AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Established direct sourcing, distribution contracts and forecasting infrastructure are supported by realized savings and synergies. Relative cost superiority is unquantified, and equivalent capabilities at other large operators remain possible.
durability · 2/4 · Producer relationships across the disclosed years and five consecutive years of positive same-restaurant sales support persistence. Competition and portfolio closures limit confidence in prolonged protection.
customer dependency · 1/4 · Dining demand depends on price, service, food and convenience in an intensely competitive market. Brand sales persistence supports preference, but offers little demonstrated dependence or switching friction.
erosion resilience · 2/4 · Sustained brand sales, savings and productivity show adaptation. Incomplete food-cost recovery and actual closures demonstrate limits; potential competitive risks are not treated as realized losses.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Third-quarter pricing leverage offset 1.0 percentage point of food costs against a 1.5-point inflation impact; nine-month pricing benefits also fell short of food inflation. These are observed partial recoveries, not evidence of unrestricted pricing power.
retention · 2/4 · Five years of positive same-restaurant sales at the three largest brands and fiscal 2026 comparable-sales growth indicate sustained demand indirectly. Price and mix effects prevent inference of repeat-customer retention or traffic growth.
margin resilience · 2/4 · Pricing, productivity and savings helped absorb costs. Nine-month operating margin was 11.2% versus 11.1%, while the third-quarter margin fell to 12.1% from 13.2%, including closure-related charges. Resilience is mixed and is not attributed solely to pricing.
contractual freedom · 2/4 · Geographic menu-price differentiation and realized pricing actions demonstrate practical discretion. The passages do not establish comprehensive contractual freedom over all channels or terms, and disclosed competition and demand sensitivity constrain its economic value.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 1.30
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.33
Financial strength69
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 93.38
- netDebtEbitGrade
- 82.08
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 1.46
- Net debt / operating income (x)
- 0.90
- Interest coverage (x)
- 12.51
- Current ratio (x)
- 0.31
Capital allocation99
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 39.35
- 3-year average dilution (%)
- -1.78
- 3-year average SBC / revenue (%)
- 0.62
- cashConversionGrade
- 97.51
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation increased from $1.62 billion in fiscal 2024 to $1.85 billion in 2026, and share count declined despite issuance. However, fiscal 2026 equipment/property and software spending plus dividends and repurchases exceeded operating cash generation, alongside increased commercial paper. Realized synergies are positive, but full acquisition returns and buyback value are unestablished.
incentive alignment · 3/4 · Actual policies include performance incentives, clawbacks, holding requirements and restrictions on hedging; directors complied with ownership guidelines. The granted $17 million special award adds conditional long-term exposure, but its size and change-in-control acceleration temper alignment. Future vesting and executive ownership compliance are not assumed.
execution · 3/4 · Five-year positive comparable-sales records at the three largest brands, 43 net restaurant additions, rising operating cash generation and realized acquisition synergies support strong demonstrated execution. This assessment uses aggregate operating evidence, not management praise; closures and integration costs prevent an exceptional grade.
governance · 3/4 · An independent chair, independent committees, annual elections, majority voting, shareholder special-meeting rights and actual auditor-service pre-approval compliance support strong governance practices. Nominee status and disclosed policies do not prove every subsequent outcome or exceptional long-term effectiveness.
Evidence
Our sourcing staff sources, negotiates, and purchases food and supplies from more than 1,400 suppliers whose products originate in more than 30 countries.
Business / Sourcing and Distribution / supplier scope · Filed 24/07/2026
We leverage competitive bids, long-term contracts, and strategic supplier relationships to manage availability and cost of products.
Business / Sourcing and Distribution / purchasing arrangements · Filed 24/07/2026
We enter into long-term agreements with multiple third-party national distribution companies to deliver food and supplies to our restaurants.
Business / Sourcing and Distribution / long-term distribution agreements · Filed 24/07/2026
These and other terms of Darden Direct’s long-term supply agreements further enable our sourcing staff to integrate demand forecasts into our purchasing operations, driving efficiencies in our operations.
Business / Sourcing and Distribution / demand forecasting · Filed 24/07/2026
We have excellent long-term relationships with key suppliers and usually source our product directly from producers (not brokers or intermediaries).
Business / Sourcing and Distribution / direct producer relationships · Filed 19/07/2024
Nine Months Ended February 22, 2026 Compared to Nine Months Ended February 23, 2025 •Food and beverage costs increased as a percent of sales primarily due to a 1.2% impact from inflation and a 0.2% impact from menu mix, partially offset by a 0.8% impact from pricing leverage and 0.2% cost savings.
MD&A / nine months ended February 22, 2026 / food inflation, pricing and savings · Filed 27/03/2026
•General and administrative expenses decreased as a percent of sales primarily due to a 0.4% impact from Chuy’s transaction and integration costs incurred in fiscal 2025, 0.3% impact from sales and pricing leverage including synergies realized from the Chuy’s transaction and a 0.1% impact from lower performance-based compensation expense, partially offset by a 0.2% impact from one-time transaction costs incurred in fiscal 2026 and a 0.1% impact from inflation.
MD&A / nine months ended February 22, 2026 / realized acquisition synergies and overhead · Filed 27/03/2026
The full-service dining sector of the restaurant industry is intensely competitive with respect to pricing, service, location, personnel, take-out and delivery options, and type and quality of food, and there are many well-established competitors.
Risk Factors / full-service dining competition · Filed 24/07/2026
The annual maturities of our lease liabilities as of May 31, 2026 are as follows: (in millions) Fiscal Year Operating Leases Finance Leases 2027 440.2 114.6 2028 444.6 118.5 2029 438.2 121.0 2030 425.3 123.1 2031 400.5 125.7 Thereafter 3,523.3 2,395.3 Total future lease commitments (1) $ 5,672.1 $ 2,998.2 Less imputed interest (1,733.3) (1,257.8) Present value of lease liabilities (2) $ 3,938.8 $ 1,740.4 (1)Of the $5,672.1 million of total future operating lease commitments and $2,998.2 million of total future finance lease commitments, $2,041.5 million and $821.3 million, respectively, are non-cancelable.
Note 11 / lease liabilities and non-cancelable commitments · Filed 24/07/2026
•Restaurant expenses decreased as a percent of sales primarily due to a 0.7% impact from sales and pricing leverage, partially offset by a 0.5% impact from inflation and a 0.2% impact from delivery fees.
MD&A / third quarter fiscal 2026 / pricing leverage, inflation and delivery fees · Filed 27/03/2026
This was a particularly strong year for our three largest brands, Olive Garden, LongHorn Steakhouse, and Yard House, marking the fifth consecutive year that all three brands delivered positive same-restaurant sales.
Proxy / Key Fiscal 2026 Performance Highlights / five-year brand sales record · Filed 10/08/2026
This most recent donation marks a total of $22.3 $1.4B Cash returned to shareholders through dividends and share repurchases 4.5% Same-restaurant sales (SRS) growth(1) 43 Net new restaurants opened (1) Annual SRS is a 52-week metric and excludes Chuy's and Bahama Breeze 2026 Proxy Statement 3 million that the Company and the Darden Foundation have contributed to Feeding America since 2010.
Proxy / fiscal 2026 highlights / same-restaurant sales and coverage exclusions · Filed 10/08/2026
Olive Garden leverages the efficiency of national advertising, on both traditional and streaming television, supplemented with targeted digital media investments.
Business / Integrated Marketing / national advertising · Filed 24/07/2026
Third, we will not rely on deep discounts and are therefore able to provide great value to our guests while driving profitable sales growth.
Business / Integrated Marketing / management discounting policy · Filed 24/07/2026
Furthermore, delivery aggregators and food delivery services provide consumers with convenient access to a broad range of competing restaurant chains and food retailers, particularly in urbanized areas, and may form a closer relationship with our customers and increase costs to us.
Risk Factors / delivery aggregators and customer relationships · Filed 24/07/2026
•Impairment and (gain) loss on disposal of assets, net increased as a percent of sales primarily due to the decision to close approximately 14 Bahama Breeze restaurants.
MD&A / third quarter fiscal 2026 / Bahama Breeze closure decision · Filed 27/03/2026
Fiscal 2026 actual restaurant openings and closings, fiscal 2027 projected openings, and approximate capital investment, square footage, and dining capacity, by brand, are shown below: Actual - Fiscal 2026 Projected - Fiscal 2027 (1) Pro-Forma New Restaurants (1) Restaurant Openings Sold (2) Restaurant Closings New Restaurant Openings Capital Investment Range (3) (in millions) Approximate Square Feet (4) Approximate Dining Seats (5) Olive Garden 22 8 — 22-26 $4.4 - $6.3 7,700 250 LongHorn Steakhouse 27 — — 26-30 $3.8 - $5.2 5,800 180 Yard House 5 — — 7-10 $7.8 — $9.8 9,000 330 Ruth’s Chris 1 — — 1-2 $6.0 — $8.0 7,400 200 Cheddar’s Scratch Kitchen 4 — 1 6-8 $4.3 - $5.4 6,300 210 The Capital Grille 4 — 1 2-4 $7.2 — $9.5 9,000 260 Chuy’s 4 — 2 4-6 $4.3 - $5.5 5,900 160 Seasons 52 2 — 1 1-2 $6.0 — $7.2 7,400 230 Eddie V’s 3 — 1 1-2 $8.5 — $10.2 10,000 320 Bahama Breeze (6) — — 15 — Totals 72 8 21 75-80 (1)The Capital Burger is a development-stage concept with limited pro-forma information, and as such, it is excluded from this table.
Business / fiscal 2026 actual restaurant openings, sales and closures · Filed 24/07/2026
Three Months Ended Nine Months Ended February 22, 2026 February 23, 2025 February 22, 2026 February 23, 2025 Sales 100.0 % 100.0 % 100.0 % 100.0 % Costs and expenses: Food and beverage 30.7 30.2 30.8 30.4 Restaurant labor 31.3 31.5 32.0 31.9 Restaurant expenses 15.8 15.9 16.2 16.2 Marketing expenses 1.2 1.1 1.4 1.5 Pre-opening costs 0.3 0.2 0.2 0.2 General and administrative expenses 3.6 3.7 4.0 4.4 Depreciation and amortization 4.2 4.2 4.4 4.3 Impairments and (gain) loss on disposal of assets, net 0.8 — (0.2) — Total operating costs and expenses 87.9 % 86.8 % 88.8 % 88.9 % Operating income 12.1 13.2 11.2 11.1 Interest, net 1.5 1.4 1.5 1.5 Earnings before income taxes 10.7 11.8 9.7 9.7 Income tax expense 1.4 1.6 1.2 1.2 Earnings from continuing operations 9.3 % 10.3 % 8.5 % 8.5 % Three Months Ended February 22, 2026 Compared to Three Months Ended February 23, 2025 •Food and beverage costs increased as a percent of sales primarily due to a 1.5% impact from inflation and a 0.2% impact from menu mix, partially offset by a 1.0% impact from pricing leverage and a 0.2% impact from cost saving initiatives.
MD&A / operating cost ratios and third-quarter food pricing bridge · Filed 27/03/2026
•Restaurant labor costs decreased as a percent of sales primarily due to a 1.2% impact from pricing and sales leverage and a 0.1% impact from productivity, partially offset by a 1.0% impact from inflation and a 0.1% impact from higher performance-based compensation expense.
MD&A / third quarter fiscal 2026 / labor productivity and pricing leverage · Filed 27/03/2026
Olive Garden maintains different menus across its trade areas to reflect geographic differences in consumer preferences, prices, and selections, as well as a smaller portioned, lower-priced children’s menu.
Business / Olive Garden / geographic menu and price differentiation · Filed 24/07/2026
In addition, our ability to offset the effects of inflation through pricing actions may be constrained by competitive dynamics and consumer demand sensitivity, and if menu pricing does not sufficiently offset rising costs or adversely affects guest traffic, our operating margins and results of operation could be adversely affected.
Risk Factors / inflation pass-through and demand sensitivity · Filed 24/07/2026
49 DARDEN RESTAURANTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Fiscal Year Ended May 31, 2026 May 25, 2025 May 26, 2024 Cash flows - operating activities Net earnings $ 1,206.7 $ 1,049.6 $ 1,027.6 Losses from discontinued operations, net of tax 7.0 1.4 2.9 Adjustments to reconcile net earnings from continuing operations to cash flows: Depreciation and amortization 561.1 516.1 459.9 Impairments and (gain) loss on disposal of assets, net (10.7) 49.2 12.4 Stock-based compensation expense 79.1 79.1 68.5 Change in current assets and liabilities (24.8) 11.5 95.4 Deferred income taxes 71.3 5.0 (3.2) Change in other assets and liabilities (0.4) — (23.4) (Increase) Decrease in trust-owned life insurance value (42.6) (9.2) (24.8) Other, net 6.4 4.3 6.4 Net cash provided by operating activities of continuing operations $ 1,853.1 $ 1,707.0 $ 1,621.7 Cash flows - investing activities Purchases of land, buildings and equipment (734.0) (644.6) (601.2) Proceeds from disposal of land, buildings and equipment 45.5 2.5 3.3 Cash used in business acquisitions, net of cash acquired — (613.7) (701.1) Purchases of capitalized software and other assets (26.4) (27.3) (27.1) Other, net 3.5 4.8 1.5 Net cash used in investing activities of continuing operations $ (711.4) $ (1,278.3) $ (1,324.6) Cash flows - financing activities Net proceeds from issuance of common stock 25.0 55.6 43.6 Dividends paid (693.0) (658.5) (628.4) Repurchases of common stock, inclusive of applicable excise taxes (671.7) (418.2) (453.9) Proceeds from (repayment of) commercial paper, net 194.0 (86.8) 86.8 Proceeds from the issuance of long-term debt — 750.0 1,100.0 Repayments of long-term debt — — (600.0) Principal payments on finance leases, net (18.1) (21.0) (19.9) Payment of debt issuance costs — (6.9) (11.6) Net cash used in financing activities of continuing operations $ (1,163.8) $ (385.8) $ (483.4) Cash flows - discontinued operations Net cash used in operating activities of discontinued operations (4.8) (8.5) (9.8) Net cash used in discontinued operations $ (4.8) $ (8.5) $ (9.8) Increase (Decrease) in cash, cash equivalents, and restricted cash (26.9) 34.4 (196.1) Cash, cash equivalents, and restricted cash - beginning of year 254.5 220.1 416.2 Cash, cash equivalents and restricted cash - end of year $ 227.6 $ 254.5 $ 220.1 Reconciliation of cash, cash equivalents, and restricted cash: May 31, 2026 May 25, 2025 May 26, 2024 Cash and cash equivalents $ 219.5 $ 240.0 $ 194.8 Restricted cash included in prepaid and other current assets 8.1 14.5 25.3 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 227.6 $ 254.5 $ 220.1 50 DARDEN RESTAURANTS, INC.
Consolidated Statements of Cash Flows / fiscal 2024–2026 · Filed 24/07/2026
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (In millions, except per share data) Common Stock And Surplus Shares Amount Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Balances at May 28, 2023 121.1 $ 2,230.8 $ (32.5) $ 3.2 $ 2,201.5 Net earnings — — 1,027.6 — 1,027.6 Other comprehensive income — — — 22.4 22.4 Dividends declared ($5.24 per share) — — (631.9) — (631.9) Stock option exercises 0.4 31.8 — — 31.8 Stock-based compensation — 36.6 — — 36.6 Repurchases of common stock, inclusive of applicable excise taxes (2.9) (58.6) (398.7) — (457.3) Issuance of stock under Employee Stock Purchase Plan and other plans 0.3 11.8 — — 11.8 Balances at May 26, 2024 118.9 $ 2,252.4 $ (35.5) $ 25.6 $ 2,242.5 Net earnings — — 1,049.6 — 1,049.6 Other comprehensive income — — — 6.2 6.2 Dividends declared ($5.60 per share) — — (663.1) — (663.1) Stock option exercises 0.5 42.8 — — 42.8 Stock-based compensation — 41.8 — — 41.8 Repurchases of common stock, inclusive of applicable excise taxes (2.6) (54.2) (366.8) — (421.0) Issuance of stock under Employee Stock Purchase Plan and other plans 0.2 12.8 — — 12.8 Other — — (0.3) — (0.3) Balances at May 25, 2025 117.0 $ 2,295.6 $ (16.1) $ 31.8 $ 2,311.3 Net earnings — — 1,206.7 — 1,206.7 Other comprehensive loss — — — (12.2) (12.2) Dividends declared ($6.00 per share) — — (697.7) — (697.7) Stock option exercises 0.1 11.3 — — 11.3 Stock-based compensation — 48.9 — — 48.9 Repurchases of common stock, inclusive of applicable excise taxes (3.4) (73.2) (601.3) — (674.5) Issuance of stock under Employee Stock Purchase Plan and other plans 0.4 13.7 — — 13.7 Balances at May 31, 2026 114.1 $ 2,296.3 $ (108.4) $ 19.6 $ 2,207.5 See accompanying notes to consolidated financial statements.
Consolidated Statements of Changes in Stockholders’ Equity / share issuance and repurchases · Filed 24/07/2026
Executive Pay Governance The Compensation Committee continues its commitment to sound overall governance of executive compensation by adhering to the following practices: What we do: What we don’t do: • Fully independent Compensation Committee • No guaranteed bonuses • Independent executive compensation consultant • No excise tax gross ups • Majority of our target pay opportunity for our NEOs is in the form of “at risk” incentives • No option repricing • Annual incentives have multiple performance measures and capped payouts to mitigate risk • No dividends paid on unvested long-term incentives • Long-term incentives granted in multiple award types to achieve multiple objectives • No hedging, pledging, or short sales of Company securities by officers or directors (more details on these policies under Employee, Officer, and Director Hedging above) • Clawback policy to require us to recover incentive compensation in the event of a financial restatement regardless of fraud or misconduct • No excessive perks • Robust executive officer and outside director stock ownership requirements with mandatory holding requirements until requirements are met • No automatic single-trigger change in control payments • Minimum three-year vesting period on annual equity awards • No executive officer employment agreements • Regular shareholder engagement process The Compensation Committee considered these practices in designing the CEO Special Equity Award (as defined below), which was granted to the Company’s President and CEO in September 2025.
Proxy / Executive Pay Governance / existing compensation policies · Filed 10/08/2026
As of May 31, 2026, all of our directors were in compliance with the stock ownership guidelines.
Proxy / director compensation / ownership guideline compliance · Filed 10/08/2026
Cardenas) evaluated the Company’s financial performance and certified the following performance results and the Darden Company Performance Rating as follows: Darden Company Performance Rating Target Results Weight Company Performance Rating (% of Target) Darden Adjusted Diluted Net EPS fiscal 2026 $10.26 $10.64 70% 143% Darden same-restaurant sales growth 2.4% 4.5% 30% 185% TOTAL Company performance rating 155% ** Darden Adjusted Diluted Net EPS is a non-GAAP number, reconciliation to the nearest GAAP number is as follows: Darden Fiscal 2026 Reported Diluted Net EPS from Continuing Operations $ 10.44 Adjustments: Closed Restaurant and Strategic Review Costs $ 0.13 Impairment due to Restaurant Closures $ 0.22 Income Tax Adjustments and Benefits $ 0.06 Chuy's Integration Related One-Time Costs $ 0.06 Gain on Olive Garden Canada Sale ($ 0.27) Adjusted Diluted Net EPS from Continuing Operation (Adjusted Diluted Net EPS) $ 10.64 The final individual annual incentive awards for the NEOs employed by the Company as of the end of fiscal 2026 as determined by the Compensation Committee (and the independent directors, with respect to Mr.
Proxy / Performance and Pay Results / certified fiscal 2026 outcomes and reconciliation · Filed 10/08/2026
Corporate Governance Highlights Our Board seeks to maintain the highest standards of corporate governance and ethical business conduct, including the following highlights: • Our current Board Chair is an independent director and eight of our nine director nominees are independent; • The Board met in executive session at each of its quarterly meetings during fiscal 2026; • All directors are elected annually and we have a majority vote standard for uncontested elections; • Directors and executive officers are subject to robust stock ownership requirements; • All Board committees are composed of only independent directors; • 10 percent of shareholders can call a special meeting; and • The Board and committees conduct annual self-assessments; • We have no supermajority voting requirements.
Proxy / Corporate Governance Highlights / existing practices and nominee independence · Filed 10/08/2026
2026 Proxy Statement 59 The CEO Special Equity Award consists of a grant of PSUs with a target grant value of $17 million, which will vest on July 24, 2030 (the Vesting Date), subject to achievement of performance targets and continued service.
Proxy / CEO Special Equity Award / value and conditional future vesting · Filed 10/08/2026
The award was granted on September 24, 2025 (the Special Award Grant Date), with the target number of PSUs determined based on the average closing stock price on the NYSE for the two fiscal weeks ending before the week prior to the Special Award Grant Date (the Target PSUs).
Proxy / CEO Special Equity Award / actual September 2025 grant · Filed 10/08/2026
Cardenas's employment is terminated by the Company without cause, the earned percentage will be deemed to be 100%, and he will become immediately and unconditionally vested in all earned PSUs.
Proxy / CEO Special Equity Award / qualifying change-in-control acceleration · Filed 10/08/2026
Under the Company’s stock ownership policy, the CEO must hold 100 percent and any other officer must hold 50 percent of any net after tax shares issued to them until they achieve the required stock ownership level.
Proxy / executive stock ownership policy / mandatory holding requirements · Filed 10/08/2026
During fiscal 2026 and fiscal 2025, all of the services provided by KPMG LLP for the services described above related to Tax Fees and All Other Fees were pre-approved using the above procedures, and none were provided pursuant to any waiver of the pre-approval requirement.
Proxy / auditor services / actual pre-approval compliance · Filed 10/08/2026
