Despite rising costs and shifting consumer habits, Darden Restaurants, Inc. (NYSE: DRI) has maintained stable performance, reflecting the unwavering popularity of its brands and their ability to compete effectively in the challenging restaurant market. The company’s casual dining segment experienced growth, more than offsetting the weakness in its fine-dining restaurants like Ruth’s Chris Steak House.
After experiencing volatility in 2024, Darden’s shares ended the year on a positive note and maintained the momentum in the early months of 2025. The stock has grown 18% in the past three months, hitting an all-time high more than a week ago. The company has a history of paying consistent quarterly dividends, regularly increasing them, and offering strong yields. That makes the stock an attractive buying option for income-focused investors.
Estimates
The Orlando-based company, which owns the popular Olive Garden restaurant chain, will report its third-quarter 2025 financial results on Thursday, March 20, at 7:00 am ET. It is estimated that third-quarter sales increased around 8% year-over-year to $3.22 billion. On average, analysts forecast adjusted earnings of $2.8 per share for the February quarter, vs. $2.62 per share in Q3 2024.
In the second quarter, total sales increased 6% to $2.9 billion, with same-restaurant sales growing 2.4% year-over-year. As a result, adjusted earnings from continuing operations grew 10.3% annually to $2.03 per share in Q2. Net earnings were $215.1 million or $1.82 per share, compared to $212.1 million or $1.76 per share last year. Both revenues and the bottom line matched estimates, after missing in the prior quarter.
Strategy
The Darden leadership has been focused on streamlining cost management, innovating the menu, and optimizing delivery, to tackle headwinds like inflationary pressures, and customers’ changing consumption patterns. Those initiatives, combined with the general improvement in macroeconomic conditions, are poised to drive profitable growth for the company in the coming quarters.
From Darden’s Q2 2025 earnings call:
“Looking at the back half of the fiscal year, we expect sales and EPS growth rate to be lower in Q3 than the growth rates in Q4, given the impact of the Thanksgiving holiday shift into the third quarter. Finally, as we expected, we closed in on the Chuy’s deal in October, acquiring 103 Chuy’s restaurants. We’re in the early stages, but the integration is going well, and we now expect to realize run-rate synergies of approximately $17 million with approximately $2 million realized in fiscal 2025 and the balance in fiscal 2026.”
Guidance
A few months ago, the company in a statement said it expects full-year 2025 sales to be around $12.1 billion and same-restaurant sales growth of approximately 1.5%. Adjusted earnings per share from continuing operations is expected to be between $9.40 and $9.60 in FY25. The optimistic outlook underscores the value of the company’s diversified menu offerings and promising partnership with Uber Eats for on-demand delivery.
The average price of Darden’s stock for the last 52 weeks is $164.03. It had a modest start to the week and traded lower during Wednesday’s session. The shares have declined by 4% in the past thirty days.