Darden Restaurants' profit slips in Q4 2025 despite sales growth
Darden Restaurants has reported a drop in profit for its 2025 fiscal fourth quarter (Q4) ended 25 May, though acquisitions lifted sales.
The group, which is the parent of restaurant chains LongHorn Steakhouse and Olive Garden, saw total sales rising 10.6% to $3.27bn in Q4 from $2.96bn in 2024.
This was driven by a 4.6% increase in same-restaurant sales and the acquisition of 103 Chuy's Tex Mex outlets, along with 25 net new restaurants.
Net income in Q4 was $303.8m, compared with $308.1m a year previously, while operating income dipped 3.2% year-on-year to $382.8m.
Adjusted diluted net earnings per share from continuing operations climbed by 12.5% to $2.98, excluding certain costs.
The board of directors at Darden has announced a quarterly cash dividend of $1.50 per share, a 7.1% increase from the previous quarter, payable on 1 August 2025 to shareholders of record as of 10 July.
The Florida-based company has also bought back almost 0.2 million shares for $51m and authorised a new share repurchase programme worth up to $1bn, replacing the earlier authorisation.
Looking ahead to fiscal 2026, Darden anticipates total sales growth of 7% to 8%, factoring in a 53rd week, which is expected to contribute 2% to growth.
The company projects same-restaurant sales growth of between 2% and 3.5%, the opening of 60 to 65 new restaurants and total capital spending of between $700m and $750m.
It expects an effective tax rate of 13% and diluted net earnings per share from continuing operations of $10.50 to $10.70, including the impact of the additional week.
Darden CEO and president Rick Cardenas stated: "We had a strong quarter with same-restaurant sales and earnings growth that exceeded our expectations.
'Our strategy remains the right one for the company, and we will continue to execute it to drive growth and long-term shareholder value."
Cardenas revealed in an earnings call that the Bahama Breeze chain, which owned by the brand, may be sold or rebranded following the closure of 15 of its locations in May 2025.
The remaining 28 restaurants are primarily located in Florida.
Eugene Lee Jr, the former CEO of Darden, recently joined the board of directors at fast-casual chain Portillo's.
"Darden Restaurants' profit slips in Q4 2025 despite sales growth" was originally created and published by Verdict Food Service, a GlobalData owned brand.
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