Darden Restaurants (DRI) Q1 2025 earnings summary

Executive summary

• Q1 sales rose 1.0% year-over-year to $2.8 billion, driven by 42 net new restaurants, partially offset by a 1.1% blended same-restaurant sales decrease.

• Adjusted diluted EPS from continuing operations was $1.75, slightly below last year, with reported diluted EPS at $1.74.

• Net earnings from continuing operations were $207.6 million, up from $194.8 million year-over-year.

• Strategic focus remains on operational execution, menu innovation, value-driven marketing, and long-term health.

• Announced a multi-year first-party delivery partnership with Uber, piloting at Olive Garden.

Financial highlights

• Operating income was $269.2 million (adjusted), with an operating margin of 9.8%.

• Restaurant-level EBITDA margin was 18.8%, down 20 bps year-over-year.

• Adjusted EBITDA for the quarter was $392 million.

• Net cash provided by operating activities was $273.2 million.

• $338 million returned to shareholders via $166 million in dividends and $172 million in share repurchases.

Outlook and guidance

• Fiscal 2025 sales expected between $11.8–$11.9 billion, with same-restaurant sales growth of 1.0–2.0%.

• Diluted EPS guidance is $9.40 to $9.60 for the year, excluding Chuy's transaction and integration costs.

• 45 to 50 new restaurant openings and capital spending of $550 to $600 million planned.

• Chuy's Holdings acquisition expected to close in mid-October, anticipated to be neutral to adjusted EPS for the fiscal year, excluding transaction and integration costs.

• Sales trends improved after July softness, with planned initiatives supporting the remainder of the year.