Olive Garden parent Darden misses quarterly profit estimates as costs rise

Darden Restaurants

18/09/2025 13:39

Sept 18 - Olive Garden parent Darden Restaurants DRI.N missed first-quarter profit estimates on Thursday, hurt by higher input and marketing costs amid rising economic uncertainty.

The company raised its annual sales growth forecast to 7.5% to 8.5%, but the midpoint of the range came in largely below analysts' average estimate of 8.3%, according to data compiled by LSEG.

The LongHorn Steakhouse owner's shares, which have gained nearly 12% this year, were down about 8% in premarket trading following the results.

Darden Restaurants, like its peers in the fast food industry, has rolled out value deals such as $6 take-home offerings, while also ramping up its marketing and advertising efforts to attract cost-conscious diners.

However, rising product prices and a weakening labor market have been driving customers to opt for at-home meals, making it harder for restaurant owners to sustain sales growth.

Data showed that restaurant spending in the U.S. declined in July as inflation squeezed discretionary budgets.

The company's quarterly total operating costs and expenses rose 8.8% to $2.71 billion, in part due to the higher costs from ingredients such as beef.

Peers Chipotle Mexican Grill CMG.N and Taco Bell parent Yum Brands YUM.N reported sales declines in their recent quarters.

Darden posted adjusted profit of $1.97 per share for the quarter ended August 24, missing estimates of $2 per share. The company's quarterly profit miss comes after three consecutive quarters of surpassing analysts' expectations.

Its first-quarter sales of $3.04 billion were in line with Wall Street estimates.

Darden maintained its full-year adjusted profit forecast of $10.50 to $10.70 per share.

 (Reporting by Anshi Sancheti in Bengaluru; Editing by Shreya Biswas)

 ((Anshi.Sancheti@thomson.reuters.com))