Darden Restaurants (DRI) Q2 2025 earnings summary

Executive summary

• Total sales rose 6.0% year-over-year to $2.9 billion in Q2, driven by a 2.4% same-restaurant sales increase, contributions from 103 Chuy's restaurants, and strong performance at Olive Garden, LongHorn Steakhouse, Yard House, and Cheddar's.

• Adjusted diluted EPS from continuing operations was $2.03, up 10.3% year-over-year, excluding $0.21 per share in Chuy's transaction and integration costs.

• Net earnings from continuing operations were $215.7 million for Q2, up 1.6% year-over-year.

• The acquisition of Chuy's Holdings for $649.1 million was completed, adding 103 restaurants; integration is underway and expected to take longer due to technology upgrades.

• Exclusive multi-year delivery agreement with Uber launched, with a pilot at 100 Olive Garden locations and systemwide rollout expected by end of Q3.

Financial highlights

• Restaurant-level EBITDA margin was 19.5%, up 70 basis points year-over-year.

• Adjusted EBITDA was $445 million; adjusted earnings from continuing operations were $240 million, 8.3% of sales.

• Q2 operating income was $292.1 million, up 4.9% year-over-year; gross margin was 10.1%.

• $308 million was returned to shareholders in Q2 via dividends and share repurchases.

• Effective tax rate for Q2 was 12.3%.

Outlook and guidance

• Fiscal 2025 sales expected at ~$12.1 billion, including $300 million from Chuy's, with same-restaurant sales growth of ~1.5%.

• Adjusted diluted EPS guidance is $9.40–$9.60, excluding $47 million in Chuy's transaction/integration costs.

• 50–55 new restaurant openings planned; capital spending projected at ~$650 million.

• Effective tax rate forecasted at ~12.5%; total inflation expected at ~2.5%.

• Chuy's integration expected to deliver $17 million in run-rate synergies, with $2 million realized in FY25.