Darden Set to Announce Third Quarter Results: Spotlight on Olive Garden and LongHorn

Darden Restaurants Set to Announce Q3 Fiscal 2026 Results

Darden Restaurants, Inc. (DRI) will release its third-quarter fiscal 2026 earnings report on March 19, prior to the market opening.

Recent Earnings Performance

In the previous quarter, Darden’s earnings came in slightly below the Zacks Consensus Estimate by 0.5%. Over the last four quarters, the company exceeded expectations once and fell short three times, resulting in an average earnings surprise of -0.4%.

DRI Earnings Estimates and Forecasts

The current Zacks Consensus Estimate projects Darden’s third-quarter earnings per share (EPS) at $2.95, representing a 5.4% increase compared to $2.80 in the same quarter last year.

Revenue is anticipated to reach $3.33 billion, which would be a 5.3% improvement over the prior year’s comparable period.

Let’s examine the key factors that may have influenced Darden’s performance this quarter.

Key Drivers for Darden’s Quarterly Results

Darden’s revenue growth this quarter is expected to be fueled by robust same-restaurant sales across all segments, indicating strong customer demand and steady traffic. Notably, Olive Garden and LongHorn Steakhouse have been pivotal in driving comparable sales gains.

• Olive Garden: The brand likely benefited from the enduring appeal of its Never Ending Pasta Bowl promotion, operational excellence, and record-high guest satisfaction, all of which supported increased traffic and repeat business.
• LongHorn Steakhouse: Continued emphasis on food quality, consistent menus, and enhanced guest experiences likely bolstered brand loyalty and customer engagement, contributing to solid sales growth.

Additional revenue growth may have come from expanding the restaurant network and introducing new sales channels. Darden opened new locations during the quarter, adding more operating weeks and boosting overall sales. Off-premise initiatives, such as the introduction of first-party delivery via Uber Direct, attracted younger, higher-income customers and led to larger average orders. Promotional campaigns and limited-time menu items at brands like Yard House, Ruth’s Chris Steak House, and The Capital Grille also helped increase guest visits and engagement.

Segment Revenue Projections

• Olive Garden revenue is expected to rise 2.5% year-over-year to $1.36 billion.
• LongHorn Steakhouse revenue is projected to grow 7.9% to $828.6 million.
• Fine dining revenue is anticipated to increase 1.8% to $392.3 million.

Profitability Outlook

Darden’s bottom line is likely to have benefited from higher sales and improved operational efficiency. Productivity improvements in restaurant labor may have helped offset wage inflation, while marketing expenses as a percentage of sales likely declined due to stronger revenue. Lower general and administrative costs, supported by reduced incentive compensation and favorable mark-to-market adjustments, may have further aided earnings growth, despite ongoing commodity inflation—especially higher beef prices during the quarter.

DRI Stock: Model Predictions

According to the model, there is no clear indication that Darden will surpass earnings expectations this quarter. Typically, a positive Earnings ESP combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the likelihood of an earnings beat. However, this is not the case for Darden at this time.

• Earnings ESP: +0.08%. For more details, use the Earnings ESP Filter.
• Zacks Rank: Currently #4 (Sell).

Other Retail-Wholesale Stocks to Watch

Investors may want to consider these Retail-Wholesale sector stocks, which our model suggests have a favorable setup for an earnings beat:

• Yum! Brands, Inc.: Earnings ESP of +0.02% and Zacks Rank 3. Earnings are expected to rise 5.4% for the quarter. The company beat estimates in two of the last four quarters, with an average surprise of 1.2%.
• Domino's Pizza, Inc.: Earnings ESP of +0.19% and Zacks Rank 3. Expected earnings growth is 0.5% for the quarter. Domino’s exceeded expectations in two of the past four quarters, with an average surprise of 1.3%.
• Dutch Bros Inc.: Earnings ESP of +0.33% and Zacks Rank 3. Earnings are projected to grow 7.1% for the quarter. Dutch Bros beat estimates in all of the last four quarters, averaging a 41.6% surprise.

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Additional Resources

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• Yum! Brands, Inc. (YUM): Free Stock Analysis Report
• Domino's Pizza Inc (DPZ): Free Stock Analysis Report
• Darden Restaurants, Inc. (DRI): Free Stock Analysis Report
• Dutch Bros Inc. (BROS): Free Stock Analysis Report

Original article published by Zacks Investment Research

Zacks Investment Research