Darden reported strong Q2 with all segments posting positive same-restaurant sales, led by Olive Garden (+4.7%) and LongHorn (+5.9%). Beef cost headwinds pressured margins, but management expects relief in Q4 and maintained full-year EPS guidance. The company highlighted success of first-party delivery via Uber Direct and the rollout of lighter portions at Olive Garden. Same-restaurant sales grew 4.3% (top decile of industry); traffic positive across most brands.
Darden reported strong Q2 with all segments posting positive same-restaurant sales, led by Olive Garden (+4.7%) and LongHorn (+5.9%). Beef cost headwinds pressured margins, but management expects relief in Q4 and maintained full-year EPS guidance. The company highlighted success of first-party delivery via Uber Direct and the rollout of lighter portions at Olive Garden. Same-restaurant sales grew 4.3% (top decile of industry); traffic positive across most brands.
Darden reported strong Q2 with all segments posting positive same-restaurant sales, led by Olive Garden (+4.7%) and LongHorn (+5.9%). Beef cost headwinds pressured margins, but management expects relief in Q4 and maintained full-year EPS guidance. The company highlighted…
Same-restaurant sales grew 4.3% (top decile of industry); traffic positive across most brands.
Beef inflation ran ~5.5% in Q2, with Darden pricing 130 bps below inflation to protect value.
Full-year sales growth guidance raised to 8.5%-9.3% (was ~8%); EPS maintained at $10.50-$10.70.
Top-line guidance was raised but EPS maintained, reflecting near-term commodity headwinds; management is cautiously optimistic, expecting margin improvement in H2.
Capital spending guidance was raised to $750 million to $775 million, reflecting accelerated new restaurant openings and continued investment in the pipeline. Management noted that openings are running ahead of plan, contributing 40 additional operating weeks in the quarter, and that CapEx also supports restaurants slated to open in the front half of next fiscal year.
Management expressed confidence in the portfolio's ability to outperform the industry and manage through commodity headwinds, while emphasizing disciplined long-term strategy and shareholder value creation.
“We have seen retail demand destruction accelerate over the past few months, and we think November was actually down about 14% demand volume down in stakes.”
“Uber Direct sales represented 4% of total sales for the quarter, and approximately half of that was incremental.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | $0.75B–$0.775B | $0.7625B | MAINTAINED |
| EPS | FY2026 | $10.50–$10.70 | $10.60 | MAINTAINED |
| Revenue | FY2026 | 8.5%–9.3% | 8.9% | MAINTAINED |
| RevenueSAME_RESTAURANT_SALES | FY2026 | 3.5%–4.3% | 3.9% | MAINTAINED |
| Units | FY2026 | 65–70 | 67.5 | RAISED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q3 | EPS | FY2026 | $10.57–$10.67 | $10.64 | Met / beat |
| FY2026 Q3 | EPS | FY2026 Q4 | $3.59–$3.69 | $3.66 | Met / beat |
| FY2026 Q1 | EPS | FY2026 | $10.50–$10.70 | $10.64 | Met / beat |
Olive Garden's first-party delivery via Uber Direct generated 4% of total sales, with ~50% incremental, indicating strong growth potential for Uber's last-mile platform in casual dining. — Uber's B2B delivery service is penetrating large restaurant chains, providing a new, high-quality revenue stream beyond its core marketplace.
“First-party delivery through our partnership with Uber Direct continue to drive strong results.”
… quarter, driven by the success of the never-ending pasta bowl promotion and first-party delivery, combined with strong operational execution that led to all-time high guest satisfaction scores. For the fourth consecutive year, the starting price for never-ending pasta bowl was $13.99. Preference was strong, and refill rates reached a record high, demonstrating that guests continue to find abundance and meaningful value at Olive Garden in this environment. First-party delivery through our partnership with Uber Direct continue to drive strong results. This channel attracts younger, more affluent guests who crave Olive Garden at home, value convenience, and order more frequently. These guests have a higher check average than dine-in guests. Uber Direct sales represented 4% of total sales for the quarter, and approximately half of that was incremental. As we have discussed on recent calls, Across the portfolio, we are placing a greater emphasis on sales growth and reinvesting to drive long-term success. At Olive Garden, the success of first-party delivery is helping fund investments such as the addition of the lighter portion section on their menu, which features seven existing …
Beef retail demand dropped ~14% in November, while packer production has increased recently, suggesting beef costs may ease in Q4. — Lower beef prices relieve margin pressure across the restaurant industry and may reduce input costs for beef processors facing demand weakness.
Yeah, thanks. Morning, guys. Raj, can you maybe just talk more about the beef piece and what kind of gives you the confidence that that starts to come down by 4Q?
Yeah, Brian, I guess maybe let me start with what happened in the second quarter and how we're transitioning and how we see this. Because, you know, beef prices peaked in our fiscal second quarter, and they were well above the normal seasonal trends due to supply constraints that stem from packer cutbacks and halted Mexican cattle imports due to this crew warm outbreak. We have seen retail demand destruction accelerate over the past few months, and we think November was actually down about 14% demand volume down in stakes. Prices have started to improve in recent weeks, and we've been able to take some coverage for the back half. I think this morning we showed about 45% coverage for the back half, and actually as we're speaking, our team is getting a little bit more coverage. The coverage we're getting at is at the levels that are in line with our updated thinking, and all of that is contemplated in our guidance. If you look at what happened in the near term, prices are expected to ease a little bit as beef production actually increased to near prior year levels the last few weeks, driven by packer profitability and lower cattle prices. Now, there is enough inventory on feedlot to support the recent production increase.