Darden Restaurants, the powerhouse behind Olive Garden and other popular eateries, recently shared its fourth-quarter earnings for 2025. The results were impressive, exceeding what financial experts had predicted. The company's revenue hit $3. 27 billion, slightly above the $3. 26 billion estimate. Earnings per share also surpassed expectations, coming in at $2. 98, just a cent above the forecast.

Darden's success can be attributed to several factors. The acquisition of 103 Chuy's restaurants and the opening of 25 new locations boosted net sales by 10. 6%, reaching $3. 3 billion. Same-store sales also saw a significant increase of 4. 6%, outperforming the projected 3. 5%. This growth is a testament to Darden's strategic moves and strong brand presence.

Looking ahead to fiscal year 2026, Darden is optimistic about its prospects. The company anticipates revenue growth of 7% to 8%, with about 2% of that growth due to an extra week in the fiscal year. Adjusted earnings are expected to range from $10. 50 to $10. 70 per share, including an additional 20 cents from the extra week. Despite economic uncertainties, Darden's CEO, Rick Cardenas, remains confident. He noted that consumers are still eager to spend on casual dining, even as they cut back in other areas. This trend suggests that Darden is successfully capturing market share from fast food and fast-casual competitors.

The company's flagship brands, Olive Garden and LongHorn Steakhouse, played a significant role in this success. Olive Garden, which contributes roughly 40% of Darden's quarterly revenue, saw same-store sales rise by 6. 9%, beating analysts' expectations of 4. 6%. LongHorn Steakhouse also performed well, with same-store sales increasing by 6. 7%, surpassing the anticipated 5. 3% growth. The return of Olive Garden's "Buy One, Take One" deal after a five-year hiatus likely boosted sales.

However, not all segments of Darden's business are thriving. The fine dining segment, which includes Ruth's Chris Steak House and The Capital Grille, experienced a same-store sales decline of 3. 3%, compared to the expected 0. 2% drop. CFO Raj Vennam acknowledged the challenges in this category but noted improvements in traffic from households earning $150, 000 and above. The remaining segment, which includes Cheddar's Scratch Kitchen and Yard House, saw a modest same-store sales growth of 1. 2%, slightly above the 1. 1% estimate.

Darden is also making strategic moves to enhance its portfolio. The company closed 15 Bahama Breeze restaurants during the quarter and is exploring "strategic alternatives" for the entire brand, including a potential sale or conversion to other Darden brands. This decision reflects Darden's focus on optimizing its offerings and maximizing shareholder value. Additionally, Darden's board authorized a $1 billion share repurchase program, replacing the previous authorization. This move is likely to boost investor confidence and support the company's stock performance. Darden's stock has already seen a 19% increase year-to-date, indicating strong market sentiment.

OLIVE GARDEN

Darden's Dining Dominance: A Look into 2025's Fourth Quarter

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