Olive Garden Parent Darden Records Strong Q4 Growth, Hikes Dividend

Darden Restaurants Inc. (NYSE: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.

Also Read: Starbucks At A Crossroads, Analyst Sees Chipotle-Like Potential But Warns Of Declining Value Perception

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.

Read Next:

• Accenture New Bookings Fall In Q3, But It Raises Profit Outlook

Photo by Jonathan Weiss via Shutterstock