The power of our scale enables us to continue to price below inflation over the long term and not pass all the costs on to our guests.
— Rick Cardenas
03Detailed Report
DRI
Company DRI
Period
Q2 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
Darden Restaurants reported a solid QQ2 2026, with total revenue of $3.1021 billion, up roughly 7% year over year, driven by robust same-restaurant sales (SRS) across all segments and contributions from new openings and the Chewy’s acquisition. Olive Garden led the portfolio with 4.7% SRS and 21.8% segment margin, supported by the Never Ending Pasta Bowl promotion, stronger delivery mix via Uber Direct, and menu innovations like lighter portion options. LongHorn and Yard House also posted top-decile SRS, while Ruth’s Chris and Capital Grille contributed to the mix as consumer value-seeking behavior remained evident in the quarter. Management emphasized the durability of the portfolio’s four competitive advantages and the ability to price below inflation to sustain guest value, despite near-term margin compression from elevated beef costs.
Key Performance Indicators
Revenue
Increasing
3.10B
QoQ: 1.89% | YoY: 12.52%
Gross Profit
Increasing
2.14B
68.93% margin
QoQ: 1.08% | YoY: 279.96%
Operating Income
Increasing
320.40M
QoQ: -5.54% | YoY: 19.02%
Net Income
Increasing
237.20M
QoQ: -7.99% | YoY: 14.48%
EPS
Increasing
2.05
QoQ: -7.24% | YoY: 17.14%
Revenue Trend
Margin Analysis
Financial Highlights
Key QQ2 2026 metrics and drivers:
- Revenue: $3.1021 billion; YoY growth approximately 7%; QoQ growth ~1.9% (Q2 vs Q1).
- Gross profit: $2.1384 billion; gross margin 68.93%; QoQ gross profit up ~1.08%; YoY gross profit up materially (benefit of Chewy’s inclusion and mix).
- Operating income: $320.4 million; operating margin 10.32%; QoQ margin declined about 5.54% due to seasonal and mix dynamics amid commodity pressure.
- EBITDA: $410.1 million; EBITDA margin 13.22%; reflects ongoing underinflation pricing strategy offsetting beef-cost headwinds.
- Net income: $237.2 million; net income margin 7.65%.
- Diluted EPS: $2.03; GAAP EPS $2.05; YoY EPS growth around mid-teens on an apples-to-apples basis depending on one-time items and the 53rd week contribution (~$0.20 per share impact).
- Diluted shares: ~116.7 million; weighted-average shs out ~115.9 million.
- Segment highlights: Olive Garden SRS ~4.7%, margin 21.8%; LongHorn SRS ~5.9%, margin 16.2%; Yard House SRS ~3.1%, margin 13.4% (Other segment); Fine dining SRS ~0.8% with Ruth’s Chris and Capital Grille contributing to momentum.
- Key levers: 4.5%–5% beef-cost inflation in the quarter, with total commodities inflation around 5.5%; pricing run-rate below inflation by roughly 130 bps at Darden level; Uber Direct delivering ~4% of total sales, about half of which is incremental; 40% Olive Garden locations offered lighter portions in the quarter, system-wide rollout planned for January; 17 new restaurants opened in the quarter; guidance updated for fiscal 2026; 53rd week adds roughly $0.20 to full-year diluted EPS.
- Capital allocation and cash flow: Adjusted EBITDA of $466 million; cash returned to shareholders of $396 million (dividends $174 million, share repurchases $222 million). Capex guidance remains $750–$775 million for the year, with total openings projected at 65–70 units, and total diluted shares outstanding at ~116.5 million.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.10B
12.52%
1.89%
Gross Profit
2.14B
279.96%
1.08%
Operating Income
320.40M
19.02%
-5.54%
Net Income
237.20M
14.48%
-7.99%
EPS
2.05
17.14%
-7.24%
Key Financial Ratios
Management Insights Available for Members
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