Brinker International, Inc. EAT and Darden Restaurants, Inc. DRI are two major casual dining operators in the United States. Both stocks have outperformed the industry over the past year, showing resilience in a challenging environment. But with market volatility adding pressure, which stock offers the better value and more upside potential right now?

The Case for Brinker

EAT’s efforts to drive traffic and revenues through sales-building initiatives, such as the streamlining of its menu and its innovation, the strengthening of its value proposition and better food presentation, bode well.

In the second quarter of fiscal 2025, Brinker witnessed traffic and guest count growth on the bank of marketing campaigns, including the Better Than Fast-Food TV campaign and the Triple Dipper social media campaign. Sales at Chili’s rose 31.4% and traffic increased 19.9% year over year. As operations improve, the company is seeing higher returns on marketing investments through more frequent guest visits.

EAT’s focus on expansion efforts continues to drive growth. In fiscal 2024, the company opened nine new Chili's restaurants. For fiscal 2025, Chili’s has nine to 11 domestic openings and 21-25 international openings scheduled in the pipeline.

Brinker emphasizes menu adjustments to drive growth. In the second quarter of fiscal 2025, the company continued to drive momentum with food innovation. Following the success of the natural hot mozzarella sticks, EAT introduced Honey Chipotle Mozz Sticks, which likely fueled social media excitement around the Triple Dipper campaign. The campaign's impact was significant with Triple Dipper accounting for 14% of total sales in the fiscal second quarter, up from the fiscal first quarter.
The company is planning more food innovations in the fiscal fourth quarter, including a new item that will enhance the 3 For Me platform and build on the success of the Big Smasher launch. Brinker expects this new menu item to help increase traffic from a year ago.

The Case for Darden

The company is benefiting from the robust performance of Cheddar's Scratch Kitchen. The acquisition of Cheddar's Scratch Kitchen has added an undisputed casual dining value to the company’s portfolio of differentiated brands. It also helped Darden to enhance its scale.

Recently, DRI and Uber have expanded their partnership to include Cheddar’s Scratch Kitchen in an on-demand delivery pilot program. The initiative, currently underway at 10 Cheddar’s Scratch Kitchen locations, allows customers to place orders directly through the restaurant's website and mobile app. Uber Direct, Uber’s national delivery network, facilitates the deliveries, ensuring seamless service.

Darden is also benefiting from expansion efforts. The company expects to open 50-55 net new restaurants in fiscal 2025, whereas in fiscal 2026, it plans to open 60-65 restaurants.

At LongHorn Steakhouse, DRI strives to attract its guests by focusing on the core menu, culinary innovation and providing regional flavors. In third-quarter fiscal 2025, sales at LongHorn rose 5.1% year over year to $768.1 million. This upside was driven by same-restaurant sales growth, accompanied by revenues from new restaurants.

How Does Zacks Consensus Estimate Compare for EAT & DRI?

The Zacks Consensus Estimate for Brinker’s fiscal 2025 sales and EPS implies year-over-year growth of 18.7% and 102.4%, respectively. Earnings estimate revisions for fiscal 2025 have witnessed upward revisions of 3.4% in the past 60 days.

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The Zacks Consensus Estimate for Darden’s fiscal 2025 sales and EPS implies year-over-year increases of 6% and 7%, respectively. However, earnings estimates for fiscal 2025 have witnessed downward revisions of 0.2% in the past 30 days.

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Price Performance & Valuation

Brinker’s stock has skyrocketed 185.2% in the past year, outpacing its industry’s dip of 0.8% and the S&P 500's 2.1% decline. Meanwhile, DRI shares have gained 19.4%.

Price Performance

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EAT is trading at a forward 12-month price-to-earnings ratio of 15.00X, above its median of 12.23X over the last two years. DRI’s forward earnings multiple sits at 17.89X, close to its median of 17.21X over the same time frame.

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Conclusion: EAT Vs DRI

Brinker appears to be the more compelling pick between the two restaurant stocks at the moment. The company is showing strong momentum through successful marketing campaigns, menu innovation and expansion, all of which are driving traffic and guest engagement. EAT’s earnings outlook is improving, with analysts turning more optimistic in the recent months.

Meanwhile, Darden remains a solid operator with brand strength and steady expansion, but its growth estimates have softened slightly, and analysts appear more cautious. Overall, Brinker’s sharper rebound, stronger upside potential and growing investor confidence give it an edge in today’s volatile market.

EAT carries a Zacks Rank #2 (Buy), whereas DRI currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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