Darden Restaurants Falls 6% on Razor-Thin Q1 2027 Miss
As seen on the 24/7 Wall St. homepage on September 24, 2026.
A miss of a fraction of a percent on both lines is knocking roughly 6% off Darden this morning, even though management reaffirmed full-year EPS guidance of $11.10 to $11.35. LongHorn Steakhouse comps rose 6.2% and every segment posted positive same-restaurant sales, so the selloff reflects valuation rather than traffic.
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Darden Restaurants reported fiscal first-quarter 2027 GAAP diluted EPS of $2.05 and revenue of $3.20 billion, both narrowly missing expectations. Total sales still grew 5.1% year over year, and the stock's roughly 6% drop reads as a valuation reset on that modest shortfall.
A key piece of context on the year-over-year profit decline: the prior-year quarter included a $42 million pre-tax gain from the sale of Olive Garden Canada, which inflated last year's GAAP results and made this quarter's comparisons harder. Operating income fell 5.9% and net income dropped 9.5% against that elevated baseline, so those headline declines are not a clean read on operating momentum.
Same-restaurant sales held up broadly, with LongHorn Steakhouse leading all segments at 6.2% comparable-sales growth on a fiscal calendar basis and every segment posting positive same-restaurant sales. The restaurant count grew to 2,218 units from a year ago, with LongHorn and Olive Garden both adding locations.
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Capital returns remained aggressive during the quarter, with Darden repurchasing approximately 1.1 million shares and paying dividends, and $1.3 billion still remaining under its repurchase authorization. A quarterly cash dividend of $1.62 per share was declared on September 24, payable November 2 to shareholders of record October 9.
Management reaffirmed full fiscal 2027 guidance for diluted EPS from continuing operations of $11.10 to $11.35, signaling that the quarter's shortfall is not expected to ripple through the rest of the year. CEO Rick Cardenas called the quarter "a solid start to our fiscal year" and pointed to the breadth of positive same-restaurant sales across the portfolio as evidence that the company's multi-brand strategy continues to hold. Investors will want to monitor whether the valuation compression sticks or reverses as the next few quarters prove out that guidance.
Mentioned: DRI