Darden Restaurants To Permanently Close Bahama Breeze Chain — How Did DRI Stock React?

Bahama Breeze closures have spurred investor optimism as Darden’s focus on margin growth gains prominence.

• The stock has gained nearly 13% so far this year and is on track for its fourth straight yearly gain.
• Darden said that the 14 restaurants designated for permanent closure are expected to continue operating through April 5.
• The company expects to convert the remaining 14 locations over the next 12-18 months.

Darden Restaurants' stock closed up over 2% on Tuesday, recording its best day in two weeks after the company said it will permanently close 14 of its Bahama Breeze restaurants and lay out plans to convert the remaining 14 locations into another Darden brand.

The stock has gained nearly 13% so far in 2026, following three years of gains, driven by steady demand for its offerings and plans to roll out value meals to drive consumer traffic to its restaurants.

Darden has been focusing on improving its margins, which have been pressured by higher beef prices and heavy investments in advertising and marketing, as consumers have become cautious about spending at restaurants, leading to traffic declines.

How Many Bahama Breeze Outlets Are Closing?

The company had earlier announced that the Bahama Breeze brand and its 28 locations were no longer a strategic priority and that it would consider strategic alternatives, including a potential sale of the brand or conversion of restaurants to its other brands.

Darden said that the 14 restaurants designated for permanent closure are expected to continue operating through April 5. The company expects to convert 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,” Darden said.

Analysts See Benefit From Casual Dining

Last week, Mizuho upgraded Darden to ‘Outperform’ from ‘Neutral’ and raised the price target to $235, up from $195, according to TheFly. The price target implies a 14% upside to Tuesday’s closing price of $205.49.

Mizuho said it expects casual dining to outperform as a segment in 2026 and views Darden as a beneficiary of segment tailwinds and company-specific drivers. Higher tax refunds will benefit both of the company's brands, and its margins have upside as menu pricing "somewhat accelerates."

Melius Research upgraded Darden to Buy from Hold with a price target of $265, up from $240. The firm says its discipline in valuing the company is driving durable traffic and market-share gains. Meanwhile, beef inflation is a "timing headwind, not a structural impairment,"

How Are Stocktwits Users Reacting?

Retail sentiment on Darden dipped to ‘bearish’ from ‘neutral’ a day ago, with message volumes at ‘high’ levels, according to data from Stocktwits.

Shares of Darden have gained nearly 3% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<