Darden Restaurants Inc reported mixed financial results for the fourth quarter, leading to a decline in its stock price despite an earnings beat. The company reported quarterly adjusted earnings of $3.66 per share, surpassing the analyst consensus estimate of $3.63 per share, while quarterly sales of $3.719 billion fell short of the analyst consensus estimate of $3.730 billion. Same-store sales grew 4.6%, topping the consensus of 4.1%. Darden issued its full-year financial outlook for fiscal 2027, expecting total sales of $13.60 billion to $13.75 billion, compared to analyst estimates of $13.718 billion. Shares of Darden Restaurants had declined by 1.61% to $209.34 at the time of publication on Friday.

Q4 Performance and Outlook

President and CEO Rick Cardenas described the fourth quarter as a strong finish to an excellent year, noting the company significantly outperformed the industry. Management guided to fiscal 2027 same-store sales of 2.5%-3.5%, including flat-to-slightly positive traffic and 2.5%-3.0% check growth. Darden expects Olive Garden’s same-store sales to grow at the low end of the 2.5%-3.5% range in fiscal 2027.

Brand Performance

LongHorn Steakhouse posted comps of 9.5%, delivering the best performance in more than three years. Analysts noted that LongHorn accelerated again and remains the star of the portfolio. Although Olive Garden decelerated sequentially with comps of 2.4% missing consensus expectations of 3.2%, the results were healthy and included positive traffic. Darden Restaurants witnessed consistent trends throughout the quarter with traffic growth across all income cohorts.

Analyst Reactions

Following the earnings announcement, several analysts adjusted their ratings and price targets for Darden Restaurants.

Stephens analyst Jim Salera noted that Darden Restaurants continues to outperform its casual dining peers despite a lackluster industry backdrop and inflationary pressures. BTIG analyst Peter Saleh pointed to a slightly cautious but resilient customer base against recent economic pressures. Needham analyst Charles Shi indicated that the consumer backdrop remained steady and that LongHorn’s estimates could be revised higher given the brand’s favorable lower cost positioning.

Darden Restaurants Inc reported financial results for the fourth quarter and fiscal year ended May 31, 2026, featuring a 53rd week of operations. Total sales for the fiscal year increased 9.4% to $13.21 billion, driven by a 4.5% increase in blended same-restaurant sales and sales from 43 net new restaurants. For the fourth quarter, total sales increased 13.7% to $3.72 billion, with a blended same-restaurant sales increase of 4.6%. Reported diluted net earnings per share from continuing operations were $3.54 for the quarter and $10.44 for the full year. Adjusted diluted net earnings per share from continuing operations were $3.66, an increase of 22.8%, and $10.64, an increase of 11.4%, respectively. The extra week of operations contributed 25 cents to both EPS metrics.

Fiscal 2027 Outlook

Darden provided financial guidance for fiscal 2027, projecting total sales between $13.60 billion and $13.75 billion. The company anticipates diluted net earnings per share from continuing operations to range from $11.10 to $11.35 and EBITDA between $2.26 billion and $2.29 billion. Other guidance includes same-restaurant sales growth of 2.5% to 3.5%, new restaurant openings of 75 to 80, and total capital spending of approximately $875 million. The effective tax rate is expected to be 13.5%, with total inflation pegged at 3%.

Capital Allocation

Darden's Board of Directors declared a quarterly cash dividend of $1.62 per share, an 8.0% increase from the prior quarter. The dividend is payable on August 3, 2026, to shareholders of record on July 10, 2026. Additionally, the Board authorized a new share repurchase program for up to $1.5 billion of outstanding common stock, replacing the previous authorization. During the fourth quarter, the company repurchased approximately 0.7 million shares for $138 million.

Segment Performance

Same-restaurant sales growth varied across brands for the fourth quarter. LongHorn Steakhouse led with a 9.5% increase, followed by Other Business at 4.6%, Olive Garden at 2.4%, and Fine Dining at 1.9%. For the full fiscal year, LongHorn Steakhouse reported a 7.2% increase, Olive Garden 4.0%, Other Business 3.9%, and Fine Dining 1.2%.