Darden Restaurants Reports Q3 and Nine-Month Financial Performance with Sales Increases

Darden Restaurants, Inc. reported a solid financial performance for the third quarter and first nine months of fiscal 2025, with total sales reaching $3.16 billion and $8.81 billion, respectively, marking increases of 6.2% and 4.4% compared to the same periods in fiscal 2024. The company's net earnings from continuing operations were $323.7 million for the third quarter and $747.0 million for the first nine months, reflecting a 3.3% and 3.7% increase year-over-year. Diluted net earnings per share also rose to $2.74 for the third quarter and $6.30 for the nine months, up from $2.60 and $5.95 in the prior year.

The company experienced notable changes in its operational landscape, particularly following the acquisition of Chuy’s Holdings, which added 103 restaurants to its portfolio. This acquisition, completed on October 11, 2024, was financed through the issuance of $400 million in senior notes due 2027 and $350 million in senior notes due 2029. The integration of Chuy’s is expected to enhance Darden's market presence and operational synergies. Additionally, Darden entered into a multi-year delivery agreement with Uber Technologies, which has expanded its delivery capabilities across nearly all Olive Garden locations.

Operationally, Darden reported a total of 2,165 company-owned restaurants as of February 23, 2025, an increase from 2,031 at the end of the previous fiscal year. The company noted a blended same-restaurant sales increase of 0.7% for the third quarter, although this was negatively impacted by severe weather and the timing of the Thanksgiving holiday. Customer counts showed a decline, with Olive Garden experiencing a 3.9% decrease in same-restaurant guest counts during the third quarter, while LongHorn Steakhouse saw a 0.7% decrease.

The filing also highlighted changes in costs and expenses, with total operating costs increasing by 5.9% for the third quarter. Food and beverage costs as a percentage of sales decreased due to pricing leverage and cost savings, while restaurant labor costs remained stable. General and administrative expenses rose, primarily due to costs associated with the Chuy’s acquisition. The effective income tax rate for continuing operations increased to 13.1% for the third quarter, driven by higher net earnings and nondeductible transaction costs related to the acquisition.

Looking ahead, Darden anticipates sales for fiscal 2025 to be approximately $12.1 billion, with same-restaurant sales growth projected at around 1.5%. The company plans to open 50 to 55 new restaurants and expects capital expenditures of approximately $650 million for new construction and technology initiatives. The outlook reflects confidence in the integration of Chuy’s and the continued expansion of its restaurant portfolio.