Q3 2026 Darden Restaurants Inc Earnings Call Transcript
Key Points
- Darden Restaurants Inc (DRI) reported a strong quarter with total sales of $3.3 billion, a 5.9% increase from the previous year, driven by same-restaurant sales growth of 4.2%.
- The company outperformed the industry benchmark for same-restaurant sales by 540 basis points, with all segments delivering positive sales growth.
- Darden Restaurants Inc (DRI) opened 16 new restaurants during the quarter and remains confident in meeting its planned openings for the fiscal year.
- Olive Garden achieved positive same-restaurant sales growth of 3.2%, supported by strong operational execution and high guest satisfaction scores.
- LongHorn Steakhouse reported same-restaurant sales growth of 7.2%, driven by a focus on quality and simplicity, and was recognized as one of the best places to work by Glassdoor.
- Winter weather negatively impacted same-restaurant sales by approximately 100 basis points, with over 40% of restaurants temporarily closing during a winter storm.
- Food and beverage expenses increased by 50 basis points due to elevated beef costs, contributing to a total commodities inflation of approximately 5% for the quarter.
- Restaurant level EBITDA margin was 30 basis points lower than last year as pricing was 40 basis points below inflation.
- The Fine Dining segment's profit margin decreased by 50 basis points compared to the previous year.
- The permanent closure of 14 Bahama Breeze locations and the conversion of the remaining 14 to other Darden brands may pose challenges, although not expected to materially impact financial results.
Hello and welcome to the Darden fiscal-year 2026 third-quarter earnings call. (Operator Instructions) This conference is being recorded. If you have any objections, please disconnect at this time.
I will now turn the call over to Ms. Courtney Aquilla. Thank you, you may begin.
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 its filings with the Securities and Exchange Commission.
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