Darden Restaurants 10-Q 2025-11-23

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended November 23, 2025

or

For the transition period from to

1-13666

Commission File Number

DARDEN RESTAURANTS, INC.

(Exact name of registrant as specified in its charter)

407-245-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of common stock outstanding as of December 15, 2025: 115,139,249.

TABLE OF CONTENTS

Cautionary Statement Regarding Forward-Looking Statements

Statements set forth in or incorporated into this report that are not historical facts, including without limitation statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Darden Restaurants, Inc. and its subsidiaries that are preceded by, followed by or that include words such as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “could,” “estimate,” “project,” “believe,” “plan,” “outlook,” or similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This statement is included for purposes of complying with the safe harbor provisions of that Act. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements for any reason to reflect events or circumstances arising after such date. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. The most significant of these uncertainties are described in Darden’s Form 10-K, Form 10-Q (including this report) and Form 8-K reports.

PART I

FINANCIAL INFORMATION

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share data)

(Unaudited)

See accompanying notes to our unaudited consolidated financial statements.

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

See accompanying notes to our unaudited consolidated financial statements.

DARDEN RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions)

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The discussion and analysis below for the Company, which contains forward-looking statements, should be read in conjunction with the unaudited consolidated financial statements and the notes to such financial statements included elsewhere in this quarterly report on Form 10-Q (Form 10-Q) and the audited consolidated financial statements and the notes thereto included in our Form 10-K for the fiscal year ended May 25, 2025 (Form 10-K). In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Item 1A. Risk Factors” section of the Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Forward-Looking Statements” included below in this Form 10-Q.

To facilitate the review of our discussion and analysis, the following table sets forth our financial results for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the three and six months ended November 23, 2025 and November 24, 2024, respectively.

The following table details the number of company-owned restaurants currently reported in continuing operations that were open at the end of the second quarter of fiscal 2026, compared with the number of company-owned restaurants open at the end of fiscal 2025 and at the end of the second quarter of fiscal 2025.

1 During the first quarter of fiscal 2026, we sold all eight of our Olive Garden Canada locations.

2 Includes 103 Chuy’s locations acquired during the second quarter of fiscal 2025.

OVERVIEW OF OPERATIONS

Our business operates in the full-service dining segment of the restaurant industry. At November 23, 2025, through subsidiaries, we owned and operated 2,182 restaurants in the United States under the Olive Garden®, LongHorn Steakhouse®, Cheddar’s Scratch Kitchen®, Chuy’s®, Yard House®, Ruth’s Chris Steak House® (Ruth’s Chris), The Capital Grille®, Seasons 52®, Eddie V’s Prime Seafood® (Eddie V’s), Bahama Breeze®, and The Capital Burger® trademarks. We own and operate all of our restaurants in the United States, except for five restaurants we manage through joint venture or other contractual agreements and 86 franchised restaurants. We also have 78 international franchised restaurants in operation located in Canada, Latin America, the Caribbean, Asia, and the Middle East.

On our June 2025 earnings call, we announced the decision to explore strategic alternatives for the Bahama Breeze brand, which includes 28 locations owned and operated by Darden and one franchise location. We are exploring a sale of the brand or conversions of some or all locations to other Darden brands.

On July 14, 2025, we closed on the sale of eight Olive Garden locations in Canada to Recipe Unlimited Corporation (Recipe). All gains and losses on disposition have been aggregated in impairments and (gain) loss on disposal of assets, net on our consolidated statement of earnings. See Note 7 to our unaudited consolidated financial statements in Part I, Item 1 of this Form 10-Q for additional information. At closing, Darden and Recipe entered into an area development agreement and franchise agreements, pursuant to which Recipe will operate current and any new restaurants contemplated thereunder under the Olive Garden trade name and will pay royalties for use of the trade name.

Financial Highlights - Consolidated

• Total sales increased 7.3 percent and 8.9 percent to $3.10 billion and $6.15 billion for the second quarter and first six months of fiscal 2026, respectively, compared to $2.89 billion and $5.65 billion for the second quarter and first six months of fiscal 2025, respectively, driven by sales from the acquisition of 103 Chuy’s locations during the second quarter of fiscal 2025 and 30 net new restaurants and a blended same-restaurant sales increase of 4.3 percent1 and 4.5 percent.1

• Our net earnings from continuing operations were $237.4 million and $495.3 million for the second quarter and first six months of fiscal 2026, respectively, compared to $215.7 and $423.3 million for the second quarter and first six months of fiscal 2025, respectively.

• Reported diluted net earnings per share from continuing operations were $2.03 and $4.23 for the second quarter and first six months of fiscal 2026, respectively, compared to $1.82 and $3.57 for the second quarter and first six months of fiscal 2025, respectively.

Outlook

We expect sales growth for fiscal 2026 to be between 8.5 and 9.3 percent, driven by growth of 2.0 percent related to the fifty-third week in fiscal 2026; same-restaurant sales growth to be between 3.5 and 4.3 percent2; and new restaurant openings to be between 65 to 70. Additionally, we expect capital expenditures incurred to build new restaurants, remodel and maintain existing restaurants and for technology initiatives to be between $750 and $775 million. These amounts all include the addition of Chuy’s and our expectations for Chuy’s results from the date of acquisition forward.

1 Will not include Chuy’s until they have been owned and operated by Darden for a 16-month period (Q4 fiscal 2026), and does not include Bahama Breeze as they are not expected to be operated by Darden for the entirety of the fiscal year.

2 Annual same-restaurant sales is a 52-week metric and excludes the impact of Chuy’s, which will not have been owned and operated by Darden for a 16-month period prior to the beginning of fiscal 2026, and does not include Bahama Breeze as they are not expected to be operated by Darden for the entirety of the fiscal year.

SALES

The following table presents our sales by segment for the periods indicated.

(1)Same-restaurant sales is a year-over-year comparison of each period’s sales volumes for a 52-week year and is limited to restaurants that have been open, and operated by Darden, for at least 16 months. Accordingly, Chuy’s results will not be included in this calculation until the fourth quarter of fiscal 2026. Additionally, results from Bahama Breeze are excluded as they are not expected to be operated by Darden for the entirety of the fiscal year.

Olive Garden’s sales increase for the second quarter of fiscal 2026 was primarily driven by same-restaurant sales increases, as well as revenue from new restaurants. The increase in U.S. same-restaurant sales for the second quarter of fiscal 2026 resulted from a 1.7 percent increase in same-restaurant guest counts, combined with a 3.0 percent increase in average check, which includes a 1.1 percent increase in off-premise catering sales. Olive Garden’s sales increase for the six months of fiscal 2026 was primarily driven by same-restaurant sales increases, as well as revenue from new restaurants, partially offset by the sale of all eight of our Olive Garden Canada locations. The increase in U.S. same-restaurant sales for the six months of fiscal 2026 resulted from a 2.2 percent increase in same-restaurant guest counts, combined with a 3.0 percent increase in average check, which includes a 0.9 percent increase in off-premise catering sales.

LongHorn Steakhouse’s sales increase for the second quarter of fiscal 2026 was primarily driven by same-restaurant sales increases, as well as revenue from new restaurants. The increase in same-restaurant sales for the second quarter of fiscal 2026 resulted from a 2.1 percent increase in average check combined with a 3.8 percent increase in same-restaurant guest counts. LongHorn Steakhouse’s sales increase for the six months of fiscal 2026 was primarily driven by same-restaurant sales increases combined with revenue from new restaurants. The increase in same-restaurant sales for the six months of fiscal 2026 resulted from a 2.1 percent increase in average check combined with a 3.5 percent increase in same-restaurant guest counts.

Fine Dining’s sales increase for the second quarter of fiscal 2026 was primarily driven by revenue from new restaurants, as well as same-restaurant sales increases. The increase in same-restaurant sales for the second quarter of fiscal 2026 resulted from a 0.9 percent increase in same-restaurant guest counts, offset by a 0.1 percent decrease in average check. Fine Dining’s sales increase for the six months of fiscal 2026 was primarily driven by revenue from new restaurants, as well as same-restaurant sales increases. The increase in same-restaurant sales for the six months of fiscal 2026 resulted from a 0.3 percent increase in average check.

Other Business’ sales increase for the second quarter of fiscal 2026 was primarily driven by the addition of Chuy’s for the entire period. The increase in same-restaurant sales for the second quarter of fiscal 2026 resulted from a 0.1 percent increase in same-restaurant guest counts combined with a 2.9 percent increase in average check. Other Business’ sales increase for the six months of fiscal 2026 was primarily driven by the addition of Chuy’s for the entire period. The increase in same-restaurant

sales for the six months of fiscal 2026 resulted from a 0.5 percent increase in same-restaurant guest counts combined with a 2.7 percent increase in average check.

COSTS AND EXPENSES

The following table sets forth selected operating data as a percent of sales for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the three and six months ended November 23, 2025 and November 24, 2024.

Three Months Ended November 23, 2025 Compared to Three Months Ended November 24, 2024

• Food and beverage costs increased as a percent of sales primarily due to a 1.6% impact from inflation and a 0.2% impact from mix and other, partially offset by a 0.8% impact from pricing leverage and a 0.1% impact from cost saving initiatives.

• Restaurant labor costs increased as a percent of sales primarily due to a 1.0% impact from inflation, partially offset by a 0.8% impact from pricing leverage and a 0.1% impact from productivity.

• Restaurant expenses increased as a percent of sales primarily due to a 0.5% impact from inflation, a 0.2% impact from Uber direct fees and a 0.2% impact from brand mix, partially offset by a 0.6% impact from sales leverage and a 0.2% impact from other.

• Marketing expenses decreased due to cost savings.

• Pre-opening costs increased primarily due to new restaurant openings.

• General and administrative expenses decreased as a percent of sales primarily due to a 0.8% impact from Chuy’s transaction and integration costs incurred in the second quarter of fiscal 2025, a 0.3% impact from sales leverage including synergies realized from the Chuy’s transaction, a 0.3% impact from mark to market adjustments and a 0.1% impact from compensation, offset by a 0.3% impact from Chuy’s transaction and integration costs incurred in the second quarter of fiscal 2026.

• Depreciation and amortization expenses remained flat as a percent of sales.

• Impairment and (gain) loss on disposal of assets, net increased as a percent of sales due to gains from the disposition of assets.

Six Months Ended November 23, 2025 Compared to Six Months Ended November 24, 2024

• Food and beverage costs increased as a percent of sales primarily due to a 1.1% impact from inflation and a 0.2% impact from mix and other, partially offset by a 0.8% impact from pricing leverage and a 0.1% impact from cost savings.

• Restaurant labor costs increased as a percent of sales primarily due to a 1.0% impact from inflation and a 0.1% impact from higher performance-based compensation expense, partially offset by a 0.8% impact from pricing leverage and a 0.2% impact from productivity.

• Restaurant expenses increased as a percent of sales primarily due to a 0.5% impact from inflation, a 0.3% impact from Uber direct fees and a 0.2% impact from brand mix, partially offset by a 0.7% impact from sales leverage and a 0.2% impact from other.

• Marketing expenses decreased due to cost savings.

• Pre-opening costs remained flat as a percent of sales.

• General and administrative expenses decreased as a percent of sales primarily due to a 0.5% impact from Chuy’s transaction and integration costs incurred in fiscal 2025, 0.3% impact from sales leverage including synergies realized from the Chuy’s transaction, a 0.1% impact from mark to market adjustments, and a 0.1% impact from other, partially offset by a 0.2% impact from Chuy’s transaction and integration costs incurred in fiscal 2026, and a 0.1% impact from inflation.

• Depreciation and amortization expenses remained flat as a percent of sales.

• Impairment and (gain) loss on disposal of assets, net increased as a percent of sales primarily due to the gain on sale of the eight Olive Garden Canada locations.

INTEREST EXPENSE

Net interest expense decreased as a percent of sales for the second quarter of fiscal 2026 primarily due to sales leverage. Net interest expense remained flat as percent of sales for the first six months of fiscal 2026.

INCOME TAXES

The effective income tax rate for continuing operations for the three months ended November 23, 2025 was 12.8 percent compared to an effective income tax rate for the three months ended November 24, 2024 of 12.3 percent. The effective income tax rate for continuing operations for the six months ended November 23, 2025 was 12.5 percent compared to an effective income tax rate for the six months ended November 24, 2024 of 11.4 percent. The increase in tax rate is primarily driven by impacts from stock market volatility, primarily offset by valuation allowance releases.

H.R. 1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025. The legislation included several provisions that impact the timing and magnitude of certain tax deductions, including restoring 100% bonus depreciation for qualifying property and the immediate expensing of domestic research and development costs. We have applied the key provisions impacting our financial position for the six months ended November 23, 2025, and will continue to assess the potential impacts on our financial position, results of operations and cash flows as additional guidance from the OBBBA is issued.

LOSSES FROM DISCONTINUED OPERATIONS

On an after-tax basis, losses from discontinued operations for the second quarter and first six months of fiscal 2026 were $0.2 million ($0.00 per diluted share) and $0.3 million ($0.01 per diluted share), respectively, compared with losses from discontinued operations for the second quarter and first six months of fiscal 2025 of $0.6 million ($0.00 per diluted share) and $1.0 million ($0.01 per diluted share), respectively.

SEGMENT RESULTS

We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Chuy’s, Yard House, Ruth’s Chris, The Capital Grille, Seasons 52, Eddie V’s, Bahama Breeze and The Capital Burger, in North America as operating segments. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. Our four reportable segments are: (1) Olive Garden, (2) LongHorn Steakhouse, (3) Fine Dining and (4) Other Business (see Note 6 to our unaudited consolidated financial statements in Part I, Item 1 of this Form 10-Q).

Our management uses segment profit as the measure for assessing performance of our segments. The following table presents segment profit margin1 for the periods indicated.

The increases in Olive Garden’s segment profit margin for the second quarter and first six months of fiscal 2026 were driven primarily by lower food and beverage and marketing costs, partially offset by higher restaurant expenses. The decrease in Longhorn Steakhouse’s segment profit margin for the second quarter of fiscal 2026 was driven by higher food and beverage costs, primarily due to setting menu pricing approximately 320 basis points below inflation, and restaurant labor costs, partially offset by lower restaurant expenses. The decrease in Longhorn Steakhouse’s segment profit margin for the first six months of fiscal 2026 was driven by higher food and beverage costs, primarily due to setting menu pricing approximately 210 basis points below inflation, and restaurant labor costs, partially offset by lower restaurant expenses. The decrease in Fine Dining’s segment profit margin for the second quarter and first six months of fiscal 2026 was driven primarily by higher food and beverage costs and restaurant labor. The decrease in Other Business’ segment profit margin for the second quarter of fiscal 2026 was driven primarily by higher food and beverage and restaurant labor costs. The increase in Other Business’ segment profit margin for the first six months of fiscal 2026 was driven primarily by the addition of Chuy’s operating results and lower food and beverage costs.

SEASONALITY

Our sales volumes have historically fluctuated seasonally. Our average sales per restaurant are highest in the winter and spring, followed by the fall and summer. Holidays, changes in the economy, severe weather, and the effects of other conditions may impact sales volumes seasonally in some operating regions. Because of the historical seasonality of our business and these other factors, results for any fiscal quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

Typically, cash flows generated from operating activities are our principal source of liquidity, which we use to finance capital expenditures for new restaurants and to remodel and maintain existing restaurants, to pay dividends to our shareholders and to repurchase shares of our common stock. Since substantially all of our sales are for cash and cash equivalents, and accounts payable are generally paid in 5 to 90 days, we are typically able to carry current liabilities in excess of current assets.

We currently manage our business and financial ratios to target an investment-grade bond rating, which has historically allowed flexible access to financing at reasonable costs. Our publicly issued long-term debt currently carries the following ratings:

• Moody’s Investors Service “Baa2”;

• Standard & Poor’s “BBB”; and

• Fitch “BBB”.

Our commercial paper has ratings of:

• Moody’s Investors Service “P-2”;

• Standard & Poor’s “A-2”; and

• Fitch “F-2”.

These ratings are as of the date of the filing of this Form 10-Q and have been obtained with the understanding that Moody’s Investors Service, Standard & Poor’s and Fitch will continue to monitor our credit and make future adjustments to these ratings to the extent warranted. The ratings are not a recommendation to buy, sell or hold our securities, may be changed, superseded or withdrawn at any time and should be evaluated independently of any other rating.

On October 23, 2023, we entered into a $1.25 billion Revolving Credit Agreement (as amended, Revolving Credit Agreement) with Bank of America, N.A. (BOA), as administrative agent, and the lenders and other agents party thereto. The Revolving Credit Agreement is a senior unsecured credit commitment to the Company and contains customary representations and affirmative and negative covenants (including limitations on liens and subsidiary debt and, prior to the Amendment (as defined below), a maximum consolidated lease adjusted total debt to total capitalization ratio of 0.75 to 1.00) and events of default usual for credit facilities of this type. As of November 23, 2025, we had no outstanding balances and were in compliance with all covenants under the Revolving Credit Agreement. As of November 23, 2025, $438.0 million of commercial paper was outstanding and backed by this facility. After consideration of commercial paper and letters of credit backed by the Revolving Credit Agreement, as of November 23, 2025, we had $812 million of credit available under the Revolving Credit Agreement.

Loans under the Revolving Credit Agreement bear interest at a rate of (a) Term SOFR (which is defined, for the applicable interest period, as the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to the commencement of such interest period with a term equivalent to such interest period) plus a Term SOFR adjustment of 0.10 percent plus the relevant margin determined by reference to a ratings-based pricing grid (Applicable Margin), or (b) the base rate (which is defined as the highest of the BOA prime rate, the Federal Funds rate plus 0.500 percent, and the Term SOFR plus 1.00 percent) plus the relevant Applicable Margin. Assuming a “BBB” equivalent credit rating level, the Applicable Margin under the Revolving Credit Agreement is 1.000 percent for Term SOFR loans and 0.000 percent for base rate loans.

On September 16, 2024, we entered into Amendment No. 1 (Amendment) to the Revolving Credit Agreement, which replaced the prior financial covenant (which provided for a maximum consolidated total debt to total capitalization ratio) with a new financial covenant requiring us to maintain, measured as of the end of each fiscal quarter, a maximum consolidated leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 to 1.00 upon our election as a result of a covered acquisition, subject to customary limitations set forth in the Revolving Credit Agreement). All other material terms and conditions of the Revolving Credit Agreement were unchanged.

The Revolving Credit Agreement matures on October 23, 2028, and the proceeds may be used for working capital and capital expenditures, the refinancing of certain indebtedness, certain acquisitions and general corporate purposes.

As of November 23, 2025, our outstanding long-term debt consisted principally of:

• $500.0 million of unsecured 3.850 percent senior notes due in May 2027;

• $400.0 million of unsecured 4.350 percent senior notes due in October 2027;

• $350.0 million of unsecured 4.550 percent senior notes due in October 2029;

• $500.0 million of unsecured 6.300 percent senior notes due in October 2033;

• $96.3 million of unsecured 6.000 percent senior notes due in August 2035;

• $42.8 million of unsecured 6.800 percent senior notes due in October 2037; and

• $300.0 million of unsecured 4.550 percent senior notes due in February 2048.

The interest rate on our $42.8 million senior notes due in October 2037 is subject to adjustment from time to time if the debt rating assigned to such series of notes is downgraded below a certain rating level (or subsequently upgraded). The maximum adjustment is 2.000 percent above the initial interest rate and the interest rate cannot be reduced below the initial interest rate. As of November 23, 2025, no such adjustments were made to this rate.

Through our shelf registration statement on file with the SEC, depending on conditions prevailing in the public capital markets, we may from time to time issue equity securities or unsecured debt securities in one or more series, which may consist of notes, debentures or other evidences of indebtedness in one or more offerings.

From time to time, we or our affiliates, may repurchase our outstanding debt in privately negotiated transactions, open-market transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

From time to time, we enter into interest rate derivative instruments. See Note 10 to our unaudited consolidated financial statements in Part I, Item 1 of this Form 10-Q, which is incorporated by reference.

Net cash flows provided by operating activities from continuing operations increased to $663.2 million for the first six months of fiscal 2026, from $661.8 million for the first six months of fiscal 2025. Net cash flows provided by operating activities include net earnings from continuing operations of $495.3 million and $423.3 million in the first six months of fiscal 2026 and 2025, respectively. Net cash flows provided by operating activities increased in fiscal 2026 primarily due to higher net earnings in fiscal 2026 and the timing of federal income tax payments, offset by changes in working capital.

Net cash flows used in investing activities from continuing operations were $363.9 million for the first six months of fiscal 2026, compared to $939.3 million for the first six months of fiscal 2025. Net cash used in the acquisition of Chuy’s was $613.7 million during the second quarter of fiscal 2025. Capital expenditures increased to $375.0 million for the first six months of fiscal 2026 from $314.5 million for the first six months of fiscal 2025, reflecting an increase in new restaurant construction and remodel spend during fiscal 2026. Additionally, the first six months of fiscal 2026 include a portion of the proceeds from the sale of all eight of our Olive Garden Canada locations.

Net cash flows used in financing activities from continuing operations were $314.9 million for the first six months of fiscal 2026, compared to net cash provided by financing activities of $298.9 million for the first six months of fiscal 2025. Net cash flows used in financing activities for the first six months of fiscal 2026 included borrowings of commercial paper of $438.0 million, net, offset by dividends paid of $349.0 million and share repurchases of $407.1 million. Net cash flows provided by financing activities for the first six months of fiscal 2025 included borrowings of commercial paper of $188.4 million, net proceeds from the issuance of long-term debt of $750.0 million, dividends paid of $330.5 million and share repurchases of $314.2 million. Dividends declared by our Board of Directors totaled $3.00 and $2.80 per share for the first six months of fiscal 2026 and 2025, respectively.

We are not aware of any trends or events that would materially affect our capital requirements or liquidity. We believe that our internal cash-generating capabilities, the potential issuance of equity or unsecured debt securities under our shelf registration statement and short-term commercial paper or drawings under our Revolving Credit Agreement should be sufficient to finance our capital expenditures, debt maturities and other operating activities through fiscal 2026.

On June 18, 2025, our Board of Directors authorized a new share repurchase program under which we may repurchase up to $1 billion of our outstanding common stock. This repurchase program does not have an expiration and replaced the prior share repurchase authorization. During the quarter and six months ended November 23, 2025, we repurchased 1.1 million and 2 million shares of our common stock, respectively, compared to 0.9 million and 2.1 million shares of our common stock, respectively, during the quarter and six months ended November 24, 2024.

We are not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, sales, costs or expenses, results of operations, liquidity, capital expenditures or capital resources.

FINANCIAL CONDITION

Our current assets totaled $1.04 billion as of November 23, 2025, compared to $937.7 million as of May 25, 2025. The increase was primarily due to an increase in prepaid income taxes and inventories.

Our current liabilities totaled $2.65 billion as of November 23, 2025, compared to $2.25 billion as of May 25, 2025. The increase was primarily driven by an increase in short term debt partially offset by unearned revenues associated with gift card redemptions in excess of gift card activations.

CRITICAL ACCOUNTING ESTIMATES

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales, costs and expenses during the reporting period. Actual results could differ from those estimates. We have discussed the development, selection and disclosure of those estimates with the Audit Committee. Our critical accounting estimates have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended May 25, 2025.

APPLICATION OF NEW ACCOUNTING STANDARDS

Information regarding application of new accounting standards is incorporated by reference from Note 1 to our unaudited consolidated financial statements in Part I, Item 1 of this Form 10-Q.

FORWARD-LOOKING STATEMENTS

Statements set forth in or incorporated into this report regarding the expected increase in the number of our restaurants and capital expenditures in fiscal 2026, projections for sales and all other statements that are not historical facts, including without limitation statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Darden Restaurants, Inc. and its subsidiaries that are preceded by, followed by or that include words such as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “could,” “estimate,” “project,” “believe,” “plan,” “outlook” or similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of complying with the safe harbor provisions of that Act. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements for any reason to reflect events or circumstances arising after such date. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. In addition to the risks and uncertainties of ordinary business obligations, and those described in information incorporated into this report, the forward-looking statements contained in this report are subject to the risks and uncertainties described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended May 25, 2025 and in our Forms 10-Q (including this report), which are summarized as follows:

• A failure to address cost pressures, including rising costs for commodities, labor, health care and utilities used by our restaurants, and a failure to effectively deliver cost management activities and achieve economies of scale in purchasing;

• Certain economic and business factors and their impacts on the restaurant industry and general macroeconomic factors including unemployment, energy prices, tariffs and interest rates;

• The inability to hire, train, reward and retain restaurant team members and determine and maintain adequate staffing;

• A failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills;

• Increases in labor and insurance costs;

• Health concerns arising from food-related pandemics, outbreaks of flu, viruses or other diseases;

• Failure to maintain food safety throughout the supply chain and food-borne illness concerns;

• Insufficient guest or employee facing technology or a failure to maintain a continuous or secure cyber network;

• Increased costs related to compliance with privacy and data protection laws and government enforcement, litigation or adverse publicity relating to potential failures thereof;

• A failure to successfully complete our integration of Chuy’s operations into our business;

• Insufficient or ineffective response to legislation or government regulation may adversely impact our cost structure, operational efficiencies and talent availability;

• Intense competition, or an insufficient strategy or focus, on competition and the consumer landscape;

• Changes in consumer preferences that may adversely affect demand for food at our restaurants;

• An inability or failure to recognize, respond to and effectively manage the accelerated impact of social media;

• A failure to identify and execute innovative marketing and guest relationship tactics, ineffective or improper use of other marketing initiatives and increased advertising and marketing costs;

• Impacts of climate change, adverse weather conditions and natural disasters;

• The inability to cancel long-term, non-cancelable leases that we may want to cancel or the inability to renew the leases that we may want to extend at the end of their terms;

• Our inability or failure to execute a comprehensive business continuity plan following a major natural disaster, such as a hurricane or manmade disaster;

• The impact of shortages, delay or interruptions in the delivery of food and other products from third-party vendors and suppliers;

• Our failure to drive both short-term and long-term profitable sales growth through brand relevance, operating excellence, opening new restaurants of existing brands and developing or acquiring new dining brands;

• A lack of suitable new restaurant locations or a decline in the quality of the locations of our current restaurants;

• Higher-than-anticipated costs or delays to open, close, relocate or remodel restaurants;

• Risks associated with doing business with franchisees and licensees;

• Risks associated with doing business with business partners and vendors in foreign markets;

• Volatility in the market value of derivatives we may use to hedge exposures to fluctuations in commodity and broader market prices;

• Volatility in the United States equity markets that may affect our ability to efficiently hedge exposures to our market risk related to equity-based compensation awards;

• Failure to protect our service marks or other intellectual property;

• Environmental, social and governance risk, including disclosure expectations and the impact of third party ratings,

• Litigation, including allegations of illegal, unfair or inconsistent employment practices;

• Unfavorable publicity, or a failure to respond effectively to adverse publicity;

• Disruptions in the financial markets that may impact consumer spending patterns, affect the availability and cost of credit;

• Impairment of the carrying value of our goodwill or other intangible assets;

• Changes in tax laws or treaties and unanticipated tax liabilities; and

• A failure of our internal controls over financial reporting and future changes in accounting standards.

Any of the risks described above or elsewhere in this report or our other filings with the SEC could have a material impact on our business, financial condition or results of operations. It is not possible to predict or identify all risk factors. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. Therefore, the above is not intended to be a complete discussion of all potential risks or uncertainties.

We are exposed to a variety of market risks, including fluctuations in interest rates, foreign currency exchange rates, compensation and commodity prices. To manage this exposure, we periodically enter into interest rate, foreign currency exchange rate, equity forward and commodity derivative instruments for other than trading purposes (see Note 10 to our unaudited consolidated financial statements in Part I, Item 1 of this report).

We use the variance/covariance method to measure value at risk, over time horizons ranging from one week to one year, at the 95 percent confidence level. As of November 23, 2025, our potential losses in future net earnings resulting from changes in equity forwards, commodity instruments, floating rate and fixed rate debt interest rate exposures were approximately $65.2 million over a period of one year. The value at risk from an increase in the fair value of all of our long-term fixed-rate debt, over a period of one year, was approximately $98 million as of November 23, 2025. The fair value of our long-term fixed-rate debt outstanding as of November 23, 2025, averaged $2.18 billion, with a high of $2.20 billion and a low of $2.14 billion during the six months of fiscal 2026. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows by targeting an appropriate mix of variable and fixed-rate debt.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of November 23, 2025, the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of November 23, 2025.

During the fiscal six months ended November 23, 2025, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

**Item 1.**Legal Proceedings

See the discussion of legal proceedings contained in the third paragraph of Note 12 to our unaudited consolidated financial statements in Part I, Item 1 of this report, which is incorporated herein by reference.

There have been no material changes to the risk factors contained in Item 1A of our Annual Report on Form 10-K for the year ended May 25, 2025.

**Item 2.**Unregistered Sales of Equity Securities and Use of Proceeds

The table below provides information concerning our repurchase of shares of our common stock during the three months ended November 23, 2025.

(1)All of the shares purchased during the three months ended November 23, 2025 were purchased as part of our repurchase program. On June 18, 2025, our Board of Directors authorized a new share repurchase program under which we may repurchase up to $1 billion of our outstanding common stock. This repurchase program, which was announced publicly in a press release issued on June 20, 2025, does not have an expiration and replaced the prior share repurchase authorization.

(2)The number of shares purchased includes shares withheld for taxes on vesting of restricted stock, shares delivered or deemed to be delivered to us on tender of stock in payment for the exercise price of options, and shares reacquired pursuant to tax withholding on option exercises. These shares are included as part of our repurchase program and deplete the repurchase authority granted by our Board. The number of shares repurchased excludes shares we reacquired pursuant to forfeiture of restricted stock.

(3)Repurchases are subject to prevailing market prices, may be made in open market or private transactions, may occur or be discontinued at any time and remain subject to the discretion of our Board of Directors. There can be no assurance that we will repurchase any shares.

During the three months ended November 23, 2025, no director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.