Olive Garden Parent’s Stock Is Slumping Amid Tariff Woes. Executives Are Making Sales.

Darden Restaurants said it saw higher-than-expected costs for beef in its latest quarter. (Photograph by Luke Sharrett/Bloomberg)

Key Points

• Darden Restaurants executives sold shares after the stock slumped following a fiscal first-quarter earnings report.
• Matt Broad, Senior Vice President, sold 5,661 shares for $1.1 million and gifted 515 shares to a charitable fund.
• John Martin, Group President, sold 1,700 shares; Darden’s stock is up 0.8% this year, compared with the S&P 500’s 13.3% gain.

Darden Restaurants , the parent company of Olive Garden and LongHorn Steakhouse, was once considered a winner in the fast-casual dining category. But the stock slumped after its fiscal first-quarter earnings report, and executives are making sales.

Matt Broad, the company’s senior vice president, general counsel, and corporate secretary, was the first executive to sell company shares this month, records show. On Oct. 6, Broad sold 5,661 shares of common stock at an average price of $193.40 each, or around $1.1 million in total, according to a Form 4 filed with the Securities and Exchange Commission.

The form shows that Broad also made a bona fide gift of 515 shares to a donor-advised fund, a charitable vehicle that usually allows donors to take an immediate tax deduction.

Following the transactions, Broad directly owned 13,915.754 shares of common stock valued at about $2.6 million based on Friday’s closing price of $188.19. The amount includes shares acquired under Darden’s employee stock purchase plan and the plan’s dividend reinvestment feature.

On Oct. 14, another member of executive leadership made a sale. John Martin, group president responsible for chains such as Yard House and The Capital Grille, sold 1,700 shares for $184.58 each, according to a separate SEC filing. Martin directly owned 18,386.325 shares after the sale, worth about $3.5 million as of Friday’s close.

Before the latest transactions, Broad’s last sale was on July 1, while Martin’s was on June 25, according to SEC filings.

Darden Restaurants didn’t immediately respond to a request for comment.

Ahead of first-quarter earnings on Sept. 18, shares of the restaurant operator were up 11.8% this year, in line with the S&P 500’s 2.2% gain. However, the stock tumbled after the company posted quarterly results, with Darden cautioning that rising food and labor costs—coupled with efforts to tamp down prices—would impact earnings for the foreseeable future.

Darden cited higher-than-expected prices for beef at the end of the quarter, which could be partially driven by tariffs. While extreme weather has contributed to a historically small cattle herd in the U.S., the Trump administration’s levies on Brazil also have led to a drop-off in beef imports.

Darden’s decline has only intensified since the start of October, and was made worse by a sudden drop on Oct. 10, the ex-dividend date, or the date after which buyers of the stock aren’t entitled to the quarterly dividend payment. Shares now are up just 0.8% this year. The benchmark S&P 500, by comparison, has risen 13.3%.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com