DRI US S&P 500Russell 1000 Earnings call
Darden Restaurants (DRI) · Q3 2026 results and valuation
Share price: $228.94 · 2026-11-11
Darden Restaurants is a full-service restaurant company that operates various dining brands in the United States. The company generates revenue primarily from food and beverage sales across multiple restaurant segments. Source: 10-K annual report (2026-07-24)
Results Q3 2026 vs Q2 2026 · previous quarter · fiscal Q1 2027 · published 24 Sep 2026 and 25 Jun 2026
Net income down 42.4% on the previous quarter. Management sounded cautious, in its script and in answers to analysts.
1 · Numbers
−42.4%
Net income vs Q2 2026
Outlook given
Net income 233.4M vs 404.9M
Revenue −13.9%
Against the same quarter last year (Q3 2025) it is −9.5% — part of the move on last quarter is seasonal.
Why Against the same quarter last year (−9.5%), net income fell because the segment profit margin was 30 basis points lower than last year due to costs associated with winding down Bahama Breeze.
2 · How management spoke
Cautious
Among the least upbeat of all company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Darden Restaurants generated $464 million in EBITDA and returned $406 million to shareholders through $184 million in dividends and $222 million in share repurchases.
Valuation
Is Darden Restaurants undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-05-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 8.0% growth a year (3-year revenue growth), the model's fair value is $181.40 a share — the stock trades 26% above it. Today's price assumes 10.9% growth a year.
Current price
$228.94
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+10.9% for 10 yrs
Fair value / share
$181.40
Buy below
$136.05
Price vs fair value
Overvalued 26%
Price vs buy-below price
Overvalued 68%
Read between the lines
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Figure
The brand reached $1 billion in sales for the trailing 52 weeks, becoming Darden's third billion brand.
Source quote
“Just last week, they reached $1 billion in sales for the trailing 52 weeks, becoming Darden's third billion brand.”
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Figure
LongHorn Steakhouse delivered same-restaurant sales growth of 6.8% for the quarter.
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Figure
DRI generated $3.2 billion in total sales in the first quarter.
Source quote
“In the first quarter, we generated $3.2 billion of total sales.”
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Figure
DRI generated $464 million in EBITDA and returned $406 million to shareholders through $184 million in dividends and $222 million of share repurchases.
Source quote
“We generated $464 million in EBITDA and returned $406 million to shareholders through $184 million in dividends and $222 million of share repurchases.”
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Guidance
A calendar shift will create an approximately 1% headwind to second quarter sales with an offsetting benefit in the third quarter.
4 more
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Figure
All 10,000 passes sold out immediately, reflecting high demand for the product in the current quarter.
Source quote
“All 10,000 passes sold out immediately.”
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Key theme
The company expects commodities inflation to be 3% for the year.
Source quote
“From a commodities inflation perspective, for the year, we're still expecting 3%.”
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Figure
Darden's diesel prices are projected at a high level of 10 to 15 basis points as a percent of sales for the full fiscal year.
Source quote
“But when you think about as a percent of sales for Darden, you're probably talking somewhere around 10 to 15 basis points at a very high level, elevated level, $6-plus diesel prices for the full fiscal year type of thing.”
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Guidance
Smaller portions with affordable prices performed as expected for DRI in Q1 2027 compared to Q4 2026.
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“LongHorn continued its strong momentum, Fine Dining delivered another quarter of positive same-restaurant sales growth and Yard House led the growth within the Other Business segment.”
“And as we talk about our growth algorithm and increasing our algorithm for unit growth, we would continue to foresee that.”
“And so they should be in the high single digits, mid- to high single-digit growth in the intermediate term and long term.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-08-30)
| Metric | Q3 2026period end 2026-08-30 | Q2 2026period end 2026-05-31 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.20B | 3.72B | −13.9% | 3.04B | +5.1% |
| Gross profit | 602.9M | 822.9M | −26.7% | 574.3M | +5.0% |
| Operating income | 319.3M | 516.8M | −38.2% | 339.2M | −5.9% |
| Net income | 233.4M | 404.9M | −42.4% | 257.8M | −9.5% |
| EPS | 2.04 | 3.51 | −41.9% | 2.19 | −6.8% |
| P/E today 22.1 | 21.1 | 19.6 | +1.5 | 22.4 | −1.3 |
Topics
Most discussed now
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Faded since Q2 2026
- Fading Black Box Intelligence updated its benchmarks in early May following changes to the underlying brand set, moving average benchmarks up...
- Fading Results for the year reflect stronger-than-expected same restaurant sales and faster new restaurant openings, despite significant macro…
- Dropped Darden Restaurants' steaks cooked correctly scores are at highest-ever levels.
- Fading Several of Darden Restaurants' brands enjoyed record performance on Mother's Day, including the highest-ever traffic day at Olive Garden…
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Material agreement; Agreement terminated; New financial obligation · SEC 8-K
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Darden Restaurants reported total sales of $3.2 billion, up 5.1% from the previous year, and diluted net earnings per share of $2.05, an increase of 4.1% year over year.
- Results of operations; Articles or bylaws amended · SEC 8-K
Darden Restaurants reported fiscal 2026 total sales of $13.21 billion, an increase of 9.4% over the previous year, with adjusted diluted net earnings per share of $10.64.
- Results of operations · SEC 8-K
Darden Restaurants reported total sales of $3.3 billion for the third quarter of fiscal 2026, representing a 5.9% increase compared to the same period last year.
- Results of operations · SEC 8-K
Darden Restaurants reported total sales of $3.1 billion for the second quarter of fiscal 2026, representing a 7.3% increase compared to the same period last year.
- Director or officer change; Shareholder vote results · SEC 8-K
The Board approved a performance stock unit award with a target value of $17,000,000 for CEO Ricardo Cardenas, and shareholders elected nine directors at the annual meeting on September 17, 2025.
- Results of operations · SEC 8-K
Darden Restaurants reported total sales of $3.0 billion for the first quarter of fiscal 2026, representing a 10.4% increase compared to the same period last year.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-18.
Cash & runway
Cash & equivalents
$220.5M
2026-08-30
Long-term investments
$22.3M
total liquidity $242.8M
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -2.7% YoY.
| Quarter | Shares |
|---|---|
| Q4 2024 | 117.5M |
| Q1 2025 | 117.2M |
| Q3 2025 | 116.7M |
| Q4 2025 | 115.9M |
| Q1 2026 | 115.0M |
| Q3 2026 | 113.6M |
Shares outstanding: 113.1M (2026-09-21)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 74 filings; 50 filings parsed.
Sold by insiders
76.8K shares
$16.0M · 14 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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Friday, December 18
release fiscal 2027 second quarter earnings
Source quote
“Looking ahead, we plan to release fiscal 2027 second quarter earnings on Friday, December 18, before the market opens, followed by a conference call.”
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Later in our current quarter
Olive Garden will activate the previously planned marketing support behind its iconic unlimited soup, salad and breadsticks lunch offering
Source quote
“Later in our current quarter, Olive Garden will activate the previously planned marketing support behind its iconic unlimited soup, salad and breadsticks lunch offering at a compelling price point.”
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during the second quarter
introducing new menu items and menu enhancements for LongHorn Steakhouse
Source quote
“LongHorn also continues to invest in food quality and we'll be introducing new menu items and menu enhancements during the second quarter designed to strengthen value and variety at both lunch and dinner.”
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this fiscal year
Yard House plans to open 13 new restaurants
Source quote
“Yard House is a high potential growth brand with plans to open 13 new restaurants this fiscal year, giving even more guests an opportunity to experience the brand.”
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fiscal '27
alignment around what success looks like
Source quote
“Across the conferences, I saw strong engagement and alignment around what success looks like in fiscal '27.”