Darden Restaurants Sets Up 2026 Guidance: Analyst Expects A 'Beat And Raise' Year

Shares of Darden Restaurants Inc DRI tanked in early trading on Monday, after the company Monday reported its fiscal fourth-quarter results.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

• Stephens analyst Jim Salera maintained an Equal-weight rating, while raising the price target from $200 to $212.
• TD Cowen analyst Andrew Charles reiterated a Hold rating, while lifting the price target from $215 to $235.
• Truist Securities analyst Jake Bartlett reaffirmed a Buy rating and price target of $252.
• Oppenheimer analyst Brian Bittner maintained an Outperform rating and price target of $250.

Check out other analyst stock ratings.

Stephens: Darden reported better-than-expected results on "all major line items," like same-store sales, margins, and adjusted earnings. Same-store sales at Olive Garden and LongHorn were ahead of expectations, "partially offset by a slower-than-expected recovery in Fine Dining," Salera said in a note.

The company also closed 22 underperforming units during the quarter.

Darden has "decent" visibility into the first half of fiscal 2026 with tougher comps in the second half, Salera added.

TD Cowen: Darden Restaurants indicated that the sales momentum during the fiscal fourth quarter had continued into June, Charles said. Margins and earnings growth are in-line with expectations, with the company reinvesting to sustain sales strength, he added.

"Following Olive Garden trending roughly in line with the industry over the last 4 quarters, we are encouraged by F4Q’s robust 390 bps of outperformance," the analyst wrote. Darden Restaurants is in no rush to list Olive Garden on Uber Technologies Inc's UBER Eats app, prioritizing to roll out Uber Direct to other brands in the portfolio, he further stated.

Truist Securities: Darden reported same-store sales of 4.6%, beating consensus of 3.6%, Bartlett said. Olive Garden's same-store sales came in at 6.9% while LongHorn's was 6.7% — better than consensus of 4.6% and 5.1%, respectively.

An industry-wide shift from limited service restaurants towards casual dining benefited the company in the fiscal fourth quarter, the analyst stated. Management's full-year same-store sales guidance of 2.0%-3.5% appears "potentially conservative," given the strong start to the first quarter, "the significant tailwind from delivery, continued momentum at LongHorn, and the casual dining segment tailwind from relative pricing," he further wrote.

Oppenheimer: Darden Restaurants guided to full-year earnings of $10.50-$10.70 per share, below Street expectations of $10.77 per share, Bittner said. This reflects 7%-8% sales growth, with 2%-3.5% same-store sales growth and the opening of 60-65 new units, he added.

Although sales momentum has continued into June, management's guidance reflects "toughening comparisons and macro uncertainty," the analyst wrote. The fiscal 2026 guidance is set up to be a "beat and raise" year, he further stated.

DRI Price Action: Shares of Darden Restaurants had declined by 5.39% to $213.62 at the time of publication on Monday.

Read More:

• S&P 500 Falls For Third Day Amid Iran-Israel Conflict: Investor Sentiment Improves Slightly, But Fear & Greed Index Remains In ‘Neutral’ Zone

Image: Shutterstock