Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants demonstrated strong financial performance in fiscal 2025, achieving consolidated revenue of $12.1 billion with total sales of $3.10 billion in the second quarter, reflecting a year-over-year increase of 7.3%. Key drivers of this positive outlook included a 4.3% blended same restaurant sales growth, enhanced by successful new restaurant openings and an 11.3% increase in the "Other Business" segment, which benefitted from contributions from the newly acquired Chuy's. The company's operational efficiency was underscored by positive same restaurant sales across its major brands, with Olive Garden and LongHorn Steakhouse outperforming industry expectations, further bolstered by strong holiday bookings and record guest satisfaction levels.

Darden Restaurants reported an adjusted EPS of $2.08, falling short of both internal and consensus estimates due to a 5.5% inflation in beef prices, which negatively impacted restaurant margins by 90 basis points. Despite strong sales performance at LongHorn Steakhouse, the segment's profit margins were affected by pricing pressures and ongoing beef inflation, which continues to constrain overall profitability. Additionally, the company's recent acquisitions of Ruth's Chris and Chuy's have introduced operational disruptions and integration challenges that may further pressure earnings in the near term.