Darden Restaurants stock falls as Olive Garden reports slower growth — SkimNews
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- Darden Restaurants reported Q1 EPS of $2.05 vs. $2.06 expected and revenue of $3.20 billion vs. $3.21 billion expected, sending shares down as much as 5% premarket before paring to roughly 2% in morning trading
- LongHorn Steakhouse posted same-store sales growth of 6.2%, overtaking Olive Garden as Darden's top performer, though Olive Garden still leads the portfolio by total locations and sales
- Olive Garden same-store sales grew just 1.1%, with executives citing cyclospora-linked lettuce concerns that forced the chain to pull its planned unlimited soup, salad, and breadsticks marketing campaign and pivot messaging
- The World Cup dragged Darden's same-store sales down 80 basis points during the quarter, though Yard House was the lone beneficiary with 10% same-store sales growth and was named Darden's third billion-dollar brand
- Net income fell to $233.4 million ($2.04/share) from $257.8 million ($2.19/share) a year earlier, though net sales still rose 5.1% to $3.20 billion
- Darden reiterated its fiscal 2027 outlook, projecting total sales of $13.60–$13.75 billion and net EPS from continuing operations of $11.10–$11.35
- Yard House will open 13 new restaurants in fiscal 2027, with five of those locations converted from Darden's now-shuttered Bahama Breeze chain
Why it matters: LongHorn has now structurally surpassed Olive Garden as Darden's growth engine—a significant shift for a portfolio long defined by its pasta flagship. With Olive Garden sales growth stuck at 1.1% and weekday lunch traffic flagged as a soft spot, Darden's path to hitting its $13.60–$13.75 billion fiscal 2027 sales target increasingly depends on scaling Yard House (13 new units planned) and reviving lunch demand at the flagship chain.
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