Casual restaurant space could see pressure after Darden report, says Stephens

Stephens notes that Darden (DRI) reported revenue dollars, same-store sales, restaurant margins, and adjusted EPS that came in below expectations in Q1, though the company did reiterate FY25 guidance. Commenting on read through from the report, the analyst believes most of the casual restaurant segment could see some pressure this morning given the softer results seen at Olive Garden and the Fine Dining brands, but adds that this softness was partially offset by “healthy results” at LongHorn as the value steakhouse category continues to show strength. Other casual segment dining companies include Brinker (EAT), Cheesecake Factory (CAKE), BJ’s Restaurants (BJRI), Texas Roadhouse (TXRH) and Chuy‘s (CHUY). Stephens has an Equal Weight rating on Darden shares.