Darden Restaurants Completes Exploration of Strategic Alternatives for Bahama Breeze
Rhea-AI Summary
Darden Restaurants (NYSE: DRI) completed its review of strategic alternatives for Bahama Breeze and will permanently close 14 of the brand's 28 restaurants while converting the remaining 14 locations into other Darden brands.
The 14 closings will operate through April 5, 2026; conversions are expected over the next 12–18 months. The company said it does not expect a material financial impact and will focus on supporting team members and redeployment.
Positive
- Converting 14 Bahama Breeze locations over a 12–18 month period
- Company expects no material impact on financial results
- Company plans to prioritize placing affected team members within Darden
Negative
- Permanently closing 14 Bahama Breeze restaurants (50% of 28 locations)
- 14 closing restaurants expected to cease operations after April 5, 2026
Key Figures
Market Reality Check
Peers on Argus
DRI is up 0.78% while peers show mixed, mostly modest moves: YUMC +3.31%, BROS +3.18%, QSR +0.07%, YUM +0.15%, DPZ -0.58%. No coordinated sector move or common news theme appears in the provided data.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Dec 18 | Q2 results & dividend | Positive | +1.8% | Q2 FY26 sales up 7.3% to $3.102B, EPS $2.03, dividend $1.50. |
| Nov 20 | Earnings call notice | Neutral | +3.3% | Announcement of Q2 FY26 results release and conference call date. |
| Sep 18 | Q1 results & dividend | Positive | -7.7% | Q1 FY26 sales up 10.4% to $3.0B, EPS $1.97, dividend $1.50. |
| Aug 21 | Earnings call notice | Neutral | +1.0% | Scheduling of Q1 FY26 earnings release and investor conference call. |
| Aug 08 | Peer earnings (CGC) | Negative | -2.3% | Canopy Growth Q1 FY26 results with net loss of $41.5M. |
Earnings/dividend updates often move the stock, but reactions can diverge from positive fundamentals, as seen with the Q1 FY26 selloff despite strong growth.
Over the last six months, Darden has mainly featured earnings, dividends, and conference-call related news. Q1 and Q2 FY26 results highlighted strong sales growth, solid same-restaurant performance, and recurring $1.50 quarterly dividends, with mixed price reactions: a -7.69% move after strong Q1 versus a +1.77% move on Q2. Conference call announcements around August 21 and November 20 produced modest gains. Today’s Bahama Breeze restructuring fits into this broader pattern of portfolio and capital allocation decisions without explicit guidance changes.
Regulatory & Risk Context
Darden has an effective S-3ASR automatic shelf registration dated 2025-09-26, allowing issuance of common stock and debt securities from time to time for general corporate purposes such as working capital, capital expenditures, stock repurchases, debt repayment, or acquisitions. No usage of this shelf is recorded in the provided data.
Market Pulse Summary
This announcement finalizes Darden’s review of strategic alternatives for Bahama Breeze by closing 14 restaurants and converting 14 sites to other Darden brands over 12–18 months. Management does not expect a material financial impact, emphasizing site quality and redeployment within the portfolio. In context of recent strong sales growth and dividend consistency, investors may watch how efficiently conversions proceed and whether the brand mix shift affects longer-term sales and margins.
AI-generated analysis. Not financial advice.
The company has now determined that it will permanently close 14 Bahama Breeze restaurants and plans to convert the remaining 14 locations into another Darden brand. The company does not expect these actions to have a material impact on its financial results.
The 14 restaurants designated for permanent closure are expected to continue operating through April 5, 2026. The company anticipates converting the remaining 14 locations over the next 12-18 months. They are expected to continue to operate until any temporary closures are needed for the conversion. At this time, the company is not disclosing the specific Darden brands into which these locations will be converted.
The company believes the conversion locations are great sites that will benefit several of the brands in its portfolio. Going forward, the primary focus will continue to be on supporting team members, including placing as many as possible in roles within the Darden portfolio.
A list of the locations of Bahama Breeze restaurants that will be closing and those that are expected to be converted is provided below.
CLOSING RESTAURANT LOCATIONS | CONVERSION RESTAURANT LOCATIONS |
500 Center Blvd., | 499 E Altamonte Drive, |
3590 Breckenridge Blvd., | 805 Brandon Town Center Drive, |
12395 SW 88th St., | 14701 S Tamiami Trail, |
10205 Rivercoast Drive, | 8160 Irlo Bronson Memorial Hwy., |
1251 West Osceola Pkwy., | 25830 Sierra Center Blvd., |
11000 Pines Blvd., | 5620 W. Oak Ridge Road, |
1540 Rinehart Road, | 8849 International Drive, |
19600 Haggerty Road, | 8735 Vineland Ave., |
2000 Route 38, | 1200 N Alafaya Drive, |
3309 Wake Forest Drive, | 3045 N Rocky Point Drive East, |
320 Goddard Blvd., | 755 Earnest W Barrett Pkwy NW, |
6100 Robinson Center Drive, | 570 Cross Creek Mall, |
2714 Potomac Mills Circle, | 7811 Rivers Ave., |
15700 Southcenter Pkwy., | 4554 |
About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Chuy's, Seasons 52, and Eddie V's. For more information, please visit www.darden.com.
Information About Forward-Looking Statements
Certain statements contained in this press release constitute "forward–looking statements" within the meaning of the federal securities laws and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward–looking statements include, but are not limited to, statements concerning the company's strategic initiatives, anticipated operational actions, expected timelines, and other statements that are not historical facts. These statements are based on the company's current assumptions, expectations, and projections and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Any forward-looking statements speak only as of the date on which such statements are first made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden's Form 10- K, Form 10-Q, and Form 8-K reports. These risks and uncertainties include: a failure to address cost pressures and a failure to effectively deliver cost management activities and achieve some economies of scale in purchasing, certain economic and business factors and their impacts on the restaurant industry and other general macroeconomic factors including unemployment, energy prices, tariffs and interest rates, the inability to hire, train, reward and retain restaurant team members and determine and maintain adequate staffing, a failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills that could impact our strategic direction, increased labor and insurance costs, health concerns arising from food-related pandemics, outbreaks of flu, viruses or other diseases, food safety and food-borne illness concerns, insufficient guest or employee facing technology or a failure to maintain a continuous and secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems, the inability to successfully complete our integration of Chuy's Holdings operations into our business, risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to recognize, respond to and effectively manage the accelerated impact of social media, a failure to identify and execute innovative marketing and guest relationship tactics, ineffective or improper use of other marketing initiatives and increased advertising and marketing costs, climate change, adverse weather conditions and natural disasters, long-term and non-cancelable property leases, inability or failure to execute a business continuity plan following a major natural disaster, shortages , delays or interruptions in the delivery of food and other products and services from our third-party vendors and suppliers, failure to drive profitable sales growth, a lack of availability of suitable locations for new restaurants or a decline in the quality of locations of our current restaurants, higher-than-anticipated costs associated with the opening of new restaurants or with the closing, relocating or remodeling of existing restaurants, risks associated with doing business with franchisees, licensees and vendors in foreign markets, volatility in the market value of derivatives, volatility in the
(Media) Rich Jeffers, (407) 245-4189; (Analysts) Courtney Aquilla, (407) 245-5054
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SOURCE Darden Restaurants, Inc.: Financial
FAQ
What will Darden (DRI) do with Bahama Breeze locations after the strategic review?
When will the 14 Bahama Breeze restaurants scheduled to close stop operating?
How long will Darden (DRI) take to convert the 14 Bahama Breeze locations?
Will Darden (DRI) disclose which brands will replace Bahama Breeze locations?
What does the Bahama Breeze action mean for Darden's financial outlook for 2026?
