Olive Garden Parent Darden Records Strong Q4 Growth, Hikes Dividend

Darden Restaurants Inc. DRI, the parent stock of restaurants like Olive Garden and LongHorn Steakhouse, rose on Friday after the company topped fourth-quarter earnings and revenue estimates, lifted by strong same-restaurant sales and expansion efforts.

The company reported fourth-quarter adjusted earnings per share of $2.98, beating the analyst consensus estimate of $2.97.

Quarterly sales of $3.27 billion outpaced the analyst consensus estimate of $3.26 billion. This 10.6% increase in sales was driven by a 4.6% rise in blended same-restaurant sales and contributions from the acquisition of 103 Chuy’s Tex Mex restaurants and 25 net new restaurant openings.

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Darden reported a consolidated same-restaurant sales increase of 4.6%, with Olive Garden and LongHorn Steakhouse rising 6.9% and 6.7%, respectively. Fine Dining saw a decline of 3.3%, while Other Business grew by 1.2%.

The adjusted EBITDA in the quarter under review totaled $582 million, with Restaurant-Level EBITDA rising 50 basis points year over year to 21.6%.

The company exited the quarter with cash and equivalents worth $240.0 million, higher than $194.8 million in the year-ago period. Inventories totaled $311.6 million, higher than $290.5 million.

Dividend And Share Repurchase Program

Darden declared a quarterly cash dividend of $1.50 per share, a 7.1% increase from the third quarter of fiscal 2025. The dividend is payable on August 1.

On June 18, Darden’s Board of Directors authorized a new share repurchase program under which the company may repurchase up to $1 billion of its outstanding common stock.

This repurchase program does not have an expiration and replaces the previously existing share repurchase authorization.

“Our long-term framework calls for 10-15% total shareholder return over time,” said Darden CFO Raj Vennam. “Over our 30-year history as a public company, Darden has achieved an annualized total shareholder return of 10% or greater over any 10 fiscal-year period.”

Outlook

Darden Restaurants expects fiscal 2026 adjusted EPS between $10.50 and $10.70, below the $10.75 consensus estimate. The company projects total sales growth of 7% to 8% for the year.

For fiscal 2026, Darden Restaurants plans to open 60 to 65 new locations. This expansion is part of its broader growth strategy.

Price Action: DRI shares are trading higher by 2.27% to $227.80 at last check Friday.

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Photo by Jonathan Weiss via Shutterstock