Darden Restaurants (DRI) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 sales rose 5.1% to $3,200.3M; same-restaurant sales increased 3.1% on a fiscal-calendar basis and 3.2% on an aligned-calendar basis, with 53 net new restaurants.

• All segments posted positive same-restaurant sales growth.

• Continuing-operations diluted EPS was $2.05, down 6.4% reported year-over-year; adjusted EPS rose 4.1% versus prior-year adjusted EPS.

• Operating income declined 5.9% to $319.3M as operating costs increased; the prior-year Olive Garden Canada asset-sale gain affected the comparison.

• Yard House reached $1B in trailing 52-week sales and plans 13 openings, including conversions and new prototypes.

Financial highlights

• Continuing-operations earnings were $234.3M versus $257.9M; reported diluted EPS was $2.05 versus $2.19.

• Adjusted EBITDA was $464M, or 14.5% of sales; restaurant-level EBITDA margin was 18.8%.

• $406M was returned to shareholders: $184.2M in dividends and $220.8M in share repurchases.

• Operating margin was 10.0%; continuing-operations earnings were 7.3% of sales.

• Effective tax rate was 12.9%, versus 12.2% a year earlier.

Outlook and guidance

• FY2027 continuing-operations sales guidance is $13.60B–$13.75B; same-restaurant sales growth is projected at 2.5%–3.5%.

• Diluted EPS guidance was reaffirmed at $11.10–$11.35; EBITDA is forecast at $2.26B–$2.29B.

• Plans call for 75–80 new restaurant openings and ~$875M in capital expenditures.

• Total and commodity inflation are expected at ~3.0%; pricing is expected to moderate from 3.7% in Q1 to the low/mid-2% range by Q4.

• Thanksgiving’s calendar shift is expected to create a 1% Q2 sales headwind, offset in Q3; impact varies by brand.