Abstract

Darden Restaurants will report fiscal first-quarter results on September 24, 2026, Pre-MKt; this preview summarizes consensus expectations, last quarter’s performance, and the key factors likely to drive share reactions.

Market Forecast

Consensus for the current fiscal quarter points to revenue of 3.21 billion US dollars, up 5.48% year over year, with adjusted EPS estimated at 2.06, up 2.66% year over year, and EBIT forecast at 320.96 million US dollars, up 1.70% year over year; no formal guidance for gross or net margin is provided in the forecast field, though last quarter’s gross and net margins were 23.29% and 10.89% respectively. The main business is expected to hold steady, with analysts looking for modest positive same-store growth and a focus on menu and operational initiatives to maintain traffic and pricing discipline. LongHorn Steakhouse remains a bright spot by scale and momentum, generating 1.02 billion US dollars last quarter and benefiting from anticipated moderation in beef cost inflation; analysts anticipate consolidated same-store sales growth of about 2.8% year over year, supporting the revenue trajectory.

Last Quarter Review

Darden Restaurants delivered revenue of 3.72 billion US dollars, a gross profit margin of 23.29%, GAAP net profit attributable to shareholders of 405.00 million US dollars, a net profit margin of 10.89%, and adjusted EPS of 3.66, with revenue up 13.67% year over year and adjusted EPS up 22.82% year over year. A notable profitability highlight was EBIT of 534.80 million US dollars, up 19.72% year over year, while net profit also rose 31.98% quarter on quarter. By business line, Olive Garden generated 1.54 billion US dollars, LongHorn Steakhouse 1.02 billion US dollars, Other Business 793.30 million US dollars, and Fine Dining 371.00 million US dollars, with consolidated revenue up 13.67% year over year.

Current Quarter Outlook

Main business outlook: Olive Garden and LongHorn

The current quarter’s forecast embodies a modest growth profile built on measured price and traffic assumptions across Olive Garden and LongHorn. Analysts expect consolidated same-store sales to improve around the low single digits year over year, with Olive Garden projected to be roughly flat to slightly positive and LongHorn to maintain healthy momentum. Consensus revenue of 3.21 billion US dollars and adjusted EPS of 2.06 embed macro-normalized traffic and disciplined promotional activity, implying that operating leverage will be more muted than the prior quarter’s year-over-year surge. Management’s recent cadence of operational changes at Olive Garden, such as menu innovation and value stewardship, aims to keep repeat visits intact while sustaining brand equity; LongHorn continues to benefit from consistent execution and value clarity, supporting throughput and guest frequency.

The margin discussion this quarter will center on whether cost relief outpaces mix and promotional drag. Input cost dynamics appear mixed, with beef inflation expected to moderate as the year progresses but diesel and logistics costs remaining a near-term watchpoint. Both banners are positioned to lean on improved labor efficiency and supply chain coordination to protect restaurant-level margins; however, the current quarter’s EBIT forecast of 320.96 million US dollars and modest EPS growth signal that management may prioritize sustaining traffic and value over aggressive margin expansion. Any surprise on cost trends, especially protein and distribution, can shift the EPS trajectory quickly even if top-line comps track expectations.

Tactically, analysts will listen for confirmation that digital and off-premise channels remain additive rather than dilutive to the margin structure. Olive Garden’s brand programs and partnerships focused on convenience and frequency are intended to support incremental occasions without sacrificing dine-in economics. LongHorn’s operational consistency remains a core lever, and its execution discipline is a key reason why the steakhouse banner continues to post resilient traffic patterns. The combination of steady volumes, measured pricing, and tighter cost control sets a baseline for modest earnings growth in the current quarter relative to the strong prior-year comparison.

Most promising segment: LongHorn Steakhouse

LongHorn Steakhouse stands out as the near-term growth engine due to its scale, clear value messaging, and favorable mix within the portfolio. It generated 1.02 billion US dollars last quarter and has carried positive momentum into fiscal 2027, with analysts highlighting consistent operations and customer value perceptions as differentiators. Current-quarter revenue forecasts imply continued strength for the steakhouse category within the company’s mix, with anticipated moderation in beef cost inflation acting as a tailwind to restaurant-level margin resilience over the next several quarters. Against this backdrop, LongHorn’s throughput and check management are expected to anchor consolidated results during a period when Olive Garden comps are projected to be close to flat to up modestly year over year.

Menu and operational discipline are central to LongHorn’s compelling outlook. The banner’s routines around throughput, kitchen efficiency, and service standards have historically supported better-than-average execution during varying demand cycles, and this quarter’s set-up appears to match that pattern. As inflation headwinds in proteins ease gradually, the banner could see incremental margin expansion even if the company chooses to maintain a conservative pricing posture; this provides an earnings cushion without materially elevating traffic risk. The current quarter’s EBIT forecast, though modest year-over-year, still reflects a conservative stance on flow-through; any positive variance in beef or logistics costs could create upside to consensus EPS.

LongHorn’s role within capital allocation is also a consideration for the quarter. With a newly authorized share repurchase program and continued dividend discipline, incremental free cash generation from the steakhouse banner supports a flexible approach to returning capital while funding selective growth investments. Unit growth plans, while measured, can be supported by a cash-flow positive portfolio mix, giving LongHorn an advantaged position to contribute to both earnings and capital returns in fiscal 2027.

What is most likely to move the stock this quarter

The stock’s near-term reaction will likely hinge on three intersecting dynamics: same-store-sales cadence versus expectations, margin commentary tied to food and fuel costs, and management’s stance on fiscal 2027 guidance. On comps, consensus is anchored around low-single-digit growth, and even small deviations—particularly at Olive Garden—could swing sentiment given the banner’s revenue weight. A verification that consolidated comps are tracking near 2.8% year over year, with Olive Garden close to 1.0%, would likely validate the current sales run-rate and reduce concern about traffic elasticity to pricing.

On margins, investors will parse any updates on beef and logistics expenses. Analyst frameworks suggest potential margin upside as protein costs normalize, but rising diesel prices and a still-elevated wage base could offset part of that benefit. The company’s ability to hold restaurant-level margins near last quarter’s structure, even without a formal gross or net margin forecast, would support the EPS estimate of 2.06; meaningful outperformance would require a combination of better traffic, disciplined promotions, and realized cost relief. If management indicates that cost inflation is tracking below internal plans, the EBIT forecast of 320.96 million US dollars could prove conservative.

Guidance posture could be a decisive factor. Analysts expect management to reiterate fiscal 2027 targets rather than reset expectations early in the year, consistent with prior Q1 practice. An affirmation of full-year adjusted EPS in the low-11s and a balanced outlook for comps and margins would likely be read as constructive, particularly if accompanied by concrete updates on operational initiatives at Olive Garden and the sustained momentum at LongHorn. Given the recent authorization of a 1.50 billion US dollar share repurchase program and a higher quarterly dividend, reinforcement of capital-return priorities could further support sentiment if operating trends align with plan.

Cost and margin trajectory: what to watch

The crux of this quarter’s margin debate centers on the timing and magnitude of cost normalization. Protein costs, especially beef, appear poised to ease gradually, but they still represent a significant share of cost of goods sold; the speed of this moderation will influence gross margin relative to last quarter’s 23.29%. Logistics and fuel costs pose an offsetting risk, with higher diesel potentially pressuring distribution expenses; commentary on hedging, routing efficiency, or supplier mix could clarify how much of this is already embedded in cost assumptions. Labor efficiency remains another lever: steady staffing and reduced turnover can help offset wage pressures via scheduling and productivity gains, preserving restaurant-level contribution margins.

The company’s cadence of promotions and value plays will also shape the net margin outcome. While value-focused promotions can sustain traffic, excessive discounting would compress the net profit margin, which was 10.89% last quarter. A balanced approach—anchored in menu innovation, portion flexibility, and targeted offers—should allow the brand family to engage price-sensitive guests without diluting check averages. With the quarter’s EPS estimate up 2.66% year over year, maintaining disciplined promotions is essential to meeting or exceeding the 2.06 EPS consensus.

Finally, operating leverage may be more limited than in the prior quarter due to tougher comparisons and a more modest top-line growth rate. This increases the importance of back-of-house efficiencies, waste reduction, and tighter supply chain management to sustain EBIT. If management demonstrates tangible progress in these areas and signals that the cost environment is improving into the back half of fiscal 2027, investors may be willing to give credit for EPS acceleration even if the current quarter outcome is close to consensus.

Analyst Opinions

Across recent publications between late June and mid-September, the analyst tone is predominantly constructive. Among at least a dozen tracked notes, roughly three-quarters were Buy or Overweight while the remainder were neutral holds or market perform; no explicit sell ratings were identified in the surveyed period. The majority view emphasizes resilient sales momentum, disciplined value execution, and a clearer path to margin stability as certain cost pressures moderate. This consensus aligns with the current quarter’s modest growth profile and anticipates a reiteration of fiscal 2027 guidance.

Several well-known institutions have articulated the bullish case with specific frameworks. UBS underscored steady underlying same-store-sales trends and projected adjusted operating margins around 10.1% for fiscal Q1 and 12.2% for the full year, pointing to easing fuel-cost pressure as a supportive factor for margin progression as the year advances. That operating margin bridge, if realized, would be consistent with the forecast of 320.96 million US dollars in EBIT and EPS of 2.06 this quarter, while allowing room for incremental upside if cost relief arrives sooner than expected. UBS also highlighted brand initiatives at Olive Garden, including menu and portion innovations and convenience enhancements, which are intended to sustain guest frequency without compromising margin integrity.

Oppenheimer expects management to reiterate fiscal 2027 guidance and frames the quarter with an EPS estimate of 2.03 versus the Street’s 2.05, on consolidated same-store sales growth of about 2.8% and Olive Garden close to 0.9%. Their view is that trends will improve as comparisons ease through fiscal 2027 and that non–Olive Garden brands remain an underappreciated strength in the portfolio. While the Oppenheimer EPS figure sits slightly below the 2.06 consensus in the finance forecast field, their broader stance remains supportive, predicated on the blend of steady comps, a manageable cost curve, and operational levers that can add incremental margin as the year progresses.

Other major brokerages reinforce the majority bullish perspective. Bank of America reiterated a Buy rating and maintained a high-200s price target range during the summer, pointing to persistent strength in steakhouse demand and a favorable value comparison to at-home beef prices. Morgan Stanley affirmed an Overweight rating with a raised price target, citing confidence in the brand portfolio’s ability to generate consistent traffic through value-led engagement and operational discipline. BTIG and Deutsche Bank maintained Buy ratings while adjusting price targets to reflect the mixed fourth-quarter print—earnings beat and modest sales miss—followed by a full-year outlook slightly below market estimates. Those recalibrations were largely framed as near-term fine-tuning rather than a thesis change.

A minority neutral camp, including Stephens (Equalweight), Gordon Haskett (Hold), and BMO (Market Perform), focuses on the same variables but maintains a more cautious stance on comps sensitivity and the pace of cost relief. These opinions emphasize that the current quarter’s modest revenue and EPS growth leave less room for execution error, especially if promotional intensity needs to increase to defend traffic. However, even within the neutral set, the absence of bearish ratings suggests that the market views the risk-reward as balanced-to-positive, contingent on confirmation of comp stability and progress on margin levers.

Netting these views, the analyst majority is bullish and expects a measured yet constructive trajectory: low-single-digit same-store growth, gradual margin improvement as protein costs ease, and disciplined capital returns supported by robust cash generation. For the current quarter, this translates into a preference for confirmation over surprise—evidence that comps are tracking close to plan, that cost inflation is not reaccelerating, and that the company remains on path to deliver full-year adjusted EPS in the low-11s. If the company pairs an in-line print with steady guidance, many in the bullish camp anticipate that shares can re-rate toward their target ranges as investors gain confidence in the fiscal 2027 earnings path.