Darden Stock Slides as Olive Garden's Sales Growth Misses Estimates

Darden Restaurants (NYSE: DRI) shares fell more than 4% in pre-market trading after the company's fiscal first-quarter 2027 earnings report revealed that sales growth at its flagship Olive Garden brand missed Wall Street expectations, raising concerns about consumer demand.

Olive Garden Sales Disappoint

The primary driver of the stock's decline was a weaker-than-expected performance from Olive Garden, Darden's largest revenue contributor. The Italian-themed chain posted same-restaurant sales growth of just 1.1%, falling short of the 1.3% to 2.0% range analysts had forecast.

While the company's headline results were in line with consensus estimates, the Olive Garden shortfall overshadowed them. For the quarter, Darden reported:

• Total Sales: $3.2 billion, an increase of 5.1%
• Reported Diluted EPS: $2.05, matching analyst expectations

Cautious Outlook and Brand Divergence

Ad

Investors were further disappointed by a widening performance gap between Darden's key brands. In stark contrast to Olive Garden's modest growth, the LongHorn Steakhouse chain delivered a robust 6.2% increase in same-store sales, continuing a trend of brand-level bifurcation.

Compounding concerns, Darden's management merely reaffirmed its full-year guidance rather than raising it, which many on Wall Street had anticipated. The company maintained its fiscal 2027 forecast for total sales of $13.60–$13.75 billion and diluted EPS of $11.10–$11.35.

Market Context

The negative reaction to Darden's report occurred amid a broader downturn in U.S. equity markets, adding a macro headwind to the company-specific news. As a major player in the consumer discretionary sector, Darden's results are closely watched by investors for signals about the health of consumer spending, particularly for dining out among middle-income households.