Darden misses quarterly estimates as Olive Garden sales growth slows (updated)

Darden Restaurants

24/09/2026 12:12

Darden misses Q1 estimates, maintains annual targets
Lunch weakness hurt company sales at Olive Garden
Executives note traffic improved in September 
Recasts paragraph 1 with details on Olive Garden sales growth,  updates shares, adds CEO comment in paragraph 8
By Shania S  Thomas
Sept 24 (Reuters) - Darden Restaurants DRI.N narrowly missed estimates for first-quarter results on Thursday, as a tight consumer spending environment hurt sales growth at Olive Garden, its largest chain.
Persistent inflation, high gasoline prices and economic uncertainty have made consumers more selective about discretionary spending, prompting many to opt for lower-cost meals at home.
Restaurant giant McDonald's MCD.N also warned on Wednesday that industry-wide customer traffic in key markets would likely remain flat as long as inflation stays elevated.
Darden executives said that sustained high diesel prices through the year could slightly increase food and commodity costs, but estimated the impact on margins would be small.
First-quarter same-restaurant sales growth at Olive Garden slowed to 1.1% — the weakest in five quarters — from 5.9% last year and missed analysts' estimate of a 1.65% rise, according to data compiled by LSEG. 
Executives cited weakness in the chain's lunch business.
To attract value-conscious diners, executives said they plan to ramp up marketing for Olive Garden's unlimited soup, salad and breadsticks lunch specials, push lighter-portion offerings and expand protein-forward dinner options.
"Guests are looking for great value at an appropriate price," CEO Rick Cardenas said.
Executives also said traffic improved steadily during the quarter and gained momentum in September after an early-quarter hit from the Soccer World Cup, which boosted its sports bar chain Yard House but hurt Darden's other brands.
"Investors are still going to take a more cautious approach with consumer stocks in general given some of the macro headwinds, but restaurant stocks will respond favorably to positive/accelerating traffic trends," Jim Salera, analyst at Stephens, said.  
Shares of Darden, which maintained its annual targets, were down about 2% in early trading. 
Quarterly sales rose 5.1% to $3.20 billion, but fell short of estimates, while adjusted profit of $2.05 per share from continuing operations missed expectations of $2.06.

 (Reporting by Shania S Thomas in Bengaluru; Editing by Shinjini Ganguli)
 ((shanias.thomas@thomsonreuters.com))