Darden Restaurants Q3 Profit Falls 5.1% to $306.8M Despite Revenue Growth

Darden Restaurants, Inc. (NYSE: DRI), operator of casual dining chains including Olive Garden, LongHorn Steakhouse, and Cheddar's Scratch Kitchen, posted net income of $306.8 million for the quarter ended February 22, 2026, down 5.1% from $323.4 million in the year-ago quarter. Diluted earnings per share came in at $2.65, below the prior-year's $2.74. Read more earnings reports.

Quarterly revenue climbed 5.9% to $3.35 billion from $3.16 billion a year earlier. For the nine months ended February 22, 2026, total revenue reached $9.49 billion, up 7.8% from $8.81 billion in the comparable prior-year period.

Gross profit for the quarter rose to $703.6 million from $673.0 million, though operating income fell to $406.4 million from $418.2 million. The company reported higher cost of goods sold of $1.03 billion for the quarter, compared to $953.6 million in the prior year.

Nine-Month Performance

For the nine months ended February 22, 2026, Darden generated net income of $801.8 million, up 7.5% from $745.8 million in the first nine months of fiscal 2025. Operating income for the period reached $1.07 billion versus $979.5 million a year earlier.

The company's gross margin for the nine-month period improved, with gross profit of $1.86 billion compared to $1.77 billion in the prior-year period, reflecting cost management across its restaurant portfolio.

Brand Segment Revenue

Among Darden's restaurant brands for the quarter, Olive Garden generated $1.39 billion in revenue, LongHorn Steakhouse contributed $854.2 million, Cheddar's Scratch Kitchen produced $402.0 million, and other brands combined for $696.1 million.

For the nine-month period, Olive Garden led with $4.06 billion in revenue, followed by LongHorn Steakhouse at $2.41 billion, other brands at $2.02 billion, and Cheddar's Scratch Kitchen at $1.00 billion.

Cash Position and Shareholder Returns

Darden held $240.4 million in cash and cash equivalents as of February 22, 2026, essentially flat from $240.0 million at the end of fiscal 2025. Total assets increased to $12.89 billion from $12.59 billion at fiscal year-end.

The company paid dividends of $174.2 million during the quarter and $525.2 million for the nine-month period. Cash used in financing activities totaled $761.5 million for the nine months, primarily for dividends and share repurchases. Cash from investing activities showed an outflow of $523.1 million for the nine months, compared to $1.10 billion in the prior-year period.

Total liabilities increased to $10.78 billion from $10.28 billion at the end of fiscal 2025, while stockholders' equity declined to $2.10 billion from $2.31 billion. Long-term debt stood at $2.14 billion as of February 22, 2026. Outstanding shares decreased to 114.7 million from 117.0 million at fiscal year-end.

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