Olive Garden menu innovations help raise revenues for Darden

ORLANDA, FLA. — Limited-time promotions like the Never Ending Pasta Bowl and new innovations such as the Lighter Portions menu helped Olive Garden lead the way for Darden Restaurants, Inc. during its fiscal 2026 second quarter, generating notable top-line and same-restaurant sales growth for the company.

“Olive Garden delivered positive same-restaurant sales of 4.7% for the quarter, driven by the success of the Never Ending Pasta Bowl promotion and (Uber) first-party delivery, combined with strong operational execution that led to all-time high guest satisfaction scores,” said Ricardo Cardenas, president, chief executive officer and director, Darden Restaurants. “For the fourth consecutive year, the starting price for Never Ending Pasta Bowl was $13.99. Preference was strong and refill rates reached a record high, demonstrating that guests continue to find abundance and meaningful value at Olive Garden in this environment.”

Olive Garden’s Lighter Portions menu was rolled out to select locations during the third quarter as a value and variety option for guests, according to the company. It has been so successful that Darden will roll it out nationwide to all Olive Garden locations in January.

“Olive Garden has seen a double-digit increase in affordability perceptions from guests who order from the Lighter Portions menu and an increase in frequency among these guests, which should help build traffic over time,” Cardenas said. “Forty-percent of restaurants offered this menu during the quarter, and then added another 20% of locations early in the third quarter. Olive Garden plans to complete the rollout system-wide in January.”

During the earnings call, an analyst asked if the Lighter Portions menu also was in response to the growing number of GLP-1 users, who tend to have smaller appetites while taking the weight-loss drug.

“The lighter portions section is helpful for (GLP-1),” Cardenas said. “But we aren’t doing the lighter portions just for GLP-1. We’re doing it to give all our guests more options. It just so happens to benefit the consumers that might want smaller portions that are on GLP-1 medications. We have a lot of options like that on all of our menus.”

For the second quarter of Darden’s 2026 fiscal year, ended Nov. 23, the company’s net earnings were $237 million, equal to $2.05 per share on the common stock, up from $215 million, or $1.83 per share, in the second quarter last year.

Olive Garden tested its new Lighter Portions menu at 40% of the brand’s locations during Darden’s second quarter. The menu will roll out nationwide in January.

| Photo: Darden Restaurants, Inc.

Total sales for Darden increased 7.3% to $3.1 billion, compared with $2.9 billion a year ago. The company’s Olive Garden brand accounted for $1.36 billion in sales — up from $1.29 billion during the third quarter last year — while LongHorn Steakhouse saw $776 million in sales, compared with $710 million a year ago.

Same-restaurant sales (SRS) were up for all of Darden’s brands, with a collective increase of 4.3% overall. Olive Garden saw a 4.7% jump in SRS, followed by LongHorn’s 5.9% increase, while its other brands — Yard House, Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, Capital Grille, Chuy’s, Seasons 52, Eddie V’s Prime Seafood and Bahama Breeze Island Grille — combined for a 3.9% rise in SRS compared with a year ago.

Beef headwinds

Darden as a whole across all of its brands minimized the current high cost of beef for its customers by pricing below inflation, which resulted in restaurant margins being below last year’s second quarter, while same-restaurant sales and guest traffic increased.

“While elevated commodity costs, driven by beef, were a significant headwind for the quarter, we priced 130 basis points below inflation as we remain committed to providing strong value to our guests,” said Rajesh Vennam, chief financial officer and senior vice president, Darden Restaurants. “Our bias is to minimize pricing, and we’ll do what we think is right to protect the guest, even if that means some margin erosion in the near term. Primarily, we’re talking about second and third quarter, because we expect margin growth as we get into the fourth quarter.”

Olive Garden has not raised the price of its Never Ending Pasta Bowl in four years, keeping it at $13.99 again this year.

| Photo: Olive Garden

Vennam added that LongHorn’s menu in particular was priced at 320 basis points below inflation that resulted in segment profit margin of 16.2%, or $126 million, compared with $135 million during the second quarter last year for LongHorn.

Cardenas said customers making $50,000 or less — which is a demographic that has been dropping this year for several QSR and casual dining brands — actually increased at LongHorn Steakhouse during Darden’s second quarter.

“I think (LongHorn) may be benefiting right now with such a high price for beef that consumers are actually going to LongHorn instead of eating (beef) at home,” he said. “(LongHorn) has a higher check than Olive Garden, but (LongHorn) grew their guest count at under $50,000 range. … That could be because there’s such a disparity between how much you have to pay (for beef) in the grocery store versus what you pay in the restaurant, which could be driving some of the traffic growth.”

LongHorn Steakhouse saw an increase in customers making $50,000 or less during Darden’s second quarter, which the company attributes to the high price of beef in stores, and that it may be more cost effective to eat beef at LongHorn than at home right now.

Darden said it expects low-double digit inflation for beef to continue into the second half of its fiscal year. For the remainder of its 2026 fiscal year, the company is forecasting total sales growth of 8.5% to 9.3%; same-restaurant sales growth of 3.5% to 4.3%; between 65 to 70 new restaurant openings; total inflation of approximately 3.5%; overall commodities inflation between 4% and 5%; and adjusted diluted net earnings per share between $10.50 and $10.70.

Darden will announce its fiscal year 2026 third quarter results on March 19.

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