Darden Restaurants Faces Profitability Squeeze Despite Strong Sales

Darden Restaurants, the parent company of popular chains Olive Garden and LongHorn Steakhouse, finds itself in a challenging position. While customer traffic remains robust, investors were met with disappointing quarterly results that highlighted a growing conflict between top-line revenue and bottom-line profitability. The core issue is a familiar one in the restaurant industry: rising costs are eroding margins, creating a disconnect between healthy sales figures and net earnings.

The company’s report for the first fiscal quarter of 2026, released on September 18, initially appeared solid. Revenue climbed 10.4% to reach three billion dollars, supported by a respectable 4.7% increase in comparable sales. However, the initial optimism was quickly dashed by the earnings details. The adjusted earnings per share (EPS) of $1.97 fell short of analyst... Read more...