Darden to Post Q3 Earnings: Olive Garden, LongHorn in Focus

Darden Restaurants, Inc. DRI is scheduled to report third-quarter fiscal 2026 results on March 19, before the opening bell.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 0.5%. DRI’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed on three occasions, with an average surprise of negative 0.4%.

Trend in the Estimate Revision of DRI

The Zacks Consensus Estimate for fiscal third-quarter earnings per share (EPS) is $2.95, up 5.4% from $2.80 in the year-ago quarter.

For revenues, the consensus estimate is $3.33 billion. The projection implies a 5.3% rise from the year-ago quarter’s reported figure.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape Darden’s Quarterly Results

Darden Restaurants’ top-line performance in the quarter is likely to have been supported by healthy same-restaurant sales growth across all business segments, reflecting strong demand and traffic trends. The company recorded solid comparable sales growth, with flagship brands Olive Garden and LongHorn Steakhouse leading the momentum.

Olive Garden is likely to have benefited from the continued popularity of its Never Ending Pasta Bowl promotion, strong operational execution and record guest satisfaction scores, which helped boost traffic and repeat visits. LongHorn Steakhouse is also likely to have delivered strong sales growth as its focus on food quality, menu consistency and guest experience strengthened brand loyalty and supported higher customer engagement.

Another contributor to revenue growth is likely to have been network expansion and incremental sales channels. Darden opened new restaurants during the quarter, which added additional operating weeks and supported overall sales growth. Off-premise initiatives are also likely to have aided performance, particularly the rollout of first-party delivery through Uber Direct, which attracted younger and higher-income customers and generated higher average order values. Additionally, promotional events and limited-time menu offerings across brands such as Yard House, Ruth’s Chris Steak House and The Capital Grille have helped drive guest traffic and enhance customer engagement during the period.

Our model predicts revenues from Olive Garden and LongHorn Steakhouse to rise 2.5% and 7.9%, respectively, year over year to $1.36 billion and $828.6 million. We expect revenues from fine dining to increase 1.8% year over year to $392.3 million.

On the profitability front, the company’s bottom line is likely to have benefited from sales leverage and improved operating efficiency. Productivity gains in restaurant labor are likely to have helped offset wage inflation, while marketing expenses are expected to have declined as a percentage of sales due to leverage from stronger revenues. Lower general and administrative expenses, aided by reduced incentive compensation accruals and favorable mark-to-market adjustments, are likely to have supported earnings growth despite commodity inflation pressures, particularly elevated beef costs during the quarter.

Darden Restaurants, Inc. Price and EPS Surprise

Darden Restaurants, Inc. price-eps-surprise | Darden Restaurants, Inc. Quote

What Our Model Says About DRI Stock

Our proven model does not conclusively predict an earnings beat for Darden this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as elaborated below.

Earnings ESP for DRI: Darden has an Earnings ESP of +0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Darden’s Zacks Rank: The company currently has a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.

Yum! Brands, Inc. YUM currently has an Earnings ESP of +0.02% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Yum! Brands’ earnings for the to-be-reported quarter are expected to increase 5.4%. It reported better-than-expected earnings in two of the last four quarters and missed on the remaining two occasions, the average surprise being 1.2%.

Domino's Pizza, Inc. DPZ has an Earnings ESP of +0.19% and a Zacks Rank of 3 at present.

Its earnings for the to-be-reported quarter are expected to increase 0.5%. Domino's reported better-than-expected earnings in two of the last four quarters and missed on the remaining two occasions, the average surprise being 1.3%.

Dutch Bros Inc. BROS has an Earnings ESP of +0.33% and a Zacks Rank of 3 at present.

Its earnings for the to-be-reported quarter are expected to increase 7.1%. BROS reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 41.6%.

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Darden Restaurants, Inc. (DRI): Free Stock Analysis Report

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