Fiscal 2027 First Quarter
Filed Sep 24, 2026Darden Restaurants Reports Fiscal 2027 First Quarter Results; Declares Quarterly Dividend; and Reaffirms Fiscal 2027 Outlook
Total sales increased 5.1% to $3.2 billion, consolidated same-restaurant sales increased 3.1% on a fiscal calendar basis, all segments delivered positive same-restaurant sales, and adjusted diluted earnings per share from continuing operations increased 4.1% to $2.05. Operating income and reported net earnings declined from the prior year, while the company reaffirmed its fiscal 2027 outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| SalesGAAP | $3.20B | – | 5.1% |
| Blended same-restaurant sales, fiscal calendar basisother | 3.1% | – | – |
| Blended same-restaurant sales, comparable calendar basisother | 3.2% | – | – |
| Food and beverageGAAP | 984.9M | – | – |
| Restaurant laborGAAP | 1.03B | – | – |
| Restaurant expensesGAAP | 530.5M | – | – |
| Marketing expensesGAAP | 53.1M | – | – |
| Pre-opening costsGAAP | 8.5M | – | – |
| General and administrative expensesGAAP | 134.8M | – | – |
| Depreciation and amortizationGAAP | 144.2M | – | – |
| Impairments and (gain) loss on disposal of assets, netGAAP | −3.9M | – | – |
| Total operating costs and expensesGAAP | $2.88B | – | – |
| Operating incomeGAAP | 319.3M | – | – |
| Interest, netGAAP | 50.3M | – | – |
| Earnings before income taxesGAAP | 269M | – | – |
| Income tax expenseGAAP | 34.7M | – | – |
| Earnings from continuing operationsGAAP | $234.3M | – | – |
| Losses from discontinued operations, net of tax benefitGAAP | −900K | – | – |
| Net earningsGAAP | $233.4M | – | – |
| Diluted net earnings per share from continuing operationsGAAP | $2.05 | – | – |
| Diluted net earnings per shareGAAP | $2.04 | – | – |
| Adjusted earnings from continuing operationsnon-GAAP | $234.3M | – | – |
| Adjusted diluted net earnings per share from continuing operationsnon-GAAP | $2.05 | – | 4.1% |
| Net cash provided by operating activities of continuing operationsGAAP | $279M | – | – |
| Purchases of land, buildings and equipmentGAAP | −175.3M | – | – |
| Net cash used in investing activities of continuing operationsGAAP | −$171.3M | – | – |
| Dividends paidGAAP | −184.2M | – | – |
| Repurchases of common stock, inclusive of excise taxes paidGAAP | −220.8M | – | – |
| Net cash used in financing activities of continuing operationsGAAP | −$104.4M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Olive GardenSame-restaurant sales increased 1.1% on a fiscal calendar basis and 1.0% on a comparable calendar basis; segment profit was $270.8 million versus $267.6 million. | $1.33B | – | – |
| LongHorn SteakhouseSame-restaurant sales increased 6.2% on a fiscal calendar basis and 6.8% on a comparable calendar basis; segment profit was $154.6 million versus $134.9 million. | $860.9M | – | – |
| Fine DiningSame-restaurant sales increased 1.6% on a fiscal calendar basis and 1.0% on a comparable calendar basis; segment profit was $39.6 million versus $38.7 million. | $304.2M | – | – |
| Other BusinessSame-restaurant sales increased 3.8% on a fiscal calendar basis and 4.5% on a comparable calendar basis; segment profit was $111.5 million versus $109.3 million. | $705.4M | – | – |
Fiscal 2027 full year outlook
- NoteThe Company reaffirmed all aspects of its full year financial outlook for fiscal 2027.
- NoteDiluted net earnings per share from continuing operations of $11.10 to $11.35.
Capital returns
- The Company repurchased approximately 1.1 million shares of its common stock for a total of $222.3 million, inclusive of 1% excise tax incurred on net repurchases.
- The Company had $1.3 billion remaining under the current $1.5 billion repurchase authorization as of the end of the fiscal first quarter.
- The Board declared a quarterly cash dividend of $1.62 per share, payable on November 2, 2026 to shareholders of record at the close of business on October 9, 2026.
- Dividends paid were (184.2) million, compared with (175.1) million.
- Repurchases of common stock, inclusive of excise taxes paid, were (220.8) million, compared with (182.7) million.
What drove it
- Total sales increased 5.1% to $3.2 billion.
- Each segment delivered positive same-restaurant sales.
- LongHorn Steakhouse posted the highest fiscal-calendar same-restaurant sales increase at 6.2%.
- The company-operated restaurant count in continuing operations was 2,218 at 8/30/26, compared with 2,165 at 8/24/25.
- Quarter same-restaurant sales excludes the impact of Bahama Breeze, as all locations are expected to be closed or converted to other brands by Q4 fiscal 2027.
Concerns
- Operating income was 319.3 million, compared with 339.2 million.
- Net earnings were $233.4 million, compared with $257.8 million.
- Net cash provided by operating activities of continuing operations was $279.0 million, compared with $342.5 million.
- Interest, net was 50.3 million, compared with 45.4 million.
- Olive Garden same-restaurant sales increased 1.1% on a fiscal calendar basis.
What to watch
- Delivery against reaffirmed fiscal 2027 diluted net earnings per share from continuing operations outlook of $11.10 to $11.35.
- Same-restaurant sales progression, particularly at Olive Garden, where fiscal-calendar same-restaurant sales increased 1.1%.
- Operating-income performance following operating income of 319.3 million versus 339.2 million.
- Bahama Breeze closures or conversions, which are expected to be completed by Q4 fiscal 2027.
- Use of the $1.3 billion remaining under the current $1.5 billion repurchase authorization.
Balance sheet and cash flow
- Cash and cash equivalents were $220.5 million at 8/30/2026, compared with $219.5 million at 5/31/2026.
- Short-term debt and current portion of long-term debt were $979.7 million at 8/30/2026, compared with $693.6 million at 5/31/2026.
- Long-term debt was $1,636.1 million at 8/30/2026, compared with $1,637.7 million at 5/31/2026.
- Net cash provided by operating activities of continuing operations was $279.0 million, compared with $342.5 million.
- Purchases of land, buildings and equipment were (175.3) million, compared with (174.1) million.
- Cash, cash equivalents, and restricted cash were $228.6 million at 8/30/2026, compared with $225.5 million at 8/24/2025.
Analysis
Darden reported a solid fiscal 2027 first quarter, with sales increasing 5.1% to $3.2 billion and blended same-restaurant sales increasing 3.1% on a fiscal calendar basis. The company said every segment delivered positive same-restaurant sales. LongHorn Steakhouse led with a 6.2% fiscal-calendar increase, followed by Other Business at 3.8%, Fine Dining at 1.6%, and Olive Garden at 1.1%. The release notes that fiscal-year comparisons are offset by one week following the transition from a 53-week to a 52-week fiscal year, and provides comparable-calendar sales figures to address that shift.
Sales growth was supported by a larger restaurant base. Continuing-operations company-owned restaurants totaled 2,218 at August 30, 2026, compared with 2,165 at August 24, 2025. Segment sales were $1,329.8 million at Olive Garden, $860.9 million at LongHorn Steakhouse, $304.2 million in Fine Dining, and $705.4 million in Other Business. Segment profit increased year over year for each reported segment, with LongHorn Steakhouse rising to $154.6 million from $134.9 million.
Reported profitability was below the prior-year level despite higher sales. Operating income was 319.3 million versus 339.2 million, while net earnings were $233.4 million versus $257.8 million. The prior-year period included a (42.0) million gain within impairments and gain or loss on disposal of assets, net, and the adjusted comparison shows adjusted diluted earnings per share from continuing operations increased 4.1% to $2.05 from $1.97. Food and beverage, restaurant labor, restaurant expenses, marketing expenses, pre-opening costs, depreciation and amortization, and interest expense were all higher than in the prior-year quarter.
Cash generation declined year over year, with operating cash flow from continuing operations of $279.0 million compared with $342.5 million. Darden spent (175.3) million on purchases of land, buildings and equipment, paid (184.2) million in dividends, and repurchased (220.8) million of common stock inclusive of excise taxes paid. The company also repurchased approximately 1.1 million shares for a total of $222.3 million during the quarter and retained $1.3 billion under its current authorization.
Darden reaffirmed all aspects of its fiscal 2027 outlook, including diluted net earnings per share from continuing operations of $11.10 to $11.35. The reported outlook contains no revenue, gross-margin, operating-expense, or tax-rate targets. The company also said Bahama Breeze is excluded from quarterly same-restaurant sales because all locations are expected to be closed or converted to other brands by Q4 fiscal 2027.
Management, verbatim
The first quarter was a solid start to our fiscal year with each of our segments delivering positive same-restaurant sales.
Rick Cardenas, Darden President & CEO
The performance across our portfolio reinforces the importance of having distinctive brands, each with a clear strategy, supported by Darden’s scale and other competitive advantages.
Rick Cardenas, Darden President & CEO
Looking ahead, our focus remains the same: operate our restaurants at a high level, strengthen guest loyalty, invest in our people and brands, and deploy capital in ways that support long-term shareholder value.
Rick Cardenas, Darden President & CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results with prior guidance is available.
- Gross margin was not reported.
- Free cash flow was not reported.
- Fiscal 2027 revenue guidance was not provided in the filing text.
- Fiscal 2027 gross-margin guidance was not provided in the filing text.
- Fiscal 2027 operating-expense guidance was not provided in the filing text.
- Fiscal 2027 tax-rate guidance was not provided in the filing text.
- Segment revenue year-over-year percentage changes were not reported.
- Segment revenue quarter-over-quarter comparisons were not reported.
- Quarter-over-quarter comparisons for reported key metrics were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.