Darden Closes FY2026 With Double-Digit Sales Growth, 8% Dividend Hike, and International Expansion

Transcript intelligence

What changed

Fiscal 2026 total sales grew 13.7% year-over-year with same-restaurant sales up 4.6%, beating industry benchmarks across all brands. LongHorn Steakhouse posted a 9.5% comp, the strongest in the portfolio, aided in part by a viral social media lamb promotion that drove rapid sell-through. Darden opened 71 new restaurants, six more than planned, and launched its first international franchising partners in Spain and India. The quarterly dividend was increased 8%, raising the annual payout to $6.48 per share. FY2027 guidance was introduced: $13.6-13.75 billion in sales, 2.5-3.5% same-restaurant growth, 75-80 new restaurants, and approximately $875 million in capital spending. EPS of $3.66 narrowly beat the $3.63 consensus; revenue of $3.72 billion came in slightly below the $3.73 billion estimate.

Guidance delta

Guidance sentiment shifted from raised in Q3 FY2026 to maintained in Q4 FY2026. The prior quarter had raised the FY2026 outlook to approximately 9.5% sales growth and adjusted EPS of $10.57-$10.67. This quarter introduced FY2027 guidance of $13.6-$13.75 billion in sales, 2.5-3.5% same-restaurant sales growth, and approximately $875 million in capital spending -- up from the roughly $850 million figure discussed in Q3.

Key takeaways

• Fiscal 2026 delivered double-digit sales growth of 13.7% and same-restaurant sales growth of 4.6%, beating industry benchmarks across all brands.
• LongHorn Steakhouse led comps at 9.5%, with Olive Garden and Yard House also contributing to broad-based brand strength.
• 71 new restaurant openings exceeded the plan by six, and international franchising began with partners in Spain and India.
• FY2027 guidance projects $13.6-$13.75 billion in sales, 2.5-3.5% same-restaurant growth, 75-80 new openings, and approximately $875 million in capex.
• An 8% dividend increase to $6.48 annually underscores management's confidence in cash generation.
• Commodity inflation, especially beef, remains a margin headwind, though supply-chain scale helps mitigate the impact.

Management priorities

• Open 75-80 new restaurants in FY2027, including 11 Bahama Breeze conversions to other Darden brands.
• Expand international franchising into Spain, India, Canada, and additional markets.
• Advance menu innovation, including the lighter-portion line and new protein offerings across brands.
• Invest approximately $875 million in capital spending across maintenance, IT, and new unit growth.
• Maintain disciplined marketing spend with targeted cost efficiencies.