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Darden Restaurants (DRI +1.6%) is trading higher after reporting modest upside with its Q3 (Feb) results. The operator of chains like Olive Garden, LongHorn Steakhouse, Ruth's Chris Steak House, and Chuy's also narrowed its FY26 EPS guidance to $10.57-10.67.

• DRI raised FY26 revenue guidance to +9.5% from +8.5-9.3% and increased comp guidance to +4.5% from +3.5-4.3%, marking the second consecutive quarter of upward revisions.
• The updated outlook implies Q4 (May) comps of +3.5-5%, signaling confidence heading into the final quarter of the fiscal year.
• Q3 consolidated comps rose +4.2%, roughly in line with Q2's +4.3%, with segment performance led by LongHorn (+7.2%), followed by Fine Dining (+2.1%) and Other (+3.9%), while Olive Garden lagged at +3.2%.
• Adjusting for weather, Q3 comps would have exceeded +5%, indicating underlying demand trends remain solid.
• Olive Garden saw some modest sequential comp deceleration from Q2, which may be weighing a bit on investor sentiment.
• Olive Garden is leaning into value offerings, including its Buy One, Take One promotion and expanded lighter portion menu with several dishes priced under $15, which is resonating well with customers.
• Limited-time offerings, including Four-Cheese Manicotti and returning favorites like Ravioli di Portobello and Braised Beef Tortelloni, are helping drive guest engagement.

Briefing.com Analyst Insight:

Darden delivered a largely in-line quarter, but the key takeaway was its decision to raise full-year revenue and comp guidance for the second consecutive quarter despite only modest upside in Q3. That suggests growing confidence in Q4 (May). While some softness at Olive Garden could be a minor overhang, strength at LongHorn and steady underlying demand trends help offset those concerns. Overall, the raised outlook indicates management sees continued momentum, positioning Darden for a solid finish to the fiscal year.