# Darden Restaurants (DRI) Sector: Full-service restaurants | Field | Value | |---|---| | Price | $228.94 | | Market cap | $26B | | Intrinsic value source | Analysts | | Data as of | 2026-11-12 | | Next earnings | 2026-12-17 (estimate) | Analysts: Bullish Picks: Research only Discount category: Far above intrinsic value ## In short Investors pay a premium for the steady same-restaurant sales growth and large buybacks of Darden, and only sales growth that holds with steady margins against a careful diner and rising costs can earn this price. ## Themes and gap - Themes: Weak consumer (weak-consumer) - Gap type: Can close (closable) - Why: The Q2 report in December 2026 and the Q4 report with the fiscal 2028 outlook in June 2027 show whether sales growth and margins hold. ## About Darden Restaurants, Inc. (Darden) is a full-service restaurant company based in Orlando, Florida. At August 30, 2026, it owned and ran 2,218 restaurants in the United States. They were Olive Garden (953), LongHorn Steakhouse (624), Cheddar's Scratch Kitchen (187), Chuy's (112), Yard House (95), Ruth's Chris Steak House (83), The Capital Grille (75), Seasons 52 (44), Eddie V's (32), Bahama Breeze (10) and The Capital Burger (3). Its segments are Olive Garden, LongHorn Steakhouse, Fine Dining and Other Business. In fiscal 2026, which ended on May 31, 2026 and had 53 weeks, sales were $13.21 billion, reported diluted EPS from continuing operations was $10.44 and adjusted EPS was $10.64. Rick Cardenas is President and Chief Executive Officer. Darden files 10-K and 10-Q reports with the SEC and has a fiscal year that ends in late May. Its common stock trades on the New York Stock Exchange in US dollars. ## Thesis The price of Darden depends on whether its brands keep growing sales at a steady rate while costs rise. In Q1 of fiscal 2027, sales rose 5.1% to $3.2 billion and same-restaurant sales rose 3.1%. LongHorn grew 6.2%, but Olive Garden, the largest brand, grew only 1.1%. Darden reaffirmed its outlook for fiscal 2027 of diluted EPS from continuing operations of $11.10 to $11.35, in a year of 52 weeks after the 53 weeks of fiscal 2026. The market has to weigh steady sales, a growing dividend and large buybacks, with $222.3 million in Q1, against a careful guest, total inflation of about 3.0% and an effective tax rate that the company guides to about 13.5%. For the price to hold or rise, three things must be true. Olive Garden same-restaurant sales must stay positive, and LongHorn must keep its growth. Restaurant margins must hold when inflation is about 3.0%. Chuy's must keep growing, and the closing or conversion of the Bahama Breeze restaurants by Q4 of fiscal 2027 must not cost more than planned. The next tests are the Q2 report, expected in December 2026, and the Q3 report, expected in March 2027. ## Checkpoints - Dec 17, 2026 (estimate): Q2 fiscal 2027 results. Status: Pending. Watch: Olive Garden same-restaurant sales stay positive, blended same-restaurant sales grow 2.5% or more and the EPS outlook is kept, and this passes; negative Olive Garden sales or a lower outlook fails. - Mar 2027 (estimate): Q3 fiscal 2027 results. Status: Pending. Watch: Same-restaurant sales stay inside the outlook range and the EPS outlook is kept, and this passes; a cut fails. - Jun 2027 (estimate): Q4 fiscal 2027 results and the outlook for fiscal 2028. Status: Pending. Watch: Fiscal 2027 EPS is at least $11.10 and the outlook for fiscal 2028 shows EPS growth of 7% or more, and this passes; lower EPS or a weaker outlook fails. ## Balance sheet - Cash: $221M - Debt: $2.6B - Net debt: $2.4B - Debt due within 12 months: $980M At August 30, 2026, Darden had cash and cash equivalents of $220.5 million. Short-term debt and the current portion of long-term debt were $979.7 million, and long-term debt was $1,636.1 million. Non-current operating lease liabilities were $4,009.7 million, and total stockholders' equity was $2,068.4 million. On October 22, 2026, Darden signed a $1.5 billion senior unsecured revolving credit agreement that matures on October 22, 2031. It replaced a $1.25 billion agreement and has a covenant that limits consolidated net debt to total capitalization to 3.50 to 1.00. Darden bought back $222.3 million of stock in Q1, and $1.3 billion remained under its $1.5 billion authorization. It expects capital spending of about $875 million in fiscal 2027. As of 2026-08-30. Sources: - https://www.sec.gov/Archives/edgar/data/940944/000094094426000042/dri-20260830.htm - https://www.sec.gov/Archives/edgar/data/940944/000094094426000060/dri-20261022.htm - https://www.sec.gov/Archives/edgar/data/940944/000094094426000032/exhibit991-q1fy27.htm ## Dividends - Dividend yield: 2.7% (last 12 months, at the current price) - Paid per share, last 12 months: $6.24 (4 payments) - Current annual rate: $6.48 ($1.62 x 4 a year) - Payout ratio: 58% of the earnings of the last fiscal year (the year ended 2026-05-31) - Latest ex-dividend date: 2026-10-09, $1.62 per share - Growth from 2020 to 2025: 37.5% a year - Growth from 2015 to 2025: 11.4% a year Dividends per share by year: 2016: $2.12, 2017: $2.38, 2018: $2.76, 2019: $3.26, 2020: $1.18, 2021: $3.45, 2022: $4.62, 2023: $5.04, 2024: $5.42, 2025: $5.80. Source: company filings and market data, read on 2026-11-13. ## Recent events - 2026-10-22: Darden signed a new $1.5 billion revolving credit agreement that matures on October 22, 2031. It replaces a $1.25 billion agreement of 2023, under which nothing was outstanding. - 2026-09-24: Darden reported Q1 fiscal 2027 results. Sales rose 5.1% to $3.2 billion, and reported diluted EPS from continuing operations was $2.05, up 4.1% from adjusted EPS of a year before. It reaffirmed its outlook for fiscal 2027. - 2026-09-24: Darden bought back about 1.1 million shares for $222.3 million in Q1. It had $1.3 billion left under its $1.5 billion authorization. It declared a quarterly dividend of $1.62 per share, payable on November 2, 2026 to holders of record on October 9, 2026. - 2026-06-25: Darden reported results for fiscal 2026. Sales rose 9.4% to $13.21 billion, including a 53rd week, and adjusted diluted EPS from continuing operations was $10.64, up 11.4%. It raised its quarterly dividend by 8.0% to $1.62 per share. ## Latest news and filings - Last earnings: 2026-09-24 (8-K: https://www.sec.gov/Archives/edgar/data/940944/000094094426000032/) - Next earnings: 2026-12-17 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-23 | 8-K | New material agreement and End of a material agreement | | dri-20261022 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000060/dri-20261022.htm | | 2026-10-02 | 10-Q | Quarterly report for the period ended Aug 30, 2026 | 2026-08-30 | dri-20260830 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000042/dri-20260830.htm | | 2026-09-24 | 8-K | Shareholder vote results | | dri-20260923 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000035/dri-20260923.htm | | 2026-09-24 | 8-K | Earnings release | | dri-20260924 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000032/ | | 2026-07-24 | 10-K | Annual report for the period ended May 31, 2026 | 2026-05-31 | dri-20260531 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm | | 2026-06-25 | 8-K | Earnings release and Change to shareholder rights or bylaws | | dri-20260624 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000016/ | | 2026-03-27 | 10-Q | Quarterly report for the period ended Feb 22, 2026 | 2026-02-22 | dri-20260222 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000009/dri-20260222.htm | | 2026-03-19 | 8-K | Earnings release | | dri-20260319 | https://www.sec.gov/Archives/edgar/data/940944/000094094426000005/ | | 2025-12-30 | 10-Q | Quarterly report for the period ended Nov 23, 2025 | 2025-11-23 | dri-20251123 | https://www.sec.gov/Archives/edgar/data/940944/000094094425000071/dri-20251123.htm | | 2025-12-18 | 8-K | Earnings release | | dri-20251218 | https://www.sec.gov/Archives/edgar/data/940944/000094094425000067/ | Every filing on SEC EDGAR (CIK 940944): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000940944&type=&dateb=&owner=include&count=40 ## Risks - Medium: Olive Garden, the largest brand, grew same-restaurant sales by only 1.1% in Q1 of fiscal 2027. A guest who is more careful about spending would slow traffic at all brands. - Medium: Costs rise. Darden expects total inflation of about 3.0% in fiscal 2027, and it must offset this with price, traffic and productivity to hold its margins. - Medium: Darden has large lease commitments. Non-current operating lease liabilities were $4,009.7 million at August 30, 2026, and a fall in sales would make this fixed cost heavier. - Low: Darden guides to an effective tax rate of about 13.5% for fiscal 2027. A higher rate, because of a change in tax rules, would reduce EPS. - Low: Bahama Breeze is closing or changing to other brands by Q4 of fiscal 2027. Closure costs and impairments can hurt reported earnings. ## Links - Page: https://picks.utilarium.app/company/DRI/ - History of changes: https://picks.utilarium.app/company/DRI/history/ - JSON with full history: https://picks.utilarium.app/data/company/DRI.json > Picks is a personal record of stock picks. 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