One-glance verdict
Within fair range
$188.95 our estimate vs market $208.08
Wall Street consensus: $232.68 (23.1% higher than our fair-value estimate)
10% above our estimate
Fundamentals snapshot
Darden Restaurants, Inc.
DRI · NYQ · Consumer Cyclical · Restaurants
Current price
$208.08
52-week range
$169.00 - $229.76
Market cap
$23.63B
Balance sheet
Distressed
8.18x Adequate
Net debt $7.83B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 9.4% last year.
- Reward Returns 53.7% on equity, ahead of 60% of its peers.
- Risk Net debt grew 37.9% over 3 years.
- Risk Insider ownership is only 0.3% (peer median: 1.1%).
What this company does
Darden Restaurants, Inc.
Darden Restaurants owns and operates many popular full-service restaurant chains, including Olive Garden, LongHorn Steakhouse, and The Capital Grille. The company makes money every time a customer pays for a meal, so its financial success relies on attracting a steady stream of diners. This is important because Darden must also manage a vast supply chain (the network of farms and distributors that get ingredients to its restaurants) to control food costs and keep the business profitable.
How the company got here
Darden's story starts in 1938 with a single 25-seat luncheonette in Georgia called The Green Frog, opened by a teenager named Bill Darden. His big success came in 1968 when he started Red Lobster, a seafood restaurant for casual family dining. The food giant General Mills bought Red Lobster and, in 1982, launched Olive Garden, which grew very quickly. In 1995, General Mills spun off its restaurant division, creating the Darden Restaurants company we know today. Over the years, Darden has acquired other popular restaurant chains like LongHorn Steakhouse and The Capital Grille to build its large portfolio.
What it actually does
Darden is one of the world's largest full-service restaurant companies, meaning it operates restaurants where you sit down and are served at your table. You've likely eaten at one of their restaurants, as they own well-known brands like Olive Garden and LongHorn Steakhouse. The company makes money by selling meals, drinks, and dining experiences to millions of customers across the United States and Canada. They focus on owning and operating their locations directly, which gives them tight control over the quality of food and service.
Olive Garden
This is Darden's largest and most well-known brand, serving Italian-American food in a casual setting for families. Customers pay for classic dishes like pasta, salads, and their famous unlimited breadsticks. It is the biggest single part of Darden's business, bringing in the largest portion of the company's total sales.
LongHorn Steakhouse
This segment is a Western-themed steakhouse that offers diners grilled steaks, chicken, and seafood at a price point below high-end steakhouses. Customers are typically looking for a full-service steak dinner in a relaxed atmosphere. LongHorn is the second-largest brand in Darden's portfolio and a major contributor to its sales and profits.
Fine Dining
This group includes Darden's more upscale and expensive restaurants, such as The Capital Grille, Eddie V's, and Ruth's Chris Steak House. These restaurants cater to customers celebrating special occasions or having business dinners, offering premium steaks, fresh seafood, and extensive wine lists. While smaller than Olive Garden or LongHorn, this segment serves customers willing to spend more per meal.
Other Business
This segment is a collection of Darden's other restaurant brands, each with its own distinct theme and menu. It includes Cheddar's Scratch Kitchen (American comfort food), Yard House (large beer selection and varied menu), Seasons 52 (health-conscious grill), and Bahama Breeze (Caribbean-inspired food). Together, these brands appeal to a wide variety of tastes and dining occasions, from casual meals to social gatherings.
What management is betting on now
Darden's current strategy focuses on what it calls its "Back-to-Basics Operating Philosophy," which means concentrating on providing great food and service in its existing restaurants. The company is also focused on maintaining good value for customers, especially at its biggest brands like Olive Garden and LongHorn, to keep people coming in even when they are being careful with their spending. They also plan to open a number of new restaurants to continue growing the business. A key part of their financial strategy is to use the cash the company generates to reinvest in their restaurants, while also returning money to shareholders through dividends (a portion of the company's profits paid out to investors) and share buybacks (when a company buys its own stock to reduce the number of shares available).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$128.00M
FY2025 Q2
$219.30M
FY2025 Q3
$430.10M
FY2025 Q4
$285.00M
FY2026 Q1
$168.40M
FY2026 Q2
$119.80M
FY2026 Q3
$451.90M
FY2026 Q4
$379.00M
Revenue
$3.72B
Net income
$404.90M
Diluted EPS
3.51
Operating cash flow
$572.10M
Free cash flow
$379.00M
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Sources
Revenue
$3.35B
Net income
$306.80M
Diluted EPS
2.65
Operating cash flow
$617.80M
Free cash flow
$451.90M
Fetching…
Sources
Revenue
$3.10B
Net income
$237.20M
Diluted EPS
2.03
Operating cash flow
$320.70M
Free cash flow
$119.80M
Fetching…
Sources
Revenue
$3.04B
Net income
$257.80M
Diluted EPS
2.19
Operating cash flow
$342.50M
Free cash flow
$168.40M
Fetching…
Sources
Revenue
$3.27B
Net income
$303.90M
Diluted EPS
2.56
Operating cash flow
$457.00M
Free cash flow
$285.00M
Fetching…
Sources
Revenue
$3.16B
Net income
$323.40M
Diluted EPS
2.74
Operating cash flow
$588.20M
Free cash flow
$430.10M
Fetching…
Sources
Revenue
$2.89B
Net income
$215.10M
Diluted EPS
1.82
Operating cash flow
$388.60M
Free cash flow
$219.30M
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Sources
Revenue
$2.76B
Net income
$207.20M
Diluted EPS
1.74
Operating cash flow
$273.20M
Free cash flow
$128.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $188.95 vs current price $208.08
Wall Street consensus is the average analyst price target: $232.68 (23.1% higher than our fair-value estimate).
Our most-likely fair value is $188.95 a share — about 9.2% away from today's price of $208.08, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $7.8B. Interest coverage 8.2x.
Net debt
$7.83B
Interest coverage
8.18x
Darden Restaurants, Inc.'s profit covers its interest bill about 8.2 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
DRI
BASELINE
Darden Restaurants, Inc.
Total debt $8.05B Interest coverage 8.18x This is the baseline the peer rows are being compared against.
Total debt $1.09B Interest coverage 3,831.36x +46,713% vs DRI Carries about 468.1x more debt cushion than DRI.
Total debt $1.76B Interest coverage 15.52x +90% vs DRI Carries about 1.9x more debt cushion than DRI.
Total debt $1.92B Interest coverage 2.44x -70% vs DRI Carries about 3.4x less debt cushion than DRI.
Total debt $2.08B Interest coverage 24.67x +201% vs DRI Carries about 3.0x more debt cushion than DRI.
Total debt $13.41B Interest coverage 5.05x -38% vs DRI Carries about 1.6x less debt cushion than DRI.
What you should know
The case for and against DRI
3 Rewards
2 Risks
Rewards
-
Revenue grew 9.4% last year.
-
Returns 53.7% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 37.9% over 3 years.
-
Insider ownership is only 0.3% (peer median: 1.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
19.93x
Forward P/E
16.78x
P/B
10.75x
P/S
1.79x
EV/EBITDA
14.92x
PEG ratio
1.95x
Profitability
How much profit each dollar creates
Gross margin
21.7%
Operating margin
14.1%
Net margin
9.1%
ROE
53.7%
ROA
7.7%
Health
Liquidity and balance-sheet strength
Debt / equity
3.65x
Current ratio
0.31x
Quick ratio
0.12x
Total debt
$8.05B
Total cash
$219.50M
Growth
How the business has been compounding
Revenue TTM
$13.21B
Revenue 5Y CAGR
8.2%
EPS TTM
10.44
EPS 5Y CAGR
9.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.85B
Free CF TTM
$1.12B
FCF margin
8.5%
Dividend
Shareholder payout
Yield
3.1%
Payout ratio
57.5%
Last ex-div date
2026-07-10