Darden Restaurants reported weaker-than-expected sales on March 20, 2025, as its Olive Garden and LongHorn Steakhouse brands fell short of analysts’ projections. The company’s shares dipped nearly 1% in premarket trading following the announcement.
- Olive Garden and LongHorn underperformed sales expectations.
- Darden's shares fell nearly 1% premarket.
- Earnings per share slightly exceeded expectations.
- Same-store sales growth fell short of forecasts.
- Darden's revenue forecast remains at $12.1 billion.
- Chuy's results included in fiscal 2025 outlook.
Darden Restaurants, the parent company of Olive Garden and LongHorn Steakhouse, revealed its fiscal third-quarter results, highlighting a net income of $323.4 million, or $2.74 per share, which is an increase from $312.9 million, or $2.60 per share, a year earlier. However, the company’s revenue of $3.16 billion did not meet the expected $3.21 billion, leading to concerns about its performance in the competitive dining sector.
Key financial details from the report include:
- Earnings per share: $2.80 adjusted vs. $2.79 expected
- Net sales increase: 6.2% to $3.16 billion
- Same-store sales growth: 0.7% vs. 1.7% expected
Both Olive Garden and LongHorn Steakhouse, which are typically strong performers for Darden, reported disappointing same-store sales growth. Olive Garden’s same-store sales rose by just 0.6%, falling short of the 1.5% growth that analysts had predicted. LongHorn Steakhouse experienced a 2.6% increase in same-store sales, missing expectations of 5%. Additionally, Darden’s fine-dining segment saw a decline of 0.8% in same-store sales, while its casual dining segment, which includes Cheddar’s Scratch Kitchen and Yard House, reported a 0.4% decrease.
Looking ahead, Darden maintained its revenue forecast for the full year at $12.1 billion. The company has narrowed its outlook for adjusted earnings from continuing operations to a range of $9.45 to $9.52 per share, down from a previous forecast of $9.40 to $9.60 per share. Notably, the results from Chuy’s, a Tex-Mex chain recently acquired by Darden, will not be included in same-store sales metrics until the fiscal fourth quarter of 2026.
In summary, Darden Restaurants’ latest earnings report reflects challenges faced by its key brands, particularly Olive Garden and LongHorn Steakhouse, as they struggle to meet sales expectations. The company’s overall financial outlook remains cautious as it navigates the competitive dining landscape.
