Darden Restaurants (NYSE: DRI), the owner of Olive Garden and LongHorn Steakhouse, closed down 2.9% at $207.44 on Thursday after its largest brand posted weaker-than-expected sales growth. The fall came despite the group reporting higher revenue and earnings per share for its first quarter of fiscal 2027.
The stock had opened between 5% and 6% lower in pre-market trading before paring some of the loss through the session. It finished at $207.44, down from Wednesday’s close of $213.69, below its 50-day moving average of $211.44 but still above its 200-day moving average of $203.43, and well off the 52-week high of $229.76 it set in mid-August.
Darden reported total sales of $3.20bn for the quarter, up 5.1% year on year but narrowly below consensus, with adjusted earnings per share of $2.05, a cent below the $2.06 analysts had modelled. The group reaffirmed full-year guidance of $11.10 to $11.35 in adjusted earnings per share on sales of $13.60bn to $13.75bn. Within those figures, Olive Garden, Darden’s biggest chain by sales at $1.33bn, posted same-restaurant sales growth of only 1%, against LongHorn Steakhouse’s 6.2%.
Olive Garden’s soft same-restaurant sales growth came alongside group-level results that topped year-earlier figures but narrowly missed consensus. Management pointed to World Cup scheduling effects, softer weekday lunch traffic and consumer concern over lettuce as drags on Olive Garden, while flagging early momentum in the current quarter from its Never-Ending Pasta Bowl promotion. Consolidated same-restaurant sales still rose 3.1%, with all four of Darden’s segments positive.
Chief executive Rick Cardenas pointed to the strength across Darden’s other brands even as Olive Garden lagged.
The first quarter was a solid start to our fiscal year with each of our segments delivering positive same-restaurant sales… The performance across our portfolio reinforces the importance of having distinctive brands, each with a clear strategy, supported by Darden’s scale and other competitive advantages.
Rick Cardenas, President and CEO, Darden Restaurants
Darden also declared a quarterly dividend of $1.62 a share, payable on 2 November to shareholders on record on 9 October, and bought back $222.3m of stock during the quarter. Shares remain up between 13% and 16% for the year despite Thursday’s fall.