With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are food services and hotels and casinos.

Fortune Sector Leaders: Hotels, Restaurants, and Leisure

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-377-Darden Restaurants

Operating out of Orlando, Fla., the group's dine-in restaurant portfolio includes some of the country's most-recognized franchises including Olive Garden, Cheddar's, and Longhorn Steakhouse.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-372-Darden-Restaurants

The multi-brand restaurant operator is the parent of international dining chains including Olive Garden, LongHorn Steakhouse, Bahama Breeze, the Capital Grille, Eddie V's, and Yard House.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Google tops the list once again, marking its eighth appearance and fifth time as No. 1.

Fortune 100 Best Companies to Work For

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Darden Restaurants owns and operates a portfolio of full-service restaurants in the U.S. and Canada. Its well-known brands include Olive Garden, LongHorn Steakhouse, Ruth’s Chris Steak House, the Capital Grille, and Eddie V’s Prime Seafood, among others. Darden is also the former owner of Red Lobster, which the company sold to Golden Gate Capital in 2014 for $2.1 billion. The company was founded in 1968 when William Darden opened the first Red Lobster restaurant in Lakeland, Fla.

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Q4 2026

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Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Darden Restaurants (DRI): Company Profile, Stock Price, News, Rankings

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Darden Restaurants

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Hello and welcome to the Darden Fiscal Year 2026 third quarter earnings call. Your line has been placed on listen only until the question and answer session. To ask a question, you may press star one on your touchtone phone and we ask you please ask one question, one follow-up, then return to the queue. This conference is being recorded. If you have any objections, please disconnect at this time. I will now turn the call over to Ms. Courtney Aquila. Thank you. You may begin.

Thank you, Kevin. Good morning, everyone and thank you for participating on today's call. Joining me are Rick Cardenas, Darden's President and CEO and Raj Vennam, CFO. As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release, which was distributed this morning and in its filings with the Securities and Exchange Commission. A supplemental materials presentation containing information shared on today's call is available on the Financials tab in the Investors section of our website at darden.com. Today's discussion includes certain non-GAAP measurements and reconciliations of these measurements are included in that presentation.

Looking ahead, we plan to release fiscal 2026 fourth quarter earnings on Thursday, 25 June before the market opens, followed by a conference call. During today's call, all references to industry results refer to the Black Box Intelligence casual dining benchmark, excluding Darden. During the fiscal third quarter, average same-restaurant sales for the industry decreased 1.2% and average same-restaurant guest counts decreased 3%. Additionally, median same-restaurant sales for the industry increased 0.6% and median same-restaurant guest counts decreased 2.9%. This morning, Rick will share some brief remarks on the quarter and Raj will provide details on our third quarter financial performance and share our updated fiscal 2026 financial outlook. Now I will turn the call over to Rick.

Thank you, Courtney. Good morning, everyone. We had a very strong quarter. We generated $3.3 billion of total sales, 5.9% higher than last year, driven by same-restaurant sales growth of 4.2%. We've been consistently outperforming industry same-restaurant sales and this quarter our gap widened as each of our four largest brands exceeded the industry by more than 400 basis points. All of our segments delivered positive same-restaurant sales as our restaurant teams continued to be brilliant with the basics, once again, leading to impressive guest satisfaction scores. Our restaurant team's ability to consistently deliver exceptional guest experiences is enabled by historically high team member and manager retention levels that we are seeing across our businesses.

We began the quarter with very strong holiday sales and several of our brands generated record Valentine's Day sales, reinforcing that guests choose the brands they trust for these special occasions. We also opened 16 new restaurants during the quarter and we remain confident in our ability to deliver our planned openings for the fiscal year. Olive Garden delivered positive same-restaurant sales of 3.2% for the quarter, driven by strong operational execution, even with three fewer weeks of price-pointed promotions than last year. The restaurant teams are focused on ensuring every guest is offered a free refill on breadsticks and soup or salad. This led to new all-time high guest satisfaction score for service and matched their all-time high for overall guest satisfaction.

In January, Olive Garden completed the rollout of the lighter portion section of their menu, adding seven more dishes under $15. This platform provides their guests with more choice by offering additional smaller portions of popular dishes at a lower price and is offered in addition to the Olive Garden's regular portion sizes. Since these are existing menu items, there is minimal operational complexity and the restaurant teams can execute at a high level. The lighter portion section of the menu is clearly resonating with our guests and their restaurant teams. In February, fan favorites returned with Four-Cheese Manicotti for a limited time, starting at $12.99. Olive Garden also reintroduced two past favorites, Ravioli di Portobello and Braised Beef Tortelloni, meeting strong guest affinity for familiar, cravable dishes.

Building on last year's successful reintroduction, Olive Garden recently launched Buy One, Take One and is extending the offer for one additional week versus last year. With the same starting at price point of $14.99, guests can choose one entree for their dining experience and then they take a second entree home. To give guests even more reasons to enjoy it, this year's offer features a new Rigatoni alla Vodka entree for a limited time. Olive Garden is supporting Buy One, Take One with increased media. At LongHorn Steakhouse, strict adherence to their strategy rooted in quality, simplicity and culture continues to drive their momentum as they delivered same-restaurant sales growth of 7.2%. The LongHorn team is deeply committed to ensuring every item they serve meets their high-quality standards.

Already this year, they have recertified every manager on their culinary standards and during the quarter, their directors of operations completed hands-on culinary training in order to expertly assess and coach the behaviors that drive consistent execution. LongHorn's people bring the brand to life in their restaurants and their culture remains a clear differentiator in earning strong team member loyalty, which in turn helps drive guest loyalty. During the quarter, LongHorn was recognized as one of the best places to work by Glassdoor. This award is particularly meaningful as winners are determined solely based on the feedback provided by team members. LongHorn also celebrated five new Grillmaster Legends during the quarter.

This program is a great example of the intersection of quality and culture, celebrating team members who have each grilled more than 1 million steaks over the course of their career, a milestone that typically takes more than 20 years to reach. Same-restaurant sales for the fine dining segment grew 2.1% for the quarter. All three brands in this segment delivered positive same-restaurant sales, driven by strong private dining sales growth at The Capital Grille and Eddie V's and the continued success of the three-course fixed price menu at Ruth's Chris Steak House. Within our other business segment, same-restaurant sales grew 3.9% during the quarter, driven by very strong performance at Yard House and positive same-restaurant sales at Cheddar's Scratch Kitchen and Seasons 52.

The Yard House team has done a great job of leveraging their competitive advantages of a socially energized bar and distinctive culinary offerings with broad appeal to drive strong demand for Yard House as a social gathering space. During the quarter, more than half their restaurants set new daily sales records on Valentine's Day. At Cheddar's, the team remains focused on strengthening their competitive advantages of wow price and speed. During the quarter, they maintained their number one ranking for affordability among major casual dining brands within Technomic's industry tracking tool. I am proud of our performance this quarter and confident in our ability to build on our sales momentum. We remain focused on executing our proven strategy, enabling us to grow sales, increase market share and make meaningful investments in our business while returning capital to shareholders.

We also continue to work in our pursuit of our shared purpose: to nourish and delight everyone we serve. One of the ways we do this for our team members and their families is through our Next Course Scholarship program. Next month, the Darden Foundation will award more than 90 post-secondary education scholarships worth $3,000 each to the children of Darden team members. This is the fourth year of the program and over that time, we have awarded more than $1 million worth of scholarships, helping them reach their educational goals. Finally, I wanna thank our team members for their continued hard work and dedication to creating memorable experiences for our guests every day. On behalf of our leadership team and the board of directors, thank you for everything you do. Now, I'll turn it over to Raj.

Thank you, Rick and good morning, everyone. As Rick mentioned, in the third quarter, we generated $3.3 billion of total sales, 5.9% higher than last year, driven by same-restaurant sales growth of 4.2% and the addition of 31 net new restaurants. Our same-restaurant sales exceeded the industry benchmark by 540 basis points during the quarter. Our sales momentum was strong throughout the quarter as we further expanded our positive gap to the industry. Winter weather negatively impacted same-restaurant sales by approximately 100 basis points for the quarter, with more than 40% of our restaurants having to close temporarily in January during winter storm Fern. Same-restaurant sales adjusted for weather were greater than 5%, a strong performance in what is traditionally a high volume quarter. Overall, our teams did a great job managing the business through the volatility created by weather.

Third quarter earnings were in line with our expectations, delivering mid-single-digit earnings per share growth. Adjusted diluted net earnings per share from continuing operations of $2.95 were 5.4% higher than last year. We generated $579 million of adjusted EBITDA and returned $300 million to our shareholders this quarter by paying $173 million in dividends and repurchasing one hundred and twenty-seven million dollars in shares. Now looking at our adjusted margin analysis compared to last year, food and beverage expenses were 50 basis points higher, primarily due to elevated beef costs, driving total commodities inflation of approximately 5% for the quarter. Restaurant labor was 20 basis points lower, driven by productivity improvement as pricing was in line with total labor inflation of 3.3%.

Marketing expenses were 10 basis points higher, consistent with our expectations due to incremental marketing activity. Restaurant expenses were 10 basis points lower due to sales leverage. This resulted in restaurant level EBITDA of 21%, 30 basis points lower than last year as our pricing was 40 basis points below inflation. Adjusted G&A expenses were flat to last year. Leverage from sales growth was offset by 20 basis points of unfavorable mark-to-market expenses on our deferred compensation. Due to the way we hedge mark-to-market expense, this unfavourability is fully offset in taxes. As a result, our adjusted effective tax rate of 12.1% was 130 basis points lower than last year. We generated $341 million in adjusted earnings from continuing operations, which was 10.2% of sales.

Looking at our segments, all segments grew sales and segment profit dollars for the quarter, driven by positive same-restaurant sales. As Rick mentioned, we continue to make meaningful investments in the business, such as the lighter portion section of the Olive Garden menu. This, along with our measured approach in reacting to elevated beef costs, resulted in headwind to segment profit margin for the quarter relative to last year. Total sales for Olive Garden increased by 4.7%, driven by strong same-restaurant sales growth, as well as the addition of seventeen net new restaurants. The sales momentum continued from prior quarters with same-restaurant sales that outperformed the industry benchmark by 440 basis points. Olive Garden delivered a strong segment profit margin of 23% for the quarter, which was only 10 basis points below last year.

This includes approximately 40 basis points of margin investment related to the addition of the lighter portion section of the menu and the impact of delivery fees. At LongHorn, total sales increased 11.2%, driven by same-restaurant sales growth of 7.2% and the addition of 22 net new restaurants. A sustained sales and traffic outperformance resulted in same-restaurant sales exceeding the industry benchmark by 840 basis points and same-restaurant traffic exceeding by 640 basis points. LongHorn team remains focused on their strategy, driving strong results, delivering segment profit margin of 18.6% despite elevated beef costs. Total sales at Fine Dining segment increased 4.3%, driven by positive same-restaurant sales of 2.1% and the addition of 2 net new restaurants. Their segment profit margin of 22% was 50 basis points lower than last year.

The Other Business segment sales increased 3.2%, with positive same-restaurant sales of 3.9%, partially offset by the permanent closure of Bahama Breeze restaurants. Segment profit margin of 15.6% was flat to last year. Turning to our financial outlook for fiscal 2026, we've updated our guidance to reflect year-to-date results and expectations for the fourth quarter. We now expect total sales growth for the year of approximately 9.5%, same-restaurant sales growth of approximately 4.5%, approximately 70 new restaurant openings, commodities inflation of approximately 4%, an effective tax rate of approximately 12.5% and adjusted diluted net earnings per share of $10.57-$10.67, including approximately $0.25 related to the addition of 53rd week. For the fourth quarter specifically, our annual outlook implies total sales growth of 13%-14.5%, which includes the extra fiscal week.

Same-restaurant sales growth of 3.5%-5% incorporates the strong trends we have seen through the first three weeks of March. We expect adjusted diluted net earnings per share between $3.59 and $3.69. As previously announced, we've completed the exploration of strategic alternatives for the Bahama Breeze brand and determined that 14 locations will permanently close and the remaining 14 will be converted to other Darden brands over the next 12-18 months. We believe the conversion locations are great sites that will benefit several of the brands in our portfolio. Our team members remain a priority throughout this process. A majority of team members, including more than 70% of managers who are impacted by the permanent closures, have already been placed in new roles within the Darden portfolio.

Additionally, we intend to keep the restaurant teams from the conversion locations with the new brand or other Darden brands. We do not expect these actions to have a material impact on our financial results. Now, looking forward to fiscal 2027, I would like to provide our thoughts on a few items. First, we expect to open between 75-80 new restaurants in addition to converting 14 Bahama Breeze locations to other Darden brands. Next, we expect to spend approximately $850 million of capital on the following, approximately $475 million for new restaurants, approximately $25 million for the 14 Bahama Breeze conversions and approximately $350 million related to ongoing restaurant maintenance, refresh and technology. Finally, we anticipate an effective tax rate of approximately 13.5% for fiscal 2027 and total interest expense of approximately $200 million.

In closing, I want to commend our teams for their outstanding efforts in serving our guests. Their dedication is reflected in the strong financial results we deliver and our continued outperformance to the industry. We remain confident in our ability to grow sales, manage costs and deliver value to our guests and shareholders. Now we'll take your questions.

Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. If you'd like to remove your question from the queue, please press star two. A confirmation tone will indicate your line is in the question queue. As a reminder, we ask you please ask one question and one follow-up, then return to the queue. Our first question today is coming from Brian Bittner from Oppenheimer. Your line is now live.

Thank you. Good morning. Just as it relates to your same-store sales guidance, the implied outlook for the fourth quarter is that 3.5%-5% range, which is very impressive. That's happening despite much tougher comparisons, I think, of nearly 400 basis points in the fourth quarter. I think investors in general have been pretty worried about this multi-quarter stretch of tougher comparisons upcoming. Can you help us understand what do you believe is driving the ability to lap these so far, at least with such ease, particularly at Olive Garden?

Good morning, Brian. Let me start. You know, so let's as we look at guidance for next year, this is, you know, I think people are looking at this, you know, quarter to quarter, tougher comparisons toward the last year. But the way we think about it is what are the drivers of the business and how do we build, you know, continue to build growth or gain growth over time through the initiatives we have. I think we've shown that over time, we achieve what we commit to. We've been able to get, you know, show that we can grow. As we look at specifically with respect to Olive Garden last year, you said it's a tougher compare but if you think about the drivers of growth last year were primarily two.

One was Buy One, Take One returning for the first time since COVID and second was the first party delivery. Well, guess what? Those two are still in place today. We are extending our Buy One, Take One by an additional week. Rick mentioned we're also supporting that with additional media. You know, we build a plan and we build an estimate based on the initiatives we have in place, taking into consideration the macro factors. I think we feel good about what we're guiding here. I don't know if Rick you wanna add.

Thanks for that, Raj. Just my quick follow-up is just related to the relationship of pricing and inflation. Can you talk about that as we're moving forward into fourth quarter and then into 2027? I know you're not giving exact guidance obviously for next year yet but you know, you had some pretty meaningful gaps in that dynamic throughout this year, which seem to be narrowing now. Maybe you can just put some color on that for us.

Yeah, Brian, look, I think we've had a pretty, you know, big underpricing of inflation through the first three quarters. As we get to Q4, we expect our pricing to catch up to inflation. We expect overall inflation to be in the mid-threes and our pricing to be in that mid-threes. And I think if you look at our implied guide for Q4, you can see the power of that, right? When we start coming close to pricing close to inflation, you see the margins grow meaningfully and that's what you're seeing in the implied guidance for the fourth quarter. We'll share more about next year but I think the way to think about it is we've given ourselves a lot of flexibility by underpricing inflation over several years.

We feel like, you know, we have, if any, you know, across the industry, when you look at we have more power than anybody else in terms of being able to price to cover inflation. It's more of how we choose to run the business and we've always been focused on long-term. I think, you know, to the extent we're achieving our long-term framework of 10%-15% TSR by pricing, you know, by not having to price as much, then we do that. I think, you know, you'll hear more in the June call but our framework calls for 10-15 and we're, that's what we aim to deliver.

Thank you. Next question is coming from David Palmer from Evercore ISI. Your line is now live.

Thanks. You know, a quick question and a follow-up. How would you generally explain the same-store sales growth gap between LongHorn and Olive Garden? Is that really simply about the energy around protein and perhaps a little bit of the underpricing of beef costs lately? Or do you think there's something else that would explain the gap that we see between those two brands in terms of comps?

Yeah, David, I'll start by saying LongHorn has been on a very long path to continue to improve their business, to make sure that the guests get a great quality product every day and you heard that in some of the prepared remarks. They've also significantly underpriced beef costs in the grocery store over time. The guests are getting an amazing value when they go to LongHorn to eat. They've also done an amazing job in cooking their steaks. Going back to the quality, they've done an amazing job in cooking their steaks. Guests wanna come to a restaurant and if you can't cook a great steak, why are you open? LongHorn cooks a great steak well very close to 100% of the time. When they don't, they take care of the guest.

You know, the gap between Olive Garden and LongHorn, it's gonna fluctuate. This quarter, LongHorn had, I think, a little bit more pricing than Olive Garden did. They had a little bit more traffic growth than Olive Garden did. They also, you know, I'm not sure they were impacted quite as much by the weather as Olive Garden was. As you think about all of those things, you know, we don't worry about one brand outperforming another brand. We have a portfolio of great brands and there's gonna be quarters that one brand outperforms another one, just like we generally outperform the industry. We're very pleased with both of our brands, both Olive Garden and LongHorn and the performance they've had. I think those can explain some of the big differences, unless Raj wants to add anything else.

No, the only thing I'll just add is, as Rick mentioned, we also manage the brands. Like, we know some of the things we do are depending on how we look at our performance across the portfolio. There were three fewer weeks of price point promotion at Olive Garden and that's a decision we made because of how strong we felt the quarter was going to be. You know, that alone is probably about 100 basis points impact to Olive Garden's comps.

Great. That's helpful stuff. Do you see the gap between those two brands growing or, I mean, you just called out something, a reason why it might narrow but we see the comparisons getting tougher for Olive Garden. I know that there's gonna be concern that growth gap will widen against the tougher comparisons. Do you see that gap widening or perhaps narrowing off of some of those artificial hurts that happened in the last quarter? I'll pass it on.

Well, David, again, you know, we're not as concerned with the gap widening or narrowing in our brands as long as the brands continue to grow. Olive Garden. The important gap widening for us is Olive Garden's gap to the industry. Olive Garden's gap to the industry widened in our third quarter. LongHorn's gap widened even more. In the long run, though, you know, law of large numbers, Olive Garden and LongHorn will probably converge over time. I can't say it's gonna happen in Q4. I can't say it's gonna happen next year. Over time, you know, as long as we're not doing anything significantly different in promotional cadence or other things, you would expect those gaps to narrow a little bit. Maybe LongHorn will be above Olive Garden for a while.

We just can't tell you exactly when that'll converge.

Thank you. Next question today is coming from Lauren Silberman from Deutsche Bank. Your line is now live.

Thanks a lot. Congrats on the quarter. I'm gonna start with just the increasing gas prices. It sounds like you really haven't seen much of an impact given the quarter-to-date strength but any thoughts on whether there could be a delayed reaction from consumers and any color on what you've seen historically with high gas prices and how that's impacted different brands?

Yeah, Lauren. As quite a few of you have written, the data doesn't show a really strong correlation between gas prices and restaurant spending. I would say historically, higher gas prices had more of an impact on durable goods and less of an impact on services. I've been through a number of these cycles. I don't know how many. When there's a sudden and significant price increase in gas, there can be a brief pullback but that's usually only a few weeks. If you recall, the sudden increase in gas prices were a couple of weeks ago, so you know and we still had a pretty darn good quarter. The biggest driver we see in traffic for restaurants is GDP.

If gas prices remain high for a long period of time and make a big impact to GDP, there may be some softness but in general, we're not too worried about gas prices and we'll be able to react however we need to if they stay really high for a while.

Great. Thank you for that. Just a follow-up on the Q4 guide, the 3.5%-5%, it's a fairly wide range. Any color on what you're embedding through the rest of the quarter? I know there's a lot of moving pieces. Just trying to understand high end versus low end versus current trends. Thank you.

Yeah, Lauren, I think it's just, look, you know, what we're trying to embed is just, there's just still some uncertainty and the range is, you know, there to kind of capture that level of uncertainty. You know, we feel like we're in a good place quarter to date and that's taken into consideration but we're also taking into consideration some, you know, just the environment out there and just trying to make sure that we don't, you know, we don't overpromise. We're just trying to make sure that we're being thoughtful and taking into consideration all the factors that are out there.

Thank you. Next question is coming from Christine Cho from Goldman Sachs. Your line is now live.

Hi. Thank you so much. I would like to discuss beef prices, particularly as we look ahead to FY 2027. I think last call you've mentioned you're starting to see some green shoots but since spot prices are still trending upwards and news of the strike also seems to be an incremental headwind, could you kind of share your directional thoughts on beef and your locked-in rates for the next few quarters ahead? Thank you.

Hey, Christine. Let me start by saying, look, as far as fiscal 2027, we wanna wait till June to provide more specifics. You know, I can tell you for Q4, we have 85% fixed price coverage. This is, you know, really, pretty strong coverage relative to recent past. We haven't been able to cover that much in the last several years, that's a good thing. The other thing is we are starting to see some willingness from suppliers to contract further. We have started to lock in some things for fiscal 2027, probably well ahead of where we would have been a year ago or the last few years with respect to the fiscal next year. I would wanna wait till June to really share more specifics.

Now the other thing around the price, look, there are a lot of dynamics in terms of happening on the supply side. You know, so we don't, we're not expecting things to get significantly better on the supply side. But look, there's still double-digit demand destruction that we're seeing even in February in retail, right? I think ultimately, where it lands will depend on what happens with demand as prices go up.

Thank you so much. I'd like to also circle back on the lighter portion menu rollout in at Olive Garden. Any color on how the in-store rates trended since the launch and is the mix impact kind of tracking in line with your expectations? Also, any new learnings on the guests that are choosing these items? Does the uptake appear primarily value-driven or more kind of health or GLP-1 motivated? Thank you.

Hey, Christine. I would say we finished the launch in January, mid-January of this year, with the rest of the divisions going live. Those divisions are seeing kind of the same trends as the divisions that we launched earlier. The good news is we're seeing increased frequency in the guests that are ordering these lighter portions. We're seeing huge value scores and huge scores for portion size. It's a combination of many things. We do know that the Olive Garden menu has abundant portions and abundant means different things to different people. When you get as much soup or salad as you want and as many breadsticks as you want, a lighter portion may be all that you're looking for. Whether it's GLP-1 related or not, I don't think it's just GLP-1s.

I think a lot of people want smaller portions if you get all these other things. As I said, portion size ratings have gone up significantly and value ratings have gone up significantly for those items. We have seen increased frequency in the guests that are ordering it. It's a significant increase in frequency. Last I'll say is a lot of the preference is happening at the weekend lunch when we don't have a lunch menu. So there's a good reason for this lighter portion menu. Finally, the mix impact is about what we thought it would be. Raj mentioned what the margin impact of the mix was but the mix impact is about where we thought when we first launched the menu.

Thank you. Next question today is coming from Chris Carril from KeyBanc Capital Markets. Your line is now live.

Hi. Good morning. How should we think about marketing expense now in the 4Q in the context of the updated guidance you provided this morning? I presume you'll wait to provide any detail on marketing expense for fiscal 2027 in June. Any thoughts on how you're thinking about marketing at a higher level here in a potentially, you know, more volatile macro backdrop will be helpful.

Yeah, Chris. I think we've been very clear throughout the year that we expect marketing to be within 10 basis points as a percent of sales last year. You know, that's really how we're looking at it because, you know, one of the things we had this year that we mentioned on the calls was we had an RFP for our media buy that translated into meaningful cost savings, actually, you know, north of 10 basis points as a percent of sales. That's actually going, you know, helping us increase marketing activity even in quarters where you don't see a growth as a percent of sales. We're actually buying more because we have those savings to help.

Okay. Got it. Thank you. I guess maybe to give Olive Garden a little bit of a break here but you know, maybe changing directions a little bit. Can you comment on the improvement that you saw in the fine dining segment? How are you thinking about the segment going forward? And how much of a benefit to the comp in the quarter was from the strong Valentine's Day that you mentioned? Thanks.

Yeah, Chris. As we mentioned, fine dining, all three fine dining brands were positive same-restaurant sales in the quarter. You know, it wasn't just driven by Valentine's Day. I don't even think that would be a meaningful, maybe tens of basis points for the whole quarter for Valentine's Day. We had a really good private dining, as we mentioned, for Capital Grille and Eddie V's. I will say, this three-course prix fixe menu for Ruth's Chris is really resonating. You know, we ran it for I think five or six weeks this year, this quarter and it's resonating with guests. We're seeing guests that were lapsed to Ruth's Chris come back and we're seeing guests that have ordered that come back.

We think this is a good platform for them and we're really pleased with the fact that fine dining, all the brands in fine dining were positive this quarter. It's been a little bit of time since that's happened. You know, we can't tell you what we think going forward but everything we have is kind of played in our guide, you know, our guide is a pretty strong guide. I would think that fine dining would be doing okay in the fourth quarter.

Thank you. Next question today is coming from Sara Senatore from Bank of America. Your line is now live.

Wait. Quick housekeeping. I think I missed it. Can you run through the price and mix that were in the comp and maybe give a little bit of color on, I think you mentioned, a LongHorn had more price than Olive Garden but just how the brands compared to the average.

Yeah, Sara Senatore. At Olive Garden level, our comps were 4.2%. Our check growth was 3.5%. Pricing was basically 3.4%, so I think 10 basis points of positive mix. When you look at Olive Garden, their pricing was 2.8% but they also had catering help. Catering grew by about 130 basis points, which we don't count as traffic but that's really for all intents and purposes, that is increasing traffic. If you take that into consideration, their traffic was up basically 100 basis points. Then they had some investment like we talked about. The investment in lighter portions impacted the check by roughly 60 basis points. Uber fees helped a little bit with about 50.

I mean, the way we look at it is Olive Garden's comps, while the traffic we print might be -0.4%, when you add back the weather and the catering, that's basically a 2% comp on traffic. For LongHorn, the same-restaurant sales of 7.2% included traffic of 3.3%. The check growth of 3.9%, pricing was 4.4%, so they had a negative mix of 50 basis points.

Okay. Thank you. That's very helpful. I guess just in terms of, you know, the decision to run, you know, fewer weeks of price point and promotions, as you said, you know, maybe 100 basis points. This quarter running an extra week of the Buy One, Take One and supporting it with more marketing, it, you know, presumably all those things were planned well in advance. I just wanted to kind of confirm that because I wasn't sure if the decision to go from fewer weeks last quarter to more, you know, one more week this quarter indicated something about kind of the promotional intensity or what the results were versus your expectation. Just trying to kind of reconcile those two decisions. Maybe it's just tougher compares or something else entirely but just curious about that.

Yes, Sara. You know, we can't move on a real big dime here. I would say as big as Olive Garden is, we can't move on a real big dime here. We had planned both of those things quite a while ago. We had planned running fewer price pointed weeks in Q3 and planned on adding a week of Buy One, Take One in Q4, well early in this fiscal year, maybe even before the fiscal year started. The reason that we moved the three weeks out, we eliminated a promotion in the third quarter because we believed that weather would get back to a normal five-year average and so we'd have some weather tailwinds for us this quarter. Well, they were headwinds. You know, that was just something that happened.

Raj kind of mentioned what would have happened if there wasn't that kind of weather headwind. We would've had a two comp in traffic. We plan these long time ahead of time. This is not a reaction to promotional intensity anywhere else. If you recall, when we added Never Ending Pasta Bowl, we came back, I think it was seven weeks, maybe eight weeks and then within a year or two it was up to 12. That was a decision and a planned decision we made. I can't tell you the Buy One, Take One will get to 12 weeks but I can tell you that when we launched Buy One, Take One last year, we never intended it to be as short as it was.

Thank you. Next question today is coming from Jon Tower from Citi. Your line is now live.

Hey, thanks for taking the questions. Maybe starting, could you dig into the delivery at Olive Garden during the quarter? I think you've been running about 4% mix last period. You know, did much change. Going forward, how are you thinking about pulsing it as you're moving into the fourth quarter? Obviously, there's a different macro dynamic happening right now and that's a higher price. Well, not a high. There's the delivery fees on top of it. So I'm just curious if there's gonna be a brighter spotlight on that relative to previous quarters.

Yeah, Jon, a couple of things. Uber was 4.7% of sales for Q3. Now we did do some media support. When we took that four-week promotion out, so three weeks less price pointed, we took that one out in January. We replaced it with just a delivery message that had no offer. It was just, "Hey, Olive Garden delivers." In February, we added an offer to the Olive Garden delivery to free delivery like we did last year. You know, last year in Q3, we were roughly 0.8% in delivery. Last year in Q4, we were 3.5%. You saw that big jump when we started marketing delivery in Q4. I would say that in Q4 this year, I'm not gonna tell you if we're gonna do marketing and marketing for delivery but if we do, it'd be a secondary message.

I would think that the jump in delivery from Q3 this year to Q3 last year won't be the same in Q4 because that's when we had the big spike. We still believe that delivery should be a little bit higher than last year.

Okay, great. Maybe, you know, obviously, it sounds like the lighter fare or lighter portion menu at Olive Garden sounds like it's a pretty good success early on. I'm just curious if as you're looking across the rest of your brands, I know each one's a little bit different but is that an opportunity to bring to other brands within the portfolio or the guest is just a little bit different?

Yeah. We've said this before. I think LongHorn has done some of this already. LongHorn did this at lunch years ago and lunch is growing pretty fast and with a good lunch platform, smaller items, sandwiches, et cetera, that's grown over time. They already have different sizes of some steaks. If you think about their filet, they've got two different sizes of filet. They got sirloins. You know, they've got two different kind of ribeyes, one's bone-in, one's not. They've got different sizes for chicken, different sizes for salmon. They kind of have a lot of that already. They are looking at other things that they can do to bring portions that might not be as big for people that don't want such big portion.

The same thing with Ruth's Chris. If you think about the three prix fixe menu at Ruth's Chris, it's one of their smaller filets, et cetera. We have opportunities in all of our brands to look at something like this. It might not be as broad as we do at Olive Garden because most of these menus in other brands have kind of variety of size.

Thank you. The next question today is coming from Brian Harbour from Morgan Stanley. Your line is now live.

Yeah, thanks. Good morning, guys. I guess let me ask just the income cohort question. Anything, you know, that you'd call out about income bands that may have shifted in the quarter and also, you know, in fine dining, is there any group that you think has kind of come back more?

Hey, Brian. So from an income perspective, what we're seeing is, there is growth across all households with income above 50K and the biggest growth is coming from households over 150K. That's just generally what we're seeing across all brands. As we look at fine dining, we're seeing decent growth as we start to go above 150K as well but 200K plus is where we're seeing the most growth. That's where we see even bigger disparity between the below 75K, below 100K and then the above 200 or 150K.

Okay. Got it. Thanks. Raj, just directionally, it, you know, it's still your expectation, I think, that food cost pressure kind of continues to diminish a bit into the fourth quarter, I guess. Also, is there any reason that, you know, with the sales you're doing, there wouldn't be a little bit more leverage on the other restaurant expenses at this point?

Well, I mean, look, let me step back. I don't, you know, I hate for us to talk about a specific line item in the P&L, because there are multiple variables that can play, you know, a role in how, where we land for the end of the quarter. As we look at the business, the guidance that we provided for the fourth quarter implies margin growth. We're going to get it from probably, at this point, probably pretty much every line on the P&L but it doesn't have to end up that way. We're okay. Ultimately, we look at what's the bottom line, right? I think we're gonna show EBIT growth, EBIT margin growth.

Thank you. Our next question is coming from Jeffrey Bernstein from Barclays. Your line is now live.

Great. Thank you very much. First question is just on the fiscal 2026 guidance. I know there's only one quarter remaining but you raised the total revenue growth guidance, you raised the comp and the unit growth guidance. Ex the incremental nickel, I guess, from the 53rd week, seems like the implied fourth quarter EPS guidance is still somewhat in line with the Street. I'm just wondering how you think about maybe what's preventing the greater EPS upside, especially as total inflation guidance seems to be unchanged. Just trying to get a sense for how you think about that, going from the top line to the bottom line as we think about at least the upcoming quarter.

Hey, Jeff. Look, I don't wanna explain the Street's model, right? I'm focused on what we built as a plan. If you look at our initial guidance at the beginning of the year, we said our guidance was $10.50-$10.70. As we got through the year, our inflation was a lot higher than we thought and we didn't price for all of it. We had better comps than we thought in the plan and so we took up comps to reflect that. Ultimately, we're still delivering on the higher end. If you take the midpoint of it is higher than the midpoint of what we had initially guided. The delta on the 53rd week is just a function of, you know, we had approximately $0.20 and now we're saying approximately $0.25.

You know, if you think about, you know, how the rounding works, a couple of pennies could make it approximately $0.20 versus approximately $0.25. Don't read this as a $0.05 delta. It could be 1-2 pennies because of how it rounds. That's why we said approximately. You know, so I'll leave it at that.

Got it. So it sounds like greater comp, greater inflation, net-net, still a strong earnings year. Then as I think about that going into next year, I appreciate the color on the unit growth and the CapEx spend but maybe more broadly speaking and I know it's just directionally at this point but and maybe you mentioned it earlier, is it fair to assume you think fiscal 2027 growth in line with your long-term algo? It seems like you're entering fiscal 2027 with comps above kind of the 1.5%-3.5% long-term target. Maybe you could share the current annual EPS sensitivity to an incremental point of comp. Any color, at least directionally, on how we should think about fiscal 2027 versus the long term would be great.

Well, Jeff, I'd say, you know, we'll share more about fiscal 2027 later but I think what we're targeting is trying to stay in that frame or at least achieve what we said as part of the framework. One and a half to three and a half for comps and three to four percent for new restaurant growth. And as you look at what we're the initial indication for fiscal 2027, excluding the Bahama Breeze impact, we would expect it to be in that range of three to four percent for new unit growth contribution. And then part of the other that framework is EBIT margin flat to positive 20 basis points to get us to that EPS growth plus dividend yield of 10 to 15. I think that's kind of what we would plan for.

Any given year it might be a little bit different but that's what we target long term. At this point, I don't see a reason why we wouldn't be there but who knows? You know, we'll give you an update in June.

Thank you. Our next question today is coming from Jim Salera from Stephens. Your line is now live.

Good morning, guys. Thanks for taking our question. Raj, earlier you had talked about double-digit demand destruction at retail for beef. I can't help but draw a line between the strong results at LongHorn and then that commentary. Are you able to give us any context? Are you seeing consumers who forgo buying beef at the grocery store then showing up at?

Hey, Jim, this is Rick. You know, in times of high beef prices in the grocery store, you generally see a little bit more consumer going to a restaurant to get their steak. When a consumer has to cook a very expensive steak at home and they mess it up. They still have to eat it. When a consumer goes to a restaurant and orders a steak and we mess it up, we eat it and they still eat a great steak. I think that's part of the reason but I can't tell you that we have data to say that a consumer says, "You know, I saw this price in grocery store. I decided not to do it. I'm gonna go to LongHorn instead." I mean, we've got great data.

We've got the best data and insights in the space but we don't ask our guests that question, so we don't know.

Maybe one follow-up question, given the traffic outperformance for the Darden as a whole relative to the industry. How much of that is incremental frequency from existing guests who are just satisfied with, you know, the menu innovation and some of the portion size offerings versus you winning share from other peers within the group?

Yeah. Look, we're getting from both. When we look at our frequency, we are seeing frequency increase across the portfolio from the guests but we're also getting new guests. It's a combination of that. It's you know, just the data that we look at probably shows that a little bit more from increased frequency, you know, call it 60/40, I guess or 65/35, in that range.

Thank you. Our next question today is coming from Andrew Charles from TD Cowen. Your line is now live.

Great. Thank you. Rick, catering at Olive Garden continues to grow pretty nicely despite lapping several quarters since the large growth began. What do you attribute that to?

Hey, Andrew. Growth at Olive Garden is about execution. I didn't hear your very first word, so I wanna make sure I'm answering what growth you're talking about at Olive Garden.

Catering growth, you know, it's a great deal at Olive Garden. We do an amazing job at getting it to the guest at the exact time they want it. We have a good digital platform to do it. Catering is a very strong support for us and it's probably one of the best values at Olive Garden. We have a delivery part of catering that we do ourselves. It's our highest-rated part of anything we do at Olive Garden. What guests want for catering is they wanna make sure they get the food that they ordered, they get it on time and it's a great value. Olive Garden checks all three boxes every time.

Gotcha. Raj, is it fair to assume that a good portion of the converted Bahama Breeze's will be Olive Gardens, just given similar square footage combined as well as Olive Garden is one of your highest ROIC brands for new stores?

Yeah, Andrew, this is Rick. I wouldn't say it's fair to assume that the most of the conversions will be Olive Garden. There's 14 conversions. Olive Garden is pretty much almost everywhere Bahama Breeze is. I would say it's fair to assume that the fewest that Olive Garden will have a couple maybe but they won't have a lot of them.

Thank you. Our next question is coming from David Tarantino from Baird. Your line is now live.

Hi, good morning. First a clarification on Raj's comments about next year and the total shareholder return being in line with your normal framework. Are you adjusting for the lapping of the 53rd week or maybe you don't need to adjust and still hit that target range? I guess, could you clarify whether we should be making any adjustments to your comment?

Yeah, David, I would say we always look at it on a 52 to 52 'cause that's the right comparison. You know, you know, what is the 53rd? What is it gonna look like? I mean, you'll find out in June. I mean, at this point, you know, long term, it's really 52 to 52 is the right comparison.

Great. Thank you. I guess my real question, Raj, is about the commodity cost outlook. I appreciate you don't wanna give specifics for next year but just wondering directionally if the spike in oil prices and hence distribution costs is gonna have any material impact on the outlook for commodity costs, you know, for you and for the industry for that matter. I guess, you know, you would probably have a competitive advantage with your supply chain but just any thoughts on that topic would be helpful.

David, I don't wanna speculate but I will. You know, if you look at where we are expecting the inflation for commodities for this year to be, which is 4%, our thinking from where we're sitting now, for next year directionally should be better than that, even with some of the recent news but we'll provide an update in June.

Thank you. Our next question is coming from Danilo Gargiulo from Bernstein. Your line is now live.

Thank you. Rick, I was wondering if you can elaborate more on the turnover rate being particularly low. Is that a function of what you're doing, where you are in the market or is that something that you're seeing across the board for the industry? Was that the primary driver for the labor productivity improvement that you've seen this quarter? If that's the case, for how long do you expect the low turnover to last?

Darden Restaurants (DRI) Q3 2026 Earnings Call Transcript

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