Darden Restaurants Reports Sales Growth Amid Increased Operating Costs in Q3 Fiscal 2026

Darden Restaurants, Inc. reported a financial performance increase for the third quarter and first nine months of fiscal 2026, with total sales reaching $3.35 billion and $9.49 billion, respectively, marking increases of 5.9% and 7.8% compared to the same periods in fiscal 2025. The growth was attributed to the acquisition of 103 Chuy’s restaurants and a net addition of 31 new restaurants, alongside a blended same-restaurant sales increase of 4.2% for the quarter and 4.4% for the nine months. However, net earnings from continuing operations decreased to $310.6 million for the third quarter and $805.9 million for the nine months, down from $323.7 million and $747.0 million in the prior year.

The company experienced a rise in operating costs, with total expenses increasing by 7.3% to $2.94 billion for the third quarter and 7.7% to $8.43 billion for the nine months. Notable increases were seen in food and beverage costs, which rose by 7.7% for the quarter and 9.2% for the nine months, primarily due to inflation. Restaurant labor costs also increased by 5.2% and 8.0%, respectively. Despite these challenges, Darden's operating income remained relatively stable at $406.4 million for the third quarter, although it was a slight decrease from $418.2 million in the previous year.

Strategically, Darden has made significant organizational changes, including the decision to close approximately 14 Bahama Breeze restaurants and convert the remaining locations to other Darden brands. This decision follows a review of the Bahama Breeze brand, which included evaluating potential sales and conversions. Additionally, the company completed the sale of its Olive Garden Canada restaurants to Recipe Unlimited Corporation in July 2025, which has been reflected in the financial statements as impairments and gains on asset disposals.

As of February 22, 2026, Darden operated 2,196 restaurants in the U.S., an increase from 2,159 at the end of the previous fiscal year. The company reported a slight decrease in customer counts, with Olive Garden experiencing a 0.4% decline in same-restaurant guest counts for the third quarter. However, the average check increased by 3.6%, indicating a shift in customer spending behavior. The company’s employee headcount remained stable, with no significant changes reported.

Looking ahead, Darden anticipates sales growth of approximately 9.5% for fiscal 2026, driven by a projected 2.0% increase related to the fifty-third week of operations and an expected same-restaurant sales growth of about 4.5%. The company plans to open approximately 70 new restaurants and expects capital expenditures between $750 million and $775 million for new constructions, remodels, and technology initiatives. Darden's management remains focused on navigating cost pressures and enhancing operational efficiencies to sustain growth in a competitive market.