Darden Restaurants Q4 2025 Earnings Beat Expectations as Consumer Spending Trends Support Growth

Key Points

Research suggests Darden Restaurants beat Q4 2025 earnings estimates, with strong sales growth.
It seems likely the company, including Olive Garden, predicts solid growth for fiscal 2026.
The evidence leans toward robust performance driven by key brands like Olive Garden and LongHorn Steakhouse.

Earnings Performance

Darden Restaurants reported adjusted earnings per share of $2.98 for Q4 2025, beating the expected $2.97, and revenue of $3.27 billion, above the anticipated $3.26 billion.

Growth Outlook for 2026

For fiscal 2026, Darden predicts total sales growth of 7% to 8%, including about 2% from an extra week, with adjusted diluted net earnings per share projected at $10.50 to $10.70.

Brand Performance

Olive Garden and LongHorn Steakhouse showed strong same-store sales growth of 6.9% and 6.7%, respectively, though the fine dining segment declined by 3.3%.

Detailed Analysis of Darden Restaurants’ Q4 2025 Earnings and 2026 Growth Outlook

Darden Restaurants, the parent company of Olive Garden, reported its fiscal 2025 fourth-quarter and full-year earnings on June 20, 2025, surpassing Wall Street’s expectations and providing a bullish outlook for fiscal 2026. Below, we explore the specifics of these results, their implications, and the broader context, drawing from authoritative sources to ensure a comprehensive overview.

Q4 2025 Financial Performance

Darden’s financial results for the fourth quarter, ended May 25, 2025, demonstrated robust growth, beating analyst estimates across key metrics:

Earnings Per Share (EPS):
- Reported adjusted EPS: $2.98
- Analyst expectation: $2.97, based on a survey by LSEG
- This represents a beat of $0.01, marking a 12.5% increase from the previous year’s Q4 adjusted EPS of $2.65, as noted in the earnings report .
Revenue:
- Reported total sales: $3.27 billion
- Analyst expectation: $3.26 billion
- Revenue exceeded estimates by $0.01 billion, reflecting a 10.6% year-over-year increase, driven by the acquisition of 103 Chuy’s restaurants and 25 net new restaurant openings, as detailed in the earnings release .
Same-Restaurant Sales:
- Overall same-restaurant sales growth: 4.6%, surpassing StreetAccount estimates of 3.5%, as reported by CNBC.
- Segment performance:
  - Olive Garden: 6.9% growth (beat 4.6% expectation)
  - LongHorn Steakhouse: 6.7% growth (beat 5.3% expectation)
  - Fine dining (e.g., Ruth’s Chris): 3.3% decline (worse than the expected 0.2% drop)
  - Other brands (e.g., Cheddar’s, Yard House): 1.2% growth (slightly above 1.1% expectation)

These results highlight Darden’s ability to drive growth through both acquisitions and organic performance, particularly at its core brands, Olive Garden and LongHorn Steakhouse.

Fiscal 2026 Growth Outlook

Darden provided a detailed outlook for fiscal 2026, signaling confidence in continued expansion:

Total Sales Growth: 7% to 8%, including approximately 2% from a 53rd week (fiscal 2026 will have 53 weeks compared to the standard 52), as outlined in the earnings call transcript .
Same-Restaurant Sales Growth: 2% to 3.5%.
New Restaurant Openings: 60 to 65.
Total Capital Spending: $700 to $750 million.
Total Inflation: 2.5% to 3.0%.
Effective Tax Rate: Approximately 13%.
Adjusted Diluted Net Earnings Per Share: $10.50 to $10.70, including approximately $0.20 from the 53rd week.
Weighted Average Diluted Shares Outstanding: Approximately 117 million.

This outlook reflects Darden’s expectation of sustained demand and operational efficiency, despite potential inflationary pressures and market uncertainties.

Strategic Context and Market Position

Acquisition Impact: Darden’s acquisition of Chuy’s Tex Mex, which added 103 restaurants, contributed significantly to Q4 revenue growth. The integration of these restaurants is expected to continue supporting sales in 2026, as mentioned in the earnings report .
Consumer Trends: The strong performance of Olive Garden and LongHorn Steakhouse suggests that consumers are favoring value-driven dining experiences, particularly in casual dining. This aligns with broader industry trends where consumers seek affordability and quality, as contextualized by May 2025 retail sales data .
Dividend and Share Repurchase: Darden’s board declared a quarterly dividend of $1.50 per share, a 7.1% increase, and authorized a new $1 billion share repurchase program, signaling confidence in the company’s financial health and commitment to shareholder returns, as noted in the earnings release .
Market Competition: Darden operates in a competitive landscape with rivals like Chipotle, Starbucks, and other casual dining chains. However, its diversified portfolio and focus on value-driven brands position it well to capture market share.

Comparative Analysis and Industry Trends

Consumer Spending Context: Broader economic indicators, such as retail sales data, suggest that consumer spending remains robust, particularly in the restaurant sector. For instance, May 2025 retail sales data showed continued growth, which likely supported Darden’s performance.
Stock Performance: Following the earnings announcement, Darden’s stock rose by 4.15% in pre-market trading, reflecting investor optimism about the results and the 2026 outlook. The company’s market capitalization stands at approximately $26.57 billion, with a P/E ratio of 24.8x, indicating strong investor confidence, as reported by Investing.com.

A table summarizing the key financial metrics and outlook is provided below for clarity:

Metric	Reported	Expected	Notes
Q4 2025 Adjusted EPS	$2.98	$2.97	12.5% increase YoY
Q4 2025 Revenue	$3.27 billion	$3.26 billion	10.6% increase YoY, includes acquisitions
Same-Restaurant Sales Growth	4.6%	3.5% (StreetAccount)	Driven by Olive Garden and LongHorn
Fiscal 2026 Sales Growth	7% to 8%	–	Includes ~2% from 53rd week
Fiscal 2026 Adjusted EPS	$10.50 to $10.70	–	Includes ~$0.20 from 53rd week

This table highlights Darden’s strong Q4 performance and its optimistic outlook for 2026, supported by both organic growth and strategic initiatives.

Conclusion and Future Outlook

Darden Restaurants’ Q4 2025 results demonstrate the company’s resilience and strategic execution, with earnings and revenue beating expectations and a positive outlook for fiscal 2026. The company’s focus on value-driven brands like Olive Garden and LongHorn Steakhouse, coupled with strategic acquisitions and expansion plans, positions it well for continued growth. However, challenges such as inflation and competitive pressures in the dining sector remain. As of June 21, 2025, Darden’s performance and outlook suggest a strong trajectory, with potential to further solidify its position in the restaurant industry.