Dive Brief:
- Olive Garden increased same-store sales by 5.9% during fiscal Q1 2026. This performance was driven by menu innovation and growth in first-party delivery, Rick Cardenas, CEO of parent company Darden, said Thursday during an earnings call.
- Traffic jumped 3.6% while prices rose 1.9% during the quarter, Darden CFO Raj Vennam said during the call.
- Olive Garden has also been strengthening its affordability with “more variety at approachable price points,” Cardenas said. During the quarter, the chain began testing a section of lighter portions, featuring seven existing entrees with smaller servings and reduced prices. The items are available during dinner on weekdays and all day on the weekends.
Dive Insight:
The chain joins a growing list of casual chains including Chili’s, The Cheesecake Factory and BJ’s Restaurants that posted same-store sales growth in the most recent quarter, while fast casual chains largely struggled during the summer months.
Cardenas said casual dining is proving to be a stronger segment this year as guests see brands have generally raised prices at a slower pace than in competing segments. Across all of Darden’s casual brands, traffic has increased and there has been growth across all income groups.
“The guests see the value. Also, when they're trying to figure out where they spend their money, they're going to places where they can connect and engage with their friends and family,” he said.
Olive Garden’s strategy to add more affordability is already seeing some initial success. Its lighter menu offerings are now available in 40% of all restaurants and “the initial response from guests has been encouraging,” he said. Affordability scores increased 15 percentage points and customers expressed high satisfaction with the portion size, Cardenas said.
“We do believe, in the long run, this is a traffic driver,” Cardenas said. “It will dilute our check a little bit if people trade from a higher portion size item to a lower portion size item, but we believe that that’s the portion that those guests want.”
While it’s early, the chain saw an uptick in frequency, but Olive Garden has yet to market this offering and it has rolled out at restaurants “without any fanfare,” he said.
The chain also brought back its Never Ending Pasta promotion to run from end of August through Nov. 16. That promotion is performing at expectations, Cardenas said. Customers order all-they-can-eat soup or salad, bread sticks and pasta for $13.99.
The company’s marketing team also highlighted the Create Your Own Pasta platform on the core menu. The brand added a new Spicy Three-Meat Sauce that has helped drive a “significant increase” in consumer preference for the Create Your Own Pasta platform, he said.
Olive Garden has also seen success with first-party delivery, which it began offering last year. It advertised and completed 1 million free deliveries during the first quarter, Cardenas said. Average weekly sales in that channel doubled during the campaign and remained 40% above the pre-campaign average.
Delivery continues to entice younger, more affluent customers who don’t necessarily dine in at Olive Garden, Cardenas said. The channel made up 5% of sales during the quarter, and stood at about 4% following the completion of the free deliveries at the end of the quarter.
“We are getting higher frequency for delivery guests than we are in routine dining guests,” he said.
