Darden Restaurants Sales Rise Despite Concerns Over Consumer Spending Slowdown

The company credited its sales boost to marketing efforts, including Olive Garden’s ‘buy one, take one’ deal—back for the first time in five years.

The exterior of an Olive Garden restaurant is seen in Austin, Texas, on June 20, 2025. Brandon Bell/Getty Images

News Analysis

Darden Restaurants’ sales rose in the fourth quarter of fiscal 2025, overcoming concerns about an impending slowdown in consumer spending due to weak consumer confidence. Sales were robust across all brands on Mother’s Day, thanks to the company’s successful marketing strategy.

On June 20, the operator of several full-service brands reported total sales of $3.3 billion for the quarter, which ended on May 25. That’s up by 10.6 percent from a year earlier, driven by both higher same-store sales and the acquisition of 103 Chuy’s Tex Mex (Chuy’s) restaurants, and the opening of 25 net new restaurants.

Same-store sales were robust in the LongHorn Steakhouse brand and Olive Garden, partially offset by a decline in the Fine Dining brand.

Earnings were $2.58 per share, with adjusted earnings per share that exclude non-recurring costs of restaurant closures at $2.98, up by 12.5 percent from a year earlier.

Both revenues and earnings beat analysts’ estimates, including those by Zacks, as the company returned $215 million to shareholders.

In addition, the company provided strong guidance for fiscal 2026, expecting overall sales to grow in the range of 7-8 percent and same-restaurant sales growth in the range of 2 to 3.5 percent, with earnings per share expected to be in the range of $10.50 to $10.70.

“We had a strong quarter with same-restaurant sales and earnings growth that exceeded our expectations,” Darden President and CEO Rick Cardenas said in a statement.

Cardenas attributed its solid performance to the effective execution of the company’s business strategy and adherence to the basics of the dining business.

“Our strategy remains the right one for the company, and we will continue to execute it to drive growth and long-term shareholder value,” he said.

Over the past fifteen years, Darden has maintained high profit margins—something shareholders watch closely. In 2025, for instance, the company’s gross profit margin held at a relatively low 20 percent, despite elevated costs for food, materials, and labor.

During the earnings conference call, Cardenas provided further insight into the company’s winning strategy, including the return of Olive Garden’s “buy one, take one” offer for the first time in five years.

“‘Buy One Take One’ with a starting price point of $14.99, allowed guests to choose one entree for their dining experience and then take a second one home,” he said. “The take-home selections leveraged Olive Garden’s existing $6 take-home platform, minimizing operational complexity.”

Business at Olive Garden was robust on Mother’s Day, May 11, as confirmed by Placer.ai data, with foot traffic soaring 152.9 percent compared to an average day and 101.8 percent compared to an average Sunday.

Foot traffic at LongHorn Steakhouse displayed a similar surge, and both chains topped their Mother’s Day traffic from last year, confirming their ability to seize on crucial occasions that resonate with U.S. culture.

Darden’s shares rose by nearly 3 percent in early morning trading and closed up by 1.36 percent. Over the past five years, the company’s shares have increased by 221 percent, outperforming the S&P 500’s 96 percent gain.

Darden’s solid financial performance comes amid a string of reports by the Conference Board and the University of Michigan, which portray a weak sentiment among U.S. consumers. For instance, the U.S. Michigan Consumer Sentiment Index dived from close to 65 points in February to around 52 points in May, before recovering to 60.5 points in June.

The disconnect between depressed consumer psychology and robust spending on discretionary items, such as dining out at full-service restaurants, suggests that consumer psychology may not be the primary driver of consumer spending.

Raj Vanam, chief financial officer of Darden Restaurants, struck an optimistic tone for shareholders, saying that the company is committed to delivering a total shareholder return of 10 to 15 percent, as defined by earnings-per-share growth plus dividend yield, thanks to higher same-restaurant sales and the acceleration of store openings.

“We’re updating how we define margin expansion, shifting from EBIT margin to earnings after tax margin to more accurately reflect how we view and manage our business,” he said.