Darden Shares Fall 5% as Olive Garden Growth Slows to 1.1%

Darden Restaurants shares fell 5% in premarket trading Thursday after the company reported quarterly earnings and revenue that narrowly missed analysts' expectations, with same-store sales growth at Olive Garden slowing to just 1.1%.

For the quarter ended Aug. 30, Darden posted earnings per share of $2.05 versus the $2.06 Wall Street expected, according to a survey of analysts by LSEG. Revenue came in at $3.20 billion against an anticipated $3.21 billion.

The company reported fiscal first-quarter net income of $233.4 million, or $2.04 per share, down from $257.8 million, or $2.19 per share, a year earlier. Net sales rose 5.1% to $3.20 billion.

Same-store sales across the company increased 3.1%, with each of Darden's business units reporting growth. But the composition of that growth reveals a shift underway inside the portfolio.

LongHorn Steakhouse was once again the top performer, posting same-store sales growth of 6.2%. The steakhouse chain has overtaken Olive Garden to become Darden's strongest performer, although it still accounts for a smaller share of the company's overall revenue.

Olive Garden, by contrast, saw same-store sales inch up 1.1%. It remains the company's largest chain by both number of locations and sales. But its growth has weakened as diners have become more choosy about their spending — a constraint that matters for Darden, given how much of the business runs through its Italian-dining flagship.

Darden's fine-dining segment, which includes The Capital Grille and Ruth's Chris, reported same-store sales growth of 1.6%. The company's remaining chains, grouped under its "other business" division, grew same-store sales 3.8%.

The company reiterated its forecast for fiscal 2027. Darden projects total sales of $13.60 billion to $13.75 billion and net earnings per share from continuing operations of $11.10 to $11.35.

By holding that guidance steady despite the top-line miss, Darden is signaling it sees the quarter as a bump rather than a trend. Investors will be watching whether Olive Garden's slowdown deepens in coming quarters or whether LongHorn and the smaller chains can keep offsetting the flagship's fading momentum.