Darden Q1 sales rise 5.1% but Olive Garden slows and revenue edges below estimates; shares fall 3%

DRI reported fiscal 2027 first-quarter sales of $3.2 billion, up 5.1% from a year earlier, with same-restaurant sales up 3.2% and adjusted diluted EPS up 4.1% to $2.05. The company reaffirmed its full-year EPS outlook of $11.10 to $11.35. Revenue landed just below the consensus of $3.21 billion, while the EPS comparison depends on the estimate provider: some trackers had $2.05 as in line, others flagged a small miss.

The weak spot was Olive Garden, the largest brand, where same-restaurant sales rose only about 1%, the slowdown CNBC highlighted in its coverage. Management said the World Cup and consumer concerns about lettuce cut the chain's traffic by an estimated 150 to 200 basis points. LongHorn Steakhouse carried the quarter with 6.8% comparable growth and an 18% segment margin, and Yard House grew comps 10% and passed $1 billion in trailing annual sales.

Shares fell about 3% on the day. Pricing ran at 3.7% against 3.5% commodity inflation, and management expects pricing to moderate over the year while commodity inflation holds near 3%, which leaves less room for error if traffic stays soft. Investors will watch whether Olive Garden's Never-Ending Pasta Bowl promotion and a new weekday-lunch push restore traffic in the second quarter, and whether the resilience to cost inflation that some analysts credited holds up.