DRI Earnings: Darden Restaurants Stock Plunges After Q1 EPS Miss - What’s Next for Investors?
Darden Restaurants just served investors a cold plate of disappointment.
Q1 Earnings Shockwave
The hospitality giant's stock took a nosedive after failing to meet Wall Street's earnings expectations. While analysts were hungry for growth, DRI's performance left the market chewing on tougher questions about consumer spending and restaurant sector resilience.
Market Reaction & Sector Implications
This earnings miss isn't just about one quarter—it's a potential canary in the coal mine for discretionary spending. When restaurant chains stumble, it often signals broader economic headwinds. Traditional investors might panic, but savvy market watchers see these dips as potential entry points.
Meanwhile in crypto-land, decentralized food tokens keep feasting on traditional sector weaknesses—proving once again that while legacy stocks bleed, digital assets breed new opportunities. Sometimes the best investment strategy is simply avoiding the restaurant business altogether.
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Darden Restaurants reported revenue of $3.04 billion in Fiscal Q1 2026, which matched analysts’ estimate for the period. The company’s revenue increased 10.1% year-over-year compared to $2.76 billion. This came from a 4.7% increase in same-store sales, as Olive Garden reported same-store sales growth of 5.9% and LongHorn Steakhouse same-store sales ROSE 5.5%.
Darden Restaurants stock was down 6.13% in pre-market trading on Thursday, following a 0.6% drop yesterday. The shares remain up 14.3% year-to-date and 21.2% over the past 12 months.
Darden Restaurants Guidance
Darden Restaurants provided a guidance update for Fiscal 2026 in its latest earnings report. The company expects adjusted EPS to range from $10.50 to $10.70. With a midpoint of $10.60, that doesn’t look good compared to Wall Street’s estimate of $10.69 per share.
Also included in Darden Restaurants’ Fiscal 2026 guidance was:
- Total sales growth of 7.5% to 8.5%.
- Same-restaurant sales growth of 2.5% to 3.5%.
- 65 new restaurant openings.
- Total capital spending of $700 to $750 million.
- Total inflation of 3.0% to 3.5%.
- An effective tax rate of approximately 13%.
Is Darden Restaurants Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Darden Restaurants is Strong Buy, based on 16 Buy and five Hold ratings over the past three months. With that comes an average DRI stock price target of $238.52, representing a potential 14.24% upside for the shares. These ratings and price targets will likely change as analysts update their coverage after today’s earnings report.
