Darden Restaurants Reports 10.4% Sales Increase to $3.04 Billion in Q1 Fiscal 2026

Darden Restaurants, Inc. reported a significant increase in financial performance for the first quarter of fiscal 2026, with total sales reaching $3.04 billion, a 10.4% increase from $2.76 billion in the same period last year. The company's operating income also rose to $339.2 million, up 26% from $269.2 million in the prior year. Net earnings from continuing operations were $257.9 million, compared to $207.6 million a year earlier, resulting in diluted net earnings per share of $2.19, a 25.9% increase from $1.74.

The company experienced notable changes in its cost structure, with total operating costs and expenses increasing by 8.8% to $2.71 billion, driven by higher food and beverage costs, restaurant labor, and other operational expenses. Food and beverage costs rose to $929.1 million, while restaurant labor costs increased to $988 million. The effective income tax rate for continuing operations also increased to 12.2%, up from 10.6% in the previous year, primarily due to higher net earnings.

Strategically, Darden completed the acquisition of Chuy’s Holdings, Inc. in October 2024, adding 103 restaurants to its portfolio. The integration of Chuy’s has contributed to the company's growth, with the "Other Business" segment, which includes Chuy’s, reporting a 22.5% increase in sales. Additionally, Darden sold eight Olive Garden locations in Canada to Recipe Unlimited Corporation in July 2025, which has been accounted for in the company's financial statements.

Operationally, Darden's total number of restaurants increased to 2,165 as of August 24, 2025, up from 2,040 a year prior. The company reported a blended same-restaurant sales increase of 4.7%, with Olive Garden and LongHorn Steakhouse both showing positive growth in guest counts and average checks. The company also entered into a multi-year delivery partnership with Uber, enhancing its delivery capabilities across its brands.

Looking ahead, Darden anticipates sales growth for fiscal 2026 to be between 7.5% and 8.5%, driven by same-restaurant sales growth and the addition of new restaurant openings. The company plans to invest between $700 million and $750 million in capital expenditures for new restaurant construction and technology initiatives. Darden's management remains optimistic about its strategic direction and operational efficiencies, despite ongoing challenges in the restaurant industry.