Everyone: “Olive Garden’s comeback is the real deal.”

Darden, today: “Hold. My. Alfredo.”

After posting historic results last quarter and riding a breadstick-fueled high to an all-time stock price in June, shareholders figured Darden had officially found its groove.

But oh how the turns have tabled at your local suburban strip mall. This quarter, the Olive Garden parent slipped on a bowl of fettuccine Alfredo and dumped a scalding pot of gnocchi soup right into Wall Street’s family jewels. EPS came in at $1.97 when the Street wanted a clean $2.00, and to make matters worse, revenue landed at $3.04 billion. What was a triumphant “we are so back” last quarter instantly flipped into a collective “chat, we are cooked,” and just like that, investors yeeted shares 9% lower… the ugliest post-earnings drop the company’s seen in three years.

But you have to respect the hustle… while investors were dragging Darden through the parking lot and aiming for the dumpster, management pulled a “but wait, there’s more” and actually raised its full-year sales outlook for fiscal 2026. Translation: “Yeah, we botched earnings, but trust us, the endless pasta train is still leaving the station.”

(Source: Benzinga)

Speaking of, Olive Garden delivered 5.9% same-store sales growth thanks to the Never-Ending Pasta Bowl and a new Uber delivery hookup. LongHorn Steakhouse wasn’t far behind, with sales up 5.5% and traffic up 3.2%. Beef prices are spiking, but Darden swears it’ll keep menu prices below inflation. Fine dining, which includes Ruth’s Chris, was down just 0.2%, which is Wall Street-speak for “better than expected”... though the numbers show fewer business travelers are dropping $80 on a Tuesday ribeye. Other brands like Cheddar’s, Yard House, and Chuy’s Tex-Mex added 3.3% growth, though Chuy’s hasn’t been folded into official comps yet.

Net income clocked in at $257.8 million, up from $207 million a year ago. So yeah, technically profits are higher, but when the Street wants eggplant parm and you bring out salad with onions on it, they’re gonna riot.

But make no mistake, if Darden wants a bounce-back next quarter, the secret recipe isn’t exactly secret: just stay cheaper than fast food. CFO Raj Vennam bragged that menu prices were 30 basis points under inflation last quarter. Which means as long as McDonald’s keeps charging $14 for a Big Mac combo, Olive Garden somehow morphs into the budget-friendly option. (Yes, we live in a dystopia where unlimited Alfredo is considered a hedge against inflation.)

Of course investors hated the miss, analysts are still pretending to be bullish, and management is parading around a 7.5%-8.5% revenue growth forecast for 2026 like a coupon that’s going to fix everything. But for now, the stock’s five-day losing streak makes it pretty clear Wall Street’s gluten intolerant to more breadsticks (at least until next quarter).

At the time of publishing this article, Stocks.News holds positions in McDonald’s as mentioned in the article.