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Darden Restaurants beats Q4 profit expectations

Wall Street Journal US Business •
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Darden Restaurants posted a stronger fourth‑quarter profit, lifting net earnings to $404.9 million, or $3.51 per share, for the three months ended May 31. That compares with $303.8 million and $2.58 a share a year earlier. Adjusted earnings rose to $3.66 per share, just above the FactSet consensus of $3.63. The earnings lift also boosted the company's operating margin to its highest level in three years.

Quarterly revenue climbed 14% to $3.72 billion, narrowly missing Wall Street’s $3.73 billion forecast. Darden credited the rise to an extra week of operations and the rollout of new restaurant openings, which helped sustain momentum across its Long Horn Steakhouse brand. Comparable sales at Long Horn rose 9% year‑over‑year, outpacing the chain’s overall growth. The chain’s comparable‑sales growth offset softer performance at other concepts.

Investors responded positively, with the stock edging higher after hours as the earnings beat signaled that Darden’s expansion strategy remains effective despite a crowded casual‑dining market. The results also suggest the company can generate incremental sales without relying on price cuts, a factor that may influence peers evaluating growth through unit openings versus discounting. Analysts see the beat as validation of Darden’s pricing power.