Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants achieved consolidated revenue of $12.1 billion in fiscal 2025, underpinned by a robust portfolio of 11 restaurant brands and a notable expansion in the total number of company-owned establishments to 2,159. The company demonstrated strong performance in its key segments, with same restaurant sales growth of 4.3% and total sales up 7.3% year-over-year, exceeding industry benchmarks and reflecting effective execution across its brands. Future growth projections are promising, as Darden raised its FY26 sales outlook to approximately 9.5% total sales growth and 4.5% same restaurant sales growth, indicating continued momentum and a positive trajectory in consumer engagement and industry performance.

Darden Restaurants has experienced a decline in restaurant-level EBITDA margins, with figures dropping to 21.0% in the most recent quarter, primarily due to elevated beef costs and increased marketing expenses, which overshadowed improvements in labor productivity. The LongHorn Steakhouse segment has shown a 16.2% margin, negatively affected by pricing trailing inflation and ongoing beef cost pressures, resulting in modest profitability misses despite strong sales performance. Furthermore, Darden faces operational challenges related to unit growth, including potential inefficiencies and recruitment difficulties that could exacerbate volatility in sales and profit margins amid uncertain economic conditions.