven primarily by the revenue beat and the raised full‑year guidance. Investors weighed the strong top‑line performance and market‑share gains more heavily than the slight EPS miss, reflecting confidence in Darden’s ability to navigate commodity inflation while maintaining growth momentum.
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