Q2 2026 Darden Restaurants Inc Earnings Call Transcript
Key Points
- Darden Restaurants Inc (DRI) exceeded sales expectations with strong same-restaurant sales growth across all segments.
- The company opened 17 new restaurants during the quarter, surpassing planned openings and contributing additional operating weeks.
- Olive Garden achieved positive same-restaurant sales of 4.7%, driven by successful promotions and high guest satisfaction scores.
- First-party delivery through Uber Direct is attracting younger, more affluent guests, contributing to higher check averages.
- LongHorn Steakhouse delivered strong same-restaurant sales growth of 5.9%, with record low team member turnover and high guest loyalty.
- Commodity headwinds, particularly high beef prices, negatively impacted margins across most segments.
- Restaurant-level margins were below last year due to pricing below inflation and elevated commodity costs.
- The Fine Dining segment experienced a 280 basis point decline in profit margin due to high beef costs.
- Despite strong sales, the Other Business segment's profit margin decreased by 60 basis points due to commodity pressures and delivery fees.
- The company anticipates continued elevated beef costs into the third quarter, with only some relief expected in the fourth quarter.
Greetings, and welcome to the Darden Restaurants Q2 fiscal-year 2026 earnings conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Courtney Aquilla, Vice President, Finance and Investor Relations. Courtney, please go ahead.
Thank you, Kevin. Good morning, everyone, and thank you for participating on today's call. Joining me are Rick Cardenas, Darden's President and CEO; and Raj Vennam, CFO. As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release, which was distributed this morning, and in the filings with the Securities and Exchange Commission.
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