Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants reported consolidated revenue of $12.1 billion in fiscal 2025, underscoring its position as the largest full-service restaurant operator in the U.S. Same restaurant sales showed positive momentum with a 4.3% increase and total sales rising by 7.3% year-over-year in the second quarter of fiscal 2026, driven by strong performance across its restaurant brands, including LongHorn Steakhouse and Olive Garden. The Other Business segment also exhibited significant growth, with an 11.3% increase in sales to $647 million, highlighting Darden's ability to enhance revenue streams and gain market share within the competitive casual dining industry.

Darden Restaurants reported adjusted EPS of $2.08, falling short of both its own forecast and consensus estimates primarily due to a 5.5% inflation in commodity beef prices, which negatively impacted restaurant margins by 90 basis points. The company's profitability was further compromised by a decline in retail demand for steak and challenges related to recent acquisitions, which are expected to distract management and pressure earnings over the next two years. Additionally, unit growth poses operational challenges that could lead to execution issues, further exacerbated by external economic factors such as recession, low consumer confidence, and potential disruptions from Covid-related factors.