Darden Restaurants falls short as Olive Garden and LongHorn disappoint

In the United States, Darden Restaurants revealed disappointing sales results on Thursday, March 20, 2025, for the fiscal third quarter. This was primarily attributed to underwhelming performances from its key brands, Olive Garden and LongHorn Steakhouse, both of which failed to meet analysts’ expectations for same-store sales growth. Furthermore, the company reported a net income of $323.4 million, reflecting a slight increase from the previous year. Darden’s adjusted earnings per share stood at $2.80, marginally exceeding the expected $2.79. However, total revenue came in at $3.16 billion, falling short of analyst projections of $3.21 billion. Notably, same-store sales saw a modest rise of just 0.7%, compared to the more optimistic forecast of a 1.7% increase. While the addition of Chuy’s restaurants contributed to overall revenue growth, the lower-than-expected sales numbers from Olive Garden and LongHorn Steakhouse overshadowed these gains. Olive Garden reported a 0.6% rise in same-store sales, which was significantly below analysts’ expectations of 1.5%. Similarly, LongHorn Steakhouse's same-store sales increased by 2.6%, missing the anticipated growth of 5%. The fine dining segment, encompassing brand names such as The Capital Grille and Ruth’s Chris Steak House, also faced challenges, with a decline of 0.8% in same-store sales. The remaining segment, which includes the Cheddar’s Scratch Kitchen and Yard House brands, saw a 0.4% decrease in same-store sales. Despite these setbacks, Darden Restaurants continues to maintain a forward outlook, reiterating its full-year revenue forecast at $12.1 billion. The company has provided a narrower forecast for adjusted earnings from continuing operations, now estimating a range between $9.45 to $9.52 per share. Chuy’s contribution is expected to be included in the fiscal 2025 results although it will not affect same-store sales metrics until the fiscal fourth quarter in 2026. Investors' reactions were somewhat positive, as Darden's shares saw an increase in premarket trading despite the disappointing sales reports.