An Olive Garden restaurant in Milpitas, California, United States on Tuesday, December 16, 2025.
David Paul Morris | Bloomberg | Getty Images
Darden Restaurants Thursday reported strong sales growth, fueled by demand at Olive Garden and LongHorn Steakhouse, as thrifty diners search for bargains.
For the second quarter in a row, the company raised its revenue growth forecast for the full year, although it only reiterated its profit forecast.
“The second quarter exceeded our expectations as each segment generated positive sales at the same restaurants,” Darden CEO Rick Cardenas said in a statement.
Shares of the company rose nearly 3% in morning trading.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.08 adjusted vs. $2.10 expected
- Income: $3.1 billion versus $3.07 billion expected
Darden reported net income of $237.2 million, or $2.03 per share, for the second quarter, compared with $215.1 million, or $1.82 per share, a year earlier.
Rising ingredient costs, especially for near-record beef prices, have weighed on the company’s restaurant margin, Chief Financial Officer Raj Vennam said on the company’s conference call.
Excluding restaurant closure costs and expenses related to the Chuy’s acquisition, the restaurant company earned $2.08 per share.
Net sales rose 7.3% to $3.1 billion.
Darden’s same-store sales rose 4.3% in the quarter, beating Wall Street estimates of 3%, according to StreetAccount.
While the entire restaurant industry has experienced slow sales growth, Darden has found success by raising its menu prices at less than inflation and adding promotions aimed at value-seeking customers.
“Lower consumer confidence does not necessarily translate into reduced spending in the quarter,” Cardenas said on the conference call.
He said the company has seen higher-income consumers shift to its casual dining chains, although demand from customers earning less than $50,000 has declined slightly. Darden also saw an increase in traffic from consumers aged 55 and over.
Restaurant results
Olive Garden, which accounts for about 44% of Darden’s quarterly sales, reported same-store sales growth of 4.7%. Executives attributed the popularity of the Italian chain’s $13.99 Never Ending Pasta Bowl promotion that ran during the quarter, as well as Olive Garden’s growing delivery business.
To attract inflation-weary consumers, Olive Garden is also adding the option of smaller portions at a lower price for some menu items. Cardenas said the change improves its value perception among some diners. About 40% of the chain’s locations offered the lighter portion menu during the quarter, and an additional 20% added it at the start of the fiscal third quarter.
LongHorn Steakhouse saw same-store sales grow 5.9%. Although Olive Garden still surpasses LongHorn in terms of its restaurant presence, the steakhouse chain’s sales are growing faster.
Cardenas said LongHorn saw higher traffic from consumers making less than $50,000, despite the chain’s higher average check compared to Olive Garden. He credited higher beef prices, meaning a steak at LongHorn could be the same price or cheaper than one purchased at the grocery store.
The company’s other business segments reported same-store sales growth of 3.1%, fueled by strong demand at Yard House, according to Cardenas.
Darden’s fine dining business, which includes Ruth’s Chris and The Capital Grille, saw same-store sales grow 0.8%, countering the sector’s malaise.
The broader fine dining segment has struggled as consumers spend less at restaurants and many companies have cut back on business lunches and other expenses. Darden tried to appeal to these budget-conscious diners by offering a deal at Ruth’s Chris for a three-course meal for $55 per person.
“It’s a profitable transaction for us,” Cardenas said.
For fiscal 2026, Darden now expects total sales growth of 8.5% to 9.3%, up from its previous forecast of 7.5% to 8.5%. The fiscal year includes a 53rd week, which is expected to contribute approximately 2%.
Darden also adjusted its inflation expectations to 3.5%, at the high end of its previous range of 3% to 3.5%. Higher costs will weigh on the company’s margins, leading the company to reiterate its adjusted earnings guidance in a range of $10.50 to $10.70 per share.