Darden Restaurants, Inc. DRI reported second-quarter fiscal 2025 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and bottom lines increased on a year-over-year basis.

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DRI’s Fiscal Q2 Earnings & Revenues

During the fiscal second quarter, Darden reported adjusted earnings per share (EPS) of $2.03, missing the Zacks Consensus Estimate of $2.05. In the prior-year quarter, DRI reported an adjusted EPS of $1.84.

Total sales during the quarter came in at $2.89 billion, beating the consensus mark of $2.87 billion. Sales inched up 6% from the prior-year quarter’s level. The upside was backed by a blended same-restaurant sales increase of 2.4%. Also, contributions from 103 Chuy's restaurants and 39 net new restaurants added to the positives.

Darden Restaurants, Inc. Price, Consensus and EPS Surprise

Darden Restaurants, Inc. price-consensus-eps-surprise-chart | Darden Restaurants, Inc. Quote

Sales by Segments

Darden reports business under four segments — Olive Garden, LongHorn Steakhouse, Fine Dining, including The Capital Grille and Eddie V's and Other Business.

During the fiscal second quarter, sales at Olive Garden increased 3.3% year over year to $1.29 billion. Our estimate for the metric was $1.3 billion. Comps in the segment increased 2% year over year against a 2.9% fall reported in the previous quarter.

At LongHorn Steakhouse, sales were up 10.4% year over year to $710.1 million. Our estimate for the metric was $687.4 million. Comps in the segment rose 7.5% year over year compared with the 3.7% growth reported in the previous quarter.

Sales in Fine Dining fell 3.8% year over year to $306 million. Our estimate for the metric was $328.3 million. Comps in the segment fell 5.8% year over year compared with a 6% drop reported in the previous quarter.

Sales in Other Business increased 12.9% year over year to $581.4 million. Our estimate for the metric was $527.6 million. Comps in the Other Business inched up 0.7% year over year against a 1.8% fall reported in the previous quarter.

DRI’s Operating Highlights

In the fiscal second quarter, total operating costs and expenses inched up 6.1% year over year to $2.6 billion. The upside was primarily due to increased restaurant expenses, labor costs and marketing expenses. The figure compares to our projection of $2.53 billion.

DRI’s Balance Sheet

As of Nov. 24, 2024, cash and cash equivalents came in at $217.3 million compared with $194.8 million as of May 26.

During the fiscal second quarter, inventories came in at $318 million compared with $297.7 million reported in the previous quarter. As of Nov. 24, 2024, long-term debt was $2.12 billion compared with $1.37 million as of May 26.

During the fiscal second quarter, Darden’s board of directors repurchased approximately 0.9 million shares of its common stock, worth approximately $142 million. As of the fiscal second quarter, the company stated availability of approximately $601 million under the $1 billion repurchase authorization.