Darden Restaurants (DRI) 18 Dec 202021 Q2 Earnings call transcript

Company Profile

Participants

Kevin Kalicak	Investor Relations
Gene Lee	Chief Executive Officer
Rick Cardenas	Chief Financial Officer
David Tarantino	Baird
Chris O’Cull	Stifel
Andrew Charles	Cowen & Company
Brian Bittner	Oppenheimer & Company
Eric Gonzalez	KeyBanc Capital Markets
Chris Carril	RBC Capital Markets
Jeffrey Bernstein	Barclays
Peter Saleh	BTIG
John Glass	Morgan Stanley
Dennis Geiger	UBS
Jeff Farmer	Gordon Haskett
Lauren Silberman	Credit Suisse
Jon Tower	Wells Fargo
Nicole Miller	Piper Sandler
David Palmer	Evercore ISI
Nick Setyan	Wedbush Securities
Andrew Strelzik	BMO
Andy Barish	Jefferies
Brett Levy	MKM Partners
John Ivankoe	JPMorgan
Gregory Francfort	Bank of America
Jared Gardner	Goldman Sachs
James Rutherford	Stephens Inc.
Brian Vaccaro	Raymond James
Jake Bartlett	Truist Securities
Priya Ohri-Gupta	Barclays

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Fiscal ‘21 Second Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to your speaker today, Kevin Kalicak. Thank you. Please go ahead, sir.

Kevin Kalicak

Thank you, James. thank participating and today’s everyone, morning, you on for call. Good

are on Darden’s the me Gene call CFO. Joining Cardenas, today Lee, Rick CEO; and

forward-looking that of XXXX. comments call statements are the reminder, during risks These Securities statements and to include uncertainties Private Act a in cause as Reform As Litigation subject defined could made will this filings release, results with and described in are to Those projections. risks morning Exchange and differ actual Securities this company’s the materially which press Commission. and in distributed from its our expectations was the

by in presentation provide opens And our remarks We broadcasting call. the our release to our then will then and this followed simultaneously discussion posted measurements morning, before the non-GAAP share closing are performance financial our third the Gene outlook brief is XXXX darden.com. reconciliations fiscal included comments. quarterly a in XX at some Investor for will a some and earnings presentation. quarter. about and third of during section We and results Gene on call, more certain March on conference includes those share measurements, Relations detail Rick share plan which highlights. quarter presentation Today’s will market the This of website are business

the Now, to turn over I will Gene. call

Gene Lee

Kevin good morning and you, Thank everyone.

Total XX.X% our quarter by from quickly per environment. As same-restaurant sales we XXX impacted quarter. sales only weeks being XX.X%, XX% once open the to XX% ability X net our again went the basis in billion, and dining of our last at being with points from The same-restaurant and continue an the of $X.XX. the of a diluted we middle were quarter the operations opened end of earnings to rooms deliver were from pleased unpredictable $X.X to operate as negatively profitability approximately sales of continuing was in environment a continuing very decreased share I decrease strong in operations fluid sales

As their Thanksgiving back our shifted holiday. second just year into in modified quarter of behavior reminder, the this believe a advance and we

During priorities. technology members model. restaurant experience and our four key improve of the complex environment, our and our guest deploying health the members safety of and quarter, in we remain transforming been execution guest The priority. health and focused in our operating safety to on has always the team guests, top The and team business

monitoring, every to everyone. environment protocols follow safety continue safe and CDC team well guidance and the a to daily our make teams protocols. We latest our This safe. enhanced the other own for to from member, cleaning every our distancing for commitment each as keep requiring create mask proud member health procedures includes day guests as team enhanced of I’m social

restaurant philosophy drive level or curbside Second, Back-to-Basics focused that our whether guest our are in to-go. on remain operating to great restaurant execution with experiences us ordering guests results our teams dining

execution our simplified environment still exceptional delivering guest menus, which guest procedures Our restrictions, our XX confirm a including adept our remain That’s committed are to not teams very in become challenging COVID and satisfaction easy. streamline why have environment. operations, to to they great experience processes been ever-changing the restaurant operating strengthen have our this and in adjusting but continue job that metrics doing teams and months, this at we it’s for

the improve guest to technology deploy to continue experience. we Third,

in email to Darden by of the digital provides, our allowing more the brands our of them the million compete harnessing addresses each tools, XX benefit database. marketing technology Our platform from including effectively power

our off-premise at digital storefronts for sales XX% where digital effectively. total digital. Olive were brands And transactions XX% paid the guest quarter, of the quarter use Garden LongHorn launched the our and than ordered of refresh our quarter online. Steakhouse to during continue fully websites During sales and all More were Olive their Garden,

During Here on restaurant simply to to the message. they’ve which am easily Curbside in embedded pick our arrived guests we a the link text I notify by out to-go that tapping order allows a quarter, up rolled also their curbside

result, on the ensuring focused accurate leading are time phone is a on-time, to guest on spending operators and our less time improved scores. As satisfaction which and are more orders

several also or the whether including of in other Wait Visibility, using and our in online checkout streamlining List working We to to process on guest. person. even checked our for adding list phone additional more convenience see place And introduced have provide payment online regardless allowing their guest they we’re waiting their on mobile options initiatives,

journey, accelerate continue the making. encouraged and progress by I’m We our digital to we are

to continue business environment a growth. model view for to we rare our long-term as opportunity this Finally, transform

began make closed, and and to to Garden dining to November the investments positioned of product restrictions XX.X% Olive that quality ensure to and even our Olive sales. Garden continue as team emerge rooms we members, XX limit their sizes share. end portion same-restaurant top-line by to declined capacity number with XXX month. the in stronger better We accelerated sales continue grow

weekly retaining the of year’s promotional showcasing able the investments Garden activity, led also rather Olive capacity while sales. their more of strong than quarter limited to experience, This continued XX% a as their discounts. while off-premise focused was margin, elimination result of of reduced simplified promotions. core additional making of limited compelling sales and spend However, menu abundance operational to value. than and on margin XX,XXX featuring last average were increased deliver they segment strengthened including their realize to convenience time profit during menu the the in and environment, efficiencies In per restaurant, marketing current items

investments all-time of orders grew to-go up the Additionally, time their promised. XX% mentioned earlier, ready Garden sales. Olive another having in at satisfaction pick improved in Enabled technology total I quarter, the and to XX% representing by experience achieved sales guest the for off-premise high

during They Almost successfully three opened Steakhouse restaurants operations and execution XX% team new LongHorn member the XX.X%. laser quarter. restaurants sales quarter. leveraging quality three culture declined Finally, guest strategy also grew their solid opened their their remains Garden successfully of unique of quarter. sales drive team quarter. the in on increasing to LongHorn same-restaurant engagement. restaurants focused The another to experience, Olive the in increase the of their had new Same-restaurant simplifying

During the while of managing simplified controllable menu did job productivity. great team a drove costs the quarter, labor their improved

than Finally, XX% of LongHorn by grew off-premise sales total XXX%, more representing sales.

Now turn Rick. over I will to it

Rick Cardenas

and Gene you, everyone. Thank good morning

was $X.X operations net For decrease total from and the sales were were XX.X%. of diluted a second sales EBITDA earnings million XX.X%, per declined continuing quarter, share Same-restaurant $X.XX. $XXX billion,

weekly quarter. first from Our results sales on second was quarter encouraging the building with start

last and governments of local downward the down restrictions, COVID-XX last dining estimate weeks by impacted re-imposed sales However, this over and $XX income that as weeks many in two cases began room in operating approximately quarter negatively November trended the state million. We two the shift increasing significantly.

utilities higher Turning basis labor packaging. year operational for net driven investments basis was than week primarily by increased lower Restaurant we declines to the to reinstated expense labor quality driven of by XXX our expenses. pay our labor last impacted XX% management over Restaurant and to-go operating food closures. program was repairs, in P&L. points and lower team pay expense maintenance by lower room emergency with improving due was million and dining retention than hourly This partially as members by points offset simplification. Food year, of last by basis XX last and per $X year, points, beverage and was sales XXX credits deleverage driven emergency by than

share XXX reduced However, sales level We higher marketing margin expenses points impacted last basis on spend a percent and $X in deferred $XX quarter XXX than significant marketing of last EBITDA by above XXX Restaurant almost XX%. year points negatively mark-to-market our expense year. points deleverage basis decline last in of this This this were million the quarter. compensation. resulted was basis appreciation restaurant related in as XX.X%, price and coming sales expense to markets the despite of both year. total equity is million favorable to General sales Darden with by administrative

due this to illustrates basis quarter’s of million reduction the way mark-to-market Page and As the $X.X this expense. presentation in line. is the it points operating from we XX margin a income operating hedge tax of of mostly reminder, corresponding offset income expense, reduction XX

reduced due The in benefits the the normalized have XX.X%. points from a would compensation just this mentioned. rate lower for million, tax net been by percentage quarter to quarter I hedge income for tax million. adjusting resulting quarter expense mark-to-market deferred earnings rate to the effective after-tax second of $X.X the X.X $X.X effective this, Our reduction After tax hedge by was of tax X.X% this

reduced direct profit our This on this Steakhouse a Looking and Garden, Olive marketing was focus lower at increase saw segment, our quarter, by other which margin and all simplified operations, significantly our performance continued segment sales declines. despite segment driven expenses. labor LongHorn

board and our covenant within diluted $X.XX XX%. debt last quarter with of was share, sales giving XX% within segment of $XXX our declared well the creation. of QX liquidity. adjusted million capital second over EPS below dividend Dining We free margin cash profit of our available decline. facility, us untapped XX% for debt Fine quarter, improved year, long-term The a flow in our generated driven of of XX.X% Our quarterly per the in although adjusted $X.X another the We over by and to credit value of at framework available ended impressive, billion $XXX XX% cash quarter end to a cash our the million in $XXX million

We will future have the board with continue on to our dividends. regular discussions

with earlier, the sales building results. I quarter first started mentioned quarter As upon

these As dining sales increased, reversed. closures room trends improving

partial capacity of versus quarter. approximately XX% least of As second we our the with of have in room restaurants a dining the at operating today, peak of middle XX%

dining the we third room in forward, Moving experience quarter. restrictions increasing further and closures capacity may

call, more room by due as last earnings be and if difficult the as year time that this At peak travel seasonal historically Valentine’s higher from it also we may restrictions Day of year. travel average Christmas, recall, time, our capacity closures, dining well on-premise Current quarter, exacerbate seasonal that and you same-restaurant comparison ease. reductions to the in the – holidays in not is will year. restrictions As sales last sales sales our to sales during that capacity unit driven do our will time mentioned stated increase quarter volumes last to New we third Year’s

impacts. duration room these uncertainties there Additionally, and and are surrounding further the capacity still dining of limitations closures

for we factors, expectations are a quarter. broad of these range providing third all the Given

on between We $X.XX year between and EBITDA billion, and expect total sales share between sales. off-premise and million $X.XX diluted on continuing XX% base dining $XXX per and XXX and our million million and are $XXX total net $X.XX sales in we expense earnings rooms be between closures shares. levels, share management from With focusing a of prior of XX% increasing, $X.XX of billion to operations resulting of playbook diluted

and to XX% the experience making broad sales with time in the short-term And I’m for make on continue are news don’t we team a to right trend fourth quarter, until strengthen currently decisions in our believe the encouraging messaging EBITDA improvements appropriate we distribution of anticipate while guest and achieve to our is approximately sales, operational create last of meaningful we with business. our the XXX% to Despite fiscal the the at COVID-XX quarter we there of better pre-COVID of While long-term confident business. continuing we our members, pre-COVID investments faced can dollars complexity sales consistent vaccine trends, spring, some headwinds our XXXX. impacts in

it Now turn will back Gene. with to that, I

Gene Lee

service President as Rick’s will at look is restaurant X, a our morning, President been that side-by-side working become become to January in me Officer. the represents he and industry largest Rick. a five to Red Operating company. On over hard full He has with our new will of Chief and mastering his joined XXXX role. the about. I Thanks, the This last Lobster him worked also Buster extremely Darden great and many we functions. He’s years, partner forward world’s career all announced what Rick

enough promotion done individual as recognizes at Vennam every in will our has job take With Rick as a him me and Raj say members dining at get announced brands Additionally, our the focus, both this he an he organization. Raj I Chief are restaurants and XXXX, holiday I’m want in keen is well and of take to to our and we as year. exceptional. and program want the the closures, many become has opportunity excited in them. to to will the this made multiple to will industry, CFO. the for with team held. see can’t their significant to began is we Raj that With greater in during has Darden the over contributions in weeks career members restaurant why room role needed have the recognizing person exceptional members Raj Financial a congratulate today, to reintroduced demonstrated jurisdictions close the His three of his his know rooms Rick. implementing furloughed throughout season. team mind from role about of hours I I determination understanding we are expand not our center. they provide commitment and support are team room emergency pay Their they’ve is by our pay closed. brilliant company That here the perfect that emergency Officer. when dining dedication who the

thank of to each warm and you I you to we going for the lines our our with of season. committed questions. all taking team providing a are And of take happy care will take [indiscernible] On effort meal. extraordinary a all competitive and to members of wish to I that, team your comfort the a holiday other. your for guests care Thank behalf the our the directors, and them. safe of and Our want management tireless board by serve community advantage to greatest we

Operator

line Thank of first you. Instructions] the question [Operator Our ahead Go Tarantino Baird. from with comes please. David

open. line is Your

David Tarantino

morning. good Hi,

board this taking thoughts and role? President COO on as Gene, well will change you interpret I hear also a congratulations whether thoughts your be deserved. in a forward? congratulations and about the Rick changes. business the your will elected of promotions, maybe on being is And should those my Raj just question Chair on wanted and to result signal how of involved First, Gene, the as involvement less that your on investors day-to-day to on your very Rick going

Gene Lee

that’s mean, opportunity absolutely on involved growth there, a see operationally I this both Raj. to being I not. create Rick strength. and plan for I as No, as my

and an Obviously, to I think great today, of know understand deeper to relationship and him into it’s the lot little going think deeply. opportunity development important people get operations his more and presidents that the with it’s a to Rick oversee a has a our to operations I other give but for he get also and opportunity an make to parts there us think things making for just happen, not I synergies see on are to to in if further our the non-consumer-facing that of additional the it’s invest sure enable our all important me with president. we find business to partner continue business. him is to leveraging to

the this importantly, see deserve to people to opportunity an hands more do So and I extra as work to look with be things able an some And that of to have additional grow. can opportunity thing. look Rick think to at some things Giving bit see differently. freedom a up pick across little the organization the maybe the time where we and set good a synergy and is I

to you the have. do to limit a know I I is that in, of that even amount tried position think a but I that there was in time

the Rick as forward. giving very move will be to we think that beneficial organization time I

changes. I look working as a am a It world-class with Financial heavily anything I am think the think I anybody forward I great into Raj to in servicing read be don’t Officer, to at – today, food and him still going these So chance to about I going way giving Chief I and and just has exciting. it am also opportunity. involved atmosphere, excited really into develop be a it. look I that’s to should

people, and things So done few to growth we read anything have we’re we creating get this for into creating opportunities want change. that than new with it our don’t other a

David Tarantino

to Sounds again all great. you. of Congrats

Operator

of ahead from Chris line please. the comes Go Our Stifel. with O’Cull next question

open. is line Your

Chris O’Cull

how guys. Thanks. Good dining lifted marketing meaning, the Gene, on about plan increases that? wait thinking plan returning company am to is company you much until to the a company normalized morning, kind consumer how for about usage restrictions does there the get or are to spend, demand does to are sense mobility government how I thinking just is determine a trying guys what see of going as to be to advertising utilized? pent-up

Gene Lee

Yes.

marketing definitive that answer I multiple come we question, – put to what get grow marketing want and right how there the like little no We spend. like, have the back time. options of back can is back marketing and point demand use would line pent-up put to really rely the those We we resources part have. But advertising environment on we of that at like the where P&Ls less marketing at to to at is in Obviously, love developed going put to in with And business resources is think now. think we I a what business have see to we’re this plans and see the our judiciously. point competitive level – to the a it’s I back going your is and and we’re the the look

And just the so get make is decisions into and competitive need no – our to we outcome environment this. on We there predetermined then then.

We needed. have multiple developed if options

Chris O’Cull

on Congratulations everyone’s Great. promotions.

Operator

Our Charles & line the with Cowen Go of ahead from comes Andrew next question Company. please.

is line Your open.

Andrew Charles

see Thanks is, development and out class is from most to benefit look store terms promotions. on the see as of XX% trying and XXXX Raj, I’m XXXX that last landlords to favorable sales are do you likely openings? so of X% will And holidays you and quarter what Gene, closures? change the well get the recent from your deserved trends to happy that to starting few of much. more at developers pipeline view the Great. and weeks the category Gene, Rick to congrats

Gene Lee

mean, businesses a so think I it’s And unfortunate has way, negative in I will productivity I are is X% our it that do – to industry, so because – impact still – our this think on of forth. these a being the think position that closure range. lot No, on small that on have I on it XX% don’t a of impacted my

far more as much estate I pretty the real there availability there as still that now. is same think some on my position is So goes, right that that is out

any However, rent we’re not in weakness the deals. seeing

there think we some on going is some think right speculation – I REITs. with I out now of are the what there

will you long-term about forward, open. into as reconfirmed that talked year exactly bunch to for businesses get release try once our I in ‘XX – go We we’ve guidance to But the want a have we there get go March of the we press been thinking jurisdiction, are occupancy We’ll So that framework. here we give we’re restaurants sitting to can to in approximately grow FY will need and restaurants move ready our we guidance get eventually this doing that today our more ahead guideline continue and that restaurant, responsibly. ready very we about is, We open. in successful development. think how And we just to open and XX% we to that. for a of to our back some number and hoping we

Andrew Charles

Thank you so much.

Operator

Our Company. next question comes Brian ahead from & the line Oppenheimer with please. Bittner of Go

line open. Your is

Brian Bittner

beyond long-term some taking bit you call, the when to this spoke AUV your for this morning. What transform echo the the you all call, a business I for strategically talked Gene, in that the are that three talk that. you for and the to about about you on good portion specifically lot opportunity doing move you a and company can upcoming into and investments do and this of you else truly growth, but and release congratulations you how recapture on long-term in remarks, new growth and in growth think about growth. both on of employee and press long-term? And changes, And just fact opportunity more a prepared portfolio company were unit the little transform the said, menu the the your you Thanks to roles. the

Gene Lee

Brian. Good question,

guest brought our think really on are call simplification And the doing And But last same-restaurant down, I nudge. guest about we to lot and we’re talked we opening behavior we think was, eye and been from the I the three we day-to-day grow what efficiencies ensure a I in can a in perspective. as our And I right? menus and a think think about that the efficiency sales without that’s strengthen us. we this to that’s about operation What more that wanted creating. and it for and lot to I buy – the of side. base going the learned operation importantly, ways, think that think that I

think really I well that positioned we’re So there.

lot a done our work ensure for good have up set We of success. that to is brand

we Olive stronger that of grow able much which transformation. about Secondly, we to key we growth, believe would we new bucket a cost than us business model was grow, And enable when pre-pandemic, go is side second it should deeper restaurants, able is we pre-pandemic. be from to is talked than the be Garden, in thought to especially have the which here that to may

a that’s our better think things we we little we get actually of still investment. about good bit cannibalization Garden handle up of the tick we’ve we So improvements excited I’m and the made, a Olive over on one return can handle because and growth can is, really think – time that the

really three every our four that avenue an and support Do The continue we down to as does a platform? that third said I’ve to the framework. at add faster we to comes forever, continue long-term can obviously brand think that benefit been we do that The options to to how Olive time. filter of This bucket us But the that to on really to our you or grow growth platform brands the we different period the to does our highlighted we our it platform? – use what has was than historically look are. And done growth Does Garden around it And benefit improve of put rate? we’ve be years. brand? something believe

is well than has restaurant the getting clarity those thing up. those this buckets done three food to someone think in faster think a brands, our last the our going And job. when business. really technologically in a and business, and enabled in The all travel so say the to out of Olive is technology worked is Olive – pick I especially coming and so forward I Olive it’s of you positioned really really to the transformation, lot this to But I we’ve that would that in curbside be drive that getting to an that it – think we’re that great going versus of I business, it’s be historically the what car moved come as think we us moving X growth I been which coming of how and team our hard And last – this originally we all years play capture LongHorn, trend. but And big moving Garden has a change the of planning we Garden the well. the handle experience an a is today, because really Garden, into part do. the And were to for from off-premise convenience big

that a to forward. be think advantage really going that’s going I competitive

Brian Bittner

into percentage you of you with in reported, in-store can middle that to Thanks the it’s business when happening ask one, how if back units quarter And type of you the look the am when But seems quarter, be that the going their the the stores just in give step by dining of taking to but business quarter, I us of in third don’t Gene. follow-up, that for in you XX% performing in that’s was that, manner? operating offering been mind. to what’s that pretty the back telegraphed The a got happening you nobody at peek world.

Gene Lee

think I really you But for were problems, some we still us that there the two social because business basis I XXX the in points cost I the geographic we that were said gave last I say weeks quarter. – would – to ways Well, the and adhering distancing.

were of the performing and you well, were parts the at there think I And out really what that see of look well. I there country so index were the think parts performing mobility can and country

if tourism in and non-tourist in been tourism. well. And markets Texas, so of is Florida well look we hasn’t our down have a lot because based of just in Florida Georgia you at But as performing we’re restaurants performing and

– to had wave some as are all prepared weren’t going that this we wasn’t face And knew done, but momentum, good that it. we able the So for this we’re second management and processes them we we a team we opportunity. down effectively businesses good we and of had and to wind be been off-premise-only and to back quickly advantage take – to we’ve we’ll up the then able wind

Brian Bittner

Thank you guys. and congratulations,

Operator

Our of KeyBanc comes Eric from Capital next please. ahead Gonzalez with the question line Go Markets.

open. Your line is

Eric Gonzalez

post-vaccine, don’t think Thanks. exists? rollout, you it in to that you on to capitalize opportunity maximize my on pent-up question Hey, talk what you – that the to can advertise? any would add need about you congrats promotions. vaccine I on the And like what do differently we think thanks. to you And the do don’t also the the to incremental My order that, is, as look as follow-up to – what demand you assuming assuming to need or you be do need will And sales a today? is what likely think is rate discount flow-through ahead

Gene Lee

let our that. answer will President I new

Rick Cardenas

And a years Well, the that congratulate words. I’ve to over and five everybody half, all promotion. over – want well to first been I me of kind a CFO. on for partner the these has real four been his the as thanks He all, Raj

invest what start a And those to restaurants we appreciate and to open. And invest do members, What start so been believe needed seen really when I as doing in our make team we we’re lot sure restaurants that. to our talking up, that food. we’re seeing that growth about ramp capitalize. has Gene the we’ve we in to

part strategically on that to we just we’re much second will is as that improve, about even to we what you incremental grow, of our in flow-through to model that. if that know get better margins question our capitalize talk sales. asked, which – continue We’re the business going so not and our the to to to do going But sales gets that is question

closer at today, and our margins doing are variable As were what XX% closer look to today, we we’re right, to before XX%. they

some costs improvement started we’ve basis see of come now, about so in. But strong. that would a as right lot drop. closures, the costs long to but that we of And we XXX mentioned, is run. And points margin pretty see some of to imply incremental When back taken those profitability will we and over out, started

move to still we don’t know the of pre-COVID to We believe XX% a our XX% forward, going to just XXX% get as pre-COVID sales. when we’re we so of EBITDA, get that of going to And pre-COVID we’re sales.

Eric Gonzalez

helpful. Very Thanks.

Operator

comes Carril Capital ahead RBC from line question Chris next Markets. Our please. Go of with the

is line open. Your

Chris Carril

Good on moving Rick or and thoughts on far your please technology a think longer more savings impact held could your Gene, the this? near-term morning, how on and both normalized roles to new of you’ve point, increased G&A Rick in and could promotions provide you forward, thus seen that does be much to morning. Raj. term? Congratulations how announced this on At this the and do environment focus Hi. how the now Raj, think about you in

Rick Cardenas

you we million G&A, I’ll the in have as The G&A. Thanks. about we talked quarter had, as closer end the without $XX about would reported a early million $XX about And saw, quarter that And we about saving been to million Chris. retirement the just to us program call, that ended. at year. million that this first we expense. mark-to-market talk Yes, But $XX $XX you recall, that of

had believe kind back. where things. they Those no of things will still come in still back We’re or our other about But question. come travel manager forward. is X% seeing those and which – How we’ve and conference and reduced some fast is we a running they G&A right they savings we’ll G&A considering as where because also we G&A But now, that general keep of were X.X% are. move that that things, remarkable we’re sales

that that of near will to million $XX As $XX we early $XX $XX up got where sales, of million – retirement. back start but seeing a before was it our G&A pre-COVID million savings we because bit, to get million to we little on nowhere I’m sorry, come

Chris Carril

there? the Got again on Thank any impact you. technology And is there just it. potential focus increased

Rick Cardenas

Yes. No, in we’ve technology investing years. for been

impact As forward. have amortization that we [indiscernible] going we projects worked technology on continue But depreciation on fall that the off. to line also we line investments, some work will our would

We’re the restaurant. them and efficient of directors here effective help going president operations more vice in making and in lot our to continue out get us G&A help is of that but us to efficient, center? whole more technology. be the technology it lot But save. more will invest of a about more a in we’re investments technology absolutely, senior G&A Yes. field won’t operations in support make of and our our and are the But Will

G&A, a that’s not that’s So margin. kind restaurant of

Chris Carril

Got it. Thank you.

Operator

next from with ahead comes Go Barclays. of Our please. question the Bernstein line Jeffrey

line open. Your is

Jeffrey Bernstein

line that then pricing about thoughts picture using you national offset the of just the how should the savings is morning, question agree about choice. you. going Good and for up, or in one follow-up. your And theory increase. just just wage moving employer as And inflation guide in whether or One or a I’m think obviously in broad question wondering I labor you of how a terms wondering follow-up, unemployment cost ease with outlook second lots then think of I’m And minimum significant experienced potential how and Darden’s you I you labor on quarter. in context and pieces. of leverage an maybe we’d outlook, with that the had and Thank Rick can forward? think industry bigger Florida the congratulations, Gene, menu Raj.

Gene Lee

mark Jeff. little over Yes. bit But Labor industry. a time of is the is structural us and for as for a we’ve question definitely about the dealt Good effectively. think increases with very morning, we labor,

asking be We are minimum in else think to if a deal at the are me, industry federal because there’ll as able we margins not to that than see positioned wage you’re increase think same over increase, at with rate Florida, the – Do our Florida. but minimum be I will the I anybody do wage where better to that’s I similar federal bottom today. time

to want should believe that that relationship public our don’t advocacy and constituents, really and and thinking how where albeit we’re guest – key for us server it team change, office keep some right groups change to don’t do the relationship change. is, about that I think tip in relationship people the to way the and between two wage service get that in members that the we the want that the constituents to

right out pass – pricing we’re from faced that, the to are it we that standpoint we through. able to figure with So at going then, if all how level. If we are how a the industry have get all to to do that protect

it, example today. when it it’s I look think the an and at – think long-term, California about of I P&L I think is

end to going the labor and You’re place. up a end bit little little cost up a at of cost, you’re same bit lower going goods to sold higher with but

long cost volatility you manage impacts confident ability the we long-term. where about positioned be the over thinking our of it. to I’m deal in that to that have Yes. way, as some as able And like are structure? so our and it short-term I with and But are to ability long-term, Could

Jeffrey Bernstein

pretty can need so not brand it known and own is then you using obviously think you quantification your there goes already portfolio just follow-up, penetration And as as best to increase about necessarily create your furthest many earlier, brands, opportunity new boxes. maybe the just of to you with of would any is being Garden alternative mean, as an how your well portfolio since whether example. I is would wondering I mentioned that an is, that’s your the as open kitchens? think large is up the maybe just Olive along, on that I’m maybe the kitchen Gene, own Understood. or there

So just trying that? Thank to sense get for a you.

Gene Lee

an come strong. occasion. – fall-off for believe restaurant strongly we be off-premise company. going we And some on believe is that on-premise the in-restaurant we back really There’ll believe demand to No, dining we’re

is fatigue long-term, and have stronger primary are that developed brand – that a will some And about be as brands in-restaurant that believe mile – that to business, know off-premise you at – of off-premise when people lot come these is think cuts be the something we the so pre-COVID. these convenience box want I last we strong back but great location, your so But it be going that experience. going in in. be business than drives you with a need an that think the is just into But don’t which to auxiliary – the profitability and to to business, that to convenience important. I I right are still off-premise was point and think involved logistics moving that on-premise really now. be create expensive locations and in-restaurant and some of developed and we be your Long-term,

Jeffrey Bernstein

you. Thank

Operator

comes the BTIG. ahead Our of question from Peter next with Go line please. Saleh

Your open. line is

Peter Saleh

and guys Great. Thank concept about update you to if give us we this the the throughout pandemic? the what, how we brand the Cheddar’s have I and promotions. of of out on made pandemic congratulations Gene, when if ask to unit changes the that team and you can wanted on think you come growth an any should

Gene Lee

Yes.

last transformation structure talked I about Cheddar’s. in the cost we’ve made at biggest call been the think the has in we’ve

dining in we cost. got at has the we significant And been absorb we reduction at When and progress table. value reduction and we that in the waste there, able well, great in a the there from were did that Prior actually very implemented. And the significant simplified ratings every menu, made pricing changed has As single we’ve just model. increased. which look cost guest the goods we a backdoor has sold, around really labor our of team to the rolled and have in business in which business processes to all the resulted pandemic, procedures to that, we had out get the room were which to really the received has able

capabilities. I had their ton pandemic, mess. think couple there. – lines, of we the capabilities that was through thing did not Prior have we of a but has going We the accelerated didn’t a a this it off-premise crisis just really is to other phone

got in they in there. We’ve lines. businesses number are that. it a increased been phone a proud it competency of got And got what core now Cheddar’s, the the get in working has it’s on and to we’ve got place. our online through know ordering we’re big really have pandemic, doing. and Curbside and We’ve the team because initiative, I’m it really We’ve but better fairly rapidly I’m I at pleased very not takes So hard I of think with they Here growing the

as we’ve We’ve resources to about far the stabilized we – talk metrics. resources human human human unit in As than really about getting I growth The unit goes, closer growth. Darden metrics resource always Cheddar’s. are talk

outlier I so now long. turnover being management think actually an middle actually is for such the in after

So growth. I need am still strength to to excited about handle we build that. But management

growth from been which range, human X% way expect handle the opening pandemic think resource the that a through to And transition, to standpoint. I the through through Now – I we would really restaurants the we X% unit have can and integration. through be all somewhere in

rate. to our growth So it’s additive

about the We’re business. excited

the we’ve loved We’re post-pandemic in team excited today, like and I’m environment. will the and business business really excited of – We’ve it. proud the to love has them. what about a always P&L got see look we’re great a really we done And job,

Peter Saleh

Do – for spend on marketing in to you as growth year? side the accelerate anticipate having coming percentage quarters more sales of that to to the a or Cheddar’s

Gene Lee

No, have a I from that have don’t standpoint. – marketing business to density effective just the cost we don’t in be

structure our concept high have continue – we’ll there. a But that digital up set use didn’t capabilities was the digital volume think cost it really, the right. to I always

up think set have structure up Now week. and cost the set right X,XXX we we a guests doing –

There not companies from in is that new week. there guests comes think many doing out really units the restaurant business really that growth. a growth I comp not X,XXX

Peter Saleh

Thank helpful. Very you.

Operator

Morgan the from comes ahead question of next Our with Glass John Stanley. please. line Go

line Your open. is

John Glass

would bit end, the actually you on congratulations Happy I the it would which assume off little from this G&A, Even the high going higher at Thanks a quarter two, well. to me of maybe revenues be might everyone that a holidays mark-to-market? as guidance. the margins. but should profitability higher, Is is quarter sales? little that Is something on might very or than revenues one this quarter, – boring on questions, because versus lower just more are, and third your second allow Raj, even quarter say, operating current maybe actually just be a much. total EBITDA margins finance there Rick of they function have was like else on lower

Rick Cardenas

got it getting think at restaurants I come No, a Hi, right? little restaurants, just And doing are at we more to we as that, efficient reopen G&A we So are – are if and better reopen, John. back doing are we that. getting the that close, more efficient continue front. well. we you as as bit But getting on restaurants more

a So margins have got and believe wired we that model show pretty now well our in business that just right in we up that’s QX. should

John Glass

just about same-store capacity think just the the restrictions over sales after the recovery? on we back model volumes unit sales lapping focus probably the best we’ll start into then volume about be then start that’s quarter just Should really in etc. pandemic? way of to investors next much be year-over-year to drives couple doesn’t of what to sort to this And last sort implied May business things really or limited this of think point is and should the capacities business same-store how until you that negative – average lap end. you’ll the Is about the it’s the of – How those because a talking and to are period matter, really next the quarters think

Gene Lee

that. to shown kind kind can you a pretty average think today kind of on when and assumptions what when of is – your to of make do and on then of versus rooms when the volumes transparent doing when weekly And that that dining does kind dining really restaurants factor unit kind rooms reopen. going to We that think it. can’t reopen things dining you when starts confident room just John, the our happen, but investors see I we’re to total we’re capitalize the look tell the pandemic have some dining at going opened and wane put restrictions rooms we’ve have be do in some and Yes. and our that to best are feel is when you of company when our ease we for make and there sales pandemic that on on going of releases guesses to what and is,

John Glass

you. Thank Great.

Operator

Dennis Our with Geiger line UBS. next question of comes ahead from the Go please.

Your line is open.

Dennis Geiger

satisfaction, you that the are Thank bit coming. you about out and more initiatives about more the that Gene, you maybe a bit all up the and then, on And to line plays a and of if brand, can as that more talked a I bit tech talk opportunity But and a on to plays for the wondering cost technology there if congrats promotions. on benefits bunch sales? opportunity perhaps but a little Rick, frame could rolled deserved play well? size and anything some platforms, is some of and talked from and well think about the you more the speed margin you. Thank guest those ultimately the can perspective benefits kind about bit, that recently role digital thinking digital up the you and top

Gene Lee

side. you helps all, first – technology on think really of I I off-premise think the

in-restaurant they our out enabled don’t their that. like put people back, we and menus talk phone, advanced us they want continue to at As look pushed at a talk look try guest, we as menus. have there QR They the on tell I codes or – to experience. digital don’t really the don’t they mean, to to technologically want they

And so take to restaurant. don’t place is I trend in that going think

orders get to We if quicker. devices are some see with playing handheld we can

great It The our that I get lot to think becomes time a used be consumer in in. that non-pandemic a to in to using payment. device enabled rate to high it. extremely a device payment orders is the on kiosk as servers role on has option does major use job able of brands. played our really It’s a with that

don’t advances there I restaurant, in So of time. over ton see technological a

working now the we that order things checkout how important. as accelerate you online that the that friendly List know on how retailers. be an is big Again, Wait one on, working on think we’re as the can the process right and big I you are is do

types there. the things those I on is so margin And of think technology

advanced right are we see I’m is not with more sure system. dining there We room much fairly now. system, KDS that our how technologically our

out that. years on invest return we the how to We roadmap are do technology where get figure want five over to and do the we highest working a next on

is work be to And so done. there still

email side, it interact you in I database accelerate off-premise size think that. digitally. our still the today on the guests think our of is but talk and And how much we don’t the other when of to about, about majority we with then

We and effectively will at get the things communicate to how visit. more a efficient might drive evolve and that continue that them to with better that. with that figure to about more and Trying our consumers let know

And of that. lot from digitally social. so our both I’m engagement about brand, with but an database, excited is a There from email

with those to sudden audience. listening that. Olive the a did buzz year what very we fantastic it, happened song capture name that working And they brand all that job Garden very, about her around that Swift XX-plus were old week be team And a on Taylor sudden, when the was dropped a Taylor able to make activity. our that able to around socially a that relevant and And of clock capitalize that team, all becomes think create to are in with It’s our song, Swift in a how of were Just our to on relevant. and relevant. that’s when brand last drops

thank thank dropping So, them song. Taylor her you Olive you in for to Swift Garden and to

Dennis Geiger

Thank you.

Operator

comes from Go Gordon Haskett. Jeff ahead the with Our Farmer next please. line question of

open. line Your is

Jeff Farmer

Thank Great. you. of you, the Well deserved three to and across board. all congratulations

for question labor you. Another

forward, should the especially pay XXX second the favorability coming just first moving favorability in quarter. if memory about points you fiscal be with saw we basis emergency in serves, thinking the about like guys basis you It So labor XXX of hourly back? points quarter. How sounds talked

Rick Cardenas

Hey, is Jeff. This Rick.

still it by really favorability hourly labor these QX some fact XXX driven them quarter, because those in basis restaurants On of more by the were – with that had go XXX restaurants fact labor of compared this much, to of very driven was we the employees. running much it a points was the hourly the QX, front, only, really to some in of in some menu simplified few were

And And rooms, but dining difference you yes, of labor, so, it. added to isn’t some emergency more into it’s about don’t the as we we added big we cost, the started necessarily the that we talk direct up XX ramping basis kind in consider labor, labor from QX fixed sales pay – our put point QX. isn’t when that very we

basis basis talk it about So the when emergency points, XXX we point not does XXX the pay. to include

Jeff Farmer

close but versus are analysts in costs And as management of know between dining? XX% as But it, percent but roughly anything impact hourly you’ve fixed on Can the expense restaurant specifically Okay. investor costs, and most variable a on indoor provide follow-up you the recently. of indoor dining And affecting I there movement has some some labor, system the for again of essentially labor total color popular to just and touched to color that as the is suspensions that labor a lines? restaurant – help on investors this shared question. on level and on sort that labor, you restaurants variable you understand a with

Gene Lee

and of premise to guests but per indoor basis less, experience. a you When about, a of it’s you less that’s so servers hours the part Yes. do go a you dining, when think than big a efficient little so then bit in lot more on dollars servers no you actually, On our is have – business. have wanted go our an hour’s number – in restaurant little not bad, to

being go that go premise the on actually sales time. for it premise. the would of as little the costs open definitely on variable rather as only, versus just will a be off be We we our don’t in we have down. our of fixed cost says, to bit us premise and does margin actually So – Most total sales help a the to relation little much off variable, the way the definition we of like total And side fixed only, to there. down bit go when –

can music of kind we We that’s The to have that TVs, the those significant. we a turn off, not few but go when things and only. off-premise things,

a other don’t isn’t getting significant much repairs that full little as up But maintenance. do say, I rooms restaurant much to is dining a have you’re you and full have would less we do thing in have off-premise. and that, we The of the the cost have as and with beat there. room, When rooms empty deal repair would rather dining just restaurant dining then

Jeff Farmer

Alright. Thank you.

Operator

Suisse. from Our please. of the next Lauren line question ahead, comes Credit with Silberman Go

is line Your open.

Lauren Silberman

be up for all to ramp does at Congrats restaurants long all. sales it how questions. to next full restaurant, this time restaurant the will you Hopefully at for their Thanks to capacity. reopen take open sales XXX%? year at pre-COVID reach several level, assuming how trying it capacity? capacity restrictions get are takes allowable quickly you to What weeks full immediate that Is or full do expect I’m lifted is, to build. When to

Gene Lee

think I to that hard mean really you. I us that’s – for define for Well,

– come period to volume I think can used get and XXX% this to to what from going as they staffing hours move at a think work a we can be a is a where to back consumer standpoint, more near-term, more to once question fairly up ramp than in were in away. I it thing, from our And – because going of probably get get more be I would can a back having that, than even people back we right can on other of think over comfortable. we is have where we is get point more time maybe all we were the in right people is standpoint. of staffing, quickly can demand we fatigue come we the or there our going more to The to but that

about serve demographics have going more unfolds. And where our good different and people soon beloved prepared great can it that, the mobility, to are we’re vaccinated going cautious. and out going would on bit back it and being be they come call meal going Okay, that about they able to ready a is still – as situation to quickly going out But be our the or going there as get unknown. is us tell investors think move to to, able what I little everybody the is to once and we’re a and a as feel think them the say, be to on we’re to guest to I is are You going they are our situation to that in as be our And to to by expectation. that handle I deliver brands be and people our trusted and they’re today,

Lauren Silberman

right said of still for you on you view? Darden, existing is virtual brands are concept of concepts near-term us can those of that’s brands term. And that just in expand virtual over sales, quarter are And on kitchen operating touch those your view restaurants the portfolio? any think, regarding the and tower restaurants, that new whether the then approach the long the same more developing this And can Last sending at out wasn’t the your Great. you on appropriate concept uncertainty for I virtual businesses. Darden

Gene Lee

do run have believe many I to as do be. And our focused to building. said others we I last right that believe, that’s need on we many, spent running quarter, and still It’s to they to that marketing stay business. the years to got their they place I and brands position, need think we that the believe what investing

ask question owns kitchen who the virtual or dash just brand? Is I is, think on a I the door brand? the would virtual

Lauren Silberman

Great. Thanks.

Operator

comes line Fargo. next Wells Jon question Our Tower Go with from of the ahead please.

is open. line Your

Jon Tower

I appreciate holidays everybody. Thank taking Awesome. Friday to and the team, you happy to questions. the you. Congrats happy

really. two Just follow-ups

about thinking it, or back When more putting contemplating bit time, smaller a marketing an in turning greater about spend to, the basis And lower targeted margins more idea just potentially think for top that the is take much specific? potentially you how or there time? higher when Garden and same-store does margin And all weight account into or area a to time? of trade your is improvement brands a point over level to XXX over cannibalization First on one, spend? portfolio the Olive units are XXX is the more little one sales do a bit a opportunity And into deeper it, of on digging say, of the we we’re existing move historically? potential this you markets over essentially about then Or of thinking X% then unit earlier. into discussing were that

Rick Cardenas

is Hey, go I’ll John, Rick. through questions. this those

to of the is marketing – XXX come points. play. that going So from XXX to we’ve lower that is XXX to basis million I’m efficiencies sorry. most basis points XXX of to million But part labor be our

scale on competitive one Garden a what brand. footprint. I Olive is depending national mean, benefits And we and the up back will of of is environment Olive their looks like go market. national their sales Garden the As

us. nationally, we competitive So Olive think that’s Garden will on be TV advantage a big for because

level come is going the it be on will to back to marketing to front. labor basis XXX but before, points so of our was not And XXX most the

of Olive we because mean, going in they most lot have is, going units, one business are go Cheddar’s that in the As scale, we’re are a potential, made, give number model while smaller have of could to scale seeing into earlier Gene I to on that did it about the markets enhancements we’ve of relates a but not potentially unit brands to Garden, of the either. mention markets that other fill don’t whole don’t they Gene there mentioned in markets. things really

Olive brands, new to LongHorn in, So in of believe into they think And scale in the Cheddar’s growing we of has that supply some that it have the to new number at now many still cannibalization we’re some given as relates into isn’t of add business will some so, are we’re us. is is markets much opportunity chain. has we for regards the cannibalization do we already do, other believe build cannibalization, as the actually our a really and where so on the restaurant, other cannibalization, because impactful have in but relative things we When in so haven’t And that Garden And market plus even we markets. and Olive growing yes, are. where share it restaurants our we thing because the – opportunity, have the for while that in, so restaurants to to our all brands that opportunity, we restaurant, And some we time. we that the markets leverages disbursed Cheddar’s, be Garden. the go model better especially would right market, isn’t a in most that G&A long

So while tick cannibalize, get the we our level will restaurant if down the cost may margins outside restaurant better.

Jon Tower

Thank Great. you.

Operator

ahead Our Go of question from Sandler. comes line Miller the Piper please. Nicole next with

open. is Your line

Nicole Miller

you. Congrats quick to everybody. Thank Two me. for morning. Good questions

bit is more wonder the two with that? numbers, guidance. about Can what on little a I would about things. is just first The you talk underlying

think the open. you I are said like XX% rooms dining of

of contemplating So are everything reopening, all I you imagine not closing. yet can you’re contemplating those

then And the holding spectrum some of have softness? you. and the – seeing or steady what is they are they opened kind dining also for So there? on and achieved is Thank it the momentum rooms comp,

Rick Cardenas

Rick. is this Nicole, Hey,

As guidance I’ll to and comp. it the relates then get into our

net restriction. that significant We aren’t in changes assuming capacity we’re any contemplating

where So to contemplated is new we’re quarter. those we about are that be but then already is coming. where some ones today if there we any to we new know officials by coming – that than about, are know going don’t already expect the Other ones through

those hopefully the on. goes as ease Now quarter things will

you I of a And that. to give data bit will little – we do give points. of couple have some so, a I – want you

at the look it had So we quarter-to-date were what remember, XX a XX%, XX%. and at, week weeks. down Thanksgiving But comp on down about all a you calendar look if because, we’re first our X which over basis, Sunday you as fiscal Gene basis, shifted, last of year a comparable is mentioned, as on sales our

all up last a are or takes sales on we takes going are will be bit volume that to basis, our going comps more week that guidance little on unit high think per our grow that account basis a little account, average maybe a but it that because op bit So challenged. into into our year we against seasonal sales

so second rooms question the dining we led part restaurants of to seeing what of have still for open. in And are comps your that that

period, everybody QX recently today’s we’re We’re would our is point that, that getting seasonal be mentioned I that going remarks comps prepared on on so about talked our after and are now getting focus our What harder. into into still we And is at weekly and happen fast sales we that release sales you year, as growing shared, Unfortunately highlighted sales. our would if press we weekly average we as that. weekly have last average look average not we knew grew to which growing.

really on We we’re we’re QX, through but the to have ready more back. our So we on for focusing to that we’re the comfortable QX gave on we sales next really business with really focusing year. guidance us come that business capitalize getting and believe get when

Nicole Miller

and that’s thought And That’s the opportunity yes, mean, able what that. But absolutely, where that just interim probability understand process question about share. at. not yourselves about helpful. second and that you just to consensus independent but consensus take leads health? Thank what’s you. I sales pick to to time. to to front the this me chains quarter last on What’s the take closed for model the looking is these and we is revival, NRE the that to sales? an anymore going next, Thank you in on all think saying looking bigger is going you. for want I by point Has And What’s that? my There happening those being too to super location like is even seeing the what your that are or hope been absolutely optimistic up that’s exactly the XXX,XXX is happen? Does do – estimate, transfer? it’s are to locations we’re the type

Gene Lee

business to see from opened, we learn stay because some restaurants novelty full a they be before X% I lot more is I our what and everybody as casual mentioned, really it’s that, the category, potentially don’t We might in demand that had mean, full more and a I think at billion these X% be pandemic out been people But about But the missed of Gene coming. unfortunately category. beyond. as get as provide long we with share, $XXX that want want big, well. bigger be Nicole. independents like full it’s service restaurants was or to flare the consensus $XXX believe the and after big share, service the are run, to pent-up believe pandemic, business there or and service going we as realizing on do that to category. what that we do really have to about Yes, also understanding we dining least there about restaurant where because and of billion really unhappy going is, understanding closed comment they restaurants. know an We QX are for we have can was of

business we’re prepared have, we And the we with that share. really that so, can’t really, if well that up are share. we going capture How on to benefit bound pick restaurant we stays model close while, to of that I but believe is? for some much that. a we’re comment that to it, believe And from

Nicole Miller

again. Thanks

Operator

Our next please. Evercore comes line question ISI. with of from the ahead, Palmer David Go

open. is line Your

David Palmer

to you the great. And to Thanks. and for all lead margin to longer-term in is to about long-term, far going year about A sales have Darden a the think Good to in get how about That’s is opportunities about will comment up mentioned would step result than is greater like per it that bolster hear unit so thing perhaps the congratulations that promotions. down your that? without and brands a has your ‘XX curious I’d the curious this transforming your one internal productivity crisis be simplification restaurant transformed than model crisis some growth your whole your might been the business can and and business road. I of major morning internal long-term how follow-up been on actions, higher be way I’m and fiscal that, actions.

Gene Lee

David. Yes,

crisis has a think – done I this things. as few

than raised And we right? do after to we our investments have team you that the crisis? actions, worked – what from and the stronger on make? be mean you lot level. business. to I for minute make I’ve the activity but need our creating organizations that wasn’t talk. the you was think the business, I it’s also at I that’s operational listened identified are our you just all sales a funding, focus of offering to restaurant inside – of to day And we’ve that knew the CEOs history liquidity distractions not want And and businesses we’ve non-value-added wrong things but that think to do there in to This out us get when do a is they an that us we work. that do confidence be to want What we’re hard pre-pandemic not equity focused me issue. do after to that. do to bring really back turned pull most this above investments in it’s What April to made. type $XXX is our our XX, gravitational big XXX% upside businesses something management are for gives ensure is not there were ensure on million What the that in for the ability to to before what going

Now place each that one in is different journey. brand on of our a

bigger it a how I going level the go lot brands XX this the trying at much satisfaction we’re experience improve it’s that if how what it’s think guest with ensure detail of the the or back are absolutely point point is not look me to on improve to we microwave. made do minutes goes And and what of at moves. at on our the minutes further are is, they’re today, when spending working eating and off-premise back they’ve amazing. I’m stuff time really to XX do our working microwave like into along – – impressed Words food it in at down we a optimal is into the to

invested there’s tremendous quality back the call of brands. really the dividends. are would noticing value We’ve that excited a just amount is and to these us about lot they are And and pay I what going our guests big a I level made. and So that work I’m that second and telling think into being investment And changes.

David Palmer

compromised bottlenecks you can or running either where an capacity Garden? on-premise? kitchen into the and experiences thresholds on step happen kind issue Olive off-premise – I mean Is at changes the of without you

Gene Lee

high that the opposite, of really getting we our are we extraneous menu X.X% our more we products more And moving the And – because sales make actually we menu our lot No, to engineering, removed high we trying value, satisfaction a to are of off. have David, serve, the guests. – the out then we in we the those get. through items through of were better we

So that simplification today, account on speed actually, into process. working the of that holds is we’re taken everything and

the this great me about heard of this the crisis to we’re – that’s get starts You comes streamline with gives to we me you and confidence during processes the got journey talk and it been those reevaluate guys all activity that all the talking far have how in all tired until product kitchen table. me to we’ve future. along backdoor it. today and what those that so A able about processes And about probably and

David Palmer

Thank you.

Operator

ahead Our of Go comes Setyan Wedbush the Securities. with next line from please. question Nick

is line Your open.

Nick Setyan

Thank the all you, congratulations and on promotions.

now spending context a way of reversals to positive the the consumer closures there Is there the and as a that? tease also out strength part months way recent the the of accelerate. it is room a is less? dining to dining the happen out the customer just strong How consumer the As room Is surprise. in whether of was the tease progressed, capacities

Gene Lee

Yes. Nick.

the a week one that’s at about think average, are We consumer you check are And of and in sales to they strong as look to haven’t lot growing. our in rooms that way so week open, dining our whole still how are. difference really they seen

strength because going people hard out self-quarantining people for versus really their it’s before those Now, consumer spending were things. they tease of Thanksgiving kind or maybe and out curbing actually holidays to

see fact tough a than it’s hasn’t big other to dip. really that the really So our that had check

Nick Setyan

Thank much. very you

Operator

of Go Our next from question BMO. comes Andrew Strelzik the line please. ahead, with

Your line is open.

Andrew Strelzik

me. Great, things thank you. for Good morning. Two

operating brands around fewer The was sales to question, first, in the multiples off-premise farthest less of sales? before. from from thinking more off-premise just they where or post anything whenever thinking share your customer or you’ve pandemic like informing look the could mentioned either more COVID that maybe has side as that’s second an you inhibitor gleaned were portfolio, through you And in the markets created data now off-premise normal where the dining along, your opportunities what were adding may attractive than be. the Can a on then in environment acquisitions or environment or sales – recovery for

the environment great. comments would be any around Just M&A

Gene Lee

Yes.

it’s would hard still the six arms you your First have – what get capacity, with off-premise because I if your the on the capacity say living on restaurant to you off-premise in around is, feet. restrictions it, capacity

to is that lot still an realize that got that hour there up a people to to of So then pull and our transition we’ve experience. wait doors they off-premise

actually than that then And don’t comment feel actually will below And to higher for in going quarter, I’m behavior scenario on there’ll less we we where because that’s think I’ve for come the back believe feel going so said. up we than what it where have where was a be going really M&A the could I this out. a But level once we So pre-pandemic. demand not any said to it. at in levels really see everybody’s it environment think a dine right now. you don’t is last already further to that’s for I open to Because environment. settle level a modified down fall I rooms, pre-pandemic have

Andrew Strelzik

Thank you great. Okay, very much.

Operator

ahead, the comes Barish Go Our of from Jefferies. line next Andy please. with question

open. line Your is

Andy Barish

try number at of about of kind this variables project A long-term wanted medium obviously of has and we kind level? should mean, quarter, lot but is same fourth time, looked guys. if thinking about the there is, of to the questions. stays I your just to I given impossible Hey, think environment of things on XQ, kind like historically how of a the as is XQ kind high that it your lot be a to

Gene Lee

Andy. Hey,

third Our We’ve for got quarter. that’s Mother’s really a fourth big quarter QX, day so isn’t than that in Day different us.

While not high different. seasonally it’s as that QX, it’s as not

Andy Barish

thanks. Okay,

Operator

from question the next Our MKM please. of comes Go line Levy with Brett Partners. ahead,

Your line is open.

Brett Levy

Congratulations helped And the sharing then all to just taking and time them get question guess Great. Thanks of were all actually data second there. share. who if for that. people all I one this question willing on elevated you’d team the to who the just be members information.

Thank people, The care you those just Olive about LongHorn across you market to systems? if issues the and new on first transformative and whether we dealing are do lot current future are your positive are good any about how second how looking with Would and boxes, dealt had a is talked thinking you the with, some that and need thinking physical or ones consumers people then you on you luck. and of a issues have the and structural these boxes? the just tack share units the How just technology two Garden all thoughts share. it’s And you the with what ones, your you or X at existing are Olive to you what were to about of Garden. question,

Gene Lee

Yes, Brett.

As see pretty of we’re gained Longhorn. share quarter Garden the usually we Olive so behind share to we’ve lagging, and what in information kind get a

assume based share I a on would I the really of at industry data. we’re total industry, based down. shut so that. can’t I restaurants because So we’ve on lot that mean, really looking on gained comment were

pathway far Curbside and off-premise we’re earlier, the to as a As biggest on off-premise the get space by right experience driven came is into looking to developed think our experience were facing consumer I now the We believe to that it. where our mentioned be I boxes, that deal and brands in technology. by enabled consumer we, building really big that’s thing the this at will

adapt should facilities ways so closer current space adjustments. these facing less make cost actually and we’re kitchen So now it to the term we the as make trying to longer we’re looking at that that non-consumer develop to to and

a with We so restaurant/and more that’s have new Garden built call, the would facing just Orlando for prototype a experienced off-premise we’ve type a, determined I not on casual fast dedicated [indiscernible]. consumer good all that’s in of news now necessary, what that like

target adjustments figure hard And to like, so, and get and those over what team our look in the is investments real will they’ll working out done next off-premise high the that they react couple years. volume will these locations of

Operator

from line Our please. Ivankoe with John ahead, next JPMorgan. comes of question the Go

is line open. Your

John Ivankoe

you’re in questions. and thank think more And any of field was did efficient. think on mentioned I you. don’t effective touched Hi, management But making. this the technology you I more it was level

fully do in exactly, regional I think wanted the could you implemented to secondly, the be? And I about then changing ranks. manager Do is explore restaurants, whether as has as how have guess big of and repopulating the there mix between possibility and So you been we actually that may field manager And as managerial hourly the think to more employees? perspective an restaurants a return opportunity back to you efficient a normal? from run that

Gene Lee

Good questions. John. Hey,

got information a important We’ve been over we’ve the – those, the streamline some there nothing management adding help from their developed systems most I continue got run need think years, to that is they well to we we technology that to information we’re supervision. standpoint, get evolve businesses. those, our them try to

be that there background as to to so technology think thing they’re much that platform the especially his parallelism think information challenge not and that ensure information. much at tune will not will in with to how information one I too biggest too and think fine new is I the giving need, I role, how his that but look getting they Rick

we’ve I at more I team is think but competitors program the supplement far to that a as a maybe of a gain, our We our as efficient as employees member also a than management program. development lot mix. are efficient to into As see use management don’t management level. any supplement key been gateway always

in a think want see at I facility to people. that always going I’m pretty to there business, I large the mean lean I don’t the technology So and is our groups Management these we’re of going change person leading, in all.

in bring business of think lot off-premise it’s well, difference in all think why one the you’re as doing casual And added with that that has complex this the or as these I counter. are is, food doesn’t the not if of over in the you’re your franchise parking thing dining businesses I added and team a And reasons it lots members. XX time one you dealing at complexity more XX out. the with

businesses to different as try channels. in ways the some getting complex you more deliver through food So

don’t a savings So cost I see of whole lot there.

John Ivankoe

Thanks.

Operator

next Francfort line Gregory of ahead the Bank question with please. Go from comes America. Our of

Your line open. is

Gregory Francfort

ago changed I’ll menu. Palmer’s it your the question the to thanks. about a you to today. menu. re-expanding from on keep about Hey, can I just brief. follow-up thoughts have And had quarters maybe might talk two How

Are I and re-expanding bit customers it Thanks. shrunk You okay think stock they quite you with are a have it change with still okay it just all? that. and on at

Gene Lee

question, good Yes, Greg.

focused them have does any it eliminating a the go back. is, think it that would we consumer specific I supply for the What products else on the from they shrunk think – really we’re we satisfied the to same we someone studies menu We’ve judicious menu just We through that and eat labor did. been thing very – reasons, brought obviously, chain on want everybody a duplicity menu. places we’ve standpoint. productivity primarily that we’ve turf think then our item, you where and many offer and in as

[indiscernible] out a Hill items. do with it that what Houston’s figure has broadly or think yet everything limited you but environment that menu each consumer, number might have in to I they a but appealing items want menu very as they Stoner XX touch category of where you

And an so that’s And Longhorn same buy ensure duplicative. we it’s the consumer and in need appetizer I both don’t as is have going wild the you use to to [indiscernible], example shrimp I to that’s the don’t trying west product. do think what think would we’re I is, that

so with thing that product it that products sense unique and we one having up me. in craveable you. we’re do And can and end working same on you no and what not how ubiquitous very one that do differentiates is that’s is two is, makes differentiated, to and the And product – get a only restaurant, the one our is

it. And so that’s about we’re thinking how

And over to industry have there, what But to stuff forward. So, that to an last demonstrate that yes. you the been time, moving you demonstrating the is, years [indiscernible] over yes, and you XX have, discipline. we discipline need have product have we have take as And have to off.

Gregory Francfort

you. Thank

Operator

Sachs. question comes from Go ahead, of line next please. Our Jared Goldman the Gardner with

is open. line Your

Jared Gardner

well. to thanks the morning, and as promotions Good respected on team congratulations

one may a business, more of we come that back think sort Wanted is an past, when at-home ordering catering business another was over the or normalize of bigger potential than occasion an occasion? to to it the for dining the be as the tend long-term, the Just is be quick in and in-restaurant about to maybe restaurants, family in something things consumers and me. can get understanding opportunity that of consumers adopting that that

Gene Lee

Yes.

Olive We sell are Garden in obviously, [indiscernible]. very that. In – already we strong

packs, prepared in packs. being are prepared and family brands to able are some stakes with now size the but and that in reheat. a part you seeing family you – size that’s also big that our success upscale of Where business. to Cheddar’s with will some sell give is So can aren’t had We’ve stakes we’re that – instructions our we business growth right

very family calling And are so well. that family meals working we’re packs or

So in I something provide think penetration. as be Garden, Olive it it’s that get it had will our we I opportunity bigger And move us some other in forward. In businesses of some to that we business. an think

Operator

of Our line please. question Go from with James Inc. comes Stephens the next ahead, Rutherford

Your line open. is

James Rutherford

the for taking Hey, thanks question.

doesn’t me. that material Gene longer you have perhaps Curbside, all in terms a Just online to one changed being one mix long-term your in investments the of ordering of has pre-pandemic. view where at mix off-premise, compared term made it around all the it was quick for that where higher technology with

bump maybe is slight this pre huge still not and a kind course, of but Thank Of post-pandemic? you.

Gene Lee

a think levels. it’s bump I from slight Yes, pre-pandemic

be an this everyone’s piece more the has – growing our Maybe the we going more mean, business, so good see time. we experience am more off-premise consumer going demand became that but to is and Cheddar’s will think and a convenient what there that, get listen, to than important. a business in is the I I in, confident take Garden pie. share was our because frictionless, think, Olive I to us and Olive of to are And it to opportunity I for somewhat continue we’ll have especially on is in we over will this with job think share I it, the What we – is. will side get share do will grow to Garden really of

Operator

Vaccaro ahead from Brian with line comes question of Go next Our Raymond the please. James.

open. is line Your

Brian Vaccaro

And on I Thanks. echo the promotions. congrats your

the moving I wanted some with the could Just you XX coming labor there? guest curious that implementing circle potentially adjustments are others in you your other there server while and me. two and you to think on or back experience, what Florida years path to the maybe the toward ones curious perhaps to to the I’m tech spoke investments. protecting see, And from in get just discussion quick role handhelds could service model thoughts play

Gene Lee

a service. every to I’m saying to there, say the big Yes, going service time too are gain believer service not I cut And full efficiency you’ve in trying you’re I efficiency really to we you’re restaurant. gain side. you think mean much going on

been saving efficiency than restaurant I’m for and for time service, a just part of doesn’t our I’ve to the that I I the long about think guest the I’ve every handhelds tried for this for in service just about and I thinking it the end when more doing – of well time So speed – money. me. increase technology

the keeping levels service committed am to And so I up.

you than level, want better that your want competitors that minimum to business your get you going there to, big think of go to And versus the earn level into a do to equation, is or a we and way. when food a you you service casual to restaurant our a is, I come got to fast fast value part that you’re want is into provide differentiator that’s service. a a

the I see consumer benefit us technology So as from solution more to a to the not a cost a benefit standpoint.

Brian Vaccaro

on that’s other Understood. line. OpEx the little gears, the then shifting Rick, perspective more on And Alright, you quickly helpful. margins, could a provide store

pay I be more know QX. you. specifics are costs on normalize of like and QX ballpark that levels emergency you other QX? looks that your but, changing that of, we And the the in there cost versus mindful in are lower bed for versus mentioned specifically dynamics QX should your Thank guidance are it QX? Some in starting spend to store fiscal margins

Rick Cardenas

repairs one cost continue will maintenance. up that Yes, Brian. is The go to and

closed, As I of room. mentioned, we have dine in’s don’t we as our beating have much dining

also have it gives up tick we’ll have to and close. tick as R&M already started us we are that do dining to to up So actually repair reopen the maintenance of dining the – it some rooms while and in QX time start

everything coming we as will open got that have that your go up of more we have way. utilities that going up. guidance. Utilities rooms dining our contemplated in So But again some in and all you’ve that’s

Brian Vaccaro

Thank you. Alright.

Operator

Our next ahead, from question with line please. Jake Securities. the of Truist Bartlett Go comes

is line open. Your

Jake Bartlett

congratulations Great. on the a for one to one marketing. is quick first My in questions and LTOs Thanks also all. taking

of sort that longer strategy would promotional your you LTOs, expect mentioned of term? post-COVID. on had same Do marketing you are rethinking go largely You dollars back you kind the to to your cadence recover

Gene Lee

realized them were to we is that mean LTOs the out There do strategy that X to fact have what years, of a and we we’ve that. better going good in almost did. use was not that lot to we promotional a our there’s a those. there do we did for been lot as to that of we’re we of of adjustment. was lot That believe we way of activity there and we’ve LTOs, out – And rethinking but evaluate totally make what pre-pandemic. effectively goes been how And a bad after LongHorn in into We’re able And that. and doesn’t

to we will six use look business more that figure to Garden, we are way market continue year do ways but a also and best to we do out scale other at our effectively, the to need advantage considering what’s to Olive do or there that LTOs effectively. As try

Jake Bartlett

do improvements it. question my don’t how it, as and second talked model. business about Got think to think better unit business to the past you’ve the to think the that opportunities. margin in my And longer if kind thinking How a EBIT know long-term it you coming think about growth about or term? that you then last about talked or the I Are you’re X% ready maybe about we COVID pertains do about we yet I should out of XX% is, growth, to of algorithm expansion think talk kind and differently – last you it but of still you growth or was

Rick Cardenas

Rick. Yes, Jack, this is

think you you adjusted our our if – haven’t long-term think I about we long-term as framework. framework,

now, as run. numbers could long always can below we or that. still But as above believe year So get those one we to of said, over be we’ve any the

would be in below going where that, because And FY’XX, hope be FY’XX were of FY’XX and so we we’re above I it. would to but that in

long in run, below And never investors XX-year the when and what public all XXXX. that period. we which period of since long-term a everybody our believe we can XX%. talk hit has to where annual I to of our And We’ve about our a will had you. TSR is been we’ve all company We fiscal – average So even been remind framework.

we we of average. least year on I when industry So at of over and one TSR even think of XX% a had for fourth any any us, XX-year last had still quarter worst the

Jake Bartlett

lot. a Thanks Great.

Operator

from Our ahead please. next comes line question Go of Priya Barclays. the with Ohri-Gupta

Your line is open.

Priya Ohri-Gupta

you about around Great, was squeezing the of in. to just payout give thank dividend? if thinking curious know let some of you me you XX% add EPS. sort congrats my quarter’s to I this me you as so well. much I could for us relative are the And you how just thoughts mentioned broadly three

in in going you. So the the external of that Thank seeing volatility of light upcoming just the forward? and sort should we’re we the continued environment, how progressing of some guidance anticipate dividend

Gene Lee

Priya. Yes,

to important are dividends shareholders. the know we our As

you we we earnings. of XX% that, ended that quarter to our the just our long-term set do, our within XX% end bondholders. And at of it of We important the at XX%. think what policy about low was is that dividend also dividend the know framework typically to And as we our and

to the We’re quarter, kind dividend we than contemplate with is because dividend going our when continue set in our dividend, but this was forward, is guidance for to QX our think Board the in we work farther me on of a hard it’s but say, we one going did to going what decides board the what that QX.

ensure to dividend flows safe. what we So see are to that we to forward always our look cash think going the be is

set quarter. we the why of dividend And so this that’s $X.XX

Priya Ohri-Gupta

That’s helpful. Thank you.

Gene Lee

Priya. Thanks,

Operator

the Q&A like would And to that ladies and concludes Mr. turn session for I over to Kalicak. call. gentlemen back it today’s

Kevin Kalicak

market Thank plan call happy quarter to the opens That you before Thank we our I’d on to and third like that release March the for XX, conference remind concludes everyone you today. Thursday, to for you participating. holidays. with results follow. call

Operator

this call. gentlemen, and your thank Ladies concludes conference today’s for We participation. you

You may disconnect. now

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