ORLANDO, Fla. — Darden Restaurants delivered a mixed opening to its fiscal year on Thursday, posting a sales beat that masked a widening gap between its two biggest chains: LongHorn Steakhouse is thriving while Olive Garden cools off, and investors punished the stock anyway.

The Olive Garden and LongHorn parent reported fiscal first-quarter results for the period ended August 30, showing total sales up 5.1% to $3.2 billion and adjusted diluted earnings per share from continuing operations of $2.05, a 4.1% increase from a year ago. Company-wide same-restaurant sales rose 3.1%, but the brand-level split told the real story.

Steak wins, salad-and-breadsticks stalls

LongHorn Steakhouse posted same-restaurant sales growth of 6.2%, again the best performer in Darden's eight-brand portfolio, with quarterly sales climbing to $860.9 million from $776.4 million a year earlier. Olive Garden, by contrast, managed only 1.1% same-restaurant sales growth, falling short of the 1.3%-to-2.0% range analysts had penciled in, per TradingPedia's earnings recap. Fine dining brands grew 1.6% and the "other business" segment, which includes Cheddar's Scratch Kitchen and Yard House, rose 3.8%.

CEO Rick Cardenas framed the quarter as broadly healthy. "The first quarter was a solid start to our fiscal year with each of our segments delivering positive same-restaurant sales," he said in the earnings release, adding that the results "reinforce the importance of having distinctive brands, each with a clear strategy."

"WE BOUGHT MORE LAMB THIS YEAR THAN LAST YEAR, AND WE SOLD OUT IN HALF THE TIME. IT WAS A STRONG PERFORMANCE." — CEO Rick Cardenas, on a viral LongHorn limited-time offer

Cardenas also downplayed expectations that every brand should chase LongHorn's pace, noting "not all of our brands are going to do a nine comp every quarter" — a nod to the steakhouse's momentum in prior periods, even as this quarter's comp landed at 6.2%.

Despite the sales beat, shares fell as much as 4-5% in premarket trading before paring losses through the morning, as investors focused on Olive Garden's soft traffic and broader worries about middle-income consumers pulling back on dining out in a higher-rate environment, according to TradingPedia's coverage of the reaction. KeyBanc had already trimmed its Olive Garden same-restaurant sales estimate ahead of the print while keeping an "Overweight" rating on the stock, per Restaurant Dive.

Darden also declared a quarterly dividend of $1.62 per share, payable November 2 to shareholders of record as of October 9, and repurchased $222.3 million of stock during the quarter, leaving $1.3 billion available under its $1.5 billion buyback authorization. The company reaffirmed its full-year guidance of $11.10 to $11.35 in diluted earnings per share from continuing operations, unchanged from before the quarter.

Looking ahead, Darden's next major checkpoint is its holiday-quarter update in December, when investors will watch whether LongHorn can sustain its double-digit-adjacent growth pace and whether Olive Garden's newer promotions can reverse the traffic softness that dragged on the brand this summer.