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Darden is trading lower after missing EPS expectations for Q1 (Aug), despite posting in-line revenue and reaffirming FY26 EPS guidance. The company also slightly raised its FY26 revenue outlook and nudged comp guidance higher to +2.5--3.5% (from +2.0-3.5%), a modest but reassuring signal given Darden's typically conservative tone.

• Q1 consolidated comps rose +4.7% yr/yr, outperforming internal expectations and marking back-to-back solid quarters (Q4 comps were +4.6%). Olive Garden (OG): +5.9% LongHorn Steakhouse (LS): +5.5% Fine Dining: -0.2% Other: +3.3%.
• OG drove strong results with compelling new menu items and delivery expansion via Uber Direct. The "Create Your Own Pasta" platform and a new LTO (e.g., Calabrian Steak and Shrimp Bucatini) were standouts.
• Value is very popular these days and OG began testing a lighter portion section of the menu, featuring seven entrees with reduced portions and reduced prices.
• LS delivered strong comps but is facing a sharp rise in beef costs. Management noted value options are being tested more at OG for now.
• EPS miss was primarily tied to inflationary pressure, especially on beef.

Briefing.com Analyst Insight:

The EPS miss stings, especially with rising costs weighing on margins, but comps were notably strong for the second straight quarter. Olive Garden is executing well on value and menu innovation — finally adding spicier items — and Uber Direct is helping reach younger, higher-income diners. While this quarter doesn't clear the bar, the maintained EPS guide and raised revenue outlook suggest underlying health. That said, this report may increase caution toward restaurant names heading into earnings season next month.