Darden Restaurants (DRI) 23 Sep 212022 Q1 Earnings call transcript

Company Profile

Participants

Kevin Kalicak	Investor Relations
Gene Lee	Chairman and Chief Executive Officer
Rick Cardenas	President and Chief Operating Officer
Raj Vennam	Chief Financial Officer
John Glass	Morgan Stanley
Andrew Charles	Cowen
Jared Garber	Goldman Sachs
Jake Bartlett	Truist Securities
Jeffrey Bernstein	Barclays
David Tarantino	Baird
Brett Levy	MKM Partners
Eric Gonzalez	KeyBanc Capital Markets
Brian Bittner	Oppenheimer & Company
Lauren Silberman	Credit Suisse
Dennis Geiger	UBS
Nicole Miller	Piper Sandler
Jeff Farmer	Gordon Haskett
Brian Mullan	Deutsche Bank
Chris O’Cull	Stifel
David Palmer	Evercore ISI
Andy Barish	Jefferies
John Ivankoe	JPMorgan
Jon Tower	Wells Fargo
Brian Vaccaro	Raymond James
Andrew Strelzik	BMO
Chris Carril	RBC Capital Markets

Call transcript

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Operator

Welcome to the Darden Fiscal Year 2022 First Quarter Earnings Call. [Operator Instructions] I will now turn the call over to Mr. Kevin Kalicak.

You may begin.

Kevin Kalicak

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

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

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

outlook. we presentation. call. the We to fiscal This an discussing that will quarter on and provide fiscal the share morning, certain are included due release the on financial some posted more Today’s and reconciliations Rick results conference our environment at are call, during to quarter because capacity measurements comparison quarter XX give in before darden.com. of performance this operating Investor non-GAAP on December to update of on the of the an and a financial will these our Friday, is limited which performance; during the XXXX presentation Gene second first followed brief our on will not Raj detail website remarks opens ‘XX. This meaningful our a last ‘XX measurements results; is in update discussion and by quarter XXXX. will the business simultaneously first when to Any plan earnings and include is We operated fiscal pandemic’s reference quarter Relations the market impact fiscal broadcasting presentation are results in year’s first the section first the pre-COVID, of of

call turn over Gene. will I the Now, to

Gene Lee

you, Kevin everyone. Thank morning and good

quarter. saw a our very we this release had morning, from you As good

of and effectively their operate I to sales strong and am in a challenging quarter to proud teams of ability profitability. and another focus Our continue environment deliver

first our of segments delivered record All quarter profit.

sales ago. drive our profitable continued years the to implemented business we X our testament strategy ability adherence to Our strength is to growth model of the and a

Our brands basics to planning four of our and food, operating our while focused anchored leveraging advantages Darden results-oriented concentrate culture. data on rigorous and executing at laser strategic scale, remain back on significant our and insights, service philosophy the extensive level, we atmosphere, strengthening competitive and in

quarter and quarter sales Our started fourth peaked momentum further they as the July. trends first in strengthened over and strong from carried

to positive However, sales the in due levels. August, slowed Delta variant, the pre-COVID to remained impact of relative but

relative week X% X per our on first strategy For ensures first approximately focused operating weeks operating And to week time, same to do us. Regardless the the while best, unique focus competitive have running Throughout in to guest on period, flexibility advantages us make operators providing find to pre-COVID. our per will commitment the tremendous for shown helps of were we harder continue were what of restaurants. pre-COVID. our quarter, the operating great this our remaining environment, up our through work ways in X.X% fundamentals relative stay sales sales we September, unwavering the up to experiences. even exceptional locked At

quarter, restaurants XX exceeding fiscal are approximately We ability during opened new the we X all of which XX by of our our expectations. we And on new track leveraging restaurants ways new to is this One year. to value-creating open to the this remain do open restaurants.

Our calls long-term X% to for restaurants. sales framework X% new from growth

our and for the framework. or out a us end working that higher is at pipeline of economics, above our fiscal ‘XX unit stronger put hard Given our beyond of build locations team would development to

thank in our to Before our support I and I our restaurants turn it team center. over members want Rick, to

I visit other greatest and passion our our advantage. am I people As Rick? success. for reminded Their why teams, fuels restaurants our talk are guests our to competitive each our constantly with being and our of service

Rick Cardenas

everyone. Thank and morning you, good Gene

quarter have done by we driven to menus and level. the the execution processes Our success at simplify drive this work highest was our our to

paused what order XX also any We focus and week. our shifts to in to further new eliminate run for them initiatives distractions great to takes teams a allow on restaurant it

in To to platform. Go our it Go the both visit, at order, to dining high sales for sales benefit execute our highest continue simpler our guests off-premise. of easier teams and level, quarter. and This served addition, through remained the digital pay it pickup, To makes evolution from room ongoing while teams In This making the for our as to well platform all the

For accounted strong. satisfaction for metrics experiences transactions Digital off-premise the and XX% of guest for sales quarter Garden all Olive sales XX% quarter, remains total for at off-premise at accounted total the of off-premise sales XX% during and LongHorn Steakhouse. sales of

the pressures, continue focus external the simple. short-term to our We during challenging. navigate From perspective, and we win our must is environment a quarter was staffing why our That’s to priority comes employment top it people when As product. is restaurants. people our

Our apply X operators acquisition talent. in done allowing an helps by our less. and or candidates that a to minutes pool schedule and applicants interview job HR We talent launched great system recently a of have teams sourcing increase new

utilizing employment their brands our our and digital applications. successfully proposition platforms, are including social media, promote drive Additionally, to

with more been count temporary per are member team week operational we we our contact identified of a team is levels. exclusion and result, members through X,XXX tracing. our As team new the biggest approximately members XX% pre-COVID The of is have than dealing netting challenge

and our and strong training. exclusion staffed to operators. little create the can these negatively for on of prepare. they Getting staying restaurants volatility Despite requires sales duration the with are staffing our safety, period. appropriately impact a commitment members operators of majority team for the exclusions, health sudden to but diligent notice disruptions This number our in in our restaurants, also for we reduced about the focus exclusions Given staffed these being available of

to training the to leaders we at our of As quality we validating continue ensure their critical to amount of high are hire, the complete operations required appropriate place training new the the that ensuring That’s members team assessments. we and restaurant continue it receive our execute level. during have is why in visits, a right training successfully

team address heart I The our make continue Our and of soul enables through us When distribution business chain significant restaurants. retain maintain and affecting and the people the our we capabilities, to our proposition. dedicated our in ability needs. global members are including continuity made am employment constantly to helping it focused challenges product, our are our manage to talent confident we the on our staffing in have and and are investments us top attract our comes scale, and supply for to

successfully spot supply products Our the outages our and we through guests. need we to they key any chain ensure encounter restaurants to team to manage work hard continues have our serve

had contributed moment, share product During in the market, expectations more spot more exceeded to costs as higher we have the to because Raj sales capacity our as brands usual a well on details quarter, inflation. sales but volumes and challenges. these will our than than suppliers of expected secure higher freight experienced some

inflation, below to for opportunity executed a the us and provides advantage scale competition our successfully. price is which strategy Our have we

strengthening with pricing our value to insights well be exceptional we surgical want and team. supply expect over the be to inspired the am to maintain and be success appropriately higher wrap that our find of avoid will support minimize deal the you that pricing Thanks data up, help us spirit and the time. To approach to factors continue I extensive for all of chain value and continues We leaders our us advantage to competitive our below each recognize our opportunities and continue center to in to our create both The outstanding our rich restaurants winning gather staffed do still by year, to inflation to experiences positioning in us important short-term. our most Ensuring impact demonstrate. you right I further our to our dedication the members restaurants allows traffic in guests. price insights rate proposition. of in costs the ways from in well that are for leadership. of these and disruptions to Our continued our significant for team also our analytics

over turn Raj. will I to it Now,

Raj Vennam

$XXX net Thank than and higher We Total the good for this pre-COVID. continuing and million you, last million in year, Diluted returned repurchasing XXX EBITDA Rick our increased approximately share XX same-restaurant basis from million inflationary this performance operations quarter earnings restaurants. sales EBITDA XX% everyone. $X.XX. net $XXX higher XX.X% new first morning sales $XXX We the $XXX quarter, than had quarter of paying pressures, with margin were shareholders of billion, addition of points dividends $X.X million by growth XX%, and in despite and per shares. driven to were strong

sales higher Fine proteins, inflation and The contributing versus proteins contracted XX% Our outperformance on out Dining had resulted quarter for expected, for better above our X.X%. commodities was This per as our more market In go LongHorn spot to were product, segments requiring largest and our the results purchase proteins, the us particular, sales as than market. in rates. this approximately quarter our to premiums average the spot very with as strong of cost for high pound total expectations.

to want to calculating we use rate clarify of attention inflation. conventional heightened I Given the the a approach on that inflation,

We for change price, in the constant. the average constant and wage. inflation are approach measuring holding only we in look product in mix We at keep and calculating usage follow wage and same job only which change mix rate hours

enable expect believe year persist to While we us model versus rates scale recent adhering to strategy business our we and our we our the initially expansion, to still of to while higher of what deliver remainder enhancements inflation. of inflation the margin below pricing for significant planned,

a have we our how first Now, pre-COVID XXXX, which we with first quarter looking business is P&L XXXX been results about normal in to against talking a for the expansion. margin quarter operations of believe of the more the comparable we and providing at comparison are

was For significantly due XXX $XX both higher operational spend food points pressures. due driven also below wage by inflation. expenses XXX elevated investments simplifications lower, Restaurant the by favorability. XXX sales and and hourly expenses basis efficiencies leverage. of offset first from by resulting partially to in was lower XXX basis quality were quarter, Restaurant basis million gained pricing food in basis lower, labor points Marketing points and points to beverage labor was were driven improvement primarily

level related compensation equity XX to awards XXX points better expense the for restaurant G&A by $XX was basis As result, was a levels. million margin of stock XX.X%, higher, retirement-eligible than of for expenses employees. expensing approximately pre-COVID EBITDA Darden basis primarily immediate driven points

Additionally, we had on mark-to-market related approximately $X million deferred expense to of compensation. our

this hedge offset restructuring expense, largely we As offset by way from the due savings it’s a XXXX. reminder, impacts These line. fiscal in partially on were to the tax corporate implemented

compensation Our tax XX.X%, rate from deferred mentioned. for effective benefited was the hedge just I which quarter the

effective tax guidance Excluding this top rate would benefit, range closer have our our year. for the of to been end the

to segment pre-COVID, LongHorn sales points, had performance commodity the X-year growing quarter Fine strong pre-COVID, Dining which to margin pre-COVID basis Segment driven sales from performance were by flat and versus with XX% grew elevated segment quarter inflation. basis our Sales points. was their and increased check double-digit basis strong Turning first growth offset best our XX% by sales XXX XXX what’s This in profit while than at perspective. of versus increased segment traditionally increasing sales more margin across by inflation XXX our segments profit Olive Garden performance, by operational X.X%. seasonal at efficiencies, slowest a margin while leverage profit points. despite only segment

by X% XXX segment sales other and by points. nearly profit Our basis grew margin segment

continue of about segments. the model strongest our We this improvement business as to driving of it’s be long-term segment underlying the all prospects excited

for and $X.X XX% inflation hourly approximately fiscal total quarter our our commodities billion Finally, annual X%; inflation expect the performance $X.X of XXXX, of XX% of which and diluted X.X%, year, outlook XX%; total of this rate inflation to labor of to same about of billion performance growth effective $X.XX of wage X.X% includes sales pre-COVID an of X% tax for helping to expected million $XXX levels; remainder previous EBITDA billion; resulting we restaurant $XXX XXX outstanding offset outlook sales on shares elevated to in of full implies outlook average in all year. X% approximately XX restaurant share year, and turning $X.XX. higher We for are to now based our margin of total as and increased for growth spending with between our representing financial the diluted million earnings XX% capital sales the net of XX the and line This $X.XX inflation. versus $X.X new per restaurants; pre-COVID EBITDA to million; outlook to X% growth billion, with to from inflation

I whereas second it fiscal open next third calendar quarter. Before you quarter want net a be Thanksgiving shift This second fiscal we it up in this for from year, falls perspective. remind our questions, was to pre-COVID. to quarter sales quarter negative the will in its about a

Now, questions. your we take will

Operator

And question [Operator John Instructions] Stanley. Glass our from comes first of today Morgan

John Glass

brand about Good Thanks. whoever, you the It right adversely that the on impact a please quantify foregone huge for sales Garden? you peers, or think we I you Olive sort have obviously morning. the that reduction first of the has think so positive at think about of probably can margin. what talk of were could context? that we Gene couponing But versus impacted as just just has impact sales.

Gene Lee

Yes.

take me sure I sales. a right the coupon can little the get think coupons, mean about that I probably for. number this X% at of not broader, number are to a the am looking I and was just Let John stab we because you

that say, to was okay, harder bit it’s about guest at little driving think count? X%. I line P&L, trying so it – When I get to that a that’s the at. in And about what’s look

a That’s Garden’s in check you the for the little we We X thrilled continue to if points performance that’s just over the mean, make the was Let that put in business marketing you a X% industry. to strategic to to only I right over have add breakeven, assume think the that me choice choice. just everybody. Obviously, it’s we for mean, And the sales. last another with Olive got performance. their and XX I context am X.X% I compared years.

number. flattish flat, marketing, are you they basically, out so big take that’s that And and a

primarily and it’s just in exclusions. another just from a and limitation. you the struggling think then about it’s alluded And way that’s if script staffing way our it, to because Rick other And The I I limiting of mean this standpoint, thing still are sales. his we that, about – think capacity of the

we Just average, guess in our have it, just of about if closed on or nights. think most I you restaurants, one sections most two

we to tables. losing So are X X

sales. what is, So there in do can Olive a on especially we Garden, putting that’s for cap

think Olive about I overall when So, performance, doing that unbelievable. I Garden’s are the we and think up sum I just

level We percentage. earnings have XX.X% restaurant got

time are Our going impressive is marketing. about profit activity think about full couponing $XX when business grew – we pre-COVID. over market we we This just this is reevaluating to million and – this an we are business. overall over just think promotional take And are how to we

John Glass

better would in it I Thank ask your better just you for you have more have Raj, market quarter? can that. year one comments, maybe to for commodity before? inflation if follow-up, inflation How spot you on do sounds like year. later Do visibility commodity the to you much you still if did would on having visibility And expect than prevent full the what that from last you I often now continue versus go go? to mean sales the

Raj Vennam

John. Sure,

by start – saying for me our we we saw Let sales. us have increased you forecast

So, that to gives than are need we back bit I already a little guess, to of, market go us into what anticipating. less the have

estimate. that increased into sales of impact baked our some is So,

did we figure about have it QX. thinking we the QX, into into do all-in-all, X.X%. visibility way probably we QX higher in visibility QX and year will QX, QX about clearly at look out, – QX. last that’s we are but decent a we out is where had have into lot – one is, more As shake to have some we more and inflation we But things

for We have And QX the updated we around XX% based contracted about for XX% volume. have on I think contracted then QX, out.

ability think we good pretty movement? some we you, manage as us fairly as help about other quarter think, I we we that. about mentioned our that’s first in disposable the there have I I feel that Could think how where at have Absolutely. to the the through business – be through So, mean, I showed model at that. fact manage well. I improvements well disposal to But the our levers

Operator

of question Charles from comes Andrew our And Cowen. next

Andrew Charles

Rick, seeing summer benefits of Thanks. a tail have a a tailwind earlier anticipated seen that the on Great. staffing follow-up. a in labor as the you previously week state supplemental challenges. have weeks last you appreciate I commentary $XXX what expired. you as indicator? speak are What and you this then And the to perhaps X as leading unemployment insurance been since sector over this [ph] large Has and can I

Gene Lee

say Hey, of about a new one things flow that would the lot Andrew. in – for Thanks we system staff help And done of flow. increase the I have to applicant I we talked was put question. is place. or those

really staffing we seen that put in new system place to to flow eliminate. haven’t We benefit unemployment in a started the dramatic when change from when

think staffing we before getting that even flow happened. been we have So

said, more we not when versus up a the We by have the bit but benefits. up. certain they challenges driven country, And necessarily challenges. driven have, they unemployment It’s opened just of staffing little as not by are have when opened parts in

so not right great because now. are worried we about getting We are them getting applicants,

Andrew Charles

mix the Garden with the then to is out XX% follow-up you sales bit could sticky. the that reach called have question And a still Yes. that rebound come off-premise. off-premise seeing my are And business, you down prior of Olive dine-in pandemic in obviously, that

down dining? ease fulfill come this can you you to sustainably XX% more a forward of likely can sales as ultimately on-premise staffing going or of fair are is now the accounting for that You and mix see you Do about it further is challenges sales. brand think

Gene Lee

Olive the Garden was the percent that to restaurant. still variant before mix going And spiked. see fill LongHorn at see of think will Delta then We when go in down come and to when we starting rooms a back, up. continue We to some COVID the people dining spike that at that winding started comfortable Delta to variant I and came our back sales go off-premise as feel more Andrew, were starting to down. down out eat the Yes, see were percent

depends. have the don’t XXs, technology. we over. COVID investments I be XX% is of somewhere our in mean, great we in think that we We after long-term will the where believe lot So, that all is immediate in still made a but

it team to members of for our made have all easier handle We the orders.

it to made pay, our have guests in – that We order, easier I mentioned to earnings for the to the do call. the things in

done is And for sales lot than so than to that be greater we we we as because that are Go have be Garden COVID. our To it getting into people that a hadn’t of percent thought of going – do To before. Go it That’s that believe to would hadn’t a done was Olive LongHorn ever come

great and are – a getting they So experience.

Andrew Charles

helpful. Thank you. Very

Operator

Instructions] comes [Operator The Jared Sachs. today Garber from of next question Goldman

Jared Garber

the as robust of positive of turned activities Fine And terms question. do not wonder strong, the in if like the really of reduced maybe some you very is some category some I LongHorn brand? seems brands. Dining of remain benefiting I and much to the trade-up quarter. remains segment state it Obviously, It the Thanks Olive this demand and of relative Garden trends that despite about pro in are what think that really the trade-up? other consumer even for sort seeing was to encouraging you pent-up taking talk Can

Gene Lee

Yes.

strengthening might be that has even overthinking the little COVID. through think it bit. mean steakhouse strengthened category I pre-COVID been I a just be

easier – I say We smaller you to geographical lot LongHorn from have we – And little think these a employees been really they over bit think that a also years. come heavy run think X LongHorn – have last investments think COVID. easier I that Georgia, we made footprint has Florida, less they as through has operating been I discussed, heavy in LongHorn. their that a need a of footprint I lot would also footprints are have benefited or when to the somewhat has through. as, X that

think in that are staffed fully business. I – basically fully we

And well. running so and I together come think it’s all real

there sales I the summer As drag far see we Dining the as mean did you in will Fine cities. goes, level – Dining are we thrilled that tell heavy Fine is still I this major Dining. volumes on in a the to Fine

Suburbia X the less little in still bit locations, fantastic. in which we Dining, other been major seeing cities, are in our Manhattan than are XX% big a We down but in a has Fine that uptick

so never that I’d we robust. business been in absolute saw my I dreams, numbers Dining, has of wildest And the kind thought see this that has Fine fantastic. which summer been in

is there some out celebratory think there. I So,

day are was to. day most Dining, us in our some you start maybe thing Sunday Fine little get I think a but I think unless – much traveling is Dining taking to on using been Sunday, a of has operationally – which business sales who real taken a great used people – weekend, which really the more on as convention that convention aren’t city and Dining adjustments is has for legitimate for that And legitimate see. to they only think the I day would a to Fine a Sundays now, throwaway bit are kind as I other used in on is become Fine restaurants which pre-COVID and say

Jared Garber

follow-up And wanted earlier, Thanks. Gene. Appreciate you commentary the just growth on the color that unit I there. made to

the be there? within little ‘XX. and a think top the segment the it the range bit to in some of maybe other or end encouraging adjustments impacts really seen restaurants you’ll opportunities the X% the you’ve in for of of was Can that segment about I the talk coming or pandemic out that in at of likely that ahead to that ahead hear X% you

Gene Lee

Yes.

we’ve business talked significant Cheddar’s. been Also Breeze a those had I the has about models, we’ve impact biggest made transformation the there. think Bahama we transformation at transformed and

We’re doing some House. good Yard in work

a good investments more We’ve that business the in some model making place. in food. We’re got

good hopefully, is in business. outsized, we good growth So there think that

I significant so have capital these – Seasons investing into we’re we’ve that more business. new reinvest made another confidence really a So mean segments. I is also lot on to that business in in improvement, that’s mean we confident

the real as becomes So options. available, have we more estate

We’re more use to options that estate. confident and real

we if on Olive a brand great have a real already LongHorn, a confident go estate have from Garden we we’re a of that where return going we So put that top great get and good can or piece into great we a to market that property of really that. and

our it’s team so and little bit more these a estate in development now confidence And flexibility given in. businesses real that can we grow this have we that

Jared Garber

much the for it. Appreciate so Thanks color.

Operator

The Truist Bartlett next from Jake question comes of Securities.

Jake Bartlett

kind for Thanks sales? independents margins. their re-expand recovery Olive I of And the is just that the might then there great are on I Is been I’m My of and Olive whether do that, commentary as menus. reexpanding there And the question. of know impacting the have – some you any wondering think from taking the have of In limited a a recovery, that’s menus the distributors the is impacting you Great. missing that follow-up. whether pace concern Garden, been in others guys be question concern the it’s on context sales? there menu question, I that that that’s Garden. for

Gene Lee

the I’ll all, back limited that go think I menu provided at to in impacting the is the Olive beginning. I and Jake, not context Garden

And define been much business. just number, has to Garden, in the and on really how think, stronger Olive pleased. Again, recovery than I on keep If at make. breakeven profit based recovery break the this I’m advertising, we be do I advertising use don’t in And digits most. the up we even. And you looking profitability we’d I that double

ability is line having the business. beginning. outlined to of the think some limited impact don’t things to go in that any in top I’d back I on So drive our menu the I

as what’s make adding items, that’s think They drive decisions. menu As power those to business, let far to going more their it. independents them

comfortable we where our at in very menus point are time. this We’re with

Jake Bartlett

X% of for that. up the historical. last three And right the about has change the the you that, now. for about should Is been on Great. thoughts significant share following just level selling I term, year? appreciate from quarters on have we sales that longer maybe any expense of rest think And

So percentage more long-term where should in than we of of terms sales? be the as a marketing near in thinking

Gene Lee

for the see think all short-term, at Well, you’ll I in all I time. marketing this think I at tactics change point us I at or, guess, think – our strategies don’t our

longer I go to talked term, be this what What’s last I’m what – on-premise? call what going think think I waiting to going was, the going What’s I to to back about still is of of look to I COVID, competitive think, This set ramp-up is be going business? determine we’re out maybe like? What’s more know. don’t off-premise? equilibrium we to restaurants, the – so don’t in additional kind there I stressing is more some know be closures.

we develop position that our And a will this equilibrium. so to that tactics we at into implement we’re that strategy best huge to talk mistake to once just and in. be to But point know we for don’t where able about that’s us a to will would just to we brands and what operating going environment end just that up, think say for kind equilibrium, – that’s going future. be because profitably the be get searching we’re And of we grow think

Jake Bartlett

much. very you Appreciate Thank it.

Operator

comes Bernstein Jeffrey of Our question next Barclays. from

Jeffrey Bernstein

in slowed versus but very mentioned up I versus you Thank specific your still think that and July, questions. you August, prepared Gene, One, June trend pre-COVID. remarks, much. Great. Two to

up September attribute you you per spike impact quarter, to a only variant said gauge was X% Delta operating maybe shortage staffing to wondering from up perspective, first maybe the week versus that how I the much the from Just the just think trying versus X.X%. of each. And

your follow-up. is fiscal comment. So XQ of that then I’m one assumption rest relative just for And wondering to what September the

Gene Lee

say to a footprint. COVID we was I just Good in where going commentary about forward-looking that the not that will Jeff. our huge have on the will in pick and hard sales. trends as is try, Florida especially I say hit I’m Southeast to comment on started up,

and you variant, you a also lot had these the of territories got Delta You’ve the that time. had – back-to-school in impact at of

with sales a little do, was felt explicit seasonality reasons come time So September impacting get variant. our It’s different of enough one tease bit after of August. many hard falling the think was business. this to was in bit month-to-month quarter-to-date the out us wanted to week-to-week, in change what less a sales is impact that the of in given habit little going – back has at is we’re that bit teasing now. so but there we’re that do that’s we have to to be environment a difficult in what COVID, gave we why not variables has sales We very maybe some of there call, to a the seasonality, that the having we right And in that some out. There little of the

And can. so possibly as we we’re just being as transparent

given where be You think guidance and quarter-to-date, going able going of on you do. at we’re know we I’m to for to to what not that’s We’ve we’re what. year, comment and rest the the

Jeffrey Bernstein

like Thank how pushback when or trying you. wondering pricing industry the to and more prices consumer. in All broadly your you just think not then a end, traffic? just even inflation, about drive And you whether inflation industry the follow-up for maybe about inflation restaurant It versus the industries just seem I’m of more just broadly. be view, from maybe elevated. seems raising Darden, think getting to how on Understood. in much context the is retail this does wondering for and just

Gene Lee

And consumer right? Jeff, lower going think our is of in increases could our impacted So is to that it’s for disproportionately of all, a all income inflation. make-up by I think guess good I I part guests we – a brands. question, casual big that consumer be very first agree

the focused we’re not on well, incredibly we’re to pushback, going much Eventually, term. guest, one’s pushback. pushing So short back. there longer the People term is be no on this so say, off pushing

to choice, though that with of what our we for this we’re to is extremely that pay. group so big Olive have making we’re that being consumers Garden can to want in and they strategic value and make I’ll feel service restaurants And Cheddar’s, pricing, they great come sure and cautious especially as an get for say very a still we

through I will who so get a through okay. this those think this longer And who really we take those look, prudently, that manage

pricing. who think at think got manage costs costs out concerned entire I those it made of and And how really going a your to really we’ve their that. strategic And much. about too get the average really, myself could we’ve lot about that priced pass my think made casual – really price team cost that’s I we the dining, of I effectively, and consumer is choice forward. our point, with Because through we’ve that why managing if think aren’t some

And thinking how so to I think we’re an about ourselves we position inflationary environment. excel in do

Operator

of from comes David Our Tarantino Baird. next question

David Tarantino

the mentioned question Hi, brand. there for Gene, morning. a Garden all that and get on on I good on thoughts Olive that whether appreciate But weighed factors was the you performance factors you the just just that factors may have for not? I curious Are quarter and those could or you particularly your that you sales assuming that? continue as the on rest was year goes in about acute thinking how or ease the that reported think those some the on of of are and the year you to

Gene Lee

Yes.

one profitability would X quarter ago, not the promotion. thing comparables does is mention one this think to I were buy we tied have the add it. a running for it which I in did take significant one, that I years believe And traffic-driving was first we some

I sense QX. weighing get that out the business – dining I you we’re no all to So any without try and sales experience. there today are sense looking we Until the Garden this on It aren’t to assured at staffed and mean, to restaurants top feel makes exclusions, that at comparable a that time. restaurants. XXX% line you than day to I advertised and line every perspective fully that with push a don’t in makes just no in at bottom into not great having know. and just get be have It on Olive in deal we can we point really going people to me. provide driving these David, are certain single think the to that was more we’re that performance that

prevalent if disappoint we ease. COVID very not think to we’re at continue our Olive very, forward, when Garden what is as I environment. And as just you exceed the will moving But be COVID, I what those things, continue a But some on operating we’re to communities, and and still that this is doing this. sell-side in stuff if expectations. a with thrilled equilibrium potential the to for you tell know look I to I this continue can going And though so tell I while. or And me when what refer what’s COVID going can expectations to of my it is in some seems to of difficult then that full happen

David Tarantino

Understood. staffing levels, And I wanted just on to the clarify.

you optimally. some How heard is to, think you’re I does gains you Because pre-COVID than had that think you what you targeted that compare said level? to had optimal about right. guess, of be? to XX% What if that guess, might to would have lower I at ideally pre-COVID I relative the where level? efficiency running I like lead you But that are I levels might levels,

Rick Cardenas

is say did Yes, of I XX% David, levels. staffing Rick. pre-COVID this

how you much that volume volume will have staffing so the today, Assuming right, need. we drive

about So number somewhere We think probably single-digit that. our restaurants. team in the of need in members

well are they We as have fairly more most a little restaurants of But that bit some said, restaurants our need in. are the of because I location staffed.

the to so we volumes to And hire. continue increase, as start

coming at don’t where did we on we COVID before the the depends that that got that believe with venues. would end really are hours. thing same levels work Yes. the that be volume it of need the into number the volumes the other these we members is happening And people new number now not able same may that’s team industry to so But we’ve of And same up.

can really all the it and days on the work that people depends work. can they hours So

we good it’s pretty but the our in a isn’t versus best indicator, a increased productivity. So we’ve I where pre-COVID said, people probably were levels number staffing of one. And as again,

of hours number for So same for count guest equal, same all fewer need would we someone person, of a people. number

David Tarantino

very you much. Thank Great.

Operator

of Our next MKM Partners. Levy from comes Brett question today

Brett Levy

picture guess both more question. taking Great. specific big we for and Thanks then if to you go my just could guys. I

your competitive landscape, out maybe could out LongHorn had regionality both And to a share Darden also your planning, the just If we specifically consolidated a on little the seeing successes Garden guess you’re in Olive just can and you’re that a gained or then specifically. at on great you and but there hitting more Where what bit execution. market do ceiling, also, Thanks guys. little parse bit as how I you’ve data on margins, you the either you, margins willing share of more the through much through the see for you really and quarter? for share do if well as

Gene Lee

Brett. morning, Good

on I comment than think some just into get me competitive regionality the situation. so let maybe more

going I be. California very some what think has spent I different a lot been it in back. we’ve pleased was with that California than I It quarter. to how come was time this thought

there come strong. that think since of the July, very sales our back I So have middle

last it And have We you have going that to pockets has you very own. got at Northeast and to the never X mind we’re today – Delta weeks X where what’s pressure to much variant. we’ve performing felt was. for didn’t problems. So really the Texas from there. some back the come in The seems Georgia can impact, a Texas still happening and pleased know sales heat map okay, but Florida over its have It’s with then of look where COVID, some hasn’t you’re with just rebounded. really you just out

not difference Tennessee, So Virginia regionality. there issues you’ve overall, Kentucky, say I mean, of is a some in got But would today. West I tremendous amount

choices lot. some really learned couple models. We’ve more over learned We’ve strategic this businesses through to margins would to our a equilibrium think where framework we’ve be get a eventually We great – business And how of efficient. about and will real We’ve transformed last we back ceiling we lot our the XX% should any is years. can that on figure I I go, of today see don’t made XX% And as the where I’m that us us as line, to we can’t why to up. can is to do out sit these margins. to the we think the is. on far long think And drive these top way reason hang say, no think continue think there give I get we once what’s we long-term. you’ll as where or don’t As that here run

Brett Levy

you. Thank

Operator

comes of KeyBanc question next Markets. from Our Eric Capital Gonzalez

Eric Gonzalez

advertising, off-premise here the traffic want with maybe Thanks. across that back that real Did overwhelm just Or to specific given requires thanks an beat about marketing push comment I the to off-premise strategy brands? the talk by them? across drawing but my is a you see two to staff trends. to channel or business. opportunity Hi, want just don’t you maybe wondering the major of I go different And to harder that was performance And can question Recognizing less then I with if just acceleration here, the likely – want for about is in different quarter-to-date the horse the question. was on you I broadly to there one don’t if your on of it all maybe brands. dead wondering was promotions labor.

Gene Lee

No I Yes. about quarter-to-date. which to and to comments I’m talk – that’s We anymore. like you don’t not do on it gave a number going

that, people trying as food. is discount. that you far to As problems labor, but without need all to produce takes goes discounting. still specifically exceptions to the difficult and want there and And dealing you to And It less very, of business these very to with part off-prem off-premise drive we it’s drive – impacts the too. labor still cook, need don’t the

off-prem. create we that trying like restaurant, guest I get as excluded experiences, And And his dealing was trying about so or prepared we of it’s I the in lot we’re great outlined not from we’re and notice the seven mean, to Rick – short people night. think this, are exclusions, with to it’s a we’ve seven people on-prem whether for got that these when remarks,

challenges. try overcome to those and adapt You got to

off-premise each idea different every that brand restaurant I’ll an are has give In some of more many we’ve do we’re And go is at now, we on where business. the we there a control lot to we that right that. to words, way XX we throttling. But orders every And are you think other orders take differently. Each four – a I so throttle can’t on minutes. orders discounting. without average, than and we And only got how have throttle minutes, doing weekends, the things to off-premise XX can

And so – the excess dining we to know able got and that that’s be demand, I that, to something service the service and off-prem. – but think have we we’ve that’s think I

Eric Gonzalez

what pay, are From might an perspective, labor that exclusion be an expense recognizing but there from maybe there have about impact, expense talk you that’s maybe paying the a from the to able is not present. margin sales just perspective, that an

Raj Vennam

It’s meaningful a enough. not P&L. It’s big impact not on the

Eric Gonzalez

Thanks.

Operator

Our next Oppenheimer & of Company. Bittner question Brian comes from

Brian Bittner

Thanks. Good morning guys.

like restricting through Obviously, talked when lens look perspective. looking just the the you it Olive you capacity. clearly the at numbers. you going dealing same back Garden staffing or look to Just about are it doesn’t issues issues, at the a are of at When staffing from LongHorn, similar the with that sales they look

two So can are between difference they the brands? staffing issues, with dealing there just talk about why and going you if those primary the on

Rick Cardenas

Hey, Garden things of team total actually that and – parts about LongHorn, were smaller a early does, they than they of opened a the faster. pandemic Brian, in So Rick. it’s is have right? up A lot one couple in Olive country the

team their where And are members be. doing a pre-COVID, they they they Garden lot So actually, staffing aren’t would more volume. more right challenges now, have than but Olive did nearly

same exclusions. lot staffing the on a kitchen. you the about of it if thing really their think challenges impacts So exclusions, And the are

through not as as big sales long that an they as continue the It’s kitchen people so exclusion, they them. in got an enough to have for drive working that. have And issue they can

the So LongHorn, members of if an Garden team than restaurant you XX% think a does. a probably about total Olive of

for you impact big have as it’s exclusions, not LongHorn. when so an of And

Brian Bittner

of promos? about pleased ability business this Okay. Olive Great, just how brand profile and Meaning, the if the the are want thinking aside the you Garden, in Garden us do from weapons with Or future more really operates? you issues, just this with want thinking want want? profitability us kind that how forward you to and new have unused analysts do to you new this thanks, more the deploy base you be And of your strategy with you could so staffing Rick. that case moving you that Olive drive potentially marketing proactively

Gene Lee

business – winners $XXX inflation only is is it made some the this This out they is you to figure Brian, earlier the to what is sure No, exceptional And going try through, where sales. way going back want we’re downturns. on want we strategy be to be we value. well. consumer. to going going provide business. And done Garden comments of value in to trying tactics be we Olive think think that there well marketing, we’re implement the if brand. profitably. – with to really in this term It’s be the downturn, to do we’re that million ones will and million We to I we position historically who I want the think And to that able And What to drive equilibrium to develop are a we be position is to to to of going base have do another that this is the in focused longer will to do $XXX is make then go to it. get the you about once we back put is a is

I get wrong. me think we Don’t again. will promote

around promote how to the to off platform. thinking when discounting think price. be – at we to about don’t focus want table have will – just than and we be Even do the that it’s value, value again. don’t value a extremely really and that will that’s I think a And we important. proposition, We And lot want full paying we’re on we table differently. sitting guests if less though think a value of it we cost more not We we are opportunity busy value

And get We see there. environment we out But that we plans the contingency We’ve is, think the we backdrop so do. figure and to we we we’ve now. right got got is. once to what competitive to economic what need what to need see want know

Brian Bittner

Great. Thank you, Gene.

Operator

Suisse. Silberman Our next question comes of from Lauren Credit

Lauren Silberman

Thank you.

segments commentary all all So Olive just no understand the quarter basis, dynamics there. in across there X-year the And perspective, fourth change on same? a except at the I differences for from on an Garden. the accelerated a trying the the to basis. sequential is appreciate the just comp absolute I’m from looking trends are on why But just May, brands

Raj Vennam

we let’s Can question. question? understand Lauren, make Hi, repeat the sure the you

Lauren Silberman

Sure.

for the So Fine for for from just Dining quarter Garden. flat fourth looking basis, accelerated Olive the quarter and the business, other comps at a X-year reasonably LongHorn,

X-year brands. So on across I understand on comps all the commentary absolute an the basis

Just Garden? if versus the sort the understand acceleration regarding there other for from a the to sequential flat the fourth brands perspective from Olive for call to is quarter, the on quarter of versus out first anything factors reasonably

Rick Cardenas

second has think just just in Fine Dining, – the I’ll a mostly back extremely well. LongHorn about Yes. when quarter. the a of got we you full quarter. capacity things. has we done And segment all in lot Yard – other make steakhouse the quick the like business, House more I back just got mean, couple

the really that’s think change. big I So

Raj Vennam

promotions best QX. of the back really Yes. had the we is of of in a Olive trying had in That’s there. the one of point – their And to I Garden lot about a not talked think we – lot the is to market is we a dollars thing We keep and – lot had promotion starting other apples-to-apples. come best what marketing

So off. to we or your X where is when That’s you lower when starting to argue that’s compare the ago years – more. number, it points would trying you’re point XX

start that that, look that’s And there accelerated. where at is by you Olive brand some differences. volatility Garden if promotional you the because with So when of

Lauren Silberman

helpful. on Very just Okay. And loyalty. then

previously restaurants. across tested select You program a loyalty

full them implement seen we’ve a of or think looking a date. to implementing service I brands lot

potential for the on Or in tests system? you it? think across you the program about loyalty thoughts as what updated any have you a do saw So

Rick Cardenas

the get making Rick. our thing that it’s it were up the Yes, loyalty was well, the time we do we stopped can eliminated believe we and didn’t Hi, sure Lauren, we test – to during when started. right running. We and of that restaurants open right COVID

right are on We now working everyday value.

we’ve sure brands. make continues Garden, to improve. talked our that value perception all of Olive great about It’s our for we to As already want in

loyalty to now, happen we come even do used to And again. don’t that down so to – haven’t decided program right test provide is But That the may consumer. a to provides someday. highest discount what a want may we

we we will loyalty different. have a if program, something work on So that’s

don’t Now in is long trends point-based positive program discounted program I we think loyalty to But right were seeing we before. loyalty a in that say restaurant our in do the that way will the was run, business. the

Operator

of to on move can Geiger We Dennis UBS.

Dennis Geiger

Great. Thank you.

chance? the on Thanksgiving by see just to wanted you impact if shift quarter Raj, quantify the First, the of could

Raj Vennam

I comparing a it high about as of we’re Yes. level, a point say because a it probably, think would impact. a at at as as pre-COVID, look it’s yes, about X-year of on to X% impact you think it,

Dennis Geiger

as the just wanted can business you very of come much. And you off-premise, share efficiency some as even so digital either that even thank front or technology it mix off-premise that additional it to support Yes, then some back wanted digital on to to to relates additional Great. top margin business impressive that results opportunities. the line or any for just get a can sense the opportunities the dining relates

highlighted, side? if geo-fencing that Thank opportunities you close an of is think have and any or that how tech you. there is share curious the kind on so, I one might anything other to be there interesting

Rick Cardenas

Dennis, Hi is Rick. this

experiences. first is the we they while personal across want and a broad to they to growing desire choice really chain for from want choice, message is technology of Just technology reduces personal – respond our and be want goal friction guests. every that our They personalization on to part implement value

mobile To and Pay that pay quarter, use it’s our for – to PayPal were these over of able an did of are via Pay other wallets, the we paid to much And order. olivegarden.com. pay. idea, PayPal to now we transactions in Google to things app one more you We our guests just you XX% Go of already give first Apple a the to so convenient where added to And few and

started going curbside, our online the well. geo-fencing, I Still updated to experience we AB for have about recommendations have talk they but testing am go. to improvements. but we have coming not Garden not here just what we and And for quarters, for more We guests are I items. doing have in Olive including it’s as future when am

this invest We in continue digital platform. to

bring to Our service to goal when to spend comes Will more But learn technology, they for guest are we are can space going we it will going probably to going space. what restaurant no, lead in relevance industry, guests. technology doing do the And restaurant full-service see to do the what lead convenience lead we are in we are we is more for and things and guest facing. segment but quick our facing and the for to that. continue players to our our

Dennis Geiger

Thank Great. you.

Operator

go Nicole Miller to Piper can of Sandler. We

Nicole Miller

morning. about trend Two can you underlying off-premise, in seeing catering you than talk Thank what you. as catering? an Good quick ones, on are

Rick Cardenas

to back huge to offices, haven’t in since see and seeing of business we catering back did a spending yet. gone are pickup, catering still we a homes more lot but haven’t Nicole, pickup during We to than COVID haven’t businesses. we But whole seen people some. Yes, seen

but some seeing in are growth been dramatic. it hasn’t catering, We

catering holiday see a on. huge going in while this was jump happened season what from what the right during huge, will year. COVID happens not But We now,

Nicole Miller

What then is coming a And holiday and some not you are what the question up of fair for really up corporate assessment the think we high-level a social the peers, for might of just about industry like if numbers pluses dining, better. season? minuses gatherings fine or around of

Gene Lee

Yes.

to bigger of this I are, some be on we going the levels here all it’s think say in are think holiday what with season. it’s and to today the where and especially I markets. I robust a depend variant going would sit

have holiday all of in robust I restaurants a for retail. all our season think we

next restaurants gatherings six I a inside that have we if people seen parties groups fairly as the holiday is is mid-summer. we weeks as And in cancellations the is we start think financial have start as But aren’t control. thinking in as will comfortable weeks I seeing still the in gathering eight under the of seen weeks the fine know from healthy a One bookings. last over this eight a dining that to larger trend about be of six we weeks standpoint. variant to or consumer robust they season we more may lot to would been big expect the have the

Nicole Miller

you. Thank

Operator

on now Jeff Haskett. move Farmer to can of Gordon We

Jeff Farmer

Good thanks guys. morning and

but menu pricing think quickly has for and guys higher that pricing to questions levels, you. Just you wanted follow-up some that holding value received, pointed on the below of you menu to I obviously well moved inflation

you quarter of and inflation the could for in that up number roughly do total pricing menu X.X% So, you? the balance has last pricing think inflation I this ticked considering Where – that the menu go quarter. at think sit over year

Raj Vennam

Jeff, I to speak Yes. our X%. contemplated the pricing just is What’s in year. under will Hi guidance

So, we if our provided, assuming under pricing forecast total this are the X% about think being provided, we you outlook inflation in in – we just our X%.

Jeff Farmer

aggressive peers delivery delivery, I helpful. peers, that your curious, margin for potentially these premiums, of out that that channel? better bit have Okay, offering. pursuing considering there pricing structure sales profile there am about has little margin delivery that And topic, the changed profile dining for is have casual in menu a a then improved lot just opinion been which pretty your different that’s taking

Gene Lee

No.

Jeff Farmer

you, Thank guys. Alright.

Operator

Brian of Deutsche comes Mullan Bank. Our next question from

Brian Mullan

you. Thank Hi.

you for Garden, Just less about in a opportunity more cannibalization development quarters, long-term might made commentary number on a optimistic question on bit the units. been recent the the past, in Olive of worried have you

restaurants? Could color more? question your is number have long-term So, updated thinking? mind? thinking Just there there you in X,XXX be an what’s here? your actual Could on this potential there current on be any the Is

Gene Lee

X,XXX. we I don’t say more there number. think to a want get to than We will pathway put Yes. think there. a I that is

run kind and those I we strong. brand a is every We time I time, think a this this we it’s numbers through get to say, easily. business really dangerous are The that brand, for long think doing have in out been potential. of we pretty put numbers

just So, to let’s belief continue say we convenience is that our – underlying one is to going matter. of

where have travel And We to build in, restaurants also XX-mile these need that we would closer can these Garden Olive we that more believe where and to people large, in I going in people and dine. what remote live. areas in like out to trade things build are especially call to areas get

then opens over returns about just especially if can off-premise. we we that continue take are and some more and And areas. amazed. to continue so excited Gardens up can Garden, we pretty We the to getting. Olive we we maintain volumes the That XX% And do at open trade where Olive are we amazed be

get think easily. fairly X,XXX definitely can we we over So,

Brian Mullan

me. That’s that. for it for Thanks

Operator

question from of Chris comes next Stifel. Our O’Cull

Chris O’Cull

stronger what attract I morning driving how create your Good think proposition the employee labor the get Gene, on a is guys. maybe to perspective talent? shortage Thanks. wanted you can to and industry industry

Gene Lee

Yes.

I national think I it’s a problem. all, labor just don’t restaurant industry, of shortage think the is First the

we single other other maybe challenge We I this with we associated see see in day. all see it every have with that places. think vendors. companies We it that some our

members are let’s as about to environment we work the that to well we And the a have of They on think think pass-through. I point are of using So, all flexibility. improve that we want an growth do able are I depending to in ways to restaurant find restaurant that for. have A they get from I think be They want job – what opportunity restaurant jobs what B. is team I proposition. to proposition, want think kind they And continue lot as point to run. want. an to do They mean understand

that opportunity. into the think got I employee one have in have able I ranks we management. people got meet potential. their I and or the are that hourly are that three that about four I that get excited they almost them the we we ranks. into I proud growth. their and – When last from how to come months an into really taken love of We field, and love they future moved management to just as am many am – us most members XXX in that is people team of would love are hourly months, so and our I And things these

I that that too. not box, who where that’s it’s and where we have problems. to – and an of resources, resources think people. And to we think think that this which how down I the So, be we at others is something people an There in people. want lot best gets can work. have this point matter, going people I than inside will scale have – to leadership, time. with to doubt do importantly, the than attract and, it’s more those are it’s no situation, don’t – shape who Where stronger is in proposition going this we think better GM each that’s to I create that they down is I can company individual create I labor have in environment our think come Those it will think others restaurant attract manager, employment a

Chris O’Cull

am curious all? have you kind pay. rates of pay recently, One will seen the continuing the think issue at And if that I if you thing didn’t just think rates was employment mention you increasing healthier address or we that at

Gene Lee

even of I to years, COVID. I wage you that’s before think There for on one got aspect a only few pay. have employment been pressure competitive proposition. And the now think has No,

away go will think we be if I it going – think I there don’t if the comes mean, just just all think industry pressure I because down I we – problems think for you I pay. move wage to on the to don’t are But as more. pay we forward.

Chris O’Cull

Thanks. Great.

Operator

Our Evercore next ISI. Palmer from comes of question David

David Palmer

Thanks. Good morning.

the talk a in over restaurant you how line basis in XXX Could this? how with much quarter X% that And longer is I the that is productivity think the do of comps your think down up doing sustainable time. was view? company expense points term you basis on X-year about

Raj Vennam

David, this is Raj.

an per below. absolute expenses week on restaurant were operating slightly So, basis, were

are we where think I we at were below about a point pre-COVID.

efficiencies depends I leverage. are some of some see think going R&M. through costs pre-COVID. again, that managing to some the we to we well line also services one a little slightly mean continue and contract sales where Is on line back but that’s a to going the keep found I where and have be pre-COVID. to to probably versus we – some do come it’s a in It going it it not. will of the are. have still We it some manage at or point bit, all the pandemic on flat are below we XXX, were But been stay XXX where able actually fairly range, improvement –

David Palmer

a that then some are and a on these side. of going is you about variety are of are COVID forces spending part how Just as just there? see And separate I them. some promotion specific that am you what – on promotion marketing and question marketing wondering the era on things quick easing, follow-up I thinking

do you ‘XX? marketing fiscal levels to ‘XX spending So, and promotion more in returning Thanks. specifically, anticipate fiscal

Raj Vennam

this it on No, question expense to first. answer point. the me restaurant the I like that then let last So, to really it’s at we said, services. line, expect get back But contract don’t

we is there more been work But continue these is that’s there less I I some streamline to by our multiple in with levels of will catching QX, of to to and vendors about, on or pre-COVID specific that line. But there but more that stuff line optimize, think really that, We other come think and back. look at kind has them how part mean bit R&M a places. There that are there. little up. little we one talk a beyond was there is of is continue on no item – that it’s that on bit to music, are I closer And this, that. here

David Palmer

you. Thank

Operator

Our Barish next comes of question from Jefferies. Andy

Andy Barish

morning good Hey, guys.

Just am short-term love. I a couple you questions, sure kind of which of

there sense I Day years Labor a just shift, a numbers On X you far? you was know obviously, noise in weather. I the of ago, with talked give the the about, so us that can think September quarter

can what tease trying out variables? to all you the of Just get given a other sense

Raj Vennam

Hi Yes. Andy.

some comps Day weeks don’t a are had fiscal There actually of impact our time, ago fiscal impacted shift few point High at Labor maybe years about because that’s and we the so from but we clearly I – weeks Day. what Hurricane X have had have we say. So, we I first for in that level, Labor little recall years labor bit. can’t that that talked actually that XX the because apples-to-apples about Dorian you a giving exactly, our we a – the would or was ‘XX, fiscal

Andy Barish

where year, there? on margins that are to sequential sequentially, then you And just going tell too given the a the the everything of somewhat or Is points tough quarter margins in lowest. just predictable usually on usually see decline volumes finally hundred this given is basis couple a this out of

Raj Vennam

you QX sitting, also So, going to is where we and the let where the where specifics quarter me volumes begin have probably of look would low with, have But do going margins to to that. without it probably on answer bit say getting is we inflation at one think highest as are QX one than little I improvement low because to more are a that we are the we typical quarter. a right.

And going higher be so, to it’s of terms than inflation. in QX

Andy Barish

Okay, helpful. you. Thank

Operator

our John question Ivankoe JPMorgan. of from comes And next

John Ivankoe

staffing you net is and to are new at which you you. Darden you labor wanted week, you a great turnover of employees and I think quits Can the to in heard rate back Thank per hiring particular. said, people overall talk about tick to are about can kind versus which think you would that as the just look achievement. is there adding like below, terms get How be I ramp a metrics assuming real-time you X,XXX Hi. more obviously are were X,XXX I at you that just obviously in you where some gross? where operating back quickly to And feeling be? of those much up how you than of net, might standard?

Rick Cardenas

this Yes, Rick. is John,

it of turnover coming kind out On from right turnover dramatically improved get was during to see front, and the starting even COVID our COVID. actually are we where of

turnover in members team first We doing really that testament in. in is especially new a well coming the better dining to and to industry are we that right. are they the XX-day than casual the turnover, still when these And training are

than higher still than it’s better, better pre-COVID, much and is was turnover Now, but still it’s the it industry. much getting

John Ivankoe

the side? operating And on

Rick Cardenas

it Say again?

John Ivankoe

translating I mean, what in if opportunity Sorry. past? that’s employees, hiring many terms I so considering more there operating an the obviously And on the staff of if maybe is is? improve how mean, operating given you net side, margin I to some of new your overall the real-time relative are is that And than X,XXX much – gross. new metrics on to that mean your

Rick Cardenas

year. say for X of us are are that we with team not in about first of with days been us days, percent members the than team are XX – higher years team And percentage have are we first our for XX think as have do that that if as members Yes. ago. a the a were I would you the productive members they

in bit members. are years there those spending for than we we team X a ago training And do of new because some little can did are more that. that So, productivity we improvements

inflation of just operating, operating down might And things. there from so chance But the well But road. will that those our of come some yes, offset we some be operating metrics. all to are

think you levels over months, still are with about at or the were metrics, same the our If team they four these members. guest last even three satisfaction new they months

John Ivankoe

Thank you.

Operator

from Tower of comes question Jon next Fargo. Wells Our

Jon Tower

Awesome. Thanks questions. taking my for

this did and and your your than is business challenges despite and are you First the industry the of you that then and how well that Rick But throughout that many one. acutely I apologize would I this to if missed more Gene, the the second, that on And the are. overall sales competitors your headwind pain important benefits call, been hit quantify of business facing. category during scale Raj, been the smaller the had exclusions I OG on doing feeling quarter? how assume the has frankly, in you has

six company So, so? I table, all am portfolio grown the bring curious, for brands to has to at adding the or benefits given the months over past appetite scale the could your your of

Gene Lee

to – do We no exclusions. from something – did impact the have quantify No, the sales that’s can’t on we that. any That’s not methodology we do that.

place. As mean, at far the as M&A we same goes, are I

We my the prepared maybe Management best love we vibrant company. we our think find to that own that value now Board an I platform strong continue our remarks, sense, about focused a brands we are I option we some. will our healthy evaluate for opening that We are. now, good Right to would our pivot just think is in We as on growing makes – options. and create the brands. talked are are, to say do are way And existing how really extreme the and right when shareholders. how restaurants business models we

Jon Tower

Got you. Thank it.

Operator

Raymond of Our Brian next question comes James. Vaccaro from

Brian Vaccaro

Thanks.

back-to-school? is you. weekly by increase then Thank your level on quarter-to-date, driven ones quick comparison, of bedded the also you more of September two Raj, guidance? Just percent confirm lapping what sequentially? is that volumes improved can fiscal seasonal for sales average the lower Was kind ‘XX in easier And me, usually G&A

Raj Vennam

referencing the versus are quarter-to-date, September for Brian, we Okay. are numbers pre-COVID.

that September industry good with the rate pointed month is the you is, quarter, casual a the out, unique on a as September. seasonality forward. had you seasonal items as us So, come there million But run $XX I the and of like the use G&A that space. you as look be for think, rightly out you lowest into generally in said, we front, if take would that to said, this I

Brian Vaccaro

Thank you.

Operator

Strelzik next BMO. of Our question comes from Andrew

Andrew Strelzik

coming two and of of yourselves, about Thanks for brands on accelerating a estate. the It unit had just number are similar unit like real to growth ones out that taking Great. the is kind talking I quick there question. growth pandemic. of feels

makes real several seeing So, you play availability secondarily, just of it estate for in at am why I this that level you sense then about why given the competition price. put And curious you I up think out? kind on your answers of kind perspective new your much curious have Thanks. Are environment X%ish the own of just point? right terms is eloquent am so to units.

Gene Lee

or Unit mean its Yes. this use. retailers use. not use of lot we are competing growth, getting more as as was – It’s out space. I mean just pre-COVID. out it’s sites definitely people just we that not the spaces a there I there spaces that hard expensive. for the there. restaurants acquiring are competing was it competition lot Banks There a restaurants use is

and will with that help I moderate. to you start the our is crisis costs been with landlords. how construction seeing are we how rent We having tell And these landlords. does we paid credit not investment-grade an forgotten behave through

we to I pieces exciting of on as very of group brands that excited as tenant. and Darden So, are have think a property the people put

people. it X%, comes we right down be, why as the to to believe where As far is number

Especially we decision we that Every handle in managers. team that you open time human up the And brands, going management to have sure ramp tough to you it’s your general because you really restaurant, make on that have people need a can of through this the to think make is responsibility. kind really that I we be that business really growth our quickly. smaller is rip resources two running in important most who restaurant. new

existing taken business them new General have got somebody the Managing and and a you You in existing an putting new in Partner Manager from existing then an business, business.

at have two you And risk. have for years So, amount doing of we it. I done are businesses this the that

to I in why tend get takes for years. And on right to it we correctly. And a don’t real about it X% to a a out for restaurant. we do if six open restaurant, conservative to really takes X we to pretty lot and that need ability how are maxing that problem right. and months, be And right restaurant to it first lot you open a think think that’s a they this. up a It resources rate Darden, human our and growth open is this do our

Andrew Strelzik

you helpful. very very much. Thank Great,

Operator

Capital of to Chris go can Carril RBC Markets. We

Chris Carril

questions. Hi, good for morning. the Thanks

your related tech technology, tech thoughts operations, side. Any labor So, you that in additional hiring I but you but curious the around hear guest-facing else scheduling? offered anything commentary related mentioned and technology staffing focused some related in-restaurant believe to helps on labor Thanks. maybe on on to on be to that’s would eating detail investing to helpful? or

Rick Cardenas

Manager’s – Rick. We world-class improve processes. aren’t system, believe this General and user in the it is What that great Yes, our scheduling to a to forecast Chris, a easier and the is the do We the restaurant-facing it that job things taking for schedule. we have interface world-class, and goal great does simplify isn’t primary is make scheduling a guest-facing, productivity them. for manager and

easier continue their guests can for team they we so faster, things with more. and get train managers make So, things members with do to can to it guests they and to do be

Go have we for things members To kitchen. some forecasting. in with have what And and machine and We at team learning looking better we to our done do the are AI

So, things. to do there especially that is of on, product, are we of making working inventory lot kind a receive order it and things and the in easier kitchen, those

technology is On are the them. override the we things what a But to we experience the do have for service side, want for guests. testing easier don’t that it few may make

technology, to make To in technology to continue investments in productivity. technology our we and will Go our our kitchen these So, improve help

Chris Carril

Great. back you. following That’s competitor helpful. closures. Thank the just supply up just reduced from of industry topic on then And quickly,

Just markets have versus really just Just perhaps has – there where what get you what curious you any right? to sense of there more to extent less from any closures? competitor there extent trying to can saw or been if share you observations industry a been benefit a were markets closures where closures, has from Thanks.

Gene Lee

closures, it. to there is not two areas, Tier of I a lot going are right. trade you in X one, Number would say to about your think ways see

Tier restaurant onerous. it too a in a the average rent even is make below So, can unless in X environment,

sites, in secondary independents seeing some So, and especially in more the you closures are restaurants. your chain casual from the and tertiary of space

believe chef closure will very are of those will recapitalized Now restaurants. back. X Tier going let get Those on to other to be out that and the seeing first built owners. I sites, in quickly as dining. some fine come you are They the some independent

this you So, I in saying do think I by those summarize seeing will not would Tier back. come are X. your But

You it areas where seen your have lot tertiary in closures. more are a of seeing you

Chris Carril

it. Got

all Okay. today. detail Thanks for the

Operator

That or additional turn at I the this concludes conference Kalicak, today’s back Mr. you any session. time, to question-and-answer closing will for remarks.

Kevin Kalicak

everyone that our concludes have plan like day. That a XXth, we to with quarter on Kevin. I December market the opens a results before call would great to remind call. release to second and Thanks, Friday, Thanks, conference follow.

Operator

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

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