Darden Restaurants (DRI) 16 Dec 222023 Q2 Earnings call transcript

Company Profile

Participants

Kevin Kalicak	IR
Ricardo Cardenas	President, CEO
Rajesh Vennam	CFO
Eric Gonzalez	KeyBanc Capital Markets
Brian Bittner	Oppenheimer & Co.
Andrew Charles	Cowen
David Palmer	Evercore ISI
Jared Garber	Goldman Sachs
David Tarantino	Baird
Dennis Geiger	UBS
Jeffrey Bernstein	Barclays
Peter Saleh	BTIG
Lauren Silberman	Credit Suisse
Sara Senatore	Bank of America
Andrew Strelzik	BMO
Christopher O'Cull	Stifel
John Evanko	JPMorgan
Danilo Gargiulo	Bernstein
Brian Vaccaro	Raymond James
Nick Setyan	Wedbush
Jake Bartlett	Truist Securities
Brian Harbor	Morgan Stanley

Call transcript

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Operator

Good day, everyone, and welcome to the Darden Fiscal Year 2023 Second Quarter Earnings Call. [Operator Instructions] Today's conference is being recorded.

If you have any objections, please disconnect at this time. I will now turn the call over to Mr. Kevin Kalicak. you. Thank

begin. may You

Kevin Kalicak

Good call. and Todd. participating you on today's morning, you, thank everyone, for Thank

are Cardenas, me CFO. Joining Rick Raj CEO; Vennam, and Darden's President and

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

these a during presentation are the and website presentation. the broadcasting simultaneously are included posted of darden.com. is at call, includes in certain We in Relations our measurements section presentation of this non-GAAP discussion which measurements, Today's Investor reconciliations and

plan Looking followed market the fiscal release XX, quarter call. XXXX opens March Thursday, earnings to ahead, we on before by conference a third

to as XXXX. the discussing During when second any call, performance quarter reference second quarter today's to pre-Covid of comparison a fiscal

all Steakhouse Additionally, dining Garden, results Olive refer call Kitchen. excluding benchmark, Intelligence's today's LongHorn Black during Box Cheddar's to casual Scratch to and references industry

an During This to brief industry and Rick decreased fiscal counts same-restaurant share X.X% update XXXX X.X%. provide more focus will outlook. our Raj financial increased quarter and and guest our quarter, our industry same-restaurant some and the results remarks second forward, on will our morning, sales moving financial on details fiscal

Rick. to over call the turn I'll Now,

Ricardo Cardenas

and happy Good everyone. Thank quarter. our morning you, this pleased Kevin. holidays, I'm with results

atmosphere. a Darden great we with and basics X scale, ready our the by member is brilliant staffing of philosophy and of in run our level, competitive operating are and extensive highs. strengthen brands results-oriented Being are our staffed anchored the we leverage historic rigorous team XX remaining we staffing high planning restaurants. performed achieving level, our of brands, are and ensuring maintaining focused service At advantages culture. and of strategic to our each at and manager great week. on teams to insights, levels our significant level our brands, a starts All a shifts appropriate data fully our continue food, back-to-basics Across At the in doing job at at with

a are which guest driving according satisfaction executing As teams sources. our turn external to result, is consistently, our internal in more across and strong both brands,

Also, X our internal of quarter, Darden tool, guest others achieved particularly the a tracking casual dining industry #X the Olive high in major was category. and brand performance. During each highs. measurement of I satisfaction among all-time within brands remain brands near am ratings Technomic all-time ranked Garden's proud

During never the any popular they most offers, back time brought limited their possible. quarter,

that following recall, As you last promotional filters. be activity evaluated or should X I any introduced when brands with I talked the may shared

competitive to equity needs it First, brand's the by to elevate bringing life. advantages brand

Second, it should execute. be to simple

We will which deep simplify to to have third, teams it And not a not jeopardize all consistently operations done discount. exceptional allows the experiences. deliver work at will guest be we our

profitable drives value of providing in boxes. XXXX that it these last the We years was to are never offered, doing our of but a growth. possible sales on that great guests, way X all any Three checked focused after version

never-ending Olive perfectly their equity leveraged iconic reinforcing competitive Italian of it Garden's brand food. First, by advantage craveable abundant

guest easier with was existing great which limited experiences. amplified add-on items menu it only in to execute, offering resulting it Next, choices, by made

at possible Never given of we the past XXXX, I'm encouraged X/X ramp. was in by years. of priced still in while it the higher our saw $X a change offer gap media exceeded tremendous traffic value industry performance, more Olive this about supported to during Garden's it guests. weeks that margin improved positive ending for with even X than which step and expectations, Finally, the was providing significantly this

at Going drive their in team continue guest time will this year. be on we but of the guests the only forward, do brands across strong that limited Garden execution investments through this off-premise for operators. offer experience we may our ongoing technology reduce and the to and brands, insights share friction our Olive learnings our build fiscal Across our

prefer many in example, our to For of their order. guests still to-go call

restaurants call-in for However, XX% they of this, is for XX% time Digital the Longhorn total during of enhancing transactions XX% into holidays this help quarter, of when all Cheddar's. orders for guests dining of or are sales. convenience for we and taking busiest back their payment at casual and payment quarter our sales core arrived for rolled our To XX% and To-go have and across sticky and inefficient sales teams off-premise total for making inconvenient sales accounting remain season. brand, over of out guests at address Olive efficient. more the teams, to-go the guests guests. the the Garden, year Darden's more phone welcoming our both The our XX% even restaurant online the our for our accounted enjoyed specialists during

service delight Capital of business. and guests, and on serve, at purpose higher we a this bookings reminder the and are our all-time season our In holidays for everyone embraced is our ADB enjoyed Day, our Grille, and holiday great nourish CDXX fact, encouraging. team members communities. we also are a Thanksgiving the record heart that and being to daily The sales of

have to more difference this meals. been unused banks more And harvest is X XXX I than for on thank without our the a to trailing of local in on our to are first their is On am significance in our our Darden's live program. all equivalent during in One wonderful we food the you throughout basis XX-week teams to households some of million Their helping to history. serve to serve communities XXX,XXX food. our executing environment. a operating season. year. in the communities team regardless a our disciplined time behalf display. evidenced in leadership proud approach through I $XX billion make our nonprofits our succeed food country. of we donated, us One food team holiday surpassed fresh, of continue of on This weekly million that holidays. and our basis of guests To fact is country a last help the our the Directors, just the of that harvest hunger, and fight pounds program, sales by across the impact I'm week, Since for do access wish The inception communities. enables program in strategy XXX is focus so senior the of takes communities Board to want what donate in of I you consistent delighted members which the ways added restaurants the and everything teams the on our and commitment than in our

Now it to over I'll turn Raj.

Rajesh Vennam

this $XXX industry restaurant basis and and XXX same an driven shareholders Rick, was even billion, EBITDA the along as points $X.XX, last of X.X% performed restaurant industry returned above points. increase you, the XX good sales year. $XXX of by $X.X continuing X.X%. dividends basis points Total million pricing last restaurants. inflation by Total share new outperformed Total roughly same-restaurant X.X% net and the X.X% Diluted $XXX quarter total cash than of exceeded -- approximately quarter, net X.X%, sales in of million Thank sales counts earnings basis were of more $XXX quarter everyone. we consisting benchmark in below morning, growth repurchases. year, for and was higher first to per for XXX gas million, the were are share million with addition the same they performance our outpaced operations XXX from our by This

XX%, at pricing. the and P&L which higher, commodities were year, last inflation Now by XXX details of the basis of significantly looking our outpaced to driven compared expenses points beverage Food approximately

As grains quarter. dairy of continue growing due poor events to higher categories and the than be conditions highest experiencing and inflation. expected let in was to the levels we especially chicken much weather-related us Produce expected,

restaurant impact the inflation relative market. X%. to partnerships However, our points National general and total labor minimize better last scale XX was with labor vendor help basis even than year, of this

quarter. basis G&A basis labor higher XX and leveraged maintenance and higher line continue expenses basis last driven than expense. increased the that favorable we presentation from our basis more inflation on to to been were quarter XX reintroduction point this due repairs support as expectations was hedge. by favorability despite tax largely the was efficient partially This favorability rate. were for deferred our as accrual, mark-to-market of offset from as to point rate the wage points year leverage Marketing which the reduction media we possible. in were expense of to roughly effective on income sales as last of inflation lower Our And into would this the The benefit points National sales XX mark-to-market X.X%. by operating Page XX.X% line is hedge elevated on was than utilities heading reminder, XX.X% the higher expense line. a incentive with XX hourly well the expenses year, compensation. run below illustrates this expense, XXX our plan. impact basis This expenses and points XX tax our way restaurants of the as with we offset in have without tax higher offset the a never-ending

looking reduced than points. than initiatives. were we and Now more basis and XXX at inflation margin improved while versus marketing, beverage by pre-Covid, other XXX points, underpricing grew operating productivity, Increased food cost more by savings margin performance our by income offset costs basis

Looking performance. at our segment

were their above segments of Sales sales of Olive Garden last on sales. were sales at driven the benchmarks Average X.X%. Olive -- sales the were at LongHorn Fine last weekly growth XXX% segment All X% Average pre=COVID our year recovery weekly by same-restaurant were pre-covid traffic above by both Same Sales X.X% sales same-restaurant industry our sales respective sales level. sales X.X% XXX% with Garden level. driven X.X% were of XXX% year LongHorn outperformed in at and significantly were last and Dining of level. Russian average of weekly year, X.X%. the of above of sales

were sales the sales level. average weekly other above year XX.X% same-restaurant last were pre-covid Our segment XXX% -- X.X% of sales of with and

our financial fiscal XXXX. for to Turning outlook

net year. million $XX.X our to We half sales X% of new million, We expect of diluted total the back $XXX expectations Furthermore, have and to approximately between XX% and to we capital now of X%, XXX Total annual per continue reflect guidance resulting sales the annual for pricing expect XX $X. total of earnings same-restaurant was effective shares spending growth the with X%. our to approximately and and diluted of $XX.XX inflation between million commodities underpricing year. approximately $XXX X.X%, billion outstanding All inflation An of updated in we restaurants; X% approximately and to rate billion, share results plan year-to-date for XX $X.XX X%. to tax average inflation

the offset be at pricing by partially In quarter, EPS fourth basis the from we balanced. we last year expect on inflation to rate moderate the lapping by growth we sales gap and year-over-year growth. expect third third to drivers quarter, outsized inflation estimate contributing Omicron the the to our quarters, be In underpricing growth XX Looking fourth further approximately points. margin to fairly

and remain wrap are strength guests adhering we're of of results. in strategy very to the managing how underlying team's providing the our ability unpredictable our our We're to businesses strong We that to strong in environment this up, confident and model effectively. let face to their our value delivering Now managing our continue business pleased inflation. say me through and with in teams disciplined

for open will up questions. we Now it

Operator

question Markets. take We'll Instructions] our [Operator from Capital Eric with KeyBanc first Gonzalez

Eric Gonzalez

the real strategy. on quick promotional a Just one

that the be LTO. for guessing talk I comp -- year. $X you past. possible you LTO about which be But so your a run never think driver offer, maybe if But that that I you you could consider brought an remember in said you offer? take-home back I'm the would this Because only also was will expectations to any that correctly, strong that fairly

Ricardo Cardenas

possible, any been only limited likely remarks we the time Eric, in offer, is our thanks prepared only limited for offer. said Never question. the maybe time a

$X As core you on talk that's take about menu. home, the our

But for we're So any it's not not menu. reasons, considered on going promotional details. to limited time, our more competitive plan discuss it's

not the use mentioned, execute; that to going at live; to by to first, third, second, so filters we're bringing elevating advantages simple deep our discount. equity And we brand brand's competitive to a and continue

we're ATV you'll currently us. As probably pastas, see core menu on which airing open our today, items are big for

these our So they're limited none and not discounted. Ravioli of Carbonara, offer, it a items time includes are new

as strategy, going our going accordingly. said, growth, So stick react to we're we're discount Raj and core to growth, core to

Eric Gonzalez

be maybe do marketing in X.X% And expect for that then year? the to to spend, range you X% the still on just

Rajesh Vennam

going Yes, be Eric, to close. we're

-- So points to how I year. we think think should we close above it said XX said, be That's last about X that to as we it. basis XX

Operator

take next from Brian our Bittner question Co. We'll Oppenheimer & with

Brian Bittner

on forward modeling X-year a price you you Olive results. to comp And bringing how few X-year believe question sustainable? And kind and this same-store sales did this is above a attribute versus relative for on much of we on X-year point accelerated strong conservative the to the underlying you Garden would never-ending Olive clear The moving Congratulations -- you the brands, XX%. do basis factors? possible at also. would attribute should term quarter in to inflection particularly more the quarters, directly Or and trend this dynamic tiny other of a last how much showed to Garden? strong back underlying be other

Ricardo Cardenas

Yes, Brian.

let and done on proud work team First, keeping me working I Garden. handle how at his the Olive say our Dan strategy have with

prepared we brought sales the to we industry already mentioned before possible gap back weeks. had in when remarks, As Garden and a possible, never-ending in Olive that for gap increased positive same-restaurant never-ending X our

to for half about was to ran about us. how and much not possible quarter. it kind the So talk a of contributed We're the jump nevering good it but quarter, going of

for probably we filters possible. as Remember, we positioned, exceeded guidance mentioned. time and at have that strength contemplates strength is the nevering as the expectations. prepared uniquely And in Garden, our remarks, Olive year, our we the X had we about limited it an but so this said iconic our continued of rest in all covers offer, think And not that I

So us. surprise pleasant -- and that's a for pretty

brand higher such a to support, is the things think speak compelling and lower how way. offer it then in And Garden does If about X we media that given price you the that point, haven't in run Olive the finally, but iconic brings years.

in guests the well and return, So really our excited were second really quarter. for fits it

have team if you little we volume year never and So of our higher hours bringing helps think that team members any the down quarter don't go our to so back bit traffic second then the possible think keep bringing about members lowest up. a when quarter, holidays about

the Olive to and did going work appreciative possible Garden is we really were as the was. and X-year nevering really love we So with to our stay stack not that in did same that say where But it QX.

Brian Bittner

a across And you consumer Rick, just more get the broadly, just you witness different brands. where seat multiple have to

takes? 'XX of into best of consumer of and lot a calendar obviously different see and one have cross You of on and to going kind the maybe is out where the of consumer a lot puts the seats you're there's there, feeling behaving. consumer is how your XXXX. There's you view consumer how currents Can about the overall into the views just maybe describe some and

Ricardo Cardenas

our during shift I to spending I positive in and restaurant U.S. a talk what this what necessarily economist, the listen to just everybody as to gap same-restaurant that to that The from know, even dining say. talk has seen QX Brian, or all household won't you about sales from QX they not industry drives seeing, though, goods durable being on we're we've leisure Casual durable benefited I'll economy. improved shift. have spending an -- and industry improved Yes, knows, call services, about from goods to consumer But more the XX. the time.

a But impact the for and think of are same spectrum. as consumers the holiday our record for end And a is at remarks, at bookings all the portfolio, consumers. of We the prepared higher-end data Thanksgiving the sales the lower as spectrum. if Fine a wide all seen mentioned, of of consumer hasn't XX and season the serve across you one benefits have range of them indicates Seasons of about you lot So this our we encouraging. Dining were

in XX,XXX lot above has is shift we're the that $XX,XXX end levels $XX,XXX consumers And over multigenerational because little living more mix levels below over of that's I below though a in X last income Even the at households. say, come seems year talk that us. that pretty still like a retirees our And under seen mind consumer a are in doing income the higher consumers pre-covid in and the the but little and is would disproportionately, there's the of months, bit, inflation it we've impacts above but are consumer XX,XXX pre-covid for high of been single, are keep well. down I consumer below. that about a So know still lot softness

farther the So the all months little that on it was that XX,XXX consumers than consumer maybe of we last bit lower X months $XX,XXX pretty below seen those across the without commenting for but higher it few goes a ago, still the than performance future, good a consumer. was pre. have is than But over other fact

Operator

our take We'll of from Cowen. Charles next question Andrew

Andrew Charles

more Great. Notwithstanding in and were were think that? we XXXX, potentially you'd expect me, expect just calendar plan perhaps XXXX overhead? respond more fiscal about if to marketing, Should kind the some deterioration you macro How contingency value. the the order the you a tighter XXXX of preference the industry strong reducing of some more deterioration in taking invest we XXXX? focus to of to see guys calendar on invest do belt the a Will potentially pecking XQ if we see how we guidance, of what's higher to or performance your but magnitude in excuse impact your fiscal to -- of the and

Ricardo Cardenas

and We actually If administrative XXXX, ways and always improve deterioration productivity This expenses. our to we the think we're to find at really look ways is tighten calendar Andrew at see that. doing Rick good in improve we again.

So places at something tighten. badly way, find really wrong going really to we're gets to to -- if ways the shifts in least find

I when spend, in stick what core said the that for no the what to filters the we've Garden, to as of because rest matter we're talked the their their year. I strategy accordingly it marketing say we'll expect we'll anticipate next X always happens We're our of the year of change this Raj And happens. about in said use spend and big continue mix to making We're We return what don't advertising to react going the Raj will to before, it spend. in over whatever too, marketing mentioned. months. if And as is going that Olive But we whole and On for the scale. and our to going marketing have a past, to to a growth. earn our increase would we been return spend, without to have compared -- it said

we we're we when you've react us So as think to in happen, -- going the we'll past, same thing going things the do seen forward. and

Andrew Charles

if helpful. maintain else in were bit higher something about? guidance should in are or Very perhaps And be than CapEx costs step Raj, thinking one a what's you openings? investments I as new running some incremental hire technology the construction that Is to could store sneak small in expected, there we

Rajesh Vennam

some on construction equipment It's truly well. costs inflation the as and costs

new -- a really of it related. it's So restaurant lot is

on is facilities bit -- a Some on higher CapEx, inflation. even there's the the little

Operator

Palmer take Evercore question with our from David next ISI. We'll

David Palmer

traffic, particularly on-premise. a on question Just

some Olive something not back household is isn't the how patient, traffic industry just Garden opportunity? to feel either. to informs want it on-premise but dining. that's that was. XX,XXX users, this chase an And user is Or to with your at look you under where you like Do If be you income lapsed I casual digits you particularly maybe have wonder double maybe even down that strategy? numbers, for

as that So I'm informs view wondering that how you the strategy. opportunity

Ricardo Cardenas

users. you think have about traffic past on done talked versus be if And Garden, focusing about years, to reduced David, at few that the driving XX-point could at in Garden. we're last Olive we've drop Olive users a us. promotional for core core But gas in significantly marketing what over the we how spending we've

our we And an restaurants that But as so off-premise we in-restaurant capacity we've moved what experience lot got a the opportunity, in to than before. did see has more experience. of

it As you see lower that. much where than to off-premise prior XX% Olive Garden COVID, still was at

just to pricing time So by in every an to our and cost below help don't give great great we to message get see that strategy continue come. a it value consumers value offset inflation competition, on our so of need to focus they come our finding as below pricing a a they opportunity they other savings promotional and

David Palmer

quick Actually, deck, on on XX. slide a I Slide had your question just

inflation beef, same inflation items, seeing? it's on inflationary previously, many what some still but we're of had dairy food it Your on. to less what those X%. And chicken, food is Is the like your looks oil outlook outlook versus I'll line pass you there offset at

Rajesh Vennam

really it's that quarters was XX%. in quarter David, the Yes, fact XX% X last quarter, were first the was second

look and at be you thinking is digits the high single as So to back to to QX, half, it's flat. we're really, closer then mid- going QX

on do the X% that's translates that into to So difference. if that, is the you really closer that to X% year what

we time, expected when a half. we change are first think that. And we second last from the half seeing I to step the spoke the

I single and we're get going single pretty close as as QX. It's to high mentioned, a flat as However, for it mid-teens I QX mean, we digits as it's -- just thought. from to not into to big high big still change. we mid-

would expectations but weather-related namely expected, that change, so forward. that's baked we were few have going big and and higher grains pretty few this So are into produce, our a of a and items than bit is a there dairy, quite actually there are

Operator

comes question next with Sachs. from Jared Goldman Our Garber

Jared Garber

Great. for Thanks question. the

of opens quarter maybe Cheddar's was years. this the seen first that at think quarter several we've or I the and largest

sense there little a bit So a lower well. on know as an the a update get to wanted I skew income I of brand. of just it's

units seeing in where on commentary were some you're maybe there terms performance there's what anything of So a and customer and new if these the opened. from regionality standpoint

be would on great. update brand Just the any

Ricardo Cardenas

business the chatter with versus talk talk in opening. had productivity that about a of lot about felt we a improvements a they even comfortable have that their and these of they more a pace. quicker to have menu more let menu pipeline a model. bit little able leadership with and to really their restaurants run has opening made simplified pre-COVID, and go at that, me partners have so Cheddar's, and significant Cheddar's streamlined we Not all the Jared, managing with pipeline we restaurants built open level been significant as inflation, only ready staff have high enhancements restaurants. of

So Cheddar's. yes, quarter openings this X highest restaurants. was our of for We opened

Rajesh Vennam

Yes, versus versus in had year. we X restaurants quarter. well. We are -- last performing year And restaurants Cheddar's the X last at those really

-- So to to that where they're they the exists. Cheddar's already in we in. have newer we room already close opening infill as have markets not markets we're open looking acquisition on brand-new are to we more we But Cheddar's mentioned restaurants. Cheddar's, early lot of at markets. It's restaurants of we had thought primarily markets a But like in in

our leverage those So helps that our people. our us in that chain helps markets and supply scale us leverage

Ricardo Cardenas

But proud pipeline, performance their again, and at building strong team they've JW work in seeing restaurants, some made the have proud the his that done level, high in and restaurants. we're new staffing of Cheddar's, of progress these their really pretty really

Operator

of Stanley. from comes Brian Morgan question Harbor next Our

Brian Harbor

those of items Or contracted? point? have about those up follow of recently? to you are the the quickly -- just risk that on to at this Maybe are some just kind half things of that to do see commodity the surprised upside that any feel How you comments. Do based can't be necessarily kind second on

Rajesh Vennam

I think risk. always there's

As is There out, some We'll us of earlier cycle X contemplated -- one to our in. mean to that as a was in that hurricanes going related. It you think we on of how X a that. And the X% and that's produce the this remarks, I crops. risk. see Florida, QX, they especially of plays mentioned stuff, our have product the just in nowhere. always I really prepared out X% It guidance. of about, were Mexico, came expected hurricanes have impact my why assumption range We like stuff right? have no destroyed some weather in led

Brian Harbor

about some some Is there made never What of could ending you brands. at from then comment your promotional echo of those in other you’re brands doing the you kind at And just sharing possible not be thinking are change the that possible? to of about a to Okay. there? are you things architecture? kind of it lessons doing never Or

A –Ricardo Cardenas

Yes.

As you think about our were and did use we we can kind possible, on time. never that more bit those things that of that testing there to what during importantly, digital filters – leverage did brands. we’re we little that things other across a We ending But more communicate. going those

and that, not V Olive business, very offer. learned – simplified helped helped a We’ve Garden build learned and continue brand discount. equity, strong that We’re to our we’ve their elevating brand very the and important,

the a to past, for investments promotion we’ve discounting than made that’s the now, that television. television in But into expensive strong seeing what we in to going $X net be that Garden go right? never-ending So So over to not Olive is say be means that is the real it are few X the still don’t on the price was everybody and more us. last the have it to all scale on to consumers has really was was the the – possible years below inflation range

things promotion. have the we fact of the of just The construct the digital and learned other testing the did brands that about

Operator

of comes Our Baird. Tarantino David next from question

David Tarantino

Or denominator? you where the I keeping would be getting color the are are your up And is, getting come numerator point guess of seeing know construction with and getting you're moving on recent I parts returns upcoming just comment, your on is escalating. about there to the are lot unit escalation question the you returns? down? on in a a returns the openings Any is if the the on Raj, there's wondered and or great. similar returns you return And My question the development main to of costs specifically you're equation could openings? expected the I starting comment

Rajesh Vennam

on Yes, let by saying much me pretty start David, average.

had by margin new exceed big restaurants cost We quite of begin capital to a bit. with. Our a

costs construction the Now have unit have economics. so gone our up,

look where earlier, I we operating higher mentioned overall are, than you XXX COVID. basis if So pre just income points performance at our quarter of was this

X-wall better cost of helps increases. economics the construction gotten So unit level that some our mitigate have

walked Now opening. construction very -- we with And inflation are high monitor to want our that the have though we on where to cost maintain costs. being we more that capital. too are said, little even we away continue We're in of would times front. a we of to There was have obviously pace some just from being the bit selective few cost disciplined. probably continue deals that already But because a exceeded

that all on least shoots I some it's a construction the were bids, at or think, to sign. starting we're elevated slightly side. last more few closer positive to budget. Now see below The -- below green But said,

So think could are the some we there lead this to in of over -- some potentially there's time. -- inflation decrease level

David Tarantino

that industry. about dine-in Great. prior company traffic cost the to think has building on inside follow-up there of is, I to know get to a question commented, anything dining equation of the And going guess thinking the smaller trim or projects costs rooms box down? that softer a I for to the the try Are I you are been out -- nature

Ricardo Cardenas

find ways the use. our about look David, think new costs the for to and to our prototype out prototypes as always ways for to designs new future, trim we materials of we build

have finding on rightsize our the we go efficient But least of room find the all you that so out is the of built easier out our prototypes area really you compete team a XX most the We've the is. market in of have have we'll take necessarily they're gone and that of of restaurants as those not great and building. little by taken we but have lot some the it experience restaurants, expensive are take where to-go in. I you said, smaller as think the other prototypes. it the expensive we of the Remember, brands. some the brands, want which the is cost less the to-go a framing So slightly kitchen. overcomplicating but in. ways for right? versus expired plumbing. if at or cost to to sites because makes focusing also some without slightly infilled some room because development their that the And actually have dining the we've closed markets dining for got building, that to kitchen, costs we've got building because shifting of part or the of existing we, a different to don't prototypes leases We in

it respect. So that us helps in

Operator

Our next with comes Geiger from UBS. Dennis question

Dennis Geiger

the pricing, more Curious to response if as speak relates it kind seen to you to could what you've it relates a customer date of pricing, respect lot, as with a to you to any bit obviously, customer impacts assuming trends, strong how but to feedback how I'm sales think pricing the pricing to whole going thoughts not or forward? about the with resistance that and

Rajesh Vennam

historical decent meaning to flow-through reaction not pricing XX%. that the from north think is we Dennis, pretty getting a dissimilar are of I

And not seeing pushback. major so any really

any big We and things check But advertiser level the resistance. picture, maybe on we there's pricing, when There it doesn't of look gotten haven't lot there here you exact have the may overall, not seen been look like flow-through. a where mix. have of moderation

Now than a we are less competitors. pricing our lot

is And seeing well of -- below is industry existence. I with itself, that's pricing maybe industry. happening but So the don't the we're why lot our what of know not a part what

Dennis Geiger

that, Great. more. I appreciate one Raj. just And

the more bit a speak and could restaurant. the you situation if in wondering staffing execution Just to

I staffing anything XX-year average the is as the you it to of your are they shorter may would versus you them scores highs, now that employee relates all-time can customers right where from where level go the pre-COVID to versus with be go. potential, of respect very now, manager the feedback maybe fully operations Anything there that sounds execution -- going to like as currently forward? or encouraging to you'd strong. But being levels can where to maybe it where build relates than there think staffed, spoke at

Ricardo Cardenas

today tenure over COVID the before have Dennis, we because the we COVID. than lower of time did a turnover through

better pre-COVID what were. on our levels closer turnover still -- it's levels, but it getting and working getting Our it's from to turnover we're elevated getting pre-Covid is the

new to members we As for more we've give to calls, opportunities productive. and them is training to us. in continue also members mentioned focus efficient team and down, that to these getting focus training continue will And learn them grow. get prior and a team our them more levels as more on existing our getting turnover and better be our them make

slightly that a historical tenure too. as back while. levels, train. continue to point more as will it productivity is then does back we take on think lower which true. a we little our there, But our to will slightly get to improve But we is from going gets historical tenure to And your levels, So

Operator

Markets. Carril next Capital Our of RBC Chris from question comes

Chris Carril

clearly, the Olive the on seeing thoughts strong any you but Maybe this the a brand continued category? driving the focus morning, provide that's Garden momentum of relative continued just could just seeing you're on and sales I there. else anything some lot there. just to was So hoping how more thoughts is on performing then you're LongHorn And

Ricardo Cardenas

and past, last a we've off Chris. in a year, quality strong Raj in coming off. the sales performance that continues team, over average said right? was strong So are very same-restaurant Todd mentioned and a his They pretty X% XX% quarter. and been Longhorn. result sales this levels. longer for above pre-COVID weekly pay it on to journey the portion Yes, investing have and had as

out anybody I stay traffic, it's, only well. but categories traffic I think, companies traffic versus most that own of room restaurant is say would up state is that of doing category. scale. their full-service dining Now time, in the in of room the benefit have holding one over And They're casual down run Longhorn of in positive the there pre-Covid. long really the unlike dining

So really the simplification done. we're proud journey on before COVID. of what they they've were Remember, of

our ahead they where they're else everybody of portfolio were. on in So

of have so already worry kind didn't that promotion guest And that they flushing happened. out to about

state of proud also doing a in value. is state say the really has category what a I great value. category will general in general doing. The So they're well got great because they've

about what the If you put consumers we you the the dollars on that. for plate know think spend,

continue they've provide focus value long of always great but particularly the our to brands, and the with going had, culture at a at a run that And had building. they've Todd's all so quality Longhorn to that the simplicity and we're

Chris Carril

following what if any down, detail behavior shifts And or of any up trade like Great. trade maybe the the any? then any on seeing earlier just Can more there, you're terms in comp you regarding in to up mix comments kind around provide contribution the consumer. of

Ricardo Cardenas

Chris. Yes,

lot data mix learned helped way of you But don't when way here. much use we If not -- got mix a strategic the going time, as seeing said price that do the so management. seeing that a seeing we because a with we've changes not We're get it's not shifting very our scientists did as price Raj a have mix, big we're about we take over we system think it, we're way everything this in methodical because we strong we've not a earlier, impact comment -- possible to about mix comp. our for we proprietary and comp it to we're performance check

a lot in -- as we've whole a mix And and beginning, of economy shift said good seen shift. services. the from seen I haven't we the seen has So to

you So mix lot that -- competitors' businesses. our whole a maybe and maybe why in our haven't shift be seen in in other of business could in

Operator

with comes Barclays. question Bernstein next Our from Jeffrey

Jeffrey Bernstein

questions. Two Great.

outlook. servicing wondering obviously you've the The I'm here. behavior. first ends spectrum Again, one seen in just on whether all competitive you're just any of change the competitive

sure So discount, to were the just across drive know your strategy, of just to uptick landscape? deep if continue the seeing to you're ease, potential And not contrary had I to from you're but know concerned seeing one what follow-up. I competition. commodity competitive then a what some to in traffic inflation discounting that's wondering wondering I are make to

Ricardo Cardenas

There we when not brands off had over haven't knew that the indicated seen one landscape. might competitive on a come about the even back they they're they of the really Jeff, TV talking are deep of the got come discounting have lot in on, that television. many years aren't but that of discounting that. We've

pre-COVID margins I about are think our as levels. mentioned, Raj

space most of companies X trying of are X maybe were in them improvement we in public that about the margins. think versus had pre-COVID. improve their talking I And to margin

on I'll I'm simple going So what we're execute, growth guest to to reacting do. I they'll deep equity, We're of that core sticking messaging strategy not focus going back think to you to do, talk filters going to evaluate what or get about to at we our our not continue but our promotional any messaging elevating do, a discount, accordingly. to brand to and

our do, but we've been to competitors -- watch, we're whatever the doing. going what whatever So to we'll stick

Jeffrey Bernstein

in what worst terms the follow-up think guidance, on of the best prioritize to guidance worst in of the of those. at then you And it's look broader 'XX is, as terms process. thought the your best of Understood. the Rick, line specific fiscal comps, whether speaking, to whether But all is to components, numbers prioritize earnings, any sight Raj, of line inflation, to do your broadly you or or just --

potentially going you you slowing few more find next about as forecast economy. Just quarters less difficult potentially think into to wondering what or the

Rajesh Vennam

impacting as right? You -- impact. to down labor impact. range other kind and I uncertain the factors what a shape, have been the deferent, has obviously, used a half an all is weather of Well, really going multitude have that that's you've inflation been one roughly mean, labor traffic. X% shifts, we the some have of I that obviously, we see? there to Dennis, the -- inflation, with but with -- things, accommodate one. off That's now been But the to or something I start a big heard mean wide events, going think are better That's And starts could start obviously, the come meaningful data biggest most have shortages we've consumer on that's of there's the a get back into change. global to traffic supply events. got

else pretty probably is a that, And So are lot going those there's the one. on. X second probably of I Outside was to well up. buttoned the inflation things. think me, everything

Operator

Peter comes BTIG. with Saleh from next Our question

Peter Saleh

Great.

Just questions. X

feel able you be guests else the Do extend never-ending that on like benefit you weeks? does menu? they the promotion, the possible something hold on purchasing of to those possible that never-ending to promotion. promotional the on even might window X never the First, beyond though Are

Ricardo Cardenas

think we we've activity make to or equity said still about any that, as specifically. limited brand Peter, that any time We promotional as want time elevates activity sure offer offer Yes, more before. limited

And little so is over a a we halo think bit that. of there

got our not. when equivalent you've Now limited in remarks, I coming is comp it message, a as our we time sales strong But probably said as the year-to-date year-to-date, prepared as going sales. comp to are we've out promotional to offer quarter-to-date our be -- there, message said think

since not it's a slowdown never-ending possible. stopped seen like big So we we've

that's idea one longer necessarily that's across Darden, the Olive should marketing this endure did. Now not Garden. across than But I and the we think that think messaging time limited of is or offer,

Peter Saleh

bit construction costs. the Great. a seeing Any And Can on on costs? a new be of would lot to insight environment there in then the Or just you're helpful. the as from restaurants construction about been Are more relates in specifically you formation discussion a newer it what competitive built? surge in little new development is on formation, restaurant there's around you more surge restaurant maybe that the seeing more given pullback being specifically competition, independents? talk

Ricardo Cardenas

how is are question many offset closing new The Yes, Peter, always built. the being restaurants new built. there restaurants being to are

pre-COVID, bit. going on as see that competitors opening digits. get move, We're number a it's bigger, about some number or still restaurants we that to basis. smaller trade but the restaurants seeing starting As little to of have you're net since double closed areas it's off So units think a level But not strong But open. right? still

full-service unit a seeing net a space. opening lot growth the not whole but restaurant basis, in net are of restaurants on we're for total We

it the little and bit think bit as a mentioned, construction Now make weigh more But maybe that. a see as costs start Raj the I margins challenging. to you'll about little

Operator

Suisse. comes Our with from next question Lauren Credit line of the Silberman

Lauren Silberman

across Rick, industry you might mentioned these record high the you And how guest think satisfaction of any the X do are all-time levels. guest of What sense this satisfaction broadly? compare at running to driving internal brands is that levels?

Ricardo Cardenas

makes talk simplicity Well, do. do the if And how things doing Lauren, easier. been they they few things what I of have they our the over different to we've lot have that would say years. learn what's gets We it execute, to is easier and a about it teams driving and simplicity for last it don't

better in the a over means the made that As years, a last ago, more That it X these items Gene gets you being the menu streamlined fewer we at few year streamlined X items often. the you being items as menu, have even more mentioned -- sell team versus week. items or those having

So that helps experience.

fewer team on selling Our because there's the members have left side items. to learn

-- they get items the they So understand more.

guest our what performance in is on or little our we're we've flattening it. out food bit of or might have brands in We're made has. our years there and over the the necessarily Now our really couple significant external measures. move. eventually then will our the the a have measures people. in show we've satisfaction, last in And We're say seen that a been and internal both in finally, our maybe competitor situation investments satisfaction, are it performance side. I and gone They the negative stronger. and proud few of getting not up will But here proud seeing

we're categories for the first amazing a good And for they restaurant in people in for invest us. about and our do continue we're being brand to in food. the feel time teams what of invest our #X going #X having what ever. make what So easier really That's done we having and to being doing. news do -- to our it satisfaction, our in we've to to do gets brands to And Darden all Technomic, improve

Lauren Silberman

gift early calendar follow-up on with And this share sales sales Gift Great. on you just card you've can 'XX. season? important generally what pretty far the season. card so are holiday a for Anything seen

Rajesh Vennam

day year. before gift see there's a the pretty I with -- mean, also Christmas matters I again, last I lot. sales, consistent card they're don't

offers we for before discounted. there's go. gift lot some we of of haven't have a So to then to bit -- And time little a COVID, cards. used still We --

that. stop have doing We

brands, discount. don't So additional don't much of cards. our big buy discount gift all provide We to pretty we any

seeing to So for we strength pretty see good. are without discounts, any the us we feel

Operator

Our of with from Sara next question Bank America. comes Senatore

Sara Senatore

the from sort shrinkage that follow-up on I on of the net growth appreciate my from detail a I guess growth Just independents. capacity and there's is coming though sense comments. chains coming

to, volumes. chains So have count suggest, as given if would boxes quite I and think, come bigger you as down tend higher maybe much unit capacity, will, the hasn't

this wondering of of gotten there's on guess chains the fair it's of I'm and any notion if I that more kind thoughts just hurt have maybe you out there still being amount idea, there's therefore, been capacity that, this a that have So in I inflation, I then for expectations line a some labor, the perhaps. seeing in quick wages, been question such was, concepts, understand but of just we've have And guess, on wage added. with guess, a I'm trying follow-up I moderation that to

across I'm maybe geographical maybe or of an service minimum have increases to segments, statutory impact. So trying there's service understand markets versus more limited full wage if difference or a where

I there. Just on a would any more because moderation bit expected, color you give that I can guess, have

Ricardo Cardenas

I'll and is give question take I'll this to the labor Rick. Raj get question. Sarah, the capacity

the total you more of We've than seen in restaurants bit if you're chains. to capacity smaller So But -- right. in places have know and seats on get don't a independents, XX% I capacity, out grow. absolutely which in the some the are can some seats come little

opening getting And even that said restaurants, other get sure at restaurants and capital can inflation offset our of the still earlier, and away we've returns get that do because restaurants and the deals. actually everybody not the that from they same level walked quite though of their cost not We We're they better all as lot all of but with we some the it's -- kind thought above out the coming were not have, to harder deals had Raj that it's -- construction before. were we helping of open open still are folks chains a of still of capacities and have seen on bit the the margins were before, they still system. costs little a

impacted but So to is by restaurant your smaller. generally or you're independence The opening little a question, what closing. of capacity answer is is long kind And right. absolutely

And seats so down as are down. as probably much are capacity not units

Rajesh Vennam

the where look in side, year, the you labor our mid-X. rate on And the we was Yes. as quarter at hourly started first wage

So think I we X.X%. said

quarter X.X%. Second was

like the in inflation. change saw rate you So of full a point

to continue down points XX next to quarters. a the for X maybe We expect go that basis quarter

bring takes moderation that's seeing you time And -- year. are terms the new give we seeing an Obviously, this on So in as then that of that once continuing we somebody people, on starting it still there, the it as are up. impact high. there's we full increase, pre not but be. than not pressure continue much to go it's way wage -- -- It's to the it's still to cover, doesn't used higher It's as go for not

And so hopefully, answers that your question.

Operator

Andrew Strelzik next BMO. our We'll take question from with

Andrew Strelzik

X to back going the of cost outlook. just had questions I kind food

prices what where have flattish visibility in towards fourth doing or to maybe the inflation side? Or that can move opportunity an be aggressive that to commodity even challenges are you more in you as one cost quarter, still there locking think first you lower. a you the improve are or little there going The on is

play. And so that's at

maybe anything there's is there's maybe that's how the number more scale that in basket, where inflation commentary food number food know divergence if curious I'm some headed the it else I you're the your about two, driving out. maybe from curious particular, I'm recently. this timing a So playing you're of like differences. than is seems bit if thinking But there's wondering And that, optimistic one. peers on benefits

about that So curious how you as well. think

Ricardo Cardenas

there. a in there's Andrew, lot

more the I'm to So all address pieces. try to just

have lot understand a Like some we I the to -- lock some, I with innovating going you more. want really and Let's think They I don't ability products, for of don't. that instance, beef, to are we start price. the to for in if see happen supply suppliers for what's with about think think think

last to are XX days. So point, beyond few at this suppliers willing very

ability, structural But there where guess, of So that. issue really and can I we truly locking in other in, we are lock a are on in. the that's terms products

you of price, at there's for lock good continuing coverage doing in are we're to that for to that. example, kind look half. why saw we wherever we're So for the at That's opportunity XX% a chicken, back

we get thought last -- and of a we find flat price into as did that and closer we we year was the year. to So QX to good this

in. So lock of that some we

And so year. the we playing by are it

strategy Our for great through supply team to really best as thinking chain kind you the team relationships. helps. while a mentioned, minimize us job does leveraging Obviously, of the inflation scale

gives teams number have us that and built to part have more bit bigger, relationships Big are leverage. little contracts get a overall is that And our help the we pay. a is the teams long-standing us again, of ability suppliers rate have Our built this that with better this to

Operator

Our Stifel. comes Christopher question with next from O'Cull

Christopher O'Cull

become been XXX implies to that restaurant be half up to wondering that the Or half to first I could just half Question of driving Raj, contributor of points margin. year. of if back are to kind more you up the to in or in basis the I expecting And year, margin relates basis a think, I'm second your margin XXX G&A guidance for bigger the margin looking and XXXX relative improvement? the about points, has you're the continue the EBITDA improvement? think

Rajesh Vennam

G&A in The it margin high back the way look say overall, the do actually is starting way growth cold. to versus is margins accruals, should in the the point in overall, higher that would our G&A in going probably I'll back back back at point be because the in half step the half of first now. back, front pre-COVID way incentive is half for But expect if improve to your out was were half. the than begin the I that we very half restaurant-level We to before point you do the half. back higher half -- right. relative Yes. because where the

back the in room of and definitely, a grow half the But more than G&A, it had in front first percent the we in that. be to G&A sales saw expect half, we So as to you higher half. was

Christopher O'Cull

intentional segment to the much pressure? parse And in basis inflationary just think, it labor or I was And what Garden, Olive drove how Can XXX of how of help much And you about menu this at was it compressed out points margin of just quarter. year-over-year that? terms investments? due secondly,

Rajesh Vennam

It's inflation. really

has -- and that's for inflation XX-plus got the If percent. gotten have all chicken, you well, the inflation think about had in X dairy, XX% They highest I items that a the -- highest commodities on little mentioned we the inflation We you. this quarter, have quarter. over

that's to So the piece other same mentioned that was on the biggest of million X.X% close inflation fact piece. the consideration call was lettuce obviously, a surprise. It while level Garden, it one -- That's impact we to into as million quarter, I did the experience big Darden had that general $X in at we the it, not meaningful. market, was, $X you call pricing price that then the and in take And level Olive price our and look when pretty would level. Darden only at be

Operator

question next Gargiulo Our comes Bernstein. Danilo with from

Danilo Gargiulo

what in wondering, slower expectations. the brands sales? the to potentially for you in environment, was same-store particular, I your context outlook on which And are elevating confidence of you market raise gives the

Rajesh Vennam

let me explain of actually, so how Well, there. kind got we

If We was X%. the coupon you earlier think raised point. in X%, we're about our pricing our the we X.X guidance by at had of now sales

about we gets pricing. brought on bottom by end, of basically which the on raised X.X the So full it top actually point. kind down we're saying we're then to traffic point, And by essentially, the that end,

where around our we we we guidance. some some into how some ones and came have have guidance. costs change the driver the up out and ranges of -- of in costs that's So risk, that's really then cost this with have visibility the we the

Danilo Gargiulo

provide on context of you frequency the your versus brand consumers frequency of can some by averages, perhaps type historical and And brands? maybe or some of the visits cohorts by differently today whether consumer by seeing also you're

Rajesh Vennam

No.

fact X of we to made and brands pay believe core I slight think But are this time, is time. increased think that build. bet slow up transmitting our it we're is industry that's in frequency. I in -- this we we've traffic, positive investments always we see frequencies call and XXX over time it Xx. the takes some But we've look, the momentum. -- the with We off things signs seeing that again, we that average we outpaced are -- over seeing our you over the dining are done a And into seeing into translating And on -- tells tick is our what that a of by basis points that all casual frequency. is

Operator

next from question Brian Vaccaro of comes James. Raymond Our

Brian Vaccaro

Olive Garden. on is My question

the the lower down offer Anything might gain some just the you it you dynamic maybe comp said on kick up. and was is seen you launch ring you are data think Or and before I that recent Pasta, other what traffic to starting And I curious, consumer the several really which versus end industry trade attribute your even traction -- maybe there? it's quarters. in do change that Have months? last to? the in think in a execution guest outperforming of scores

Ricardo Cardenas

Yes, Oliver as outperformed Brian. in QX well.

that last was little year, the brands in got better. we the last fully outperformance maybe more other I the Just than where of of were staffed year. Garden bit would about probably some you a first think Olive say quarter When

team bit other benefit from so had members. brands may little a And of have more

since last a wasn't over across continue And investments maybe Olive off California, to big was are where that will Garden time. back the then their Olive their staffing are of levels and jump There we the they year And Garden, in continue pre-COVID We to improvements that to made they've pre-COVID. believe a there as made pay much were food. we lot have in in us, restaurants industry. finally, for California

to though industry to And -- QX why got QX. the that's in from so believe we gap that our it better positive QX, was even

Brian Vaccaro

helpful. That's right. All

on reasonable I menu the pricing what's menu thinking it, a expectation if about on that? sorry just in but And quarter? missed what how through second moving And QX, was QX you're pricing, pricing,

Rajesh Vennam

the is full approximately closer it's Yes, to Xs, going about to likely is was going likely low And way QX to -- be the Brian, and X.X% closer think so QX. year, to be going it to X%. it we're QX be is saying for in to

Operator

question with John Evanko next from Our JPMorgan. comes

John Evanko

mean, Guys, that basics. I to used brilliant to maybe it's probably ago so. you back or years think nice coming I see XX we first the with

you of it for the why quits term of first. are the seeing I'm some like but leaving happening curious X-month a markable job you And quote going are? there in other you unexplainable they turnover types employment? are Darden, are to front seeing of seeing that in it trade they going So you it's a make you're house, very for is that, XX-month kind fast where Are do a might Or increased can it can just better others context is it of over no, like -- like you when they guess high to, And to guys. Or of turnover. in of And some seeing I restaurants? you're them? other just are like terms of And back answer and anything the XX? Is definitely be house? especially --

Ricardo Cardenas

The -- John,

John Evanko

the just to Yes. industry what what is in what I employee. the is guys, versus is I'm is the mean change you determine what trying --

Ricardo Cardenas

Yes, since been time remember the ago. a I long that when brilliant No jelly It's the Yes. basics. days. was problem. coined with here

the was within our you today then versus period. was leave least XX-day big last at right? work to come So the time. basic, basic we believe So reeling went thing, basics pre a time it more and That we things what a little we've X if turnover, that about that you you been our better. A that about So during for did we we turnover of in lot over talking the quite days. months think our and bit with coved And was is long got of right? turnover, start said, which chunk menu, the a to turnover the simplifying right XX

how and them to to they to general all those August. August And the work. and even -- respect by an manager their guess, of member theme and do we happen that better with the September, the continue listening better the of treating their need them focus X in conferences Brand were we team concerns. to job, making make do So place theme I Z tools our Y conferences giving experience

Our turnover is improving.

Now kind I It think about of of happens. jobs. turnover more where the generally the happens in entry

is them turnover continue than front just the give with to work area. brands to and have Gallup, we've grow. in going turnover and make the by our them opportunities really our we we're and dish invest higher and teach team we to good our And survey area the in house. team. kitchen, completed generally the That to engagement to host feel continuing about our in better of engagement to generally, in places more continuing the in Our said,

do them others. for So where every board team going. for a where So Don't we lot industry. But to do on that We have are us I interviews come the know, they're many they're work people going? exit don't guess right? member for that hourly of leaving of necessarily would a

don't go we to that people say have can't I So us else. work somewhere leave

John Evanko

guys And give that or gosh, I made the on assistant the more first that in in manager mean GM bit stability at hour and I over call -- ago, is little one terms positions an manager all highs. think, historic you the of you staffing, a color -- was comments role. just of the essential

Ricardo Cardenas

is our restaurants. that all John, Yes, positions manager in

it's manager, makes to So high, General be all-time pretty for have one every to a -- we're Manager, sense. that. close you bit if manager general But general restaurant Well, harder that little

manager think our it's So if staffing, at about you high. restaurant all-time

them grow more proud from of fact we is opportunities giving a we before promotions than restaurant We within. because are to lot that managers COVID. of have are do per we And today we and did the it part of

working little somebody there, become manager knows they and a the brand. they're So that more a bit when to there's brand for loyalty

our all we were during teams staffed during we on we're So didn't back. well fully then manage them level. -- other kept And the knew things sure and bring and COVID, you we made to why that we that's Cove. important the managers eliminate members our when manager to We we feel our staffed they like about we're award because did thing, think really team how

Operator

from Nick of next Wedbush We'll question take our Setyan

Nick Setyan

follow-up a an to Just earlier question.

to but would X.X% by from midpoint. something the restaurant that go we total I guidance QX, X%, labor imply slightly X% at sequentially through the of end saw down for inflation XX year think maybe lower around than the expect X% you the inflation the year commodity total bps inflation that with said you is in your X%,

total reconcile So and inflation commodity of the just the labor maybe how we inflation is where guidance. guidance combination versus total get from inflation

Rajesh Vennam

Yes.

think items. the look is have at point here I line other to you

utility And That's part mid-teens the other we low of So low in digits. mid-single it. being is -- all costs probably to are in to mid-teens. that seeing then

is take you what that expecting. into total the of when we're consideration, inflation So

right, total you with X%. restaurant X% to to mid-single digits, that then get approximately other yes, of on beverage. So And that And you're the X% utilities and inflation the costs big that's how all you that X.X%, to mid-teens labor prudent point is total. X% combine low on in

includes cost about talking That the total we're So base. everything.

Nick Setyan

gap that even in about may maybe of are overall as cadence even maybe calendar we at of 'XX. gap been a that's you the about for kind How pretty home, year and terms grocery promotional And think thinking Got favorable as gap and food narrowing has for potentially quarters reverses. inflation it. then now, reverse environment next and the the the restaurants versus few competitive

Ricardo Cardenas

on get of able put that the was about Yes, And full-service and time already, to get we that when than that to Nick, sit more if other that's a people get people great coming a value you for. and get what they spend They family just experience. the all friends. commodity to there's what they things think go than plate. food. do just are restaurant, with us their and service, the to the -- the more but being the all It's of people

in think got not cadence start value home going on just a our if what And I home, going proposition. away and I bit sales said, growth, we've way talking now about. there's doing still get think little makes we a in what We're a little profitable happens, do. in versus to are competitors we're future. the their margins react driving they'll promotional think driving shift Can't if it to our into significant that's So near promotions, We're That a going of -- at for great discounting do right? focus say so we've guests been continue that. happens from that yes, to harder the focus to our core to

Operator

question Securities. comes next from Our Truist with Jake Bartlett

Jake Bartlett

the is expecting My less than traffic first on one of commentary before.

to the that? I the seemed in by second like the really diversion just taking And driving what down expectations. assumption understand So XX or It want points. solid it seems -- basis traffic quarter, pretty is not from

is question really 'XX. than bit before? you out So but thinking [Navtec] deceleration you are X a for the also were -- year-over-year slight little for We've a seen November, next put your less outlook the quarters the versus deceleration when

the investors should in a on on -- industry-wide concerned about be So if on that just you deceleration what how the maybe industry could -- comment and November?

Rajesh Vennam

you're X% signs basis this, we at do method pricing. points last is because activating look higher midpoint of XX time the guidance too here about think with I than our much when how we to this Jake,

prognosticating That's effect on. lot our the wider. what hate we XX within It's it, of a build. admit basis had experts obviously margin but I to we around we're points matter at business basis only So I the on -- many we don't models. think wish margin this not of mean, changed really, by a point midpoint XX I I traffic. models

the this doing we best our best we're at that's point. can, So and estimate

Jake Bartlett

your if you. And what have others a wage -- in your Okay. build basic could But a modest you you obviously, outlook? within in for just in macro maybe what about assume that, talked recession continued about macro sales if your just perspective inflation. you is embedded environment. We're talk guidance or What on have seeing, framework a that's

Rajesh Vennam

incorporating we're you a potential Well, think some I on in is X have points range shifts, of That's what changes consumer why behavior. percentage traffic.

of the not have, major half guidance. translate that said potential range X at look into and you If a but you that's behavior, is to step that our points, range in -- there consumer step look if really earlier, accommodate implies in change, at not that changes a back guidance the change. I if is contemplated And -- a we

Jake Bartlett

a good G&A on for talking -- you've $XXX of the a then quick being number before believe the as been And as I guidance million about kind a follow-up. year. Great. question

a roughly, you behind rate run 'XX? to fiscal But you as the in half, G&A the should what whole 'XX You're first that just go in higher. significantly commented it expect for running that year for just expect -- we

Rajesh Vennam

this estimate is our at Jake, point, $XXX million. best Yes,

Operator

time, we in this no like for At it additional to have any queue. further management back Thank you. turn closing it or questions remarks. appears to I'd

Kevin Kalicak

a the results concludes I'd holiday like remind release new a That Todd. plan call great on conference XX, Thank you to in Thanks, Have that our to with you before market follow. call. happy call. and quarter third opens participating Thursday, today's March year. we for to

Operator

thank you participation. This call will your our for We conclude today.

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