Dive Brief:
- Olive Garden saw 4.7% same-store sales growth and LongHorn Steakhouse posted a 5.9% increase, driving overall sales growth at Darden during fiscal Q2 2026, according to an earnings release.
- Olive Garden’s sales growth derived in part from a 1.7% increase in traffic, a 2.6% price increase with the remaining 1.1% comps growth driven by an increase in catering orders, Raj Vennam, Darden’s chief financial officer, said during a Thursday earnings call.
- Both Vennam and Cardenas said the chain’s pricing was below the general rate of inflation, which could aid in consumer value perception. Olive Garden has been testing a selection of seven menu items with smaller portion sizes and correspondingly lower prices.
Dive Insight:
Full-service and casual dining sales have grown faster than industry benchmarks, CEO and President Rick Cardenas said, and Darden’s sales are growing faster than average for those segments, meaning the company is taking some market share from limited service.
The performance of Darden’s keystone brands are another data point showing the strength of casual and full-service dining relative to fast casual and QSR, segments that have seen slowed growth or even outright reversals in traffic and same-store sales over the last year-and-a-half.
Cardenas said the company’s casual brands saw traffic growth among the majority of consumers including both middle- and higher- income cohorts, though the higher-income growth was notably stronger. But lower-income consumers have slowed their spend.
“There was a little pullback in those earning less than $50,000 in the casual brands,” Cardenas said, adding that casual dining retains some structural advantages with consumers drawn to these restaurants to “treat themselves and indulge” while still getting “a great value and a good experience for a great price.”
The rollout of the lighter portioned menu section is moving faster than anticipated because consumer response has been especially strong, Cardenas said. The menu was available at 40% of its restaurants during the quarter, and another 20% will add it during the fiscal third quarter. The rollout is expected to be completed in January.
“Olive Garden has seen a double-digit increase in affordability perceptions from guests who order from the lighter portions menu and an increase in frequency among these guests, which should help build traffic over time,” Cardenas said.
The lighter portions are not intended specifically for consumers using GLP-1 medications for weight loss, but are meant to offer a greater variety of choice and value to diners, he said.
Potential impacts to Olive Garden’s menu mix from the cheaper, lighter portions items are likely to be offset by the strength of the brand’s delivery offerings, Cardenas said. Olive Garden launched nationwide delivery through Uber Direct earlier this year.
Delivery orders hit 4% of sales mix at Olive Garden in the quarter, per the earnings call, up from about 3.5% six months ago. Cardenas said the increase was achieved without Darden spending to market the channel this quarter.
“This channel attracts younger, more affluent guests who crave Olive Garden at home, value convenience and order more frequently,” Cardenas said. “These guests have a higher check average than dine in guests.”
