Darden Restaurants (DRI) Q2 2025 earnings summary

Executive summary

• Total sales rose 6% year-over-year to $2.9 billion in Q2, driven by 2.4% same-restaurant sales growth, the acquisition of 103 Chuy's restaurants, and 39 net new restaurants.

• Adjusted diluted EPS from continuing operations was $2.03, up 10.3% year-over-year, excluding $0.21 per share in Chuy's transaction and integration costs.

• $308 million was returned to shareholders in Q2 through $166 million in dividends and $142 million in share repurchases.

• The acquisition of Chuy's Holdings for $649.1 million was completed, with integration underway and expected to take longer due to a new point-of-sale system rollout.

• Hurricanes Helene and Milton impacted operations, but most locations reopened quickly; only one remains closed.

Financial highlights

• Q2 operating income was $292.1 million, up from $278.5 million year-over-year; adjusted EBITDA was $445 million.

• Restaurant-level EBITDA margin was 19.5%, up 70 basis points year-over-year.

• Adjusted earnings from continuing operations were $240 million, or 8.3% of sales, 20 basis points higher than last year.

• Q2 net earnings from continuing operations were $215.7 million; reported diluted EPS was $1.82.

• Net cash from operating activities was $661.8 million for six months, up from $609.9 million year-over-year.

Outlook and guidance

• Fiscal 2025 total sales expected at approximately $12.1 billion, including $300 million from Chuy's.

• Same-restaurant sales growth forecasted at 1.5%; 50–55 new restaurants planned; capital spending of $650 million.

• Adjusted diluted EPS guidance is $9.40–$9.60, excluding $47 million in transaction/integration costs.

• Annual effective tax rate projected at 12.5%; total inflation expected at 2.5%.

• Run rate synergies from Chuy's acquisition expected at $17 million, with $2 million realized in fiscal 2025.