Restaurants Industry: Restaurants Weekly: The K starts to close?

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Restaurants Industry: Restaurants Weekly: The K starts to close?

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Restaurants Industry

Restaurants Weekly: The K starts to close?

Price Objective Change

Off cycle beef cycle 27 June 2026

Darden’s fiscal 4Q release and conference call highlighted a combination of persistent Equity

trends and interesting inflection points. Persistence showed up in the form in continued United States

robust performance of the steakhouse category and protein more generally. While Restaurants

LongHorn Steakhouse’s +9.5% same-store-sales-growth did reflect a boost from a viral

social media post about lamb, that post only amplified what was already very strong

performance. When grocery store beef prices are elevated, so too is the relative value

provided by steakhouse restaurants. So much so that, as we’ve shown in the past,

there’s a strong positive correlation between retail beef prices and steakhouse traffic.

And elevated beef prices seem unlikely to fall in the near term given that the already

tight beef supply is at risk of shrinking further with the return of the New World

screwworm. For those who are interested, we’re hosting an expert call on that subject

next week (Zoom 6/30: Will screwworms put the screws to the cattle market?).

Converging cohorts View Transcript

If strong steakhouse demand is a sign of persistence, some of Darden’s commentary on

its customer base was the opposite. CEO Rick Cardenas reported that Darden’s casual Sara Senatore

Research Analyst

brands saw an increase in visits year over year from all income groups, including the BofAS

bottom quintile,” a departure from prior quarters, when the lowest income households in +1 646 743 2110 sara.senatore@bofa.com

Darden’s customer base were reducing visits year over year.