Stock Analysis

Stock Analysis · Darden Restaurants Inc (DRI)

Overview

Darden Restaurants, Inc. is a U.S. restaurant company that owns and operates well-known dining brands across different occasions and price points. Its business model is straightforward: it earns money primarily from food and beverage sales made in its restaurants, supported by operational scale (purchasing, marketing, staffing systems) across a large portfolio of locations.

In its reporting, Darden groups results by operating segments/brands rather than by “product lines.” In broad terms, revenue is generated by these major brand groups (largest to smaller, based on Darden’s segment structure):

Olive Garden (largest brand)
LongHorn Steakhouse
Fine Dining (a group of higher-end brands)
Other Business (a group of additional brands)

Because the exact percentage split can change by fiscal year and is reported in Darden’s segment footnotes, the most reliable place to confirm the latest mix is the company’s annual report (Form 10‑K).

Darden’s long-term economics depend on guest traffic, menu pricing, food and labor costs, and the company’s ability to open new restaurants or improve performance at existing ones (“same-restaurant sales”).

Over the last several years, total revenue has increased materially, while net income has grown more slowly. One visible pressure point is interest expense, which rises meaningfully in the latest period shown, making financing costs a more important line item than earlier years.

Key Figures

Metric	Value	Industry ⓘ
Date	Feb 07, 2026
Context
Sector	Consumer Cyclical
Industry	Restaurants
Market Cap ⓘ	$25.16B
Beta ⓘ	0.61
Fundamental
P/E Ratio ⓘ	22.67	29.16
Profit Margin ⓘ	8.92%	7.98%
Revenue Growth ⓘ	7.30%	6.90%
Debt to Equity ⓘ	307.96%	69.29%
PEG ⓘ	1.91
Free Cash Flow ⓘ	$1.36B

Darden’s market capitalization is about $25.2B, and its stock has shown a beta of ~0.61, which indicates the share price has historically moved less than the broader market on average (though it can still be volatile).

The company’s current P/E ratio is ~22.7, below the restaurant industry median of ~29.2 in this peer set. Profitability (as measured by net profit margin) is about 8.9%, above the industry median of ~8.0%. Year-over-year revenue growth is about 7.3%, roughly in line with the industry median of ~6.9%.

One notable outlier is leverage: debt-to-equity is ~308% versus an industry median of ~69%. Free cash flow over the trailing twelve months is about $1.36B, which matters because cash generation is what ultimately funds reinvestment, debt service, and shareholder returns.

Growth (Medium)

Restaurants are a mature industry, and demand is closely tied to consumer spending, employment, and how comfortable households feel about discretionary purchases. Over long periods, growth tends to be steady rather than explosive, with leading operators gaining share through brand strength, consistent execution, and disciplined expansion.

Darden’s strategy is built around a portfolio of large-scale brands, standardized operations, and national purchasing power. In practical terms, future growth typically comes from a mix of (1) opening new restaurants, (2) increasing same-restaurant sales via traffic and/or pricing, and (3) controlling costs well enough to protect margins as wage and commodity inputs shift.

The year-over-year revenue growth rates show a post-pandemic surge followed by normalization into single-digit growth. The most recent figure shown is around 7%, which suggests growth is continuing but at a more typical pace for a large restaurant operator.

Free cash flow has increased from about $260M (FY2021 timeframe) to roughly $1.03B (FY2025 timeframe), with the latest trailing figure around $1.36B. This type of cash generation can provide flexibility, but how durable it is depends on guest demand, cost pressures, and the company’s capital allocation choices (new units, remodels, debt, and shareholder payouts).