Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants demonstrated robust financial performance in fiscal 2025, achieving consolidated revenue of $12.1 billion and a significant 7.3% year-over-year increase in total sales driven by a 4.3% blended same restaurant sales increase and the addition of 30 net new restaurants. The company successfully outperformed industry benchmarks, with same restaurant traffic rising by 2.8% and same restaurant sales exceeding expectations, indicating continued market share gains amidst positive consumer sentiment and record holiday performance. Furthermore, the Other Business segment emerged as the fastest-growing division, with an impressive 11.3% increase in sales, highlighting Darden's adaptability and growth potential across its diverse portfolio of 11 restaurant brands.

Darden Restaurants reported an adjusted EPS of $2.08 for fiscal 2025, falling below both its own estimate and consensus, primarily due to a 5.5% increase in beef inflation negatively impacting restaurant margins by 90 basis points. Additionally, LongHorn Steakhouse's segment margin of 16.2% was undermined by pricing pressures that lagged behind inflation, ultimately leading to reduced profitability despite strong sales performance. The company is also facing operational challenges from acquisitions like Ruth's Chris and Chuy's, alongside potential volatility from economic factors, further contributing to a cautious outlook on its financial sustainability and unit growth.