Q4 2026 Darden Restaurants Inc Earnings Call Transcript
Key Points
- Darden Restaurants Inc (DRI) reported strong fourth-quarter results, with total sales exceeding expectations and annual earnings above the midpoint of initial guidance.
- The company opened 71 new restaurants during the fiscal year, surpassing initial plans, and has a strong pipeline for future growth.
- Olive Garden, LongHorn Steakhouse, and Yard House all delivered positive same-restaurant sales, marking the fifth consecutive year of growth for these brands.
- Darden's international expansion is progressing well, with new locations opened in Spain, India, and Canada, and plans for further growth.
- The company has maintained a strong balance sheet, with an adjusted debt to EBITDA ratio within the targeted range, supporting financial flexibility and investment-grade credit profile.
- Darden Restaurants Inc (DRI) faced significant macro pressures, including higher-than-expected beef inflation, impacting cost management.
- The company experienced some softness in guest visits from consumers under 35, which could indicate challenges in attracting younger demographics.
- The closure of 15 Bahama Breeze locations contributed to a net reduction in restaurant count, affecting overall growth metrics.
- Despite strong sales, the restaurant level EBITDA margin compressed by 20 basis points due to elevated commodity costs.
- The company's guidance for fiscal 2027 includes a modest same-restaurant sales growth target of 2.5% to 3.5%, reflecting cautious expectations amid uncertain economic conditions.
Greetings and welcome to the Darden fiscal year 2026, fourth quarter earnings call. (Operator Instructions) This conference is being recorded at this time. I will now turn over to Miss Courtney Aquila. Thank you. You may begin.
Thank you, Kevin. Good morning and thank you for participating on today's call. Joining me are Ricardo Cardenas, Darden's President and CEO, and Rajesh 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.
A supplemental materials presentation containing information shared on today's
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