Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants reported consolidated revenue of $12.1 billion for fiscal 2025, with notable growth driven by a 7.3% year-over-year increase in total sales in the second quarter of fiscal 2026, largely due to a 4.3% blended same restaurant sales performance and the addition of 30 net new locations. The company's Other Business segment exhibited significant expansion, achieving an 11.3% sales increase to $647 million, bolstered by contributing factors such as a 3.1% same restaurant sales increase and the inclusion of Chuy's. Additionally, key brands like LongHorn and Olive Garden surpassed expectations, reinforcing Darden's ability to gain market share within the casual dining sector as industry sales growth remained modest.

Darden Restaurants reported an adjusted EPS of $2.08, which fell slightly below both internal and consensus expectations, primarily affected by a 5.5% inflation in commodity beef prices that squeezed restaurant margins. The performance of LongHorn demonstrated strong sales and traffic; however, a segment margin of 16.2% was hindered by pricing that lagged significantly behind inflation, resulting in reduced profitability. Additionally, ongoing disruptions and integration challenges from recent acquisitions are likely to pressure earnings over the next two years, compounded by external factors such as declining consumer confidence and potential operational volatility from economic downturns.