Darden Restaurants tops estimates as LongHorn Steakhouse leads 4.6% sales gain

Darden Restaurants posted fiscal fourth-quarter comparable sales growth of 4.6%, beating estimates as LongHorn Steakhouse and Olive Garden both drove traffic.

"Our brands delivered strong results in a competitive environment, with particular strength at LongHorn Steakhouse," Chief Executive Officer Rick Cardenas said in a statement.

LongHorn Steakhouse posted same-restaurant sales growth of 7.2% for the quarter ended May 31, while Olive Garden rose 4%. Total revenue increased 8.5% from a year earlier, the company said. Darden did not disclose exact revenue or earnings per share figures in its preliminary release.

The company also expanded its share buyback authorization, boosting its capacity to return capital to shareholders. Darden's board authorized an additional $750 million in share repurchases, bringing total remaining authorization to approximately $1.2 billion, according to the company.

The results come as the broader restaurant sector benefits from falling energy costs. West Texas Intermediate crude slipped below $70 a barrel this week, acting as a de facto tax cut for lower-income consumers who are highly sensitive to gasoline prices. Quick-service and casual dining stocks broadly gained on the macro tailwind, with Wendy's surging 30% and El Pollo Loco rising 4.9% in recent sessions.

Darden shares traded at $206.26 in pre-market action, down 3.4% from Wednesday's close of $213.45. The stock has a market capitalization of about $24.5 billion and trades at roughly 20 times forward earnings, with a dividend yield of 2.8%.

The comparable sales beat signals that Darden's value positioning is resonating with consumers navigating persistent inflation. Investors will watch the company's full earnings call for updated fiscal 2027 guidance and margin commentary.

This article is for informational purposes only and does not constitute investment advice.