Darden Restaurants Inc (0I77.L) Q1 2026 Earnings Report

Darden Restaurants Inc. delivered a solid QQ1 2026 fundamental performance, with revenue of $3.0447 billion and a robust gross margin of approximately 69.5%, underscoring the strength of its brand portfolio and pricing power in the U.S. casual dining space. Net income of $257.8 million and adjusted EBITDA of $428.8 million reflected efficient SG&A management and ongoing operating discipline. On a per-share basis, diluted EPS was $2.19, up about 26% year over year, despite a meaningful QoQ decline in earnings driven partly by seasonality and non-operating items referenced in the period. The company generated $342.5 million in net cash from operating activities and $342.5 million in free cash flow, supporting shareholder returns and a disciplined capital allocation approach, even as the balance sheet remains highly levered with net debt around $5.94 billion and total debt of $6.16 billion. Key takeaways: (1) Revenue growth persisted with a year-over-year lift of roughly 10.4%, though quarter-to-quarter activity softened by about 6.9% sequentially, highlighting seasonality alongside ongoing macroheadwinds. (2) The topline strength coupled with a high gross margin signals durable brand economics across flagship concepts (notably Olive Garden) and pricing power, but the elevated explicit non-operating charges in other expenses warrant ongoing vigilance. (3) Cash flow generation remains a bright spot, with operating cash flow and free cash flow both positive, enabling shareholder returns via modest buybacks and consistent dividend activity, albeit while continuing to service a heavy debt burden. Management commentary (when available in call transcripts) would likely emphasize brand momentum, guest traffic trends, and cost-management initiatives as key levers for the remainder of FY2026.