DRI - Earnings call 1 2024 | Darden Restaurants, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Darden Fiscal Year 2024 First Quarter Earnings Call. [Operator Instructions] This 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 Daryl. participating you on today's morning, you, thank everyone for Thank

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

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

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

XXXX to December by we plan XX, Looking the release a market before Friday, ahead, quarter followed opens, fiscal earnings on call. conference second

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

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

and first some financial morning, results. industry sales our provide industry our on the will X.X%. details remarks same-restaurant During quarter decreased same-restaurant on Rick increased quarter, counts brief X.X% guest share fiscal This will and Raj

the Now turn call I'll over Rick. to

Ricardo Cardenas

as strong same-restaurant Good continued everyone. sales morning, quarter outperform we traffic. the Kevin. a had benchmarks and We to industry for Thanks,

share were and billion, increase XX.X% per diluted sales adjusted net $X.X were the earnings total an quarter, For $X.XX. of

quarter. in X XX new states different We restaurants during also the opened

strategy. strength model to to is and a to ability sales our drive our business Our the of adherence testament profitable growth

focused X atmosphere. We and intensely strategic continue data restaurant to executing insights, philosophy anchored service results-oriented and and scale, and our rigorous food, extensive in teams operating a culture, planning remain our on our Back-to-Basics competitive advantages while significant leverage of strengthen

-- with to drive being guest growing on satisfaction. the continues strong This focus basics

all In fact, at remain across our brands. satisfaction all-time highs guest our internal metrics or near

our dining brands in Steakhouse to Cheddar's including of #X quality tracking several within among value. tool, brands rank LongHorn Kitchen Additionally, Scratch continue and taste for key and categories industry Technomic's for measurement major food casual

members and Our know focused are leveraging vital engaged bring brands That's unique each team brands to life our team their our to members we are guest strengthen great engagement. cultures day team creating member to why experiences. on

throughout who created the the that during takes XX more grilled For typically member Legends Grill Legends this Master their career, members to masters a grill have for more who honors Steakhouse team example, million than years X the total honored LongHorn have received to XX X program were which steaks recognition. Master bringing than Grill accomplish. quarter, team

Best service brand's to named an the Best experience members Alyssa House Tap. to having quarter, tested them tenders its On first expertise giving bartending their completed the than and opportunity knowledge, the beers to and guest like serve winner, a Grove, during tap, us on for On Yard its give more bar competition. year's the from showcase restaurant, beverage House from for skills. who Known was Yard XXX in who Also this Tap Willow role celebrate Yard Congratulations House torchbearers every Hurley, play Programs in critical opportunity the as these Pennsylvania, who their team culture.

partner our across to is brands their iconic high provide through our all levels brands. across guest strong creating of of must the to each exceptional One alignment which leadership I the and year experiences and front pleased the operators. plans what managing general of and most conferences, on continue get opportunity to do significant generate excitement drive for was ways restaurants among every teams manager culture annual of our discuss our the in the restaurant our to engagement see

To when any X comes one why unique. further highlighting That's is on makes focused evaluated each marketing, we through brands, activity to filters. are our it what our strengthen brands undertake

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

should to simple execute. it Second, be

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

guests value on We are in providing growth. profitable focused way a so great sales our to but drives that doing

place Pasta Olive offered Garden's life on food. This this abundant, begin special never-ending, This back a which Italian of favorite to guests enjoying to competitive brings its was eClub curated this the returns And be at of Never the NEPB second craveable week. everybody year. wine menu. to Olive Bowl, will activity specially experience items event last award-winning during great on Ending Grille's took the Monday received guest sample wines Garden point example same quarter. Pour invitation Capital Generous as Grille for and pair Capital A price in quarter, with that allows bringing the that is members advantage the

day Turning key to guided acquisition, the objectives. have X Since Ruth's Chris. been we announced the of the completion by we

and all strong First, The executive a Ruth's to helps smooth and and has culture. this people-focused a are to long-tenured we Chris the is of brand's the we is have preserve levels, ensure buying many want leadership team team transition. ensuring which members across we process. committed team the member experience operations and unique engaged

Next, some plan brands member even originally provide one more strong guest Raj is and it Technomic's will We incredibly anticipated we the team expect we to synergies remarks. as details industry the during his and experience. tracking want than ranks Chris now multiple metrics top an experience. strengthen the to brand and realize to in we reinvest of within tool. of across maintain Ruth's them more and guest

in next X successfully the We it's embark know limit integration disruptions we platform. we Darden we're to stage up part, want to And wrapping hardest team the leading actual that processes. The much on as not last, and the Ruth's phases easy, systems complete the about the why is new to under conversion is Chris and as possible. planning over which months to migrate it to the plan

entire our portfolio, pleased with the across quarter. Looking am I

strategy members working, to business and continued I'm continue strengthen returning to there our our a to that while X what And communities we larger just restaurants nourish meaningful home. we but guests the margins everyone proud Our do capital of is of share, is that in and is while success, and grow to within in investments shareholders. our delight and we serve, purpose the not make team call our walls

to our XXth nonprofit are served excess fight restaurants help for Action program. Hunger and we positioned hunger. anniversary to XXXX, our local collected Harvest food Since that guests to Month of uniquely was weekly is and nutritious have September it partners. marks This the prepared donation not

Over the the more to $XX XX Feeding than support partnered the years, we donated their program, hunger. past network more has of of have that more we the of than XXX America help equivalent the million life to for million with And time, banks. donated Over than have XXX fight Foundation meals. Darden food

together a states. more banks. America trucks Feeding week, at across Leasing food our refrigerated To and pantry XX local total XX Logistics, we banks food added have date, Lineage Last food Truck mobile added programs for in we XX XX with of Penske trucks partners,

be delight company Our and members our for in and do make you XXX,XXX the serve. ability help difference not their a we to team to to possible I'm hunger without our everything of the nourish everyone efforts make passion fight against grateful would successful.

I will turn it to Raj. Now over

Rajesh Vennam

Steakhouse higher billion, everyone. the XX.X% of XX Darden you, first Thank than last same-restaurant restaurants, were of quarter sales legacy Rick Total Ruth's $X.X restaurants. growth and Chris the X% addition net company-owned by new sales good for year, driven morning, and XX

industry basis points. and counts Our exceeded the guest by sales XXX same-restaurant same-restaurant by the industry outpaced for quarter basis points XXX the

net adjusted dividends net earnings earnings quarter from million an million to share First with We last of from $XXX $XXX returned our in $XXX of were generated and year's per of share repurchases. million approximately per adjusted continuing $XXX and share. increase XX.X% shareholders capital diluted EBITDA operations million of $X.XX, reported

total of pricing the X% total of we look was during we above basis approximately which XXX had inflation pricing X%. roughly inflation at points As quarter, and

compared driven looking lower year. our basis XXX at beverage were analysis expenses leverage. to margin pricing points last and by Now Food

continues inflation categories line are in slight our with most track other favorability. expectations, beef seeing to While

result, total better points of basis inflation approximately last driven XX than better was labor As Restaurant X% productivity commodities a expectations. improvements. was by than year, our

but We quarter expected these the productivity them improvements to start we began materializing sooner. in second realizing

favorable roughly and Pricing expenses Ruth's Restaurant and as leverage expenses XX labor at and including basis elevated than sales last expense. our Chris. Marketing year from points repairs consistent basis higher offset than from higher with points were more were inflation XX maintenance were plan impacts equal X%.

higher points resulted this XX%, EBITDA of than year. level basis in restaurant last XXX of All

expenses primary year, were driven points XXX basis by last X G&A above factors.

a due compensation low incentive and significant year. to EPS in and for First, last in growth the wrapping sales very incentive of the quarter higher first accrual quarter

to approximately of stock-based expenses addition from million of tax a related the year incurred Ruth's earnings We're Chris. Impairments third, year. Chris year. on last points XX increased retirement-eligible to year last And awards of related last unfavorable to points we for a to $X million year. to of the XX to expenses sales, $X and basis expensing Ruth's of the for impairments X.X% the the gain was handful were adjusted last immediate equity Second, flat compensation anticipated of employees. expense financing wrapping Interest And closings related after versus due $X acquisition. for this basis quarter, million

what growth, on Dining Garden labor lower to restaurants overall margin Fine sales productivity sales segment but driven to earnings dining Eddie margin V's, our inflation Olive fine Now segments. Capital indicated Chris same-restaurant Ruth's Garden company-owned relative sales negative basis and for in increased and the XXX at and Grille with quarter. consistent This profit both same-restaurant last of sales This both by we profit last year. at with Olive segment resulted addition with drove Sales increased LongHorn. along segment higher LongHorn at were total call and points than increases and growth. pricing our of traffic turning

sales retention Fine the resulting Ruth's the Other more of quarters. The decline locations dining pre-covid basis to growth. managed our levels in points quarter wrapping in first with on that the drove Chris segment profit anticipated, by positive we of line first Dining for the XXX% the resurgence this addition was levels traffic was franchised royalty a levels. in segment X last pre-Covid driven revenue sales and business As of margin XXX% result segment XXX of prior increased same-restaurant the in the sales Fine demand and in retention year-over-year quarter traffic of year of same-restaurant retention of year

are franchise reminder, the results all our business Other included operating of As in segment. a

Now to on provide Ruth an update I'd synergies. like

synergies expected initially are rate reinvest some guest had rate As into Rick member run $XX $XX team and approximately gross annualized run investing and choosing we other $XX million anticipated now we million. and rate we've of the synergies. more at annualized approximately for mentioned, in identified expect XXXX, we We the and approximately Ruth's synergies $XX cost million than of million in business, now resulting And net experience $XX million fiscal expect we of run savings synergies them to Previously, net Chris. approximately synergies. in of anticipate

reiterating as Finally, financial this morning, are release outlook the our XXXX. for in fiscal distributed full shared year press we

and continuing still net results transaction to earnings $XX approximately $X.XX, integration-related but Ruth's excludes costs. outlook anticipates operations share per of operating Our including million Chris $X.XX pretax from adjusted of diluted

your take And we'll with that, questions.

Operator

[Operator first with questions line Instructions] Cowen. TD Charles of from Our come the Andrew

Andrew Charles

showed that Olive XQ same-store what fine year led the you sales I while and that result? restaurant Garden the positive performance to And something are impressive keep in decision despite seems in be a as strong I'm investors for guess balance saw perhaps seeing dining to full industry of LongHorn year. And I warned. been breather. -- keen headwinds have curious, you guidance XQ, outlook Your taking the previously September gives data you know

Rajesh Vennam

our within our think Andrew, we was from XX plan. was our quarter so with We performance, pretty of let's points it start actually plan line about that same-restaurant as perspective, you top were a So guidance, first right? with had. the basis consistent

year out the the a is expected. So way top we from line playing

at still while like we the And how puts There's we're quarter beginning there's we behind for So to on but within go the with. far it not feel is crux expectations bottom we changing there. the lot look, of range year. why guidance provided a the as a so the to now a we're the us of quarters as range year. -- and begin in, outperformed we gives little really uncertainty out a -- had head estimate our bit of X and X it that's the And line, point -- start still the

Operator

the Brian Bittner Our come line Co. & questions from with next of Oppenheimer

Brian Bittner

with is results. strong casual normalize. want think, industry there question sales I I Andrew's on a regarding of moving the impact little Congrats out trends for evolving follow of lot the up how a just to anxiety, as bit. benefits dining macro There forward, pricing specifically could

do Just us And strongly the relative to understand X.X% within intact? the that original you year your you based you if your consumer down to expectations? your does believe of on health remains flat macro help full all insights, keep what do have deteriorate to the traffic of can guidance range weapons current

Ricardo Cardenas

more selective. continues but to is be seems Brian, be resilient bit a to this Rick. the little we there think Overall, consumers

above that our our brands. affect versus a little incomes but $XXX,XXX We dining of are fine last it brands and household does year affects with primarily all seeing softness

could most not food this away continue and people they a in as they're said the to about. to low luxury seek value, home which is But people making pay things and going you've can give really many what attention they price. increase the always of travel, before, from afford there They're one what I've be want can trade-offs lot is to international about and travel, Now up. particularly because talk to of heard times, difficult

for value does operators We to deliver what that our to on believe again, continue So that brands? consumers. brand mean promise appeal their and will who

to who to keep We're our We're our deliver portfolio promise. experiences. going going breadth guest the to to confident for Thanks I'm value we execute committed that and our our we're that. the we're to whatever restaurants positioned are to our to brands with. well and of going team to members going have outstanding keep and so And deal exceptional in doing doing guests. deliver we're And

It's marketing we Our for end going of in be deep marketing, means at lower to going the the impact you told be in it that the whatever remarks. discount to programs, do us term. the do is elevate traffic our things lower it's with we're to not It's going prepared is of it's guide, that term at not short guide, to if to simple equity. then our And do are what to and our we going brand going end to -- we're operate. just long again going

Brian Bittner

up my follow-up been is the just Raj, up suggest the guidance costs, it below you that have first did commodity year? obviously guide? were they your the on of full quarter? in Is move And And rest the recent X the conservatism reiteration some X% of items quarter, more which throughout of X.X% a is the What's X.X%. the favorable. offsetting Is year non-beef as favorability anything after driving just commodity bit we there

Rajesh Vennam

Yes, Brian.

lot than remarks, by, we as -- I The So point better in beef coverage were beyond, of inflation prepared you we X you holidays a other don't mostly the saw that as get if our thought, categories. and my we around of still quarter, is beef a about mentioned and uncertainty the have think especially first into expectation -- our coverage we past. about lot for from driven

So around there it. some uncertainty is

little the first Now in favorability helps a bit. quarter us that

be in X.X%. might little approximately guidance a is we that provided range of we So that might mean what that bit lower

with of So of maybe to beef. is and there's lot I it's -- X there's quarters a a really that. beef mean, more little go bit south But risk

So...

Operator

Capital the Our KeyBanc line Eric Markets. Gonzalez from next of questions come with

Eric Gonzalez

to as about Olive it question is My guidance Garden. relates the

is down bit been industry. last the been the seasonally period revenue to typically volume And from different a XQ bit how Garden Olive bowl. the second there's pasta little step curious Historically, thinking a a but about with quarter, the a low of for sort return was year which you're of in XQ in of

that or your you second about to think increasing second own to whether can guidance how decreasing fiscal relative expectations, sequentially? quarter see and that perhaps us help you model your So quarter revenue

Rajesh Vennam

quarter a sequential it's part I back-to-school we with the a relaunching and and going bit casual little at Obviously, little it that's and the it's I be quarter. to want time we what lull quarter-to-quarter -- a we Never to as lower get look frame. look why a Bowl there's the basically, And going contemplate I is, this in to help I we -- quarter-to-quarter. don't I last that exactly think of change. this But into that's expect do Look, pricing Pasta Ending year, don't in second being the that's And the a range. does -- huge don't of second the think within nuances quarter our some are with bit than as there's reason respect mean, we to slowdown to really dining. first year

Operator

with come questions Brian the next Our of from Morgan line Stanley. Harbour

Brian Harbour

Maybe the things synergies, just also impact? would Or of of found? to you of kind staffing? additional kind talk food about menu? when that you And see Ruth were kind Where we the you would some referring in what reinvesting, of that primarily then that are be and on

Rajesh Vennam

Yes.

through both places. more the estimate, it's So we're the G&A, So both started identify we as synergies, with finding able are is and initially that as been now -- in generally, in process, we've right? we where entire supply the them Ruth getting as well year, as between chain we the we're in go an to

a a team member long our across the experience So in and history brands. we guest have investment from perspective, investing of

notice Ruth's the guests And manner some cost and investments these in team savings synergies investing appreciate. of and additional so will members that and with we're similar a

Brian Harbour

of that the that progression, still and some like stock-based the But It valid? your also Okay. piece kind quarter. sounds kind year kind quarterly you piece comment on could just -- just was G&A outlook? about G&A kind is for onetime the of prior with in comp first the of Raj, comments of maybe of

Rajesh Vennam

Yes, as expected that things, bottom first we outperform that in on we that for more mentioned, were couple more of sure. line. on line, as a than And higher was a G&A mean Yes, bottom that's was little while higher caused line year, more driven to our from that a right. G&A full of future the a last quarter. I quarter. Part it's right? But did earlier sales truly some the was but onetime. that about of years, is mentioned helped outperformance the stock-based a comp. the talked bit incentive we comp, we look at timing little I be pulling bit then forward likely than what by is

So [ $XXX think we I ] probably closer point, to last ]. on quarter, million million to year. $XXX closer at I it's say, talked [ this about would the

Operator

Our next of David Tarantino Baird. questions come the from with line

David Tarantino

talk annual could wondering, us your be how of was targets. growth perhaps, growth you if that's wondering update an next would towards you the still Raj, returns were at on and I about helpful. if to years. I if give your you're you high and And thinking trying unit several build could costs, push you're And unit end that desire seeing I'm on Rick, for know what about point, the one

Ricardo Cardenas

unit do framework want from restaurants. David, growth, in of of sales X% development new regards growth long-term to to get to top the end we our and

and there's still of little still some to seeing We're the permits. things a but utility still in a those little said past, on delays. we're get -- the connections it's kind we've longer taking permitting As less

have to the with like little inflation deals a And error good especially are little the generally of made attractive. also margin being have of a where economics less our We projects. costs and selective, we

reasonable a same we've that higher turned projects at able them those costs the done -- be. we've are a to just to to been so And and than few get for wanted we us. the And that costs we've in that down little are because past more back projects

that bit believe below and are in we to line. That more wait little our line to our and are some even bids said, get more project has we're back receive we to So peaked actually the budgets a with willing project inflation costs in budgets. starting

high feelings that building us good and we are believe of close future. So that our actively the some gives to framework We pipeline. to grow for the still end have the opportunity we

Rajesh Vennam

we -- returns, And returns David, on strong. pretty the our are still are

not net little We mentioned, generally has Rick present are accretive within be. And a bit as margin project is have us. -- quite as any bit. we performance it as we to approve a approve hurdles we actual our like on when we projects. But value used at error average, internal of to be Maybe our we of look as exceed by to that buffer high headroom to

Ricardo Cardenas

add one And more thing. David, to I'm going

like capital, to what unit selective that's going And to If and present a as our about to thing buffer ready and value that focusing framework developing saying the We're all than us got bit long-term over people we've people our we we're a great well. you pipeline is well. from we'd think keep as we be that's a faster our growing that's to capital on run having net focus restaurants. little cost those because way think in of need we us growth on we going the see so in of have And of projects. people

Operator

Evercore. come Palmer with questions from David next the of line Our

David Palmer

Just I a answer. got sure not up, quite I'm follow before this the was asked but

fiscal EPS costs are coming the What of and -- end like Given increasing guidance in where the what you're EBITDA to for the that are EPS in, plan not year. synergies looks were low line? potential your we're and on the year the we seeing also offsets upside food surprised what your Ruth to of terms

Rajesh Vennam

So right? to There's to data X question. think Yes, consumer. We're X trying been go. understand we're happen. it's going on the months to mixed just in, what's fair David, I there's a But quarter

felt of range so off to too we really it like provided. early come we And was the

in our now that's has earlier, year range. our said but first the doesn't moved that I As I bit. outside of the up performance the little estimate from to mean because point quarter we're mean of the a beginning

we primary we we're a -- where things. there needed around uncertainty, the the what biggest at question to consumer. the on your feel didn't So is so place guidance consumer, The happens risk few a with to range. And like there's obviously change are

We're understand to going with Second beef. is to especially is commodities. trying what's on XX% our beef, the of happen, basket

some there's there. risk So

has in high imports early. because some pretty pricing too the the the Now but being see remained of supply beef We're to might mid-single the that in beef help additional digits. down front it's starting on

considered felt I the at all So it guess like this point, provided. things with we we was prudent to guidance stay

David Palmer

I the your the pivot. know we're given company industry in might plan [ you ]. you were terms that not with wondering, going worse game the speaking, just in current seeing guidance of I'm gaps consistent in trend ways trend be would marketing, for to apps your than give that flattish the generally type But if

the deep If I traffic said, Rick is are would you you -- how modestly but or you adjust? way, ways with do down than see your what your go you're more mean, and just would think to adjust discount that not can brands? it -- you ways major route going going how what

Ricardo Cardenas

our even to short it not start come And that off impacts to to David, in our bit just and strategy discounting operate core And stay we're short restaurants restaurants a understand you're below heavy -- that with where because little running if right. we're a we're be not long core are if our think continue the term that that huge visit we'll from would just discounting, that business. more deep little brings going doing to us a long-term into business we some guests. going guests. what it our stick do. our means in information to We We're we that believe going. is pricing buy keep too the drive that to if And term to better in the getting inflation, others you less health strategy. that to Yes, guests overall one in much to of the bit of our But term it's think going we we give means better best on

Operator

Barclays. next Jeffrey come Our from line of questions Bernstein the with

Jeffrey Bernstein

drive clear seeing long any the But think Great. doesn't just to there the benefit I are you're the that One, traffic, aggressive especially pretty some easing. in not you being in changes start term. more on an Two competitive were and discounting, you that questions. are competition. commodity keen with you know to are uptick promos inflation broader of I with behavior? concerned discounting Rick,

So contrary strategy, just And the your broader you're landscape? follow-up. to had what across X seeing I wondering then

Ricardo Cardenas

increase too. least ramping bar particularly business in our have we activity I'm business and promotional guessing at Yes, inflation, slight little better. -- is seeing it's dining Jeff. brands there's pretty commodities Garden of still but in competitive increase and said, I competitive not not getting a in and It's other in the grill as easing the One seen competitor thing, might Garden in in even We're labor be Olive in of That said, X still is high. that bar net competitor one kind of said, top but voice. and activity with little X be -- segment. range above other a that up Olive whole and bit to that yes, commodities But if bit. With a than, usually of are really family seems lot deflationary, grill the share a

tell is activity more and top our is few of and that's more competitive more I activity, one voice this message reinforced more, brands And more talking for value, as about. strategy. And And our that's Never you, we're more into Ending said, refills. Olive Garden Come Olive what matter more. Garden but of Pasta about television food, and no to the usually So in what share is I'd we'll Bowl. stick

for never-ending, planned great So plan. Italian year Bowl, Never value about at the Ending Ending craveable, we with We're exactly this right fiscal doing new. abundant what and Bowl Pasta it's at Pasta of on our Never beginning food is a nothing

Jeffrey Bernstein

if post broader of like Got feeling casual as year. you. to you to something lot People to we during and And you how consumer? see were dining dining you're whether you to sales now I mentioned thoughts then battling explain kind should this I or coming historically, specifically slowdown now just if a traditional frame to was that stronger seasonality seasonality. maybe a post-COVID no there get that fine maybe be maybe referring seasonality slow about and it's couple therefore, But you and therefore, return to about pent-up time how I think willing about you follow-up. wondering, of know decipher I could of Any like expect past relative even September, know But less that in the was think go just last in just weeks? summer I'm there out great. around a back-to-school. seasonality. I'm in feel there were wondering demand seasonality a were would return, the to slow years, seasonality. earlier in

Ricardo Cardenas

bit think but of not of a at think saying getting we same for XXX% the trends levels. of Yes, where back And trends year, do back same seeing to now, historic dining talked trends. We're was with pre-COVID we a is fine of levels pre-COVID there kind demand. actually little I'm the seasonality XXX% the back about data similar Jeff. pent-up do thing. We kind towards last getting of to

to And patterns were. like the we're what going it. so next of much for of But month. getting happens the the this closer see We're going now rest to it seasonal appears and we're rest to watch what month

Operator

Our come with the Joshua next of from questions Stephens. Long line

Joshua Long

of dive anything largely the quarter, When in for there here if kind that comments the Olive we were Curious in trends around sales of to-go the understand line pacing, sort I day performance, daypart, you reported first the channel you about in into expecting. what or with week, perhaps any could of business geographic you strength was think Garden?

Rajesh Vennam

from perspective, at think softness we company I in when We're Josh, entire strength Yes, at England, look some seeing we're a in the and New Texas average California, more seeing portfolio. geography Northeast. least Florida or below

regional some variability. definitely across a better so perspective, strength overall. a But Now Northeast that's seeing average, of But we in brand others company seeing casual -- the where terms portfolio, there's of daypart when and at From and to the lunch kind New of bit closer we're seeing are by areas will. brand, in our you between little especially in the of brands. at England if differences. Most kind are getting look you area

don't color Outside I that the can additional sales detail. And there's we any really on it. that, so that's provide of know

Joshua Long

That's about then last like Raj, probably on about helpful. X kind bit of softer from think years. being feels we couple California, over base think were little the Texas, of clarification, comparison? point a that we do just basis, of of It a stronger Florida And there. relative a When they maybe

and how it's second be change when big the half you're So maybe the communicating to key value about point about comparison. that and and you agree kind just component executing opportunity marketing I in the Is would of I that maybe, going a messaging, of you or and in messaging. execution then feel think you It doesn't it's like of that lean for year. it. operational about to And with need the a sound Rick, totally good the out of the opportunity drive to mean balance just correct?

Rajesh Vennam

Okay.

-- a about you're softness strength last me markets different the driven they place. I'm right year, year because the or let those in the in of on year talking were by last It's on really So a rate. over function

-- comment on Rick thing that's a and let marketing. truly then So X-year a the I'll X year

Ricardo Cardenas

consistent last that quarters, fairly of now across we in at -- the we're of traffic our trends that we think I seasonal look X more most back segments. think our we're getting actually, across versus They're patterns, brand Josh, most seeing our to pre-COVID.

we're to exactly of traffic believe we levels of slightly because with marketing maybe were so bunch without a we is that before doing marketing. us lower where getting And what

then fiscal little them without be always of and drive so giving differently. Pasta that what we doing eClub we're Never to that's not going to our maybe to plan. to of discounts. deep see discount aren't was club, Pasta the members our eClub just change. something the It we beginning them And to our give we're stick we're Never in at if of this was bit do, doing Ending the doing they a reason give be year. And to members which one in Bowl, a to pull more dramatically Ending And again to we the our levers Bowl plan a club in preview We're pulled have with that if in learn. If It's patterns it necessarily going more. was

levers and we're And COVID. not we're learning could still anything, that things but throughout So looking marketing we do discounts. at we and other learned digital necessarily deep and use we've done if those we've

Operator

the Dennis from next of line with questions UBS. Geiger come Our

Dennis Geiger

even Olive the traffic you more the bit Wondering to a if a speak room broadly levels across or portfolio at specifically. could Garden or bit dining

And you can to where point? opportunity traffic recovery side traffic Have we are those think is dine-in dine-in the the this levels on more where still business? Or gains normalized? how to-go go of sort about see there relative an currently, at to they

Rajesh Vennam

a our from Dennis, were COVID. Yes, where before quite has off bit we premises gone

yes, pre-COVID closer perspective, probably we're largest brand, a a terms our from that So at perspective, Garden. of sales where probably range in But we're COVID. to to XXs in traffic from Olive before we traffic relative were in

that but we that promotional part made as about, that lot Olive with couponing spend on and to is, conscious at dollars activity, Now pull we marketing Garden. decision talked we of back a a said

healthier a business. we're So

at value to it like we the And in so There so in not to it actually also back. time. a is From That's a menu, can over the -- going can that we're at but us that's also go we door build more the and the executing way room, in it get focused people we're is highest gives we levels we are. right? That but opportunity capacity dining slowly but us provides we onetime -- build why core durable. everyday opportunity, on want so which where

Dennis Geiger

quick LongHorn? That's or And the one, either just Olive on side one at itself. just helpful, then quarter traffic things mix of call Raj. notable to Garden on Anything or the out,

Rajesh Vennam

traffic a our was but I into mix going Well, the actually quarter than was little better our thought a we bit say would little bit worse.

from So I a entrée of can what Garden alcohol check a -- perspective But this at in and what sales little some we're share negative and point. entrée that's really at Olive mix. bit seeing mix LongHorn, is, pullback

Operator

of Bernstein. with Our line Gargiulo the next questions Danilo come from

Danilo Gargiulo

be on peers? a to might know a local versus prudent comment level how strategy absolute I of now? your you deviate in prudent why it about pricing the below increasing period. you that inflation from facing for is times specific But Is inflation? Darden Can pricing above you prices And strategy? it you're why spoke several

Rajesh Vennam

pricing saying start standpoint. from with are me we where let Danilo, a So

the Our about quarter X%, was as we said. in pricing overall

where quarter related that that the be expect -- closer you We talked points including on peers over to Where that time at our pre-COVID, closer about XXX XX%, full created that over year That XX%. to to mid-Xs, the X% XX% to we to to in basis XXX X.X% frame is maybe just when that than pricing means higher look this X%. we are X% to to which is about frame, are, average, gap. we have time us a said, are

last pricing wrap quarter this took year. a actions Now is most pricing from we our of

up year fact, In of our year -- XX% less total I from this pricing. the the impact make than this think actions

last from X%. the -- So carryover represents year we

narrower. we We don't But be delta at may scale we to in to of experience feel like that own our when our our a maybe look of not gap peers overall, there pricing of that much because better talking the because place. basis it gap that local generally to we going overall, like feel some tens of especially and going be the of of how our being of quarter-to-quarter, still peers a we up we're great price. expect created to -- we any than is you're like of inflation that we is terms we're feel most have end in much, We than from perspective, when inflation our get we year to peers. ends that less ahead competition. Part But target is we competitors strategy our try points and our about. So that inflation

Danilo Gargiulo

Extremely more you clear. mind. question, don't one And if

to in can accelerate is of and timing integration? a EPS potential 'XX fiscal light comment you on pace the found, if 'XX? there the integration do that So you full there to efforts, new you upside think accretion in the the especially so, synergies the any And have is of

Ricardo Cardenas

process X part as are but the the mentioned Danilo, finished earlier, -- to embark take and on it's only months. about we're us to we we hardest planning going

than systems, our too system payroll of want systems. all just all operated on restaurants, lot don't faster because our think getting go system, of point-of-sale integrating We in XX other restaurants disruption So X the on about franchise and owned the operated Chris Ruth's to thinking restaurant. the months a of about much our and that's

up million, synergies $XX the level. We've going this year $X said, pace of this we're from synergy million -- we've we've the some So we as it brought $XX to that includes found. and at right reinvesting to that already million estimate our about I believe, for to year

do in tell got wanted our a we like would that investments just bit faster. But you make we So little other that to we brands.

analyzed, we've we So investments. however we higher make if we more are than that the on see, synergies get the just even some of then synergies, faster even may

going the we're our try right we'll we're of and for pace. so too do not to going integrate to And the but is at what business to long-term fast, health stay

Operator

the of come Haskett. questions with Jeff next from Gordon Our Farmer line

Jeffrey Farmer

Great.

Some big dining picture casual questions.

of So into other that lining slowed some August, traffic source some early the traffic of slowed show casual September. in data the KNAPP data, growth has

of taking factors for consumer? that contributing obviously bigger were market casual picture sort guys You a perspective, your to consumer trend share. dining most again, or are from traffic that what But of lot softening macro

Ricardo Cardenas

seasonality. to start going with I'm Jeff, Yes,

Last typically talked a year, same couple this thing seasonal -- we've is The low it pattern. is with August. of As the wasn't. September times,

pre-COVID we've quarters, our to pretty seasonal getting back I by -- And consistent. compare all been of the back start levels, would saying more normal. are so segments X you last When to patterns over

bit other is consumer And so a is they're less selective. -- mentioned, little have thing, the as the confidence there a starting more is to and we've little already bit

the we're industry so may below a execute. And pricing we've but caused to else. pricing we're going on and to I where our this to have work well been just pricing feel everybody that worked we think what is good the little we've of And bit about to on. But continue compared position going industry in

Jeffrey Farmer

And That's pricing. a All follow-up very right. helpful. then on just

in X% is pricing So XQ.

just year what about the X% pricing the that is You for forward, full But should of guys are to 'XX. be to guiding how moving we thinking sort -- cadence. X.X% that

So it's would theoretically XQ. like X% pricing cetera? et -- What in or XQ, in look X% XQ, Darden blended

Rajesh Vennam

the closer say let's get by get fourth by looking quarter, time we're quarter X% time quarter. Yes, closer second to probably we in to to the and or to third X% probably at X% X-ish we below the

Operator

Jon questions next Our Citi. Tower with from line of the come

Jon Tower

off broader going way in to [indiscernible] a would implications but your bit going changing the or have and here industry employees California I for it the argue is get that the thoughts. beyond potentially California changing perhaps fast its that. to little curious guess it's I the food side. in some Great. pays

spilling as in labor So or perhaps And will then have to be moving And inflation taking in X pretty given evolves particular, the reasonable little that to in an I'm will be get be levels? might you industry either starts even cost how bit that your market a on more bit the shut that though think environment curious opportunity to this get around see costs broadly? you to might market would higher? operate thoughts; one, accelerate in I to your dramatically aggregate two, an beyond how that where a down some thinking little handle do curious in elsewhere? share state, off I'd independents market,

Ricardo Cardenas

know saying of lead to experience. the could first about Yes, in fast John, that other I dining impacts Act California. FAST start across me and let the you're higher segments wages food by talking it

employment is proposition. great got Our a proposition great. We've employment

higher average it's before, about across we our at $XX tips that. now we've As when think you over talk But mentioned in including country. California, than and are wages, I the look

in labor and execute wages grow, able minimum as there. continue tip in seen share and or we've to gain continue a think I we've been costs so we've to where credit to markets seen had And the reduction grow that other we've

that restaurants, it's have less little a ability So impact less to ones this does little probably to the a that. the if impact withstand and going capital

really wages share we've pick Just been have like we're still in seen to where grown other we've markets able there. because fast, up

going to trying can share taking And continue to if what which below inflation strategy. to able our and a price to little to gain providing to and guest a inflation. experience to we going have higher, more to are we're by control, going is is focus stick price on So price. great be others we'll less We're

Jon Tower

it. Got

price in that So the market potentially that the idea table more this inflationary pressure. of off taking later is given year not

Ricardo Cardenas

taken, change it's be change. if unlikely, that it the X% but inflation. the things built higher, And already change. off could already dramatically ever on could things be higher if table, if that could be pricing is What most actions things we've that talked our is it Nothing of we lower about highly in. Raj in But pricing with said QX

Operator

of next from Our questions America. Senatore Bank Sara come with of line the

Sara Senatore

maybe moderate but I I was -- might wide through have any mix the a commodities, that think restaurant digits, just dynamics dining, question with the there The comps marketing. with fine just the different is we in level this performance? and shift pretty between inflation I labor given price be Are of talk an a margin wasn't respect But should and pricing the Ruth's might better about mix past margins inflation about that given think then And you context, inflation delevered. of I come? negative see to offset, gap as higher. to roll mid-high quite pricing, then pricing to expansion to in with high. and that and the that terms by quarter, guess that any some it A between kind other think you margin one there quarters could that I the going versus than and and is, I I should it from commodity had could and that negative think, sort whether of whether gap had impact the we on thinking off even expect to quick expected. the guess quarter expect margins, we single on factors. Is anything the dynamics said in

Rajesh Vennam

Sara. Yes,

sure So question. of try aspects answer to me I let all make the that

So let's start with the margins.

So perspective, from a margin you're right. Yes,

pricing full could have think you say, negative and or One, inflation you inflation few at about The is well, the get pricing just If didn't things. are inflation. a absolute the commodities between there and look delta we you and overall to things mix. a

dining, driven costs we a year-over-year. there incremental they on trading of was blended is brand at on alcohols in was -- is where profit down high-margin comps a negative to each mix. Olive and that on seeing part had also, with basis, the you really has is pricing points starting margin. at X-year But other start XXX to you up. Their fine Garden strength. there by look which our some decline our a have basis have with some happening what's let's negative all, LongHorn of catch our And On lower-priced a most fine negative that When impact of -- you're basis. mix. that overall wines what saw First the -- at mix of alcohol. When margin, of is The there X-year brands dining, lot negative segment and

big However, falloff. at when we were look a see where don't versus we we it pre-COVID,

-- year exuberance goes that like on. back that we're clearly So wrapping this a feels to existed that there ago, was

whether piece impact have on margin the is, lines. I'd that some mid-single-digit of is inflation repairs from expenses part and say high those so maintenance. it's the last running still And then that. And inflation, We're of restaurant

had summer And Last We part is record that. heat. a piece -- of so utilities. that's record

that of too. some and caused ever terms usage, much into cost translated we've has -- incremental more electric usage tremendous in So seen historically that

Sara Senatore

helpful. very That's

the feeling the You of your or you know all think going lower in by, up traffic, better. of returns that expected, you're hedging on it then about to much ratio did bit marketing of talk basis line that about pretty points. percentage maybe I one Could higher? better back you just XX top context hit a revenues said was kind as the seeing marketing, bit just XX, little and parts. versus maybe as traffic on line I And a a that you the how you're in took

Ricardo Cardenas

Yes, Sara.

of Our marketing mix. just year points, versus half basis was that Ruth's prior was XX about up

So bringing into the Ruth's mix.

in ] plan. was Our little X/XX higher. bit marketing was already a other [ the our And

[ included the the in So X/XX planned performance marketing. ]

we to So to -- to you getting and we when COVID start back, marketing been the are adding it an during see see. And you we've it's on learned the a versus how can add ROI better lot we've a times completely really when that. impact eliminate it believe have because of little you analyze it able bit, of -- and harder you over you

able marketing we're read marketing, believe ROIs is one. we So better the and the much in and there to

Operator

Our next with Saleh questions Peter come BTIG. from the line of

Peter Saleh

come I Great. conversation wanted to mix. the just menu to back around

you pull Can time bit in little in a mix But some this more that, and this declines some you'd also of change elaborate dining in bit mentioned alcohol the mix brands, it. expect you've little was what a than you you're that seeing? core at mix you think alcoholic some since pre-COVID? something fine the I seen first at less brands. on behavior back the -- Is on mentioned similar consumer entrée this

Rajesh Vennam

points seeing of would I Garden alarming. talking Peter, the we're mix. What it not and Olive about of Yes, brands, it's LongHorn negative on say only casual basis we're and tens is at

quarter, a it's maybe in take last -- by have have because we a mix, at a hey, in where feel a we look negative But that, quite worse like much it what's that But we're a into So X% example, happening bit missing environment there. an but at the little the it's where than when basis a like, pricing impact -- point doesn't we're mix check it it's not range too we're we're about in you seeing to not was bit. in reading negative at of points huge Cheddar's, expected. primarily not XX

have better -- some some have causing -- are items but are that not other people that be down might the our items difference we yield we pricing hurting menu So margin, to part LongHorn, it's is, margins. example, more there introduced at and trade for it of

negative mix seeing. with So we're okay some entrée that we're actually

that this last truly So year. draw were yes, X it's too exuberance dining, read check much seeing into to too a kind on early we're actually had to I year until until mix last We too I quarter the seeing is -- casual it away. through brands. From huge negative we or mix the or function much we've and we a that of X the at into that's believe year. positive to of of the going for last mean second got think quarters fine

And And dining. look to things and so at off now we not is normalize. looked it big through it wanted the any at we're starting that that's when to pre-COVID lens, see see did this why we we -- drop versus when fine at

Peter Saleh

obviously starting it Rick, labor, more that are just on bit improved. of And you coming color wages I Is side? helpful. is give a or down? Any seeing would out think what availability then, flattening but Can the inflationary labor that you're us you still more be has labor little detail front on more mentioned on

Ricardo Cardenas

every few we it we've gotten have We've hire years. more before. last much We're Yes. much the easier had for in applicants seeing to than job than

wage mentioned, overall you And lower starting seeing, our a think up gratuities. our we've yes, is $XX employment an wage inflation including as is minimum we're proposition the than wage inflation it If inflation. hour, about of includes but

it's door. and to We're like staffed. at to little people seems get hire don't a in high it have such just getting rate, hire So we people fully a bit easier to the

Our down. coming -- turnover getting is

is starting to inflation inflation, a people is overall lower for much our come so -- which our work lower when thing. And inflation is us than or wage wage our good entry-level

Operator

Our Guggenheim next of from Gregory come the questions Securities. with Francfort line

Gregory Francfort

earlier comment the I that? think be surprising Rick, income the of softness, you're a -- curious more I because might little the about I'm the $XXX,XXX on on I of lot bit a over lower maybe it's the concern call think And made think consumer. you what side in seeing more income guess And of driving that's you a is just things. if

Ricardo Cardenas

the over of has things. Yes, over inflation wage time. at their level the the mentioned of lower Greg, income last wages than it. impacts it higher growth level I at And look few One, more, been kind higher years, and couple I grown inflation the if think a had faster than income lower income you while

international bit I lot think was summer, a little actually there of of last now it the from and this is travel. year a exuberance

they could that and maybe been maybe adding reason part strong outside about and that traveling Florida hadn't because talked have internationally airlines when of able California they people talked routes U.S. the do years X plans doing have weren't quite that but were anecdotally, for did know because few I X this few summer. to that saw markets of to that in our they travel as they just had it it You international the a for were I've traveling weren't been their years. COVID not a sights here, folks and or because

understood see going and changes if a monitor we're but it. That dramatically see had not watch too we've of because softness and and something We that. quarter. sure first not be right to least reading a lot $XXX,XXX up now. we're the make could you much just concerned seeing in too into the said, wanted or that at did little We're in we're and it So to we that is that something

Gregory Francfort

it. Got And just maybe one other.

of mix a at that over franchise more of decreasing goal kind versus you of company-owned, you increasing lower things As will the Ruth's go stable? time, higher have you or or look do think or that

Ricardo Cardenas

franchise, to want focus it us. restaurants Yes, are But current XX own expect really we're got -- our Greg, our as Chris saying them integrating and to company-operated these We've partners they by start valued Ruth's -- Darden, makes restaurants. is with our continue restaurants opportunities we into our I they to If Ruth's want grow to then to well. grow growth grow and sense, us. we're we'll have let

of go franchise So compared -- time, doesn't that company-owned number over open that franchises the franchise would will at more because mix Ruth's of necessarily down, restaurants will going we're to I to anticipate Ruth's. or go it's down. company-operated It mean

we're it. to to how that's stick so going And

Operator

come questions with John of next from Ivankoe JPMorgan. line Our the

John Ivankoe

your on not conversely, we've where you increase actually their based age for the may incomes rates. I in be a behavior are, it's see if bit differences your to an benefiting affect beginning of but the student wonder it But traffic real cohort from older about loan might term some XX know repayments over them the past, little of you're consumer cohort under talked the consumer, sub-XX could is question I income interesting, in see consumers Maybe from XX and influencing some most. incomes business? that how who different from but performance an interest and just a the the consumer. especially And on actually the be from fixed

Rajesh Vennam

grow Yes, mix. continuing below consumers to see XX actually to continuing John. Actually, be are a the actually as we

In versus last versus fact, we pre-COVID, still quarter XX year look as last trending when below are and as well at consumers better. versus

pre-COVID fact decline quarter. from In a XX-plus -- this especially below last and slight then actually is to and quarter still XX plus,

a what we consumer. where a lines something did we're more up guest and too, And from the we've to been of well. a before pretty makes that mentioned the for our younger spectrum than base like holding be feels that, of along tracking quarters few trends it on in mix it a perspective, seeing of not we're seems kind because percentage any up cracks COVID. But we're today seeing so bigger those seeing income now So it income lower Rick --

Now in that's change can't is to whether future, something the any we not. -- say have or going point, to change and going we don't insight this at to

John Ivankoe

that business, is specific that maybe I re-add it Olive way a Is would terms told a wouldn't reattracting of ago, assume but to in we years there be have old, And broadly -- at that of Garden. consumer? to kind reattract have especially XX-year that's mean change customers? mean, big X your of for that gosh, said, XX- I an because be it you I if your I would to that brands that subset would opportunity or

Ricardo Cardenas

talk do add reattracting they lot John, "Wow, above I back do think that and had about bit I "Hey, we're a use eClub more loyal in seen a to and COVID have big loyal our some we're and to going consumers." should little if X if you've been, got we were more we we've one they ago, have little our to the on believe our big we've from them a think on how we dramatic asked But guests them, do you younger consumer. can a of guests visit We have to the to targeted any increase actually some trying enough don't Olive think I have consumers have would our bit consumer, "Hey, come had spooked us to people pretty I things XX. said, side". younger because efforts. to Garden". would And And don't a impacted marketing younger more. side eClub. They we're I'd continue to believe say, COVID going can many focus thought, them can't would years if And

them that to something and So I we I actually said mix of to consumer to be consumer over we our value that Ruth's XX customers, in all lower actually but Greg, operated a clarify said for see be love like us that more consumer. want restaurants it's and our We not, frequently. And higher. will think I strong to going is for back come that we'd including those

So in it future. should higher be the

that. about Sorry

Operator

the questions James. come Vaccaro Brian next Our from line Raymond with of

Brian Vaccaro

quarter? quarter? quick was will mix it in Just data LongHorn know the Could could. of traffic I but for also the what what Olive X items, those premises and And if Garden you share each maybe for you be brands off XX-Q in was the in

Rajesh Vennam

a Olive so little over about XX%, Garden Brian, XX%. was

not a was perspective, LongHorn in the X.X% is premises. From digit X.X%, of So X.X% say Olive lower traffic. -- were they than we low was where year ago. a points [ one slightly a were for It that's couple LongHorn Garden This or of might about been have I'd about traffic XX% perspective, then quarters. And a ]. single range high the off positive. from

Brian Vaccaro

acquisition. Okay. quickly then up just And following the on Ruth's

just versus And the What brands? of opportunity customer you further see dig on segmentation, you you in other If the an Ruth's reinvestments you've customer dining see there. fine you're differences base chance the improve the elaborate the could some had key on I'm are areas curious in making to a experience? to guest

Ricardo Cardenas

Brian. Yes,

the of customer base, PoS. haven't Ruth's we data that on through based we our is of and On integration PoS, lot done the get our customer research a

So Capital I'm data just V's. And at as a Eddie and at in we we different slightly consumer Ruth's the overlap Grille see consumer before, Capital we've have Grille that V's. past. we little It's mentioned the the using than for Eddie and and Chris consumer have some from very for

than a that's suburban before. more Ruth's need brands We're mentioned. reaching different bit a a consumer for had other than good thing. they've we've the So little a that is

we're to synergies, get And now. that additional still and to making making more we're investments exact so the team team we're the are going investments with the food. as side our investments to be into of going continue don't said, Raj we those making kind that history consumer. In on that we're want I more going to or some a the to on that to And side. the learn food be but made these our investments investments about regards we've in of in making, have

Operator

come with questions Jake line of next from the Truist. Our Bartlett

Jake Bartlett

I for some perspective general? a space it. student little casual can just imagine work you dining brands on give and you do on loan maybe done in hoping us your even I'm the impact the payments. on think be What expectations the resumption of you've could your

Ricardo Cardenas

Jake. Yes,

going of a industry being spending. lot is to impact recall we've more restaurant As student Darden said of already be impacted time. We is over repayment before, have don't a And started the really expect material loans by made. to discretionary that these consumer

are loan August about in of of pay off or rate think was some interest it August, before the that month month And deciding billion $X I week. student just So entire back up. could -- be to starts the their a people because

rate repayment be $XX now. expectation going so a in student the was to run And and year it's we're at almost so loan that or about billion

also above $XXX,XXX. I I've these the seen know -- and loan a student of lot So payments all are you've think read that folks and and are that I read

student of that's it So their loan. well. part they've started Maybe maybe off as to pay

our to a over see don't how think progresses meaningful as time. want it's business. this we said, we going we've to But to So be impact

impact a it's to meaningful it impact going Discretionary margins, be a to is business. could the impact. be On an not bigger our but spending

Jake Bartlett

not but -- think more perspective to I'm going on your on customers Okay. focusing I an more not. that I on GLP-X or BMI going and Great. question I'm restaurant restaurant that's drugs any minds, demand, perspective wondering think go of kind it's and how I'm perspective? something any your it's impact is but Darden's valid ask sure your I'd demand. there, it's I with and I'm so something odd know maybe ask. the But not figured I investors' investors average to for are on it

Ricardo Cardenas

didn't I Yes. But that. not BMI my into to going I'm about you mean to laugh. talked get when

Jake Bartlett

as know well. yours I

Ricardo Cardenas

know don't that. I about

connect occasions and with saying by are desire full-service dining me driven start family by friends. Let to

couple X full-service about year, it's think you our for to if a guests, a of times dining of frequency a good -- times, Our X guess. the

but come their whatever us -- why of with years, ensure a to still suit of happens wide nature suppresses our out the be designing have range we have individual to lot the choices people to over And to little So we menus if And spent of to don't eat. going time going it's to because of they're a to a needs. think react we're impact guests eat. appetite meaningful people, celebratory it a bit, going to

So do. we're when for be they there to them going

Operator

John Parke of line the with from Fargo. come questions next Our Wells

John Parke

LongHorn And Can face move you of the kind inflation? we expect guys guess, just that worse of bit should beef to year? in recovery of talk kind little about tail at I we a through margin as the

Rajesh Vennam

made you had they john, at had traffic. that think at LongHorn's Part -- quality strategic choices So we opportunity I as the growing to well And back talked actually way -- if room was recall, team relative get some -- well we -- traffic by pre-COVID. was, to year have a and positive made significant LongHorn, investments dining were in LongHorn. some in pricing what margin below inflation about, there below the was does of ago, we way, food invest the make along to

get at some where we're a are. job, overall returns they much momentum to great at it some team back getting extract growth. And see wanted -- bit a we're better they the margin It's to getting LongHorn we pivot model to like place And so done where given a now little that of and that margins margin -- able so we the can has a line our business top feel we especially strong within be from perspective, portfolio. the to place just have a provides of

Operator

of Strelzik Andrew next the Our questions from come line with BMO.

Andrew Strelzik

just I had quick ones X me. for

looks The locked you basket. update. first It you did than have commodity like the less last is on with your

Now intentional bit I'm or those getting that's just wondering little if with with it more conversations things typical. Is difficult there a suppliers.

first the question. be would that So

softening premises The that's Do I at dynamics the quarter. second the due any mix, play might be to industry. a the in think numbers of that terms little of -- more nature up of like think one, or kind shifting sounds that there's volume it at to that home that other we there? is you bit gave you you on the off across the mean know also or delivery food lower seasonality

Rajesh Vennam

Okay.

the start coverage. Let me with first

what out, pointed have had before would have is ago coverage we we as than X actually lower So about months, yes, next bit same XX% the a COVID. what year a the for had but which you we

say In get prices coverage primary it's terms this beef. of difficult at still the the coverage, ability to to we at would that's secure for like driver. really the And long-term I point,

covered actually because in look renewed we're as And don't have Part in that beef expires liked point in we would at that. at to our in December you have we you about year If this coverage started XX% point, that we much December. coverage, time. other more as the covered have that contract then is much we this see but last -- normally, as we of just a poultry,

that. So renegotiate we're of to trying midst in the

little would I to where the we like. prices to But hard is kind like a it's it's have hard lock-in it that's would to the so reason lower. December why yes, at to coverage. and getting bit beef the holiday, a past, is, as holidays, still I -- more going you're not or But it right. mean, lock we into we little And especially be, mentioned, past bit of we're like

of the shifting in LongHorn had it's dining asked, that a So and from that some growth room. Olive question room to -- Garden dining premises the perspective, both quarter, off So this the traffic means right? you guests

because, premises room. that's of actually X concerned down Olive dining dining not but grew Garden was room in points a the that So we're year-over-year And with We more yes, by couple have -- than guests off points. means happy the that. to we're prefer at

Operator

reached We Kalicak the have any turn I end Kevin to Mr. of would question-and-answer our over closing now session. floor back comments. like for to the

Kevin Kalicak

follow. like to Thank with on that a you you. our you release Thank conference plan And to market in call. to today's results XX, before we second Friday, for December call. for remind all opens That participating quarter call the I'd concludes

Operator

teleconference. Thank does This conclude participation. today's appreciate your you. We

of your disconnect this rest Enjoy time. may You lines day. your the at

Darden Restaurants (DRI) 21 Sep 232024 Q1 Earnings call transcript