Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants reported significant growth with total sales reaching $3.10 billion in the second quarter of fiscal 2026, representing a 7.3% year-over-year increase driven by a 4.3% blended same restaurant sales and the addition of 30 new restaurants. The company demonstrated strong same restaurant traffic growth of 2.8%, supported by a solid 1.7% increase in traffic and successful catering initiatives, coupled with positive performance reported across its core brands, particularly LongHorn Steakhouse. Additionally, the Other Business segment emerged as a key growth driver, achieving an 11.3% sales increase to $647 million, highlighting Darden's ability to capture market share and adapt effectively to changing consumer preferences.

Darden Restaurants experienced an adjusted EPS of $2.08, which was below both internal and consensus estimates, primarily due to a 5.5% increase in commodity inflation specifically related to beef, impacting restaurant margins negatively by 90 basis points. The profitability of LongHorn Steakhouse was particularly affected, as its segment margin of 16.2% was driven down by prices falling approximately 320 basis points below inflation, despite strong sales performance. Additionally, the company is facing headwinds from ongoing disruptions and integration challenges following recent acquisitions, coupled with a notable decline in retail demand for steak, which could hinder earnings and growth prospects amid potential operational volatility.