Darden (DRI) 4Q26: Story intact

研报英文原文证据摘录

Darden (DRI) 4Q26: Story intact

FY27 guidance clearly implies moderation versus FY26’s 4.5% comp, we came away thinking the initial

outlook is conservative. Management is assuming no industry improvement, modest traffic, and measured pricing, even as

Darden continues to gain share and has several brand-level growth levers still in place. We think that leaves room for the

company to trend toward the higher end of its same-store sales range if current execution continues.

• Q1 weakness: Management signaled clearly that 1Q will be the weakest quarter of FY27 from both an earnings and

margin perspective. They expect restaurant-level margins may decline slightly in 1Q, with pressure coming from higher

food costs, especially beef, holiday and calendar shifts, lapping prior-year promotional activity such as Olive Garden free

delivery, and some higher restaurant expenses.

• Margin cadence: Management made clear that FY27 earnings progression should be back-half weighted. Management

expects the margin setup to improve after 1Q, with the rest of the year more balanced as commodity pressure eases and

early-year timing headwinds roll off.

• Commodity outlook: Total food inflation is expected to be around 3% for the full year, with Q2 likely the lowest inflation

quarter at roughly 2%, before Q3 and Q4 move back toward around 3%. Management noted that Q2 last year faced roughly

20% beef inflation, which creates a much easier comparison this year and could even allow for some beef deflation in Q2. We

think the broader message is that FY27 cost pressure looks manageable, even if it is front-half loaded.

• Fuel surcharge: Management confirmed that elevated oil prices created some fuel-surcharge pressure, with peak COGS

impact potentially reaching 50 to 60 bps.