Mizuho Sees Sales Increase at Darden (DRI) and Reports Continued Pressure on Raw Material Costs
Darden Restaurants, Inc. (NYSE: DRI) is one of the 13 Best January Dividend Stocks to Invest in.
On December 22, Mizuho analyst Nick Setyan raised the company’s price target on Darden Restaurants, Inc. (NYSE: DRI) from $185 to $195 and maintained a neutral rating on the shares. The company updated its estimates following its earnings release. Darden generated some upside in same-store sales growth during the fiscal second quarter. This strength did not fully offset higher-than-expected commodity inflation, the analyst wrote in a research note.
Earlier in December, Darden Restaurants, Inc. (NYSE: DRI) raised its sales outlook for the full year. Management pointed to steady demand for its brands, including Olive Garden, where affordable prices continue to attract cost-conscious diners.
Darden, which operates full-service concepts such as Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen and Yard House, has chosen to absorb cost pressures from pricing rather than raise menu prices. The move reflects how selective consumers remain when it comes to dining out. The company now expects same-restaurant sales growth of 3.5% to 4.3% in fiscal 2026, up from its prior forecast of 2.5% to 3.5%. During the earnings conference call, executives said Darden was taking market share from both its casual dining peers and limited-service restaurants. “The consumer remains resilient but cautious amid weakening sentiment,” CEO Rick Cardenas said, pointing to some decline among lower-income diners.
Darden reaffirmed its annual EPS outlook of $10.50 to $10.70 and noted that beef prices were likely to weigh on margins in the third quarter. Olive Garden’s same-store sales increased 4.7% in the quarter. LongHorn Steakhouse posted a 5.9% gain, driven by menu updates and value-focused promotions aimed at middle-income customers.
Darden Restaurants, Inc. (NYSE: DRI) owns and operates full-service restaurants throughout the United States and Canada.
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