Darden Restaurants reported quarterly earnings and revenue that slightly lagged behind analyst expectations, leading to a decline in its stock price. The company experienced a slowdown in same-store sales growth at Olive Garden, its largest chain by locations and sales. Despite this, Darden’s CEO Rick Cardenas provided reassurance on the earnings call, noting that the company’s restaurant performance had improved in September and that commodity costs, particularly beef, are anticipated to decrease later in the fiscal year.

The company’s fiscal first-quarter net income was $233.4 million, down from $257.8 million in the previous year, with earnings per share at $2.04 compared to $2.19 a year earlier. Net sales rose 5.1% to $3.20 billion, with same-store sales increasing 3.1%. However, external factors such as the World Cup and consumers’ concerns over cyclospora linked to fresh produce affected sales during the quarter. LongHorn Steakhouse led Darden’s portfolio with a 6.2% rise in same-store sales, overtaking Olive Garden as the top performer in growth.

Olive Garden’s same-store sales increased by only 1.1%, reflecting a more cautious consumer base amidst industry challenges involving food safety, particularly related to the brand’s unlimited soup, salad, and breadsticks offer. In response, Olive Garden delayed its marketing campaign and is focusing on driving weekday lunch traffic with value-oriented promotions. Meanwhile, Darden’s fine-dining restaurants like The Capital Grille and Ruth’s Chris saw a 1.6% increase in same-store sales, with traffic gradually improving despite still being below pre-pandemic levels.

Other Darden chains, including Yard House, which reported a 10% increase in same-store sales aided by the World Cup, showed solid growth. Yard House is highlighted as a key growth brand and plans to open 13 new locations in fiscal 2027, some converted from the closed Bahama Breeze chain. Looking ahead, Darden reaffirmed its fiscal 2027 guidance of total sales between $13.60 billion and $13.75 billion and net earnings per share in the range of $11.10 to $11.35.