Darden reported strong Q1 FY2026 with sales and EPS beating expectations, driven by Olive Garden and Longhorn momentum. Management raised full-year sales growth guidance but maintained EPS guidance due to beef cost headwinds. Key cross-company signal includes beef supply chain disruptions and the successful Uber Direct partnership. Total sales up 10% to $3.0B; same-restaurant sales +4.7%, in top quartile of industry.
Buzzberg 분석Raised full-year sales growth and comp guidanceDarden reported strong Q1 FY2026 with sales and EPS beating expectations, driven by Olive Garden and Longhorn momentum. Management raised full-year sales growth guidance but maintained EPS guidance due to beef cost headwinds. Key cross-company signal includes beef supply chain disruptions and the successful Uber Direct partnership. Total sales up 10% to $3.0B; same-restaurant sales +4.7%, in top quartile of industry.전체 분석 보기분석 접기
Darden reported strong Q1 FY2026 with sales and EPS beating expectations, driven by Olive Garden and Longhorn momentum. Management raised full-year sales growth guidance but maintained EPS guidance due to beef cost headwinds. Key cross-company signal includes beef supply chain disruptions and the successful Uber Direct partnership. Total sales up 10% to $3.0B; same-restaurant sales +4.7%, in top quartile of industry.
Olive Garden comps +5.9% with traffic +2.8% exclusive of catering; delivery via Uber driving 40% higher volumes post-promotion.
Beef costs surging due to packer cutbacks, Mexican import halt, and Brazilian tariffs; only 25% of next 6 months covered.
Raising FY26 total sales growth to 7.5-8.5% but reiterating EPS $10.50-$10.70; expect Q2 to be weakest for EPS growth.
Revenue$3.0447B
reported
EPS$1.97
reported
Gross margin69.48%
reported
Op margin11.14%
reported
이번 분기에 달라진 점
01
Guidance
Raised full-year sales growth and comp guidance
Guidance · revenue to 8%
02
Supply
Beef costs spiked, but pricing discipline remains
Total sales up 10% to $3.0B; same-restaurant sales +4.7%, in top quartile of industry.
03
Demand
First-party delivery is capturing younger, more affluent guests
Management expressed confidence in their strategy and forward outlook, raising sales guidance and highlighting strong momentum across brands despite cost headwinds.
04
Demand
Olive Garden testing lighter portions to drive traffic
First-party delivery is capturing younger, more affluent guests. Management expressed confidence in their strategy and forward outlook, raising sales guidance and highlighting strong momentum across brands despite cost headwinds.
수요
수요
수주 및 전환
First-party delivery is capturing younger, more affluent guests. Management expressed confidence in their strategy and forward outlook, raising sales guidance and highlighting strong momentum across brands despite cost headwinds.
톤 · Confident
Management expressed confidence in their strategy and forward outlook, raising sales guidance and highlighting strong momentum across brands despite cost headwinds.
공급망 알파
A1
Beef supply chain disruptions (packer cutbacks, Mexican cattle import halt, Brazilian tariffs) are causing a spike in costs; Darden sees only 25% coverage and expects demand destruction at retail, suggesting current prices are unsustainable.
Darden's delivery partnership with Uber is driving incremental sales, especially among younger, higher-check guests, and the pilot is being expanded to other brands.
“Our first-party delivery, through our partnership with Uber Direct, is helping capture younger, more affluent guests who value convenience and crave Olive Garden.”
Beef supply chain disruptions (packer cutbacks, Mexican cattle import halt, Brazilian tariffs) are causing a spike in costs; Darden sees only 25% coverage and expects demand destruction at retail, suggesting current prices are unsustainable. — If beef costs retreat as demand falls, major burger chains (MCD, WEN) could see margin relief; if costs persist, pricing pressure intensifies across the industry.
Morning, guys. Maybe just on that last point first, Raj, could you talk about sort of contracting through the balance of the year and sort of what gives you visibility that you've kind of encompassed the range of food cost outcomes today?
Yeah, Brian, I think if you look at what we published this morning, our coverage is less than typical, especially in beef. Right now we only have about 25% coverage in beef for the next six months, and that's one of the biggest opportunities in terms of where we're seeing the biggest headwinds. And I think, as you all know, There's been a significant spike in beef costs recently, especially tenders and rib-eyes. We don't believe these price levels are sustainable, and that's why we don't have as much coverage, and that's part of the reason. Given the significant price increase, we are starting to see some demand destruction in retail. So I guess really the big picture, beef is the biggest variable here. And then the other component here where you're seeing a higher inflation is on seafood, primarily due to the tariffs on shrimp. And our team is working through to figure out how to mitigate some of that. And that's really the reason why we're taking the inflation up from 2.5% at the beginning of the year to now 3% to 4%. But You know, this situation is still very fluid here.
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