Sep 24, 2026 earnings call — Solid start to fiscal 2027 results
Darden reported $3.2 billion in total sales this quarter, up 5.1% with 53 net new restaurants driving growth.
Revenue $3.2B (est $3.2B) · EPS $2.05 (est $2.05)
Key quotes
"Later in our current quarter, Olive Garden will activate the previously planned marketing support behind its iconic unlimited soup, salad and breadsticks lunch offering at a compelling price point."
"Their momentum has been powered by disciplined adherence to a clear strategy, focus on quality, simplicity and culture over many years."
"This was driven by very impressive same-restaurant sales growth of 10% at Yard House."
Analyst Q&A 14
Never-Ending Pasta price and value
Q (Christopher O'Cull · Baird): Why did Olive Garden raise the price on the Never-Ending Pasta Bowl and was it a consumer confidence move? Also asked about lunch opportunity and traffic trends.
A: Management said they added more to the NEPB offer (new sauces, Shrimp Fritta, protein add-ons) and kept the protein buy-up price the same to keep value compelling. They said Olive Garden quarter-to-date performance indicates the pricing decision worked. Lunch has been weaker since COVID and they plan tests this quarter to add lunch variety and value.
"So part of what we've done here is actually added more to the offer." — Rajesh Vennam (CFO)
Olive Garden sales cadence and NEPB start
Q (Christopher Carril · KeyBanc): Can you describe the cadence of Olive Garden sales through the quarter and color on Never-Ending Pasta Bowl early performance?
A: Management said trends improved through the quarter, with August strongest and September even stronger, and traffic acceleration into September. They reported selling 10,000 Pasta Passes earlier and stronger than-expected early NEPB results, with higher buy-ups and strong uptake on new items like Spicy Alfredo and Shrimp Fritta. All of this is included in the year's guide and they feel good about the start.
"As we said in the prepared remarks, we sold 10,000 Pasta Passes in the second, and we've seen a lot of guest reaction to that and seen a lot of redemption at Pasta Pass." — Ricardo Cardenas (CEO)
Drivers of improving trends
Q (Brian Bittner · Oppenheimer & Company): What drove the improving trends through the quarter and into September? How much was external (lettuce issues) versus company actions?
A: Management said it was a mix of both external factors and company actions. External easing (World Cup, lettuce concerns) helped, and their actions—like the NEPB launch, pricing discipline, and added proteins—also drove improvement. They highlighted unlimited proteins for $4.99 and added Shrimp Fritta as positive contributors.
"There are some external factors, and I mentioned a tougher ramp as we started the quarter, but also the World Cup and then some concerns around lettuce." — Rajesh Vennam (CFO)
Impact of gas prices and fuel surcharges
Q (Andrew Charles · TD Cowen): How does Olive Garden perform when gas spikes, and how do fuel surcharges from distributors affect 2027 guidance?
A: Management said correlation between gas prices and performance is low and gas hasn't been a clear challenge so far; Olive Garden performance improved through the quarter despite rising gas. They noted variable fuel charges are in contracts and some of that is contemplated in guidance; if diesel stayed very high it could add tens of basis points of inflation, roughly 10 to 15 basis points as a percent of sales at extreme levels.
"And I would say that the impact on gas prices isn't necessarily any different for Olive Garden and other brands, except for maybe that consumer that has to drive farther to go to an Olive Garden than some others." — Ricardo Cardenas (CEO)
Social media and younger consumers
Q (Jon Tower · Citi): How is Darden changing its social media strategy, especially to reach younger consumers, and how is it managed across brands? Also asked for Olive Garden trend color and LongHorn performance.
A: Management said all brands have strong social presence and their strategy is to show brands authentically in channels relevant to guests, using influencers who love the brands and organic creators. They are on TikTok across casual brands and will roll it out further, moving more marketing into digital and focusing on authenticity. They said LongHorn is holding up with strong traffic and sales growth and very low marketing spend.
"Our social media strategy is anchored in bringing our brands to life in authentic ways." — Ricardo Cardenas (CEO)
Yard House and Cheddar's growth and ROI
Q (David Palmer · Evercore): What's driving Yard House and Cheddar's strength, their ROI, and long-term unit growth expectations?
A: Management said Yard House performance is strong and they're ramping unit growth, aiming for higher single-digit growth long term but not double digits; Cheddar's will ramp to mid-single digits and focus on right markets. They credited intense focus on food, new prototypes, and investments that deliver strong ROI, noting Yard House AUVs and high-teens segment margins produce compelling returns.
"Yard House, as we mentioned, at their AUVs with the investments we have and the restaurant segment profit margins that are high teens, that's actually a pretty compelling return on investment." — Rajesh Vennam (CFO)
Beef market and fine dining trends
Q (James Salera · Stephens): Given beef headlines and screwworm outbreak, what do you see for beef inflation and contracts? Also, how is Fine Dining guest behavior evolving?
A: Management said their supply chain has outperformed the market and they are trending in line with low single-digit beef inflation expectations; external signs like increased cattle weights and imports could help. They noted there are no active screwworm cases in the U.S. and Fine Dining traffic remains below pre-COVID but is gradually improving, with some growth in private dining and targeted offers helping performance.
"There are no active screwworm cases in the U.S., so." — Rajesh Vennam (CFO)
Smaller portions at Olive Garden and delivery mix
Q (Brian Harbour · Morgan Stanley): Have smaller portion entrees performed as expected and how has delivery contributed year-over-year?
A: Management said the smaller, lighter portion entrees have performed as expected, are preferred at weekend lunch and are building frequency for those who order them; full rollout should wrap this year. For first-party delivery, year-over-year percent of sales was lower due to lapping free deliveries, down about 80 basis points to around 4.8% of sales, but the channel is slowly growing quarter-to-quarter.
"the smaller portions with great affordable prices have performed as we expected" — Ricardo Cardenas (CEO)
LongHorn margins and reinvestment
Q (Jacob Aiken-Phillips · Melius): Is LongHorn's margin expansion structural from higher volumes, and as beef costs ease how will you balance flow-through versus reinvestment? Also asked about portfolio mix effects.
A: Management said they balance reinvestment and margin flow-through and only make investments that deliver returns, which helped past market share gains. As inflation stabilizes, margins can improve and traffic growth provides leverage, but they focus on overall earnings after-tax margin growth and not on individual line items. The long-term aim is modest earnings margin improvement, about 20 basis points.
"We always think about the investments we got to make." — Rajesh Vennam (CFO)
Retail beef demand and delivery fees
Q (Peter Saleh · U.S. Bancorp BTIG): Is retail beef demand destruction still occurring, and would sustained high gas affect your delivery fee pricing?
A: Management said they are not changing delivery fees; contracted prices are being charged. On retail, they see continued demand destruction but lessening—August retail steak data showed about a 4% decline versus larger declines earlier, and that decline has plateaued somewhat.
"No, we're not increasing -- we don't change the delivery fees or -- we have a contract for a certain price, and that's what we're charging." — Rajesh Vennam (CFO)
Lighter portions, GLP-1 impact, and lunch cannibalization
Q (Sara Senatore · BofA): Are smaller portions driven by GLP-1 use or price, and could building lunch cannibalize dinner?
A: Management said the initiative is about right portion size at the right price, not specifically targeting GLP-1 users, and they can't identify GLP-1 users from guest data. They don't see meaningful lunch cannibalization of dinner; historically lunch programs grew traffic and profits, and they expect overall traffic to rise rather than replace dinner visits.
"It's about the right portion size for the right prices." — Ricardo Cardenas (CEO)
Weekday lunch weakness and site availability
Q (Andrew Strelzik · BMO): How does weekday lunch now compare to pre-COVID and are you seeing restaurant supply shifts that create opportunities?
A: Management said weekday lunch is weaker versus pre-COVID, and it's off by hundreds of basis points, creating an opportunity to act; weekday lunch is about 20% of total traffic. On supply, they see some competitors closing while stronger brands expand, which creates opportunities; Darden's investment-grade credit and landlord relationships help them secure sites and pursue growth.
"From a weekday lunch perspective, that's where we're seeing some of the weakness versus pre-COVID, especially when you look at how much that has -- how that's performed versus the rest of the dayparts." — Rajesh Vennam (CFO)
Chuy's two-year performance and growth plan
Q (Danilo Gargiulo · Bernstein): How have Chuy's sales trended since acquisition and what are the expansion plans and implied value?
A: Management said Chuy's integration had challenges but still delivered positive same-restaurant sales in its first full fiscal year at Darden, unlike another recent acquisition. They plan focused growth in the right markets, expect mid- to high-single digit unit growth long term, and see strong margins in top restaurants with opportunity to improve consistency and branding.
"When you look at Chuy's performance, it's the only brand in its first full fiscal year for Darden that had a positive same-restaurant sales." — Ricardo Cardenas (CEO)
Suburban visits, malls, and site availability
Q (John Ivankoe · JPMorgan): Is the return to malls and theaters sustainable and are developers changing site builds that could create opportunities for Darden? Also asked about competitive supply and site availability.
A: Management said it's early to judge mall returns but younger cohorts are increasingly visiting malls and theaters, which could be positive; Darden prefers pad sites outside malls but fits many site types. They see good site availability and expect opportunities as weaker competitors exit; Darden's strong credit and brand make them a frequent, competitive bidder for desirable sites.
"There may be some revitalization of some malls. That said, we've got a great portfolio of brands that whenever there's a restaurant site that's available, we're pretty much one of the first phone calls because whether it's a high-end mall or a more mainstream mall, we've got a brand that can go close to it." — Ricardo Cardenas (CEO)