Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants has demonstrated positive financial momentum, with total sales reaching $3.10 billion in the second quarter of fiscal 2026, reflecting a year-over-year increase of 7.3%, driven by a 4.3% blended same restaurant sales increase and the addition of 30 new restaurants. The firm has raised its fiscal year 2026 sales outlook to approximately 9.5% total sales growth and around 4.5% same restaurant sales growth, buoyed by successful initiatives in lighter portions, catering, and delivery services. Additionally, the Other Business segment exhibited robust growth of 11.3% to $647 million, highlighting strong performance from Yard House and Cheddar's, reinforcing Darden's competitive position in the full-service dining market.

Darden Restaurants experienced a decline in restaurant-level EBITDA margins, with a reported 21.0% for 3QF26, down 30 basis points year-over-year, primarily due to elevated beef costs and increased marketing expenses. The LongHorn Steakhouse segment registered a significant margin decrease to 16.2%, attributed to pricing trailing behind inflation amidst sustained beef pressures, despite achieving top decile sales and traffic performance. Forward projections indicate continued inflation challenges, with total inflation expected at approximately 3.5% for FY26 and potential operational volatility due to economic factors such as recessions and low consumer confidence which may lead to sales declines.