Darden Restaurants Q1 FY2027 Earnings Miss Estimates Amid Olive Garden Slowdown

Darden reported fiscal Q1 net sales of $3.20 billion, a 5.1 % YoY rise, but earnings per share from continuing operations were $2.05, just below the $2.06 consensus. Net income fell to $233.4 million, or $2.04 per share, from $257.8 million, or $2.19 per share, a year earlier. Same-store sales rose 3.1 % companywide; LongHorn posted a 6.2 % gain, while Olive Garden’s same-store sales edged up 1.1 %.

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Executives cited two short-term headwinds. A cyclospora outbreak linked to fresh produce raised lettuce concerns, hurting Olive Garden’s “unlimited soup, salad and breadsticks” draw. The FIFA World Cup also diverted diners, trimming same-store sales by roughly 80 basis points, according to CFO Raj Vennam.

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• Same-store sales growth: 3.1 % overall; LongHorn +6.2 %, Olive Garden +1.1 %, Yard House +10 % (World Cup boost).

Darden Stock Forecast: Olive Garden Growth Faces September 24 Earnings Test

• EBITDA margin: 18.8 % at the restaurant level.

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• New openings: 53 net new restaurants; 13 Yard House locations slated for FY2027, including five conversions from Bahama Breeze.

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• Commodity outlook: Beef input costs projected to rise at a low-single-digit rate later in the fiscal year.

Darden Earnings: Olive Garden Slows, LongHorn Leads

CEO Rick Cardenas said momentum improved in September and the company is repositioning Olive Garden’s lunch offering to capture weekday traffic. He noted the pivot away from a planned marketing push for the unlimited soup, salad and breadsticks program after the lettuce concerns emerged, with the campaign now scheduled for the current quarter. Cardenas highlighted Yard House as a “high potential growth brand” and pointed to modest price increases averaging 3.7 % in the quarter, expected to ease to low- to mid-2 % by year-end. CFO Vennam said the World Cup’s early impact was offset by stronger performance later and reiterated the FY2027 outlook of $13.60-$13.75 billion in revenue and $11.10-$11.35 in EPS.

Darden Earnings: Olive Garden Slows, LongHorn Leads

• “During the quarter, Olive Garden was prepared to communicate about one of its core brand equities, unlimited soup, salad and breadsticks, but quickly pivoted away from their planned marketing support in response to external events that led to broader consumer concern about lettuce,” — Rick Cardenas, CEO

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• “Yard House is a high potential growth brand,” — Rick Cardenas, CEO

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The mixed performance underscores Darden’s reliance on Olive Garden, whose growth has softened as diners become more price-sensitive. Shifting marketing to weekday lunch value propositions and expanding protein-forward items aims to revive a lagging daypart. Yard House’s 10 % same-store sales surge during the World Cup illustrates the potential of sports-bar concepts to generate traffic during major events. The reaffirmed FY2027 targets suggest confidence that commodity cost pressures will moderate and that lunch-focused initiatives will sustain comparable-sales growth.

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Investors will await Darden’s earnings release scheduled for September 24. The company is expected to provide updated guidance on same-store sales, margin performance, and further detail on Olive Garden’s lunch campaign and Yard House expansion.

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