Olive Garden Sales Slump Drags Down Darden Restaurants

The company reported net income of $233.4 million, or $2.04 per share, for the fiscal first quarter ending August 30. This performance fell short of the $2.06 per share anticipated by analysts. Total revenue reached $3.20 billion, narrowly missing the expected $3.21 billion mark, despite a 5.1% year-over-year increase in net sales.

While all business units managed to grow, the performance gap between brands widened significantly. LongHorn Steakhouse led the portfolio with a 6.2% increase in same-store sales, effectively eclipsing Olive Garden’s tepid 1.1% growth. Once the engine of the company, Olive Garden is now struggling to maintain momentum as budget-conscious customers pull back. Meanwhile, the fine-dining segment—comprising chains like The Capital Grille and Ruth's Chris—posted a modest 1.6% gain.

Despite these headwinds, Darden management maintained its fiscal 2027 guidance. The company continues to project total sales between $13.60 billion and $13.75 billion, with earnings per share from continuing operations expected to fall within the $11.10 to $11.35 range.