By Nate Wolf
Darden Restaurants, the parent of casual dining chains Olive Garden and LongHorn Steakhouse, reported strong quarterly sales and boosted its fiscal-year guidance. The stock inched up in early trading on Thursday.
Shares rose 0.8%. The stock is up 1.5% this year, compared with the benchmark S&P 500 index's 14% gain.
Darden reported adjusted earnings of $2.08 a share for its fiscal second quarter, below analysts' consensus estimate of $2.10, according to FactSet. The sales numbers, however, showed solid demand for sit-down dining.
Same-restaurant sales climbed 4.3% from a year before, trouncing Wall Street's call for 2.9% growth. Olive Garden same-restaurant sales jumped 4.7% and LongHorn sales were up 5.9%. The company now expects same-restaurant sales growth of 3.5% to 4.3% for fiscal 2026, up from 2.5% to 3.5%.
The earnings print is another sign that Americans are opting for full-service restaurants instead of fast-casual and fast-food competitors. That trend reflects the disparity in spending between higher-income and lower-income households, Barron's reported last month .
Food prices in November came in 2.6% higher than last year in Thursday's inflation data. The cost of dining out was up 3.7%.
McDonald's, a bellwether for the fast-food industry, had U.S. same-store sales rise 2.4% in the third quarter. That number beat analysts' expectations, but was well behind Darden's growth. In October, shares of Chipotle Mexican Grill tumbled after the fast-casual eatery forecast a decline in same-store sales this year.
Sit-down restaurants aren't immune to inflation, either. Earlier this year, Darden pointed out the higher tariff-driven prices it was paying for beef and shrimp.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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December 18, 2025 10:26 ET (15:26 GMT)
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