Darden Restaurants 2025 Q4 Earnings Earnings Grow Despite Net Income Dip

Darden Restaurants (DRI) reported its fiscal 2025 Q4 earnings on June 19th, 2025. The company delivered adjusted earnings per share (EPS) of $2.98, surpassing expectations of $2.97. Revenue reached $3.27 billion, slightly above the anticipated $3.26 billion. Guidance for fiscal 2026 suggests promising growth, with expected total sales increasing by 7% to 8%, including an additional week of sales. Darden's projected EPS for the year is set between $10.50 and $10.70, reflecting confidence in operational strategies and market resilience.

Revenue

Darden Restaurants reported a 10.6% increase in total revenue for 2025 Q4, reaching $3.27 billion, up from $2.96 billion in 2024 Q4.

Earnings/Net Income

Darden Restaurants' EPS rose 0.4% to $2.59 in 2025 Q4 from $2.58 in 2024 Q4, marking continued earnings growth. Meanwhile, the company's net income declined to $303.80 million in 2025 Q4, down 1.4% from $308.10 million reported in 2024 Q4. EPS performance indicates stability despite net income reduction.

Price Action

The stock price of Darden Restaurants edged down 1.09% during the latest trading day, increased 2.33% during the most recent full trading week, and climbed 5.24% month-to-date.

Post-Earnings Price Action Review

Investors who bought Darden Restaurants (DRI) shares after a quarter-over-quarter revenue increase on the earnings report release date have seen strong returns over the past three years. This strategy delivered an impressive overall return of 90.72%, outperforming the benchmark return of 59.07% by 31.65%. The strategy's compound annual growth rate (CAGR) of 24.19% and Sharpe ratio of 0.96 reflect solid growth and risk-adjusted performance. However, the strategy also encountered a maximum drawdown of -23.18% and a volatility of 25.12%, highlighting potential downside risks during market downturns. These metrics indicate a balance between substantial returns and exposure to market fluctuations, suggesting careful consideration for future investment decisions.

CEO Commentary

"We had a strong quarter with same-restaurant sales and earnings growth that exceeded our expectations," said Darden President & CEO Rick Cardenas. He attributed the company's success to adherence to their winning strategy, which is anchored in four competitive advantages and a focus on operational excellence. Cardenas emphasized that the strategy remains valid for driving growth and long-term shareholder value, reflecting confidence in the company's ability to navigate challenges and capitalize on opportunities in the competitive restaurant landscape.

Guidance

Darden anticipates total sales growth of 7% to 8% for fiscal 2026, including approximately 2% growth from a 53rd week. The company expects same-restaurant sales growth of 2% to 3.5% and plans to open 60 to 65 new restaurants. Capital spending is projected between $700 million and $750 million, with total inflation estimated at 2.5% to 3.0%. The diluted net earnings per share from continuing operations is expected to range from $10.50 to $10.70, incorporating roughly $0.20 related to the additional week.

Additional News

Darden Restaurants has announced several strategic initiatives recently. The company declared a quarterly cash dividend of $1.50 per share, reflecting a 7.1% increase from the previous quarter, to be paid on August 1, 2025. Additionally, Darden has authorized a new $1 billion share repurchase program, underscoring its commitment to returning value to shareholders. This program replaces the existing authorization, signaling confidence in the company's operational strength and future growth potential. Furthermore, Darden has permanently closed 22 underperforming restaurants, including 15 Bahama Breeze units, as part of its portfolio optimization efforts to enhance efficiency and focus on high-performing brands.