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Darden Restaurants, Inc.
CEO : Mr. Ricardo Cardenas CPA

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2025 Q2	6.0% YoY	4.9%	3.4%	2024-12-19

Rick Cardenas says,

Overall Performance and Sales Growth

• The quarter met company expectations with positive same restaurant sales in three of the four segments.
• Olive Garden, LongHorn Steakhouse, Yard House, and Cheddar’s Scratch Kitchen all reported positive sales for the quarter.
• Olive Garden maintained competitive pricing, with the Never Ending Pasta Bowl starting at $13.99 for the third consecutive year.

Brand-Specific Initiatives and Developments

• Olive Garden introduced Uber Direct delivery service in a pilot phase across 100 locations, with a full rollout expected by the end of Q3.
• Olive Garden launched an updated menu bringing back popular items like Steak Gorgonzola and Stuffed Chicken Marsala.
• LongHorn Steakhouse held its inaugural steak cutter summit to ensure the highest quality standards, resulting in an all-time high steak accuracy score.
• Cheddar’s Scratch Kitchen excelled with limited-time offers, achieving its best retention levels and topping the value score in Technomics’ survey.

Integration and Technological Advancements

• Successful closure of the Chuy’s acquisition with a focus on preserving culture and guest experience during integration.
• Upcoming roll-out of a next-generation point of sale system designed to enhance user interface and provide real-time analytics.
• This new system aims to improve operational efficiency and reduce training time, strengthening the company’s competitive edge.

Impact of Natural Disasters and Corporate Social Responsibility

• Operations were impacted by Hurricanes Helene and Milton, but only one restaurant remains closed.
• Darden supported affected employees significantly, with $1.1 million in grants distributed to over 5,600 team members.
• The company’s partnership with the American Red Cross includes an annual $500,000 grant to aid in disaster preparedness and recovery.

Future Outlook and Strategy

• The company remains committed to a back-to-basics philosophy focusing on food, service, and atmosphere.
• Leadership teams emphasize staying competitive in various market climates while preparing for the busy holiday season.

Raj Vennam says,

Quarterly Financial Performance

• Total sales for the second quarter were reported at $2.9 billion, representing a 6% increase from the previous year.
• Same restaurant sales grew by 2.4%, contributing significantly to the revenue increase.
• Acquisition of 103 Chuy’s restaurants on October 11 and the addition of 39 net new restaurants contributed to the sales increase.
• Adjusted diluted net earnings per share from continuing operations were $2.03, which is 10% higher than last year.
• Total adjusted EBITDA stood at $445 million.

Impact of Thanksgiving Shift

• The shift of Thanksgiving to the third quarter created a sales benefit for casual dining brands, but a headwind for fine dining brands in the second quarter.
• Thanksgiving shift contributed approximately 90 basis points to same restaurant sales but was offset by a negative 30 basis points impact from hurricanes Helene and Milton.

Segment Performance

• Olive Garden sales increased by 3.3% driven by 2% same-restaurant sales growth, outperforming the industry by 100 basis points.
• LongHorn reported a total sales increase of 10.4%, mostly due to 7.5% same restaurant sales growth, 650 basis points above the industry benchmark.
• Fine dining segment sales decreased by 3.8%, with a 200 basis points negative impact from the Thanksgiving shift and hurricanes.
• Other business segment sales rose by 12.9%, driven by the acquisition of Chuy’s and a 0.7% growth in same restaurant sales.

Cost and Margin Analysis

• Food and beverage expenses were 80 basis points lower compared to last year due to pricing leverage and slightly deflationary commodities.
• Restaurant labor costs decreased by 20 basis points, largely due to productivity improvements and sales leverage.
• Segment profit margins improved, with Olive Garden at 21.4% and LongHorn achieving a 18.9% margin.

Updated Fiscal 2025 Guidance

• Total sales are projected to be approximately $12.1 billion, with around $300 million coming from Chuy’s acquisition.
• Expected same restaurant sales growth is approximately 1.5%.
• Capital expenditures are anticipated to be about $650 million.
• Annual effective tax rate is forecasted to be around 12.5%.
• The adjusted diluted net earnings per share outlook remains unchanged at $9.40 to $9.60.

Metric	Value
Total Sales	$12.1 billion
Chuy’s Contribution	$300 million
New Restaurants	50 to 55
Capital Spending	$650 million
Annual Effective Tax Rate	12.5%

Q & A sessions,

Olive Garden Performance and Strategy

• Olive Garden’s gap to the industry is narrower than in previous years, yet still strong.
• Adopted a strategy focusing on same restaurant guest count growth and sales growth without significant discounting promotions.
• Extended the Never Ending Pasta Bowl promotion by four weeks, resulting in positive performance.
• Record preference levels were seen for refills and buy-ups during the promotion.

LongHorn’s Continued Success

• Reported a 7.5% comparable sales increase for the quarter.
• Investment in food quality and execution has improved guest satisfaction and retention.
• LongHorn’s focus on quality is yielding strong customer appreciation and loyalty.

Consumer Sentiment and Dining Trends

• Positive consumer sentiment as labor market optimism increases.
• Growth in visits from guests earning between $50,000 and $100,000 annually, benefiting casual dining brands.
• Fine dining sees reduced visits from consumers earning less than $150,000, potentially benefiting LongHorn from trade-downs.

Technology and Operational Enhancements

• Successful pilot of Uber delivery integration, contributing 1.5% to sales at 100 locations.
• Plan to complete Uber delivery rollout to all Olive Garden locations by the end of Q3, with marketing to follow.
• Next-generation point-of-sale systems being piloted to improve speed and service efficiency across brands.

Inflation Impact and Forecast

Category	First-Half Inflation	Expected Second-Half Inflation
Food Commodities	Flat	2% approximately
Labor	High 3%	Consistent high 3%
Other Costs	3%	3%

• Beef, chicken, and seafood expected to become inflationary in the second half.
• Overall inflation forecasted around 2% for second half, with commodities inflation in low single digits.

Throughout the report, there’s an emphasis on strategic adjustments and operational efficiencies that are projected to sustain growth and manage inflation pressures, likely influencing positive stock movement.