Q4 2024 Darden Restaurants Inc Earnings Call

Welcome to the Darden fiscal year 2020 for fourth quarter earnings call.

Operator: Welcome to the Darden Fiscal Year 2024 4th Quarter Earnings Call. Your lines have been placed on listen only until the question and answer session begins. To ask a question, you may press star one on your touchtone phone.

Unknown Executive: Welcome to the Darden Fiscal Year 2024, fourth quarter earnings call. Your lines have been placed on listen only until the question-and-answer session. To ask a question, you may press star one on your touchstone phone.

Speaker Change: Your lines have been placed on listen only until the question and answer session.

Speaker Change: To ask a question you May press star one on your Touchtone phone.

Unknown Executive: This conference is being recorded. If you have any objections, please disconnect at this time.

Operator: This conference is being recorded. If you have any objections, please disconnect at this time. I will now turn the call over to Ms. Courtney Aquila. Thank you. You may begin. Darryl

Speaker Change: This conference is being recorded if you have any objections. Please disconnect at this time.

Courtney Aquilla: I will now turn the call over to Miss Cordy Aquilla. Thank you, you may begin.

Speaker Change: I'll now turn the call over to MS. Courtney Aquila. Thank you you may begin.

Unknown Executive: Thank you, Darryl.

Courtney Aquila: Thank you Daryl and good morning, everyone and thank you for participating on today's call. Joining me today are Rick Cardenas, Darden's, President and CEO and Raj benign CFO.

Courtney Aquilla: Good morning, everyone, and thank you for participating on today's call. Joining me today are Rick Cardenas, Darden's president and CEO, and Rajesh Vennam, CFO.

Unknown Executive: Good morning, everyone, on today's call. Joining me today are Rick Cardenas, Darden's President and CEO, and Raj Vennam, CFO. As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which could cause actual results to differ materially from our expectations.

Speaker Change: Yeah.

Courtney Aquilla: As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release, which were distributed this morning and in its filings with the Securities and Exchange Commission.

Unknown Executive: Those risks are described in the company's press release distributed this morning and in its filings with the Securities and Exchange Commission. We are simultaneously broadcasting a presentation during this call, which is posted in the Investor Relations section of our website at darden.com. Today's discussion and presentation include non-GAAP measurements, and reconciliations of these measurements are included in the, Looking ahead, we plan to release fiscal 2025 first quarter earnings on Thursday, September 19th before the market opens, followed by a, During today's call, any reference to pre-COVID when discussing fourth quarter performance is a comparison to the fourth quarter of fiscal 2019.

Speaker Change: As a reminder comments made during this call will include forward looking statements as defined in the private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release, which was distributed this.

Speaker Change: Morning, and in its filings with the Securities and Exchange Commission.

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

Speaker Change: We are simultaneously broadcasting a presentation. During this call which is posted in the Investor Relations section of our website at Darden dotcom.

Speaker Change: Today's discussion and presentation include non-GAAP measurements and reconciliations of these measurements are included in the presentation.

Courtney Aquilla: Looking ahead, we plan to release fiscal 2025 first quarter earnings on Thursday, September 19, before the market opens, followed by a conference call. During today's call, any reference to pre-COVID when discussing fourth quarter performance is a comparison to the fourth quarter of fiscal 2019, and any reference to annual pre-COVID performance is the trailing 12 months ending February of fiscal year 2020. Additionally, all references to industry results during today's call refer to Black Box Intelligence's casual dining benchmark excluding Darden's casual dining brands. During our fiscal fourth quarter, industry same restaurant sales decreased 0.8 percent, and industry same restaurant guest count decreased 3.5 percent. During our full fiscal year 2024, industry same restaurant sales decreased 1.4 percent, and industry same restaurant guest counts decreased 4.7 percent.

Speaker Change: Looking ahead, we plan to release fiscal 'twenty 25 first quarter earnings on Thursday September 19th before the market opens followed by a conference call.

Speaker Change: During today's call any reference to pre Covid when discussing fourth quarter performance is a comparison to the fourth quarter of fiscal 2019, and any reference to annual pre Covid performance is at the trailing 12 months ending February of fiscal year, 2020.

Unknown Executive: And any reference to annual pre-COVID performance refers to the trailing 12 months ending February of fiscal year 2019. Additionally, all references to industry results during today's call refer to Black Box Intelligence's casual dining benchmark, excluding Darden's casual dining brand. During our fiscal fourth quarter, industry same restaurant sales decreased 0.8 percent and industry same restaurant guest counts decreased 3.5 percent, and during our full fiscal year 2024, industry same restaurant sales decreased 1.4% and industry same restaurant guest counts decreased 4.7.

Speaker Change: Additionally, all references to industry results during today's call refer to Black box intelligence is casual dining benchmark, excluding darden was casual dining brands during.

Speaker Change: During our fiscal fourth quarter industry same restaurant sales decreased <unk>, 8% and industry same restaurant guest counts decreased three 5%.

Speaker Change: And during our full fiscal year 'twenty 'twenty four industry same restaurant sales decreased one 4% and industry same restaurant guest counts decreased four 7%.

Courtney Aquilla: This morning, Rick will share some brief remarks recapping the fiscal year. Roger will provide details on the fourth quarter in full-year financial results and share our fiscal 2025 financial outlook, and then Rick will close with some final comments.

Unknown Executive: This morning, Rick will share some brief remarks recapping the fiscal year. Raj will provide details on the fourth quarter and full year financial results and share our fiscal 2025 financial outlook. And then Rick will close with some final comments. Now I will turn it...

Speaker Change: This morning, Rick will share some brief remarks recapping the fiscal year Raj will provide details on the fourth quarter and full year financial results and share our fiscal 2025 financial outlook and then Rick will close with some final comments now I will turn it over to Rick.

Rick Cardenas: Now I will turn it over to Rick. Thank you, Courtney. Before I begin, I would like to thank Kevin Calakack for his leadership of investor relations for close to 10 years. As many of you know, Kevin has moved to lead finance for Olive Garden. We are excited for his new opportunity and equally excited to have Courtney transition into leading Investor Relations. I'm confident you will find Courtney a worthy successor. Thank you, Kevin, and good morning, everyone. I'm proud of our ability to stay disciplined and control what we can control. This continued focus enabled us to have a strong year in what became an increasingly weaker consumer environment, especially for consumers below the median household income.

Ricardo Cardenas: Thank you, Courtney. Before I begin, I would like to thank Kevin Kalicak for his leadership of Investor Relations for close to 10 years. As many of you know, Kevin has moved to lead finance for all of us. We're excited for his new opportunity and equally excited to have Courtney transition into leading investor relations. I'm confident you will find Courtney a worthy successor.

Ricardo Cardenas: Thank you Courtney before I begin I would like to thank Kevin Kallikak for his leadership of Investor Relations for close to 10 years as many of you know Kevin isn't that moved to lead finance for Olive Garden. We're excited for is new opportunity and equally excited to have coordinate transition into leading investor relations I'm confident you will find Courtney a worthy successor. Thank you Kevin.

Ricardo Cardenas: Thank you, Kevin, and good morning. I'm proud of our ability to stay disciplined and control what we can control. This continued focus enabled us to have a strong year in what became an increasingly weaker consumer environment, especially for consumers below the median household income. For the full year, we grew total sales by 8.6% to $11.4 billion. This delivered adjusted to diluted net earnings per share of $8.88.

And good morning, everyone.

Ricardo Cardenas: I'm proud of our ability to stay disciplined and control what we can control.

Ricardo Cardenas: This continued focus.

Ricardo Cardenas: Enabled us to have a strong year and what became an increasingly weaker consumer environment, especially.

Ricardo Cardenas: Especially for consumers below the median household income.

Rick Cardenas: For the full year, we grew total sales by 8.6 percent to 11.4 billion dollars. Delivered adjusted, deluded net earnings per share of $8.88, an increase of 11 percent. exceeding the high end of the EPS range we provided at the beginning of the fiscal year, despite the challenging sales environment that emerged in the back half of the year. We opened 53 new restaurants in 24 states, eight of which were re-openings, and acquired and completed the integration of Ruth's Chris Steak House. Throughout the year, we strengthened and defended our four competitive advantages, and our restaurants remained focused on being brilliant with the basics.

Ricardo Cardenas: For the full year, we grew total sales by eight 6% to $11.4 billion.

Ricardo Cardenas: [noise] delivered adjusted diluted net earnings per share of $8.88, an increase of 11%.

Ricardo Cardenas: An increase of 11%. We are exceeding the high end of the EPS range we provided at the beginning of the fiscal year, despite the challenging sales environment that emerged in the back half of the year. We opened 53 new restaurants in 24 states, eight of which were reopened, and acquired and completed the integration of Ruth's Christie.

Ricardo Cardenas: Exceeding the high end of the EPS range, we provided at the beginning of the fiscal year. Despite the challenging sales environment that emerged in the back half of the year.

Ricardo Cardenas: We opened 53, new restaurants in 24 states eight of which were reopening and.

Ricardo Cardenas: And acquired and completed the integration of Ruth's Chris Steakhouse.

Ricardo Cardenas: Throughout the year, we strengthened and defended our four competitive advantages and our restaurants remain focused on being brilliant with the basics.

Rick Cardenas: This has enabled us to successfully navigate whatever comes our way, including the increased discounting and marketing pressure we've seen recently. And when evaluating our performance within the context of our long-term framework of 10 to 15% total shareholder return, as measured by EPS growth plus dividend yield, we delivered a TSR of 14.2% for fiscal 2024, which is near the high end of our target. And as I said, our teams are focused on controlling what they can control. One of the ways we do that is by having well-trained tenured team members. Our manager and team member retention is at or above pre-COVID levels, and our teams are benefiting from this staffing consistency, which helps create great guest experiences.

Ricardo Cardenas: Throughout the year, we've strengthened and defended our four competitive advantages, and our restaurants remain focused on being brilliant with them. This has enabled us to successfully navigate whatever comes our way, including the increased discounting and marketing pressure we've seen result in. And when evaluating our performance within the context of our long-term framework of 10 to 15 percent total shareholder return, as measured by EPS growth plus dividend yield, we delivered a TSR of 14.2 percent for fiscal 2024, which is near the high end of our target.

Ricardo Cardenas: This has enabled us to successfully navigate whatever comes our way, including the increased discounting and marketing pressure we've seen recently.

Ricardo Cardenas: Okay.

Ricardo Cardenas: And when evaluating our performance within the context of our long term framework of 10% to 15% total shareholder return as measured by EPS growth plus dividend yield we delivered a T. S. R. A 14.2% for fiscal 'twenty 'twenty, four which was near the high end of our target.

Ricardo Cardenas: And as I said, our teams are focused on controlling what they can control.

Ricardo Cardenas: And as I said, our teams are focused on controlling what they can. One of the ways we do that is by having well-trained, tenured managers and team members. Our manager and team member retention is at or above pre-COVID levels, and our teams are benefiting from this staffing consistency, which helps create great guest experiences. We also provide our teams with training programs that not only enhance their skill sets.

Ricardo Cardenas: One of the ways, we do that is by having well trained and tenured team members.

Ricardo Cardenas: Our manager and team member retention is at or above pre COVID-19 levels and our teams are benefiting from this staffing consistency, which helps create great guest experiences.

Rick Cardenas: We also provide our teams with training programs that not only enhance their skill sets, but build on the unique culture of our brands, further strengthening engagement. For example, Longhorn recently completed their seventh stake master series. Over the course of two months, thousands of culinary team members competed in this highly engaging grilling competition and training program for the right to be crowned champion and received the $15,000 grand prize. Congratulations to this year's champion, Jacob Montgomery, from the Longhorn State House in Cape Coral, Florida. Beyond providing strong labor and cost management, our operators are ensuring their teams remain focused on being grown with the basics, which is driving record guest satisfaction.

Ricardo Cardenas: We also provide our teams with training programs that not only enhance their skill sets, but build on the unique culture of our brands further strengthening engagement.

Ricardo Cardenas: Further strengthening engagement, Longhorn recently completed their 7th Steakmaster. Over the course of two months, thousands of culinary team members competed in this highly engaging grilling competition and training program for the right to be crowned champion and receive the $15,000 grant. Congratulations to this year's champions, Jacob Montgomery from the Longhorn Steakhouse in Cape Coral, Florida.

Ricardo Cardenas: For example, longhorn recently completed their seventh steak Masters series over the course of two months thousands of culinary team members competed in this highly engaging grilling competition and training program for the right to be crowned champion and received a $15000 Grand Prize.

Speaker Change: Congratulations to this year's champion Jacob Montgomery from the Longhorn Steakhouse in Cape Coral, Florida.

Speaker Change: Yeah.

Ricardo Cardenas: Beyond providing strong labor and cost management, our operators are ensuring their teams remain focused on being brilliant with the basics, which is driving record guest satisfaction. Several of our brands reached all new highs for overall guest satisfaction for the full fiscal year, including Olive Garden, Cheddar Scratch Kitchen, Yard House, Seasons 52, and Bahama Brewing. Additionally, within the casual dining segment of Technomics Industry Tracking Tool, Longhorn ended the fiscal year ranked number one for food, service, atmosphere, and overall perceptions, as well as brand fit and loyalty. Now, let me provide a final update on the integration of Ruth's Chris Day Care.

Speaker Change: Beyond providing strong labor and cost management, our operators are ensuring their teams remain focused on being broken with the basics, which is driving record guest satisfaction.

Rick Cardenas: Several of our brands reach all new time highs for overall guest satisfaction for the full fiscal year, including Olive Garden, Chatter Scratch Kitchen, Yardhouse, Seasons 52, and Bahama Breeze. Additionally, within the casual dining segment of Technomic's Industry Tracking Tool, LongHorn ended the fiscal year ranked number one for food, service, atmosphere, and overall perceptions, as well as brand fit and loyalty.

Speaker Change: Several of our brands reached all new time highs for overall guest satisfaction for the full fiscal year, including Olive Garden Cheddar scratch kitchen yard house seasons, 52, and Bahama Breeze.

Speaker Change: Additionally, within the casual dining segment of Technomic industry tracking tool Longhorn ended the fiscal year ranked number one for food service atmosphere, and overall perceptions as well as brand fit and loyalty.

Rick Cardenas: Now, let me provide a final update on the integration of Ruth's Chris Daycast. During the quarter, we completed the transition of all company-owned restaurants onto both our proprietary point of sale and labor management systems, which were the final major changes for the restaurants. We also acquired a single franchise location in Destin, Florida, during the quarter. Thanks to the hard work and collaboration between the Ruth's Chris team and our integration team, we closed on the acquisition and completed the integration during the same fiscal year. This included onboarding 5,000 new team members with no turnover among our nine Directors of Operations.

Speaker Change: Now let me provide a final update on the integration of Ruth's Chris Steakhouse.

Ricardo Cardenas: During the quarter, we completed the transition of all company-owned restaurants onto both our proprietary point-of-sale and labor management systems, which were the final major changes for the restaurant. We also acquired a single-franchise location in Destin, Florida. Thanks to the hard work and collaboration between the RootsChris team and our integration team, we closed on the acquisition and completed the integration during the same fiscal year. This included onboarding 5,000 new team members with no turnover among our nine directors of operations.

Speaker Change: During the quarter, we completed the transition of all company owned restaurants onto both our proprietary point of sale and Labor management systems, which were the final major changes for the restaurants.

Speaker Change: We also acquired a single franchise location in Destin, Florida during the quarter.

Speaker Change: Thanks to the hard work and collaboration between the Ruth's Chris team and our integration team we closed on the acquisition and completed the integration during the same fiscal year.

Speaker Change: This included Onboarding 5000, new team members with no turnover among our nine directors of operations.

Rick Cardenas: We also achieved the expected synergies, resulting in EPS accretion of 10 cents. Integrations are not easy and are particularly proud of the focus the restaurant teams maintained on the guest and team member experience throughout the process.

Ricardo Cardenas: We also achieved the expected synergies, resulting in EPS accretion of 10. Integration is not easy, and I'm particularly proud of the focus the restaurant teams maintained on the guest and team member experience throughout the year. Overall, I'm pleased with our performance for the fiscal year. We successfully navigated a challenging environment, and our proven strategy, combined with the strength of our business, ensures we are well positioned regardless of the operating environment. As we begin fiscal 2025, we remain focused on managing our business for the long term by executing our strategy that drives long-term growth and long-term shareholder value.

Speaker Change: We also achieved the expected synergies, resulting in an EPS accretion of 10 cents.

Speaker Change: Integration is not easy and I'm, particularly proud of the focus the restaurant teams maintained on the guest and team member experience throughout the process.

Speaker Change: Overall, I'm pleased with our performance for the fiscal year.

Rick Cardenas: Overall, I'm pleased with our performance for the fiscal year. We successfully navigated a challenging environment, and our proven strategy, combined with the strength of our business, ensures we are well positioned regardless of the operating. As we begin fiscal 2025, we remain focused on managing our business for the long term by executing our strategy that drives growth and long-term shareholder value. We have also taken steps to further position Darden and our brands for future growth and success through several leadership changes. We are fortunate to have a deep bench of talent, and these changes are designed to allow two of our most seasoned presidents to devote more time to developing our newest brand presidents.

Speaker Change: We successfully navigated a challenging environment and our proven strategy combined with the strength of our business ensures we are well positioned regardless of the operating environment.

Speaker Change: As we begin fiscal 2025, we remain focused on managing our business for the long term by executing our strategy that drives long drives growth and long term shareholder value.

Speaker Change: We have also taken steps to further position Darden and our brands for future growth and success through several leadership changes.

Ricardo Cardenas: We have also taken steps to further position Darden and our brands for future growth and success through several leadership changes. We are fortunate to have a deep bench of talent, and these changes are designed to allow two of our most seasoned presidents to devote more time to developing our newest brand president. After nine years of leading Longhorn Steakhouse to record performance, Todd Burrows has transitioned to a new role as President of Business Development.

We are fortunate to have a deep bench of talent and these changes are designed to allow two of our most seasoned president's to devote more time to developing our newest brand presidents.

Speaker Change: Yeah.

Rick Cardenas: After nine years of leading Longhorn Stay cast to record performance, Todd Burrows has transitioned to a new role as president of business development. Todd now has responsibility for our new restaurant development and facilities team, our international and franchising business, Enroute's Chris, our newest brand. Reporting to Todd, our Mark Braun, Senior Vice President of Development, Brad Smith, President of International and Franchising, and Rick Jenkins, President of Ruth's Chris, who previously led operations for the brand. Todd has well suited to lead this work. He brings an operator's perspective to new restaurant development and our growing franchise business.

Ricardo Cardenas: Todd now has responsibility for our new restaurant development and facilities team, our international and franchising business, and Ruth's Chris, our newest brand. Reporting to Todd are Mark Braun, Senior Vice President of Development, Brad Smith, President of International and Franchising, and Rick Jenkins, President of Ruth's Crisps. Having previously led operations for the company, Scott is well-suited to lead this work. He brings an operator's perspective to new restaurant development and our growing franchise. Additionally, Todd was with Longhorn when we acquired Rare Hospitality 17 years ago, and he will be a valuable leader and resource for Rick as the Ruth's Chris team continues to acclimate to Darden. The Dodgers replacement at Longhorn is Laura Williams.

Speaker Change: After nine years of leading longhorn steakhouse to record performance Todd Burrowes has transitioned to a new role as president of business development.

Ricardo Cardenas: Laura is well respected across Longhorn, having served as their finance leader for nine years. She will report to. We have also named three new brand presidents within our specialty restaurant group who will report directly to John Martin, who continues to serve as president of the Specialty Restaurant Group. Brian Clements, the former head of operations at Olive Garden, is now president of Yardhouse. Fallon Farrell, who led operations for Eddie V's, has been named president of the Capitol Grill and Eddie V's, and Mark Cooper, who led finance for the Specialty Restaurant Group, is now president of Seasons 52 and Bahama Breeze.

Speaker Change: Todd now has responsibility for our new restaurant development and facilities team are international and franchising business and Ruth's, Chris our newest brand <unk>.

Speaker Change: Reporting to Todd or Mark Brown, Senior Vice President of development, Brad Smith, President of International and franchising and Rick Jenkins President of Ruth's, Chris who previously led operations for the brand.

Speaker Change: That is well suited to lead this work he brings an operator's perspective to new restaurant development and our growing franchise business.

Rick Cardenas: Further, Todd was with Longhorn when we acquired Rare Hospitality 17 years ago, and he will be a valuable leader and resource for Rick, as a replacement at Longhorn is Laura Williamson. Laura is well respected across Longhorn, having served as their finance leader for nine years. She will report to me.

Speaker Change: Further Todd was with longhorn when we acquired warehouse fatalities 17 years ago, and he will be a valuable leader and resource for Rick is the Ruth's Chris team continues to acclimate to Darden.

Speaker Change: Gotcha replacement at Longhorn as Laura Williamson.

Speaker Change: Laura is well respected across longhorn having served as a finance leader for nine years. She will report to me.

Rick Cardenas: We also named three new brand presidents within our special restaurant group who will report directly to John Martin, who continues to serve as President of the special restaurant group. Brian Clements, the former head of operations at Olive Garden, is now president of Yardhouse. Ballon Farrell, who led operations for EDVs, has been named president of the Capitol Grill in EDVs, and Mark Cooper, who led finance for the Special Restaurant Group, is now president of Seasons 52 and Bahama Breeze. I'm excited about these changes and confident we have the right leaders in place to drive future growth.

We also named three new brand presidents within our specialty restaurant group, who will report directly to John Martin who continues to serve as president of the specialty restaurant group.

Speaker Change: Brian Clemens the former head of operations at Olive Garden is now president of yard House.

Speaker Change: Fallon Farrell, who led operations for Eddie vs has been named President of the capital grille, and Eddie V's and Mark Cooper, who led finance for the specialty restaurant group is now president of seasons, 52, and beyond and Bahama Breeze.

Speaker Change: Yeah.

Speaker Change: I'm excited about these changes and confident we have the right leaders in place to drive future growth.

Rajesh Vennam: I'm excited about these changes and confident we have the right leaders in place to drive future growth. I'm also proud that three of our seven brand presidents began their careers as hourly team members at our restaurants, and the average tenure of all of our brand presidents is 27. Now I'll turn it over to Rick. Thank you, Rick, and good morning, everyone.

Rick Cardenas: I'm also proud that three of our seven brand presidents began their careers as hourly team members at our restaurants, and the average tenure of all of our brand presidents is 27 years.

Speaker Change: I'm also proud that three of our seven brand presidents began their careers as hourly team members at our restaurants and the average tenure of all of our brand Presidents is 27 years now I'll turn it over to Russia.

Rajesh Vennam: Now I'll turn it over to Russia. Thank you, Rick.

Russia: Thank you Rick and good morning, everyone.

Rajesh Vennam: Good morning, everyone. Fiscal 2024 was another strong year for Garden, and I'm proud of the results our teams achieved. Despite sales results that were weaker than we anticipated, earnings exceeded our initial expectations for the year. Strong cost management by our teams and easing commodities and labor inflation drove this earnings outperformance. Now, looking at the fourth quarter, we generated $3 billion of total sales, 6.8% higher than last year, given by the addition of 80 company-owned root-scrissed take-house restaurants and 37 net-new restaurants from our legacy brands. Our same restaurant sales were flat for the quarter, or basing the industry by 80 basis points, and same restaurant guest counts exceeded the industry by 130 basis points.

Fiscal 2024 was another strong year for Darden and I'm proud of the results our team has achieved.

Rajesh Vennam: Fiscal 2024 was another strong year for Darden, and I am proud of the results our teams achieved. Despite sales results that were weaker than we anticipated, earnings exceeded our initial expectations for the year. Strong cost management by our teams and easing commodities and labor inflation drove these earnings outperformance. Now, looking at the fourth quarter, we generated $3 billion in total sales, 6.8% higher than last year. This was driven by the addition of 80 company-owned Ruth's Chris Steakhouse restaurants and 37 net new restaurants from our legacy brand. Our same restaurant sales were flat for the quarter, outpacing the industry by 80 basis points, and same restaurant guest counts exceeded the industry by 130 basis points.

Russia: Despite sales says I'll start were weaker than we anticipated and earnings exceeded our initial expectations for the year.

Russia: Strong cost management by our teams and easing commodities and labor inflation drove this earnings outperformance.

Russia: Now looking at the fourth quarter, we generated $3 billion of total sale $6, 8% higher than last year.

Russia: Given by the addition of 80 company owned Ruth's, Chris Steak House restaurants in 37, net new restaurants from our legacy brands.

Russia: Our same restaurant sales were flat for the quarter outpacing the industry by 80 basis points and same restaurant guest counts exceeded the industry by 130 basis points.

Rajesh Vennam: Throughout the quarter, our casual dining brands maintained their relative share of guest visits. Olive Garden guest count growth was near the top quartile of the industry, and Longhorn was at the top quartile of the industry.

Russia: Throughout the quarter, our casual dining brands maintain their share of guest visits.

Rajesh Vennam: Throughout the quarter, our casual dining brands maintained a relative share of guests. Olive Garden Gas Con Growth was near the top quartile of the industry, and Longhorn Steakhouse was at the top decile of the industry. This is impressive when you consider the increased levels of discounting and promotional activity by some competitors within casual dining. Our same restaurant guest count outperformance to the industry exceeded our same restaurant sales outperformance due to our lower levels of pricing relative to the industry this quarter. Adjusted diluted net earnings per share from continuing operations increased 2.7% to $2.65.

Russia: Olive garden's guest count growth was near the top quartile of the industry and longhorn steakhouse, what's at the top decile of the industry.

Rajesh Vennam: History. This is impressive when you consider the increased levels of discounting and promotional activity by some competitors within casual dining. Our same Russian guest count or performance to the industry exceeded our same Russian sales or performance due to our lower levels of pricing relative to the industry this quarter. Adjusted deluded nerd earnings per share from continuing operations increased 2.7% to $2.65. $253 million in adjusted EBITDA and returned $254 million to shareholders through $156 million in dividends and $97 million of share repurchases. Turning to the fourth quarter of PNL compared to last year, food and beverage expenses were 20 basis points better as commodities inflation was better than expected at approximately 2%.

Russia: This is impressive when you consider the increased levels of discounting and promotional activity by some competitors within casual dining.

Russia: Our same restaurant guest garner performance to the industry exceeded our same restaurant sales performance due to a lower level, so pricing led to the industry this quarter.

Russia: Adjusted diluted net earnings per share from continuing operations increased two 7% to $2.65.

Russia: We generated $523 million and adjusted EBITDA and returned $254 million to shareholders through $156 million in dividends.

Rajesh Vennam: We generated $523 million in adjusted EBITDA and returned $254 million to shareholders through $156 million in dividends and $97 million of share repurchases. Turning to the fourth quarter P&L, compared to last year, food and beverage expenses were 20 basis points better as commodities inflation was better than expected at approximately 2%. Seafood deflation this quarter helped partially offset mid-single-digit beef and produce inflation.

Russia: $97 million of share repurchases.

Russia: Turning to the fourth quarter P&L compared to last year food and beverage expenses were 20 basis points better commodities inflation was better than expected at approximately 2% seafood.

Rajesh Vennam: Seafood deflation this quarter helped partially offset mid-single legit beef and produce inflation. Russian labor was 10 basis points better, given by productivity improvement and favorability in other benefits, which more than offset the impact of pricing below labor inflation, which was approximately 4%. Restaurant expenses were 10 basis points better than last year, given by strong cost management and lower pre-opening expenses. Marketing expense was 1.3% of sales, consistent with our expectations and 20 basis points higher than last year. This all resulted in restaurant level EBITDA improving 20 basis points to 20.9%. Adjusted GNA expenses were 40 basis points lower, and the total expense was slightly favorable to our previous guidance.

Russia: Seafood deflation this quarter helped to partially offset mid single digit beef and produce inflation.

Russia: Restaurant Labor was 10 basis points, better driven by productivity improvements and favorability in other benefits, which more than offset the impact of pricing below labor inflation, which was approximately 4%.

Rajesh Vennam: Restaurant labor was 10 basis points better, driven by productivity improvements and favorableability and other benefits, which more than offset the impact of pricing below labor inflation, which was approximately 4%. Restaurant expenses were 10 basis points better than last year, driven by strong cost management and lower pre-opening expenses. Marketing expense was 1.3% of sales, consistent with our expectations and 20 basis points higher than last year. This all resulted in restaurant-level EBITDA improving 20 basis points to 20.9%. Adjusted G&A expenses were 40 basis points lower, and the total expense was slightly favorable to our previous guidance.

Russia: Yeah.

Russia: Restaurant expenses were 10 basis points better than last year, driven by strong cost management and lower Preopening expenses.

Russia: Marketing expense was one 3% of sales consistent with our expectations and 20 basis points higher than last year.

Russia: This all resulted in restaurant level, EBITDA, improving 20 basis points to 29%.

Russia: Adjusted G&A expenses were 40 basis points lower than the total expense was slightly favorable to our previous guidance. This was driven by ongoing synergies from the integration of Ruth's, Chris and favorable mark to market expense on our deferred compensation.

Rajesh Vennam: This was driven by ongoing synergies from the integration of root stress and favorable market to market expense on our different compensation. Due to the way we hedge market-to-market expense, this favorability is largely offset on the tax line. Interest expense increased 40 basis points due to the financing expenses related to the Root Stress acquisition. Our adjusted effective tax rate for the quarter was 13.4%, 40 basis points higher, given by the market hedge impact I referenced earlier. We generated $318 million in adjuster earnings from continuing operations, which was 10.8% of sales. Looking at our segments for the quarter, Olive Garden increased total sales 0.7%, given by a new restaurant growth partially offset by negative same restaurant sales of 1.5%.

Rajesh Vennam: This was driven by ongoing synergies from the integration of Ruth's Crest and favorable mark-to-market expense on our deferred compensation. However, due to the way we hedge mark-to-market expense, this favorable mark-to-market expense is largely offset by the tax credit. Interest Expense increased 40 basis points due to the financing expenses related to the Ruth's Chris Acquisition. Our adjusted effective tax rate for the quarter was 13.4%, 40 basis points higher, driven by the mark-to-market hedge impact I referenced earlier.

Russia: Due to the way we hedge.

Russia: Mark to market expense. This favorability was largely offset on the tax line.

Russia: Okay.

Russia: Interest our interest expense increased 40 basis points due to the financing expenses related to the Ruth's Chris acquisition.

Russia: Okay.

Russia: Our adjusted effective tax rate for the quarter was 13, 4% 40 basis points higher driven by the mark to market hedge impact I referenced earlier.

And we generated $318 million and adjusted earnings from continuing operations, which was 10, 8% of sales.

Rajesh Vennam: And we generated $318 million in adjusted earnings from continuing operations, which was 10.8% of sales. Looking at our segments for the quarter, Olive Garden increased total sales 0.7%, driven by new restaurant growth, partially offset by negative same restaurant sales of 1.5%. While Olive Garden's same restaurant sales were below the industry, same restaurant guest counts outperformed the industry benchmark by 60 basis points. This dynamic was due to our decision to minimize price. For the quarter, Olive Garden's pricing was approximately 1%.

Russia: Looking at our segments for the quarter Olive Garden increased total sales, 0.7% driven by new restaurant growth, partially offset by negative same restaurant sales of 1.5%.

Rajesh Vennam: While Olive Garden same restaurant sales were below the industry, same restaurant guest counts outperformed the industry benchmarked by 60 basis points. This dynamic was due to our decision to minimize pricing. For the quarter, Olive Garden pricing was approximately 1%. Olive Garden segment profit margin of 22.8% continues to be industry-leading. At Longhorn, total sales increased 7.2%, given by same restaurant sales growth of 4% and new restaurant growth. Longhorn same-Russian sales outperformed the industry by 480 basis points; segment profit margin of 19.1% was 50 basis points above last year. Strong cost management, including improved labor productivity, drove Longhorn's margin growth this quarter, as pricing was below inflation.

Russia: While olive garden same restaurant sales were below the industry same restaurant guest counts outperformed the industry benchmark by 60 basis points.

Russia: This dynamic was due to our decision to minimize pricing.

Russia: For the quarter Olive garden pricing was approximately 1%.

Rajesh Vennam: The Olive Garden segment profit margin of 22.8% continues to be industry leading. At Longhorn, total sales increased 7.2%, driven by same restaurant sales growth of 4% and new restaurant growth. Longhorn Same Restaurant Sales outperformed the industry by 480 basis points, and the segment profit margin of 19.1% was 50 basis points above last year. Strong cost management, including improved labor productivity, drove Longhorn's margin growth this quarter as pricing was below inflation. Total sales at the fine dining segment increased with the addition of Ruth's Crisp, a company-owned restaurant.

Russia: Olive Garden segment profit margin of 22.8% continues to be industry, leading.

Russia: At Longhorn total sales increased seven 2% driven by same restaurant sales growth of 4% and new restaurant growth.

Russia: Longhorn <unk> same restaurant sales outperformed the industry by 480 basis points.

Russia: Segment profit margin of 19, 1% was 50 basis points above last year.

Russia: Strong cost management, including improved labor productivity drove Longhorns margin growth this quarter as pricing was below inflation.

Rajesh Vennam: Total sales at the fine-dining segment increased with the addition of root-scrissed company-owned restaurants, and despite negative-same-russian sales at capital, rural, and edivis, the fine-dining segment's profit margin expanded in the fourth quarter, driven by improvement in our cost base. The other business segment sales increased with the addition of root-scrissed franchise and managed location revenue. This was partially offset by combined negative-same-Russian sales of 1.1% for the brands in the other segment. Segment profit margin of 17.4% was 160 basis points better than last year, driven by the sales leverage from the additional royalty revenue. As we look at our annual results for fiscal 2024, we had same-Russian sales growth of 1.6%, outperforming the industry in same-Russian sales and traffic by about 300 basis points, and this is on top of 500 basis points of outperformance in traffic last year.

Russia: Total sales in the fine dining segment increased with the addition of Ruth's Chris Company owned restaurants.

Rajesh Vennam: And despite negative same-restaurant sales at Capital Grille and Eddie V's, the fine dining segment's profit margin expanded in the fourth quarter, driven by an improvement in our cost-benefit ratio. The other business segment sales increased with the addition of Ruth's Chris Franchise and Managed Location Revenue. This was partially offset by combined negative CM restaurant sales of 1.1% for the brands in the other segment. Segment profit margin of 17.4% was 160 basis points better than last year, driven by the sales leverage from the additional royalty revenue.

Russia: And despite negative same restaurant sales at capital grille, and Eddie V's and the fine dining segment profit margin expanded in the fourth quarter driven by improvement in our cost base.

Russia: The other business segment sales increased with the addition of Ruth's, Chris franchised and managed location revenue.

This was partially offset by combined negative same restaurant sales of one 1% for the brands in the other segment.

Russia: Segment profit margin of 17, 4% was 160 basis points better than last year, driven by the sales leverage from the additional royalty revenue.

Russia: As we look at our annual results for fiscal 2024, we had same restaurant sales growth of one 6% outperforming the industry in same restaurant sales and traffic by about 300 basis points.

Rajesh Vennam: As we look at our annual results for Fiscal 2024, we had same-Russian sales growth of 1.6%, outperforming the industry in same-Russian sales and traffic by about 300 basis points. And this is on top of 500 basis points of outperformance in traffic last year. We delivered $1.8 billion in adjusted EBITDA from continuing operations. This is an increase of over 50% compared to five years ago. Additionally, we returned $1.1 billion to shareholders in the form of $628 million in dividends and $454 million in share repurchase.

Russia: And this is on top of 500 basis points of outperformance in traffic last year.

Russia: Yeah.

Rajesh Vennam: We delivered $1.8 billion in adjusted EBITDA from continuing operations. This is an increase of over 50% compared to five years ago. Additionally, we returned $1.1 billion to shareholders with $628 million in dividends and $454 million in share purchases. Looking at our fiscal 2024 full-year P&L, we had rational level EBITDA growth of 120 basis points, driven by strong cost management by our teams and pricing leverage. This favorability was partially offset by increased depreciation and amortization expense and the impairment expense related to eight permanent closures that occurred during the year. This resulted in operating income margin that was 50 basis points higher than last year.

Russia: We delivered $1 $8 billion in adjusted EBITDA from continuing operations.

Russia: This is an increase of over 50% compared to five years ago.

Russia: Additionally, we returned $1 $1 billion to shareholders with $628 million in dividends and $454 million in share repurchases.

Russia: Looking at.

Rajesh Vennam: Looking at our fiscal 2024 full-year P&L, we had restaurant-level EBITDA growth of 120 basis points, driven by strong cost management by our teams and pricing leverage. Disfavorability was partially offset by increased depreciation and amortization expense and the impairment expense related to eight permanent closures that occurred during the year.

Russia: Fiscal 2020 for full year P&L, we had restaurant level EBITDA growth of 120 basis points.

Russia: Driven by strong cost management by our teams and pricing leverage.

Russia: This favorability was partially offset by increased depreciation and amortization expense and the impairment expenses related to eight parmer and closures that occurred during the year.

Russia: This resulted in operating income margin dollars 50 basis points higher than last year.

Rajesh Vennam: This resulted in an operating income margin that was 50 basis points higher than last month. Additionally, financing expenses primarily related to the Ruth Chris acquisition drove adjusted interest expense 40 basis points higher than last year. This all resulted in adjusted earnings from continuing operations of 9.4%, flat to last. Looking at our performance since 2019 relative to our long-term framework, we generated annualized eat growth of 8% and cash returns of 3.7%. Culminating in total shareholder returns of 11.7% as measured by EPS growth plus dividend deal.

Russia: Additional financing expenses, primarily related to the Ruth's Chris acquisition drove adjusted interest expense 40 basis points higher than last year.

Rajesh Vennam: Additional financing expenses primarily related to the root-script acquisition drove adjusted interest expense 40 basis points higher than last year. This all resulted in adjusted earnings from continuing operations of 9.4% flat to last year. Looking at our performance since 2019, relative to our long-term framework, we generated annualized each growth of 8% and cash returns of 3.7%, culminating in total shareholder returns of 11.7% as measured by EPS growth plus dividend deals. This is well within our targeted range despite the issuance of 9 million shares of common stock in fiscal 2020 and other business disruptions from COVID. Our strong operating model generates significant and durable cash flows.

Russia: This all resulted in adjusted earnings from continuing operations of nine 4% flat to last year.

Russia: Okay.

Russia: Looking at our performance in 2019 relative to our long term framework, we generated annualized eat growth of 8% and cash returns of three 7%.

Russia: Culminating in total shareholder returns of 11, 7% as measured by EPS growth plus dividend deal.

Russia: This is well within our targeted range. Despite the issuance of 9 million shares of common stock in fiscal 2020, and although the business disruptions from Covid.

Rajesh Vennam: This is well within our targeted range, despite the issuance of 9 million shares of common stock in Fiscal 2020 and other business disruptions from COVID. A strong operating model generates significant and durable cash flow. Since 2019, we have delivered 9% annualized adjusted EBITDA growth. Our balance sheet at the end of fiscal 2024 is well positioned with adjusted debt to EBITDA at 1.9 times. This is below our targeted range of 2 to 2.5 times, even with the additional debt related to Ruth's acquisition.

Our strong operating model generate significant and durable cash flows.

Rajesh Vennam: Since 2019, we have delivered 9% annualized adjusted EBITDA growth. Our balance sheet at the end of fiscal 2024 is well-positioned with adjusted debt to EBITDA at 1.9 times. This is below our targeted range of 2 to 2.5 times, even with the additional debt related to root-scrits acquisition. Now, turning to our financial outlook for fiscal 2025, we expect total sales of 11.8 billion to 11.9 billion dollars, given by the same Russian sales growth of 1 to 2 percent and 45 to 50 gross new restaurants. Capital spending of 550 million to 600 million dollars, total inflation of approximately 3 percent, which includes commodities inflation of approximately 2 percent, and labor inflation of approximately 4 percent.

Russia: Since 2000 since 2019, we have delivered 9% annualized adjusted EBITDA growth.

Russia: Our balance sheet at the end of fiscal 2024 is well positioned with an adjusted debt to EBITDAR at one nine times.

Russia: This is below our targeted range of two to two five times, even with the additional debt related to Ruth's Chris acquisition.

Russia: Okay.

Rajesh Vennam: Now turning to our financial outlook for fiscal 2025, we expect total sales of $11.8 billion to $11.9 billion. Driven by the same Russian sales growth of 1-2% and 45-50 gross new restaurants, plus capital spending of $550 million to $600 million. Total inflation of approximately 3%, which includes commodities inflation of approximately 2% and labor inflation of approximately 4%. An annual effective tax rate of approximately 13% and approximately 119 million diluted average shares outstanding for the year.

Russia: Now turning to our financial outlook for fiscal 2025.

We expect total sales of 11.8 billion to $11 $9 billion, driven by same restaurant sales growth of 1% to 2% and 45 to 50 gross new restaurants.

Capital spending of $550 million to $600 million.

Russia: Total inflation of approximately 3%, which includes commodities inflation of approximately 2% and labor inflation of approximately 4%.

Rajesh Vennam: An annual effective tax rate of approximately 13 percent, and approximately 119 million diluted average shares outstanding for the year. All of this results in deluded net earnings per share between $9.40 and $9.60.

Russia: And annual effective tax rate of approximately 13%.

Russia: And approximately 119 million diluted average shares outstanding for the year.

Ricardo Cardenas: All of this results in diluted net earnings per share between $9.40 and $9.60. Finally, our board approved a 7% increase to our regular quarterly dividend to $1.40 per share, implying an annual dividend of $5.60. And with that, I'll turn it back to Rick.

Russia: All of this resulted in diluted net earnings per share between $9 40, and $9 60.

Russia: Yeah.

Rajesh Vennam: Finally, our board approved a 7 percent increase to a regular quarterly dividend to $1.40 per share, implying an annual dividend of $5.60.

Russia: Finally, our board approved a 7% increased our regular quarterly dividend to $1 40 per share implying an annual dividend of $5 60.

Rick Cardenas: And with that, I'll turn it back to Rick. Thanks, Raj. All of us at Darden continue to work together in pursuit of our higher purpose: the nourishing delight of everyone we serve, our guests, team members, and communities. During the year, we had the privilege of serving 420 million guests, more than 1 million per day, providing great food and drinks with the 10 of service in an engaging atmosphere. We also promoted 1,100 hourly team members into our manager and training program, and promoted nearly 300 managers to general manager or managing partner positions. And we continue to invest in our team members with programs like Fast Fluency, which provides the opportunity to learn English for free.

Speaker Change: And with that I'll turn it back to Rick.

Ricardo Cardenas: Thanks Raj. All of us at Darden continue to work together in pursuit of our higher purpose to nourish and delight everyone we serve, guests, team members, and During the year, we had the privilege of serving 420 million guests, more than 1 million per day, providing great food and drinks with attentive service in an engaging atmosphere. We also promoted 1,100 hourly team members into our manager and training program and promoted nearly 300 managers to general manager or managing partner.

Rick: Thanks Raj all of US at Garden continue to work together in pursuit of our higher purpose to nourish and delight, everyone. We serve our guests team members and communities.

Rick: During the year, we had the privilege of serving 420 million guests more than 1 million per day, providing great food and drinks with attentive service and an engaging atmosphere.

Rick: We also promoted 1100 hourly team members into our manager in training program and promoted nearly 300 managers to general manager or managing partner positions.

Rick: And we continue to invest in our team members with programs like fast fluency, which provides the opportunity to learn English for free.

Operator: And we continue to invest in our team members with programs like Fast Fluency, which provides the opportunity to learn English for free, and our next core scholarship program that, through the Darden Foundation, has awarded 200 scholarships worth $3,000 each over the past two years to children of our employees. We also remain committed to nourishing and delighting the communities we serve through our ongoing efforts to fight hunger. As part of our Harvest Food Donation Program, our restaurants donated 4.5 million meals to local food banks in fiscal 2024.

Rick Cardenas: And our next course scholarship program that, through the Darden Foundation, has awarded 200 scholarships for $3,000 each over the past two years to children of our team members. We also remain committed to nourishing, delighting the communities we serve through our ongoing efforts to fight hunger. As part of our harvest food donation program, our restaurants donated 4.5 million meals to local food banks in fiscal 2024.

Rick: And our next course scholarship program that through the Darden Foundation has awarded 200 scholarships were $3000 each over the past two years to children of our team members.

Rick: Okay.

We also remain committed to nourishing the lighting the communities we serve through our ongoing efforts to fight hunger.

Rick: As part of our harvest food donation program, our restaurants donated $4 5 million meals to local food banks in fiscal 2024.

Rick Cardenas: We also continued our successful partnership with Feeding America with another $2 million donation from the Darden Foundation that helped provide mobile food trucks to 10 more Feeding America food banks, bringing the total to 45 trucks provided over the last 4 years. To wrap up, I want to thank our team members in our restaurant and our support center for their outstanding efforts throughout the year. Their disciplined approach in executing our strategy is what enables us to succeed, regardless of the operating environment.

Rick: We also continued our successful partnership with feeding America with another $2 million donation from the Darden Foundation that help provide mobile food trucks to 10 more feeding America food banks.

Bringing the total to 45 trucks provided provided over the last four years.

Rick: To wrap up I want to thank our team members in our restaurants and our support center for their outstanding efforts throughout the year their disciplined approach in executing our strategy is what enables us to succeed regardless of the operating environment now I will take your questions.

Operator: We also continued our successful partnership with Feeding America with another $2 million donation from the Darden Foundation that helped provide mobile food trucks to 10 more feeding Americans, bringing the total to 45 trucks provided over the last four years. To wrap up, I want to thank our team members in our restaurants and our support center for their outstanding efforts throughout the year. Their disciplined approach to executing our strategy is what enables us to succeed regardless of the operating conditions. Now, I will take your questions.

Unknown Executive: Now, I will take your questions. Thank you.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Unknown Executive: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. We ask that you please limit yourself to one question and one follow-up. One moment, please, while we poll for your... Our first questions come from the line of Brian Harbour with Morgan Stanley. Please proceed with your questions. Yeah, thank you.

Speaker Change: Press Star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, we ask that you. Please limit yourself to one question and one follow up question. One moment. Please while we poll for your questions.

Unknown Executive: We ask that you please limit yourself to one question and one follow. One moment please, while we poll for your questions.

Brian Harbour: Our first questions come from the line of Brian Harbour with Morgan Stanley. Please proceed with your questions. Yeah, thank you. Good morning, guys. Maybe first just on your sales outlook for the year. Could you comment on how you see kind of the different brands speeding into that? And you obviously have very different kind of, you know, comparisons as we think about the start of the year versus the end of the year. What presumably there's kind of some pickup in Olive Garden. How do you think about the drivers of that?

Speaker Change: Our first questions come from the line of Brian Harper with Morgan Stanley. Please proceed with your questions.

Brian Harper: Yeah. Thank you good morning, guys.

Rajesh Vennam: Good morning, guys. First, your sales outlook for the year. Could you comment on, How do you see kind of the..., www.youtube.com Presumably there's kind of some pick-up in Olive Garden. What do you think about that? Hey, Brian, this is Raj.

Brian Harper: Maybe first just on your sales outlook for the year could you comment on.

Brian Harper: How do you see kind of the.

Brian Harper: The different brands feeding into that and you're obviously, a very different kind of comparisons as we think about the start of the year versus the end of the year.

Brian Harper: Hum.

Speaker Change: There's kind of some pick up in an olive garden, how do you think about the drivers of that.

Rajesh Vennam: Hey, Brian. This is Raj. Good morning. So let's just start with the guidance at a high level from a sales outlook, right? Before we get into the brand level. So when we take a look at the upcoming year, we look at, you know, the information that's out there and where the macro is expected to be. And as you all know, most economies are expecting weakening GDP growth. So that's taken into consideration. Then we're also taking into consideration what we're cycling to, right? We started to see a little bit more weakness in the back half of this fiscal year.

Raj: Hey, Bryan this is Raj good morning.

Rajesh Vennam: Good morning. So let's just start with the guidance at a high level from a sales outlook, right? Before we get into the brand level, so when we take a look at the upcoming year, we look at, you know, the information that's out there and where the macro is expected to be, and as you all know, most economists are expecting... We are also taking into consideration what we are cycling through. We started to see a little bit more weakness in the back half of this fiscal year.

Speaker Change: So, let's just start with the guidance at a high level from a sales outlook right, we talked before we get into the brand level.

Speaker Change: So when we take a look at the upcoming year, we look at the information that's out there and where the macro is expected to be and as you. All know most economists are expecting.

Speaker Change: GDP growth.

Speaker Change: So that's taken into consideration and then we're also taking into consideration we're cycling through right. We started to see a little bit more weakness in the back half of this fiscal year. So we're taking that into consideration as we look at next year.

Rajesh Vennam: So we're taking that into consideration as we look at next year. So when we look at, you know, how we built this estimate and guidance, we are, we're expecting underlying traffic tends to gradually improve throughout the year. And so that's really how we built it. I don't want to get into the exact details on the brands, but at a blended level, we're thinking, one to 2% same Russian sales growth for the fiscal year and, as I said, gradual improvement through the year and underlying trends.

Rajesh Vennam: So we are taking that into consideration as we look at next year. And when we look at, you know, how we built this estimate and guidance, we expect underlying traffic trends to gradually improve throughout the year. And so that's really how we built it. I don't want to get into the exact details on the brands, but at a blended level, we're thinking one to two percent same-store Russian sales growth for the full year.

Speaker Change: So when we look at how.

Speaker Change: How we built this estimate and <unk>.

Speaker Change: We are we're expect underlying traffic tends to gradually improve throughout the year and and so that's really how we built that I don't want to get into the exact details on the brands, but at a blended level, we're thinking 1% to 2% same restaurant sales growth.

Speaker Change: For the fiscal year for the full year and and as I said gradual improvement through the year and the underlying trends are.

Rajesh Vennam: And as I said, gradual improvement through the year on the underlying trends. And then there's just one call out, which is that Thanksgiving shifts out of Q2 into Q3. So Q2 print might look better than the underlying trends, and Q3 will be the opposite. So that's typically about somewhere around 80 to 100 basis points impact on sales in the quarter, positive for Q2, and negative for Q3. And so, you know, all that said, you know, in this current environment, there's more. And so, that's kind of where we are. Okay, thank you. And maybe could you just comment on your pricing thoughts at this point in time as, timing is there, perhaps. You know, some that you

Rajesh Vennam: And then there's just one call out: Thanksgiving shifts out of Q2 into Q3. So Q2 print might look better than the underlying trends, and Q3 will be the opposite. So that's typically about somewhere around 80 to 100 basis points impact on sales in the quarter, positive for Q2, negative for Q3. And so you know, all that said, you know, in this current environment, there's more variability around our sales guide, but we have higher levels of confidence in our earnings outlook. And so that's kind of where we are.

Speaker Change: And then Theres just one callout is Thanksgiving shifts out of Q2 into Q3 so.

Speaker Change: Q2 print might look better than the the underlying trends on Q through Q3 will be the opposite so that's typically about somewhere around 80 to 100 basis points impact on sales in the quarter positive for Q2 at negative for Q3.

Speaker Change: And so.

Speaker Change: All that said you know in this current environment Theres more variability at R&R sales guide, but we have higher levels of confidence in our earnings outlook and and so that's kind of where we are.

Brian Harbour: Okay. Thank you.

Speaker Change: Okay. Thank you and maybe could you just comment on your <unk>.

Brian Harbour: And maybe could you just come into your pricing thoughts at this point within that? Is there anything we should keep in mind, you know, with respect to timing? Is there perhaps some that you would delay in an effort to keep it more modest? Yeah, Brian, the good news on pricing is we've actually kept pricing very modest over the last five years, right? So we do expect pricing for this year to be more in line with inflation. So in that two and a half to three percent range, probably. But as we think about how that's going to be spread, we expect it to be more consistent quarter to quarter out.

Speaker Change: Reising thoughts at this point within that is there anything we should keep in mind.

Speaker Change: With respect to timing is there perhaps.

Speaker Change: Some that you would a delay in an effort to keep it more modest at the start of the year.

Rajesh Vennam: Delay in enough, Yeah, Brian, the good news on pricing is we've actually kept pricing very modest over the last five years, right? So we do expect pricing for this year to be more in line with inflation. So in that two and a half to 3% range, probably.

Brian: Yeah, Brian the good news on pricing is we've actually kept pricing very modest over the last five years right. So we do expect pricing for this year to be more in line with inflation. So in that 2.5% to 3% range, probably but as we think about how that's going to be spread we expect it to be more.

Rajesh Vennam: But as we think about how that's going to be spread, we expect it to be more consistent quarter to quarter. Now there may be a 10, 20 basis point movement between quarters. But if you look at the last five years, we've underpriced a lot, and that gives us some flexibility, and we've talked about that before. So we've only priced about 20 percent over the last five years, compared to where the overall CPI is, which I think was close to 23 on the same five-year basis, and then full services at 28, and underpriced groceries as well.

Brian: A more consistent quarter to quarter I know there may be a 10 20 basis points movement between quarters, but if you look at over the last five years. We wanted are priced a lot and that gives us some flexibility and we've talked about that before so we won't they are priced about 20% over the last five years compared to where the overall <unk>.

Brian Harbour: Now there may be a 10, 20 basis points movement between quarters. But if you look at over the last five years, we wonder price a lot, and that gives us some flexibility, and we've talked about that before. So we've only priced about 20% over the last five years compared to where the overall CPI is, which I think was close to 23 on the same five-year basis and then full services at 28. So and under price grocery as well. So we feel like we've done a lot of work on keeping prices low, and we're going to continue to do that.

Brian: <unk>, which I think it was close to 23 on the same five year basis, and then full services at 28, so and enterprise grocery as well. So we feel like we've done a lot of work on keeping prices law and we're going to continue to do that and as you saw that in the fourth quarter. Two we talked about olive garden closer to 1% pricing in the fourth.

Rajesh Vennam: So we feel like we've done a lot of work on keeping prices low, and we're going to continue to do that. Thank you. Our next question comes from the line of Lauren Silberman with Deutsche Bank. Please proceed with your question. Great, thank you.

Brian Harbour: And as you saw that in the fourth quarter, too, we talked about all of gotten closer to 1% pricing in the fourth quarter.

Unknown Executive: Water. That was good.

Brian: <unk>.

Sounds good thank you.

Brian: Yeah.

Speaker Change: Thank you our next questions come from the line of Lauren Silberman with Deutsche Bank. Please proceed with your questions.

Lauren Silberman: Our next questions come from the line of Laura and Silverman with Deutsche Bank. Please proceed with your questions. Great. Thank you. Just first on your approach to marketing.

Ricardo Cardenas: Just first on your approach to marketing. So all garden comps have, we go to the past couple of quarters, some share losses, quarter understand on traffic. Yeah, Lauren, in regards to marketing, we've said in the past that we probably take it up a couple of tenths a year. And that's probably what we'll do in fiscal 25, but we're going to continue to focus on our marketing efforts for our filters, which we've talked about many times. And we're not going to do things to buy sales, even with the increasing discounting our competitors are doing.

Lauren Danielle Silberman: Great. Thank you just first on your approach to marketing so olive garden comps have been weak over the past couple of quarters. Some share losses this quarter I understand on a traffic basis.

Lauren Silberman: So all garden comps have been we go to the past couple quarters, some share losses quarter, understand on a traffic basis, you outperformed. But as you think about your approach to marketing and promos, how did that influence your decision to increase marketing, and what are you expecting for fiscal 25? Yeah, Lauren, in regards to marketing, we've said in the past that we've probably taken up a couple of tents a year, and that's probably what we'll do in fiscal 25. But we're going to continue to focus on our marketing efforts on our filters, which we've talked about many times.

Speaker Change: But as you think about your approach to marketing and promo is how does that influence your decision to increase marketing and what are you expecting for fiscal 'twenty five.

Speaker Change: Okay.

Lauren Danielle Silberman: Yeah, Lauren I'm in regards to marketing we've said in the past that we'd probably tick it up a couple of tenths a year and that's probably what we'll do in fiscal 'twenty five, but we're going to continue to focusing our marketing efforts on our filters, which we've talked about many times and we're not going to do things to buy sales.

Lauren Silberman: And we're not going to do things to buy sales, even with the increasing discounting our competitors are doing. You know, our best way to drive sales is our focus on our back-to-basics operating philosophy and our guests telling others what a great value they have when they come to our restaurants. And just remember, we do have levers to pull. We do have more marketing to pull if we want to, but our focus is on profitable sales growth. Great. Thank you for that.

Lauren Danielle Silberman: Even with the increasing discounting our competitors are doing you.

Lauren Danielle Silberman: You know, our our best way to drive sales as our focus on our back to basics operating philosophy.

Ricardo Cardenas: You know, our best way to drive sales is our focus on a back-to-basics operating philosophy and our guests telling others what a great value they have when they come to our restaurants. And just remember, we do have levers to pull, we do have more marketing to pull if we want to. But our focus is on profitable sales. Great, thank you for that.

And in our guests telling others, what a great value they have when they come to our restaurants and just remember we do have levers to pull we do have more marketing to pull if we want to but our focus is on profitable sales growth.

Speaker Change: Great. Thank you for that and just a follow up on the consumer environment is this mostly related to the low income consumer cause what are you seeing across the Midland.

Ricardo Cardenas: Just a follow-up on the consumer environment. Is this mostly related to the low income consumer? Just what are you seeing across the middle income and high income across the breadth of your brands? Thanks so much.

Lauren Silberman: Follow up on the consumer environment. Is this mostly related to the low-income consumer because what are you seeing across the middle income, high income, across the breadth of your brands? Thanks so much. Yeah, Lauren. It is mostly the income at the consumer below the median household income, which is about $75,000. You know, consumers are generally concerned about inflation, and they're becoming more concerned about the job market. And what we're seeing are, you know, some behavior shifts that we had already started to see. So for Q4, transactions from households below with incomes below the median were lower than last year.

Speaker Change: Across the breadth of your brands. Thanks, so much.

Ricardo Cardenas: Yeah, Lauren, it is mostly the income of consumers below the median household income, which is about $75,000. Consumers are generally concerned about inflation, and they're becoming more concerned about the job market. And what we're seeing are, you know, some behavioral shifts that we had already started to see. So for Q4, transactions from households with incomes below the median were lower than last year.

Lauren: Yeah Lauren.

It is mostly the income at the consumer below the median household income which is about $75000. You know consumers are generally concerned about inflation and they're becoming more concerned about the job market and what we're seeing are some behavior shifts that we either had already started to see so for Q4 transactions from.

Lauren: It's below with incomes below the median where both were lower than last year, So and that's more pronounced with consumers below $50000 of income.

Lauren Silberman: So, and that's more pronounced with consumers below $50,000 in income. And these impacts were even greater in our fine dining brand. So that's why you saw fine dining had a little bit more negative comp than others. But at the same time, our guests aren't managing their check like we've seen in prior quarters. And so, you know, we continue to tell you what this means for our brands. Operators that deliver their brand promise and value will continue to appeal to consumers despite economic challenges. And that's what we're focused on doing. We're focusing on giving the consumers that are coming to our restaurants and spending their hard-earned money a great value and a great experience, and have them tell others to come back.

Ricardo Cardenas: So and that's more pronounced, with consumers below $50,000. And these impacts were even greater in our fine dining brand. So that's why you saw fine dining had a little bit more negative comp than other brands. But at the same time, our guests aren't managing their check like we've seen in prior quarters.

Lauren: And these impacts were even greater in our fine dining brands. So that's why you saw a fine dining had a little bit more more negative comp than others.

But at the same time, our guests arent managing their check like we've seen in prior quarters.

Ricardo Cardenas: And so, you know, we continue to tell you what this means for our brands. Operators that deliver their brand promise and value will continue to appeal to consumers despite economic challenges, and that's what we're focused on doing. We're focusing on giving the consumers that are coming to our restaurants and spending their hard-earned money a great value and a great experience, and have them tell others to come back. Thank you very much.

Lauren: And so you know we continue to tell you what this means for our brands our operators to deliver their brand promise and value will continue to appeal to consumers. Despite economic challenges and that's what we're focused on doing we're focusing on giving the consumers that are coming to our restaurants.

Lauren: And spending their hard earned money, a great value and a great experience and have them tell others to come back.

Unknown Executive: Thank you very much. Thank you.

Speaker Change: Thank you very much.

Speaker Change: Thank you our next questions come from the line of Eric Gonzalez with Keybanc capital markets. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of Eric Gonzalez with KeyBank Capital Markets. Please proceed with your question. Hi, thanks for the question.

Eric Gonzalez: Our next questions come from the line of Eric Gonzalez with KeyBank Capital Markets. Please proceed with your questions. Hi, thanks for the question. I think I just heard you say that your guests aren't managing the check.

Eric Andrew Gonzalez: Hi, Thanks for the question I think I just heard you say that.

Ricardo Cardenas: I think I just heard you say that your guests aren't managing the check the way you've seen in prior quarters. Can you maybe comment on why you think that's the case? Hey, Eric.

Eric Andrew Gonzalez: Your guests arent managing the checks to what you've seen in prior quarters can you maybe comment on why you think that's okay.

Eric Gonzalez: The way you've seen in prior quarters, can you maybe comment on why you think that's the case? Hey, Eric. So yes, we did. So if you think back to what we said earlier in the fiscal year, we were seeing a big negative mix on the check. And we talked about that, especially both at casual brands and fine dining. And last quarter, we said we started to see some moderation. And as we look at this year, this quarter, if we look at Olive Garden and Longhorn, basically the mix was flat. So basically there was no negative mix at all, which is a significant improvement.

Speaker Change: Hey, Eric So yes, we did so if you if you if you think back to what we said earlier in the fiscal year, we were seeing negative big negative mix on the on the check and we talked about that especially a boarder casual brands I'm fine dining and last quarter. We said we started to see some moderation.

Ricardo Cardenas: So yes, we did. So if you think back to what we said earlier in the fiscal year, we were seeing a negative, you know, big negative mix on the check. And we talked about that, especially both the casual brands and fine dining. And last quarter, we said we started to see some moderation. And as we look at this year, this quarter, if we look at Olive Garden and Longhorn, basically, the mix was flat. So basically, there was no negative mix at all, which is a significant improvement.

Speaker Change: And as we look at this year this quarter.

Look at Olive Garden, Longhorn basically the mix was flat. So basically there was no negative mix at all which is a significant improvement.

Eric Gonzalez: And then when you look at fine dining, you know, we saw some moderation in Q3, and that continues to moderate into Q4. I think we're now down into the 80, 90 basis points range in the negative mix versus the 200 or so that we were seeing a couple quarters ago. So we're just starting to see the ones that come to us are not managing the check as much as they used to. Do.

Ricardo Cardenas: And then when you look at fine dining, you know, we saw some moderation in Q3 and that continues to moderate into Q4. I think we're now down into the 80, 90 basis points range in the negative mix versus the 200 or so that we were seeing a couple quarters ago. Okay, and then maybe on the guidance, you know, there was a fairly wide gap in comp performance between Hoggard and Longhorn this quarter, and you had that one to 2% guidance for next year.

Speaker Change: And then when you look at fine dining.

Speaker Change: You know we were we saw some moderation in Q3 and that continues to moderate into Q4, I think we're now down into the 80 90 basis points range in the negative mix versus the 200 or so that we were seeing a couple of quarters ago. So we're just starting to see that the ones that come to us are not managing the check as much as they used to.

Speaker Change: Yeah.

Eric Gonzalez: Okay, and then just maybe on the guidance, you know, there was a fairly wide gap in performance between Olive Garden and LongHorn this quarter. You know, you had that 1 to 2% guidance for next year. If you're not willing to break it out by brand in terms of guidance, then maybe you can comment on whether you'd expect that performance gap to widen or stay as wide as it is, or do you think it's going to converge, and that's why 20 plus. Eric, the way we're looking at it is most brands are going to be within the range we provided.

Ricardo Cardenas: If you're not willing to break it out by brand in terms of guidance, but maybe you can comment on whether you expect that performance gap to widen or stay as wide as it is, or do you think it's going to converge in FY20?

Speaker Change: And then just maybe on the guidance there was a fairly wide gap in comp performance between Olive garden Longhorn. This quarter, you had that 1% 2% guidance for next year, if you're not willing to break it out by brand in terms of the guidance, but maybe you can comment on whether you would expect that performance gap to widen or stays as wide as it is or do you think it's gonna conversion in FY 'twenty.

Speaker Change: Okay.

Eric Andrew Gonzalez: Eric the way, we're looking at as most brands are going to be within the range. We provided we're providing a 1% to 2% I can't I'm not going to get into the comments about the range between olive garden, Longhorn specifically, but when we look at it wanted to we expect most brands to be in that range, and obviously olive garden being over 50% of the ports.

Rajesh Vennam: Eric, the way we're looking at it is that most brands are going to be within the range we provided. We are providing 1 to 2 percent. I'm not going to get into the comments about the range between Olive Garden and Longhorn specifically, but when we look at 1 to 2, we expect most brands to be in that range, and obviously, Olive Garden being over 50 percent of the portfolio, they weigh the Darden average too.

Eric Gonzalez: We are providing a 1 to 2%. I'm not going to get into the comments about the range between Olive Garden and Longhorn specifically, but when we look at 1 to 2, we expect most brands to be in that range, and obviously Olive Garden being over 50% of the portfolio, they'll have the way that Darden average too. And if you look back at last year, fiscal 24, we delivered 1.6% in same Russian sales for the Darden, and Olive Garden was right on top at 1.6%. So, you know, we'll see how this plays out, but we don't want to comment on Olive Garden versus LongHorn specifically.

Eric Andrew Gonzalez: Folio they'll have that they that they made that darden average too and if you look back at last year fiscal 'twenty four.

Rajesh Vennam: And if you look back at last year, fiscal 24, we delivered 1.6 percent of same restaurant sales for Darden, and Olive Garden was right on top at 1.6. So, you know, we'll see how this plays out, but we don't want to comment on Olive Garden versus Longhorn. Very good. Thank you so much.

Eric Andrew Gonzalez: We delivered one 6% and same restaurant sales for the Dot for Darden and Olive Garden was right on top of that one six so you know we'll see how this plays out but we don't want to comment on Olive Garden works as longhorn specifically.

Eric Andrew Gonzalez: Yeah.

Unknown Executive: There you go.

Speaker Change: Very good thank you so much.

Unknown Executive: Thank you so much. Thank you.

Speaker Change: Thank you our next questions come from the line of Andrew Charles with TD Cowen. Please proceed with your questions.

Ricardo Cardenas: Thank you. Our next questions come from the line of Andrew Charles with TD Cowen. Please proceed with your question. Great, thanks. Rick, the question is on Olive Garden. You called out multiple levers at your disposal to help profitably go beyond marketing. Can you expand more on those opportunities? You know, is it menu innovation? Is it the take-out business, the catering business? I would just welcome more thoughts on how to sustain the traffic gap versus the industry.

Andrew Charles: Our next questions come from the line of Andrew Charles with TD Cowan. Please proceed with your questions. Great. Thanks. Rick, the question is on Olive Garden. You called up multiple levers that you're disposal to help softly go traffic beyond marketing. Can you expand more of those opportunities? Is it menu innovation? Is it to go business, to catering business? Just to welcome more thoughts on how to sustain the traffic gap versus the industry.

Rick: Great. Thanks, Rick the question is on Olive Garden, you caught up multiple levers at your disposal to help profitably go traffic beyond marketing spend more on those opportunities. You know is it menu innovation is at the to go business the catering business.

Speaker Change: Welcome more thoughts on how to sustain the traffic gap versus the industry.

Rick Cardenas: Andrew, yes to all. Now, you know, remember Raj said we did exceed industry benchmarks. Olive Garden has taken much lower pricing than Darden over the year and the industries over the years, and we're really proud of their team. We're proud of what they've done. You know, they're going to continue to focus their marketing on their key equity of an ever-ending, cradle, abundant Italian food, specifically focusing on ensuring every guest is offered a refill with their first course. That's something that's not provided in other competitors. So, that refill is a pretty big part of what we do and a big part of their value equation.

Andrew Michael Charles: Hey, Andrew Yes to all now.

Ricardo Cardenas: Hey, Andrew, yes to all. Now, um, you know, remember Raj said we did exceed industry benchmarks; Olive Garden is taking has taken much lower pricing than Darden over the year and the industries over the years. And we're really proud of their team, really proud of Dan and the team and what they've done.

Speaker Change: No.

Speaker Change: Remember Raj said, we did exceed industry benchmarks Olive garden is taking much has taken much lower pricing than than darden over the year and in the industries over the years and we're really proud of their team and we're really proud of Dan and the team and what they've done.

Ricardo Cardenas: You know, they're going to continue to focus their marketing on their key equity of an ever-ending, craveable, abundant Italian cuisine, specifically focusing on ensuring every guest is offered a refill with their first course. That's something that's not provided by other competitors, so that refill is a pretty big part of what we do and a pretty big part of their value equation. But we're also going to continue to innovate on our menu. What you see right now on television, if you haven't already, is our Create Your Own Pasta for $12.99.

Speaker Change: You know theyre going to continue to focus their marketing on their key equity have been ever ending craveable ammonia and Italian food.

Speaker Change: Pacifically focusing on ensuring every guest has offered a refill with their first course, that's something that that's not provided another another competitors. So that that refill is a pretty big part of what we do and a big part of their value equation.

Rick Cardenas: But we're also going to continue to innovate over in our menu. What you see right now on television, if you haven't, is our create your own pasta at 12.99. You know, consumers in more challenging times are looking for more price certainty, and that is an amazing value at a create your own pasta at 12.99 with unlimited first course. And, you know, we'll continue to focus our marketing efforts there. And we have digital marketing that we can pull as well. So, without getting into all the details, we do have levers to pull.

Speaker Change: But we're also going to continue to innovate over in our menu and.

Speaker Change: What you see right now on television if you haven't as our create your own pasta at 12 99, you know consumers in and more challenging times are looking for more price certainty and that is an amazing value at our create your own pasta at 12 99 with unlimited first course, and you know we'll continue to focus our marketing efforts there.

Ricardo Cardenas: You know, consumers in more challenging times are looking for more price certainty. And that is an amazing value at Create Your Own Pasta for $12.99 with an unlimited first course. And, you know, we'll continue to focus our marketing efforts there. And we have digital marketing that we can pull as well. So without getting into all the details, we do have levers to pull.

Speaker Change: And we have digital marketing that we can pull as well so without getting into all the details we do have levers to pull but I want to remind everybody were focused on profitable sales growth not just buying sales to show a topline number and we've been very consistent over the years with that that profitable sales growth is what matters and Raj talked.

Rick Cardenas: But I want to remind everybody, we're focused on profitable sales growth, not just buying sales to show a top-line number. And we've been very consistent over the years with that: that profitable sales growth is what matters. And Raj talked about our EBITDA growth over the last five years, how strong it was. And so, we'll continue to focus there.

Ricardo Cardenas: But I want to remind everybody, we're focused on profitable sales growth, not just buying sales to show a top line number. And we've been very consistent over the years with that, that profitable sales growth is what matters. And Raj talked about our EBITDA growth over the last five years, how strong it was. And so we'll continue to focus there. Okay, great.

Speaker Change: About our our our EBITDA growth over the last five years, how how strong it was and so we'll continue to focus there.

Speaker Change: Okay, Great and my follow up question yourself, the Ruth's acquisition a franchisee.

Rick Cardenas: Okay, great. Then, my follow-up question is about the Ruth acquisition for franchisee.

Ricardo Cardenas: And my follow-up question is about the Roots acquisition for Franchisee. Curious if this leaves you open to more franchise acquisitions in 2025? Or is this one perhaps more of a one-off?

Rick Cardenas: Here's to this leads you open-minded for more franchise acquisitions in 2025, or this one was perhaps more one-off. Yeah, let me start by saying the franchisees that Ruth's Chris are really value partners to us. And our focus was on integrating our company on restaurants in a garden. You know, this one restaurant franchise was an opportunistic purchase. So, you know, we're going to continue as is and speak with our franchisees if they want to speak with us. But right now, we're going to continue to focus on making sure our team gets acclimated to the systems that we've implemented.

Speaker Change: Curious if this leaves you open minded for more franchise acquisitions in 2025 of this this one was perhaps more one off.

Speaker Change: Yeah, let me start by saying are the franchisees at Ruth's, Chris or really valued partners to us.

Ricardo Cardenas: Yeah, let me start by saying the franchisees at Ruth's Chris are really valued partners to us, and our focus was on integrating our restaurant company into Darden. You know, this one restaurant franchise was an opportunistic purchase. So, you know, we're going to continue as is and speak with our franchisees if they want to speak with us. But right now, we're going to continue to focus on making sure our team gets acclimated to the systems that we've implemented. And so it's not necessarily a change in strategy. It was an opportunity for me.

And our focus is was focus was on integrating our company owned restaurants in the Darden you know this one restaurant franchise was an opportunistic purchase. So you know we're going to continue as is and and speak with our franchisees if they want to speak with us, but right now we're going to continue to focus on making sure. Our team gets acclimated to the systems that they leave at that.

Speaker Change: <unk> implemented.

Speaker Change: And so it's not necessarily a change in strategy. It was a it was an opportunistic purchase for us.

Unknown Executive: And so, it's not necessarily a change in strategy. It was, it was an up- and I think you mentioned that you have assumed that you expect underlying traffic to improve as the year moved on.

Speaker Change: Very good thank you.

Speaker Change: Thank you our next questions come from the line of David Tarantino with Baird. Please proceed with your questions.

Ricardo Cardenas: Very good. Thank you. Thank you. Our next questions come from the line of David Tarantino with Baird. Please proceed with your questions. Hi, good morning.

David E. Tarantino: Hi, Hi, good morning.

Operator: Raj, I just wanted to come back to the guidance for the year. And I think you mentioned that you assumed that you expect underlying traffic to improve as the year moves on. So I just wanted to ask if you could elaborate on what factors you think will drive that improvement. Is it mostly just a matter of comparisons, or are you thinking there's something inside the business that will improve on a sequential basis as the year moves on?

David E. Tarantino: Roger I just wanted to come back to the guidance for the year and I think you mentioned that you have assumed that you expect underlying traffic to improve as the year moves on them. So I just wanted to ask if you could elaborate on what factors you think will drive that improvement is it.

Unknown Executive: So, I just wanted to ask you a question. I think you mentioned that you have assumed that you expect underlying traffic to improve as the year moved on. So, I just wanted to ask you a question. I think you mentioned that you have assumed that you expect underlying traffic to improve as the year moved on.

Unknown Executive: So, I just wanted to ask you if you could elaborate on what factors you think will drive that improvement. If it's mostly just comparisons related or you think there's something inside the business that will improve on a sequential basis this year moved on. Yeah, but it's primarily driven by the comparables, but the underlying trends have held up pretty well. I mean, you look at our fourth quarter that we just came off. Month to month, underlying trends were actually held up pretty steady, and it was an improvement from Q3. And, you know, we talked about what we're seeing on the check side that's also a positive sign.

David E. Tarantino: Mostly just comparisons related or are you thinking there.

Speaker Change: Something inside the business, so that will improve on a sequential basis as the year before that.

Speaker Change: Yeah, but it's primarily driven by the comparable but the underlying trends have held up pretty well I mean, even look.

Operator: David, it's primarily driven by the comparables, but the underlying trends have held up pretty well. I mean, if you look at our fourth quarter that we just came off, month-to-month underlying trends were actually held up pretty steady, and it was an improvement from, and you know we talked about what we're seeing on the check side, that's also a positive sign, so we think there is, you know, uh... just as we cycle through some of the weakness, that should help us gradually get better. And then, Rick, on Olive Garden, I guess a question I would have is about the advertising approach.

Speaker Change: Our third or fourth quarter that we just came off a month.

Speaker Change: Two month underlying trends, what actually held up pretty steady and it was an improvement from Q3 and you know we talked about what we're seeing on the check side. That's obviously a positive sign. So we think there is you know just as we cycled through some of the weakness that should that should help us gradually get better through the year.

Unknown Executive: So, we think there is, you know, just as we cycle through some of the weakness that should help us gradually get better through the year.

Unknown Executive: Got it.

Speaker Change: Got it and then Rick on an Olive Garden I guess the question I would have is on the advertising approach do you see an opportunity to better highlight the value you're already offering not necessarily provide.

Rick Cardenas: And then Rick, on all of Garden, I guess a question I would have is on the advertising approach. Do you see an opportunity to better highlight the value you're offering, not necessarily provide a new discount or something different than what you're adding, but it seems like that brand has a great value proposition. I'm just wondering if you think there's an opportunity to emphasize that a bit more in the advertising. Yes, David, and that's exactly what we're doing right now. You know, on TV right now, we've got their create your own pasta, 12.99 with the price point on the television.

Ricardo Cardenas: Do you see an opportunity to better highlight the value you're already offering? Not necessarily provide a new discount or something different than what you're adding, but it seems like that brand has a great value proposition. I'm just wondering if you think there's an opportunity to emphasize that a bit more in the advertising. Yes, David.

Speaker Change: Provide a new discount or something different than what you're adding but it seems like that brand has a great value proposition and I'm just wondering if you could.

Speaker Change: Theres, an opportunity to to emphasize that a bit more in the advertising.

David E. Tarantino: Yes, David and that's exactly what we're doing right now you know on TV right now we've got our create your own pasta at 12 99 with.

Ricardo Cardenas: And that's exactly what we're doing right now. You know, on TV right now, we've got our Create Your Own Pasta for $12.99 with the price point on the television. And, you know, we do believe that Olive Garden has great everyday value. And so the things that we can do to continue to highlight that versus discounting are what we'll continue to do. Great, thank you. Thank you. Our next questions come from the line of Jim Salera with Stevens. Please proceed with your question. Hi guys. Good morning.

David E. Tarantino: With the price point on the TV.

Unknown Executive: And, you know, we do believe that all of Garden has a great everyday value. And so what we, the things that we can do to continue to highlight that versus discounting, is what will continue to do. Great.

Speaker Change: And you know, we we do believe that olive garden has a great everyday value and so what we the things that we can do to continue to highlight that versus discounting is what we'll continue to do.

Speaker Change: Great. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you our next questions come from the line of Jim Celerity with Stephens. Please proceed with your questions.

Unknown Executive: Our next questions come from the law and Jim Salar with Stevens. Please proceed with your questions. Hi guys, good morning. Thanks for taking our question. Can you give us some of the puts and takes on the 3% inflation guide for 2025, particularly what you're thinking around the food basket and labor. Yeah, Jim. So this is Raj. So, on the food basket, we're basically assuming commodities to be around 2%. I think the biggest driver within the food basket is beef. We still expect beef to be in the mid single digits. And then we actually expect a low single-digit deflation in chicken and then pretty much all other categories are probably going to be in that low single-digit inflation.

Operator: Thanks for taking our questions. Um, can you give us some of the puts and takes on the 3% inflation guide for 2025, particularly what you're thinking around the food basket and labor? Yeah, Jim. So this is Raj.

Speaker Change: Hi, guys. Good morning, Thanks for taking our question.

Jim Celerity: Can you just give us some of the puts and takes on the 3% inflation guide for 2025, particularly what's your thinking around the food basket and labor.

Raj: Yeah, Jim. So this is raj so on the food basket, we're basically assuming commodities to be around 2% I think the the the biggest driver within the food basket is beef, we still expect beef to be in the mid single digits.

Rajesh Vennam: So in the food basket, we're basically assuming commodities to be around 2%. I think the biggest driver within the food basket is beef; we still expect beef to be in the mid single digits. And then we actually expect low single-digit deflation in chicken, and then pretty much all other categories are probably going to be in that low single-digit inflation.

And then we actually expect a low single digit deflation in chicken and then pretty much all other categories are probably going to be in that low single digit inflation and so that's how we're that's how we're getting to commodities being around 2%.

Jim Geiger: And so that's how we're, that's how we're getting to commodities being around 2%. From a labor perspective, we are actually expecting labor to be more like a 4% overall. So if you think about where we've been and what the hourly wage inflation is expected to be closer to 4%, and then total labor to be around 4%. So those are the two big things. And then from all other restaurant expenses, are probably going to be more in that 2.5 to 3%. And that's how we're getting to that overall being closer. 23%. Okay, great. Thanks for the detail on that.

Raj: From a labor perspective, we are actually expecting labor to be more like a 4% overall, so if you think about.

Rajesh Vennam: And so that's how we're getting to commodities being around 2%. From a labor perspective, we're actually expecting labor to be more like 4% overall. So if you think about where we've been and what the hourly wage inflation is expected to be closer to 4%, and then total labor to be around four. So those are the two big things.

Raj: Where we've been and what that the hourly wage inflation is expected to be closer to 4% and ends and then total labor to be around four so that's the those are the two big things and then from all other restaurant expenses.

Raj: Really going to be more in the 2.5% to 3% and that's how we're getting to that overall being closer to 3%.

Speaker Change: Okay, great. Thanks for the detail on that and then if I could maybe try to tie that to the consumer you mentioned earlier one of the concerns are cheap concerns. So the consumer is just kind of overall inflation.

Jim Geiger: And then if I could maybe try to tie that to the consumer, you mentioned earlier, one of the concerns or chief concerns for the consumer is just kind of overall inflation. If we see inflation maybe come in at the lower end of your expectations, is it possible that that could also provide better than expected lift on the comp side, given that consumers maybe feel a little bit better about, you know, how far their dollar goes. Just trying to think of kind of a catalyst pass with a consumer into 2025, what might make the results from a consumer be better than what you're anticipating.

Speaker Change: If we see.

Speaker Change: Inflation, maybe come in at the lower end of your expectations is it possible that that could also provide better than expected lift on the comp side given that consumers may be feeling a little bit better about you know how far their dollar goes just just trying to think of kind of a catalyst paths, where they consume or into 2025.

Speaker Change: Nick.

Speaker Change: The results from a consumer would be better than what you were anticipating.

Jim Geiger: Yeah, Jim, you know, the consumer is really focused on what price they're paying in everywhere, not just in restaurants. And if you think about the cost that they have on the non-discretionary costs, they've been growing faster than wages for quite a few years, and that eats in a discretionary spending. So if inflation in the non-discretionary gets better, that may give them a little bit more discretionary. And if you're considering, you know, food at the grocery store food, a non-discretionary, well, then yes, that should help. But we'd like to see some lower inflation in things like things that people have to buy, rent, utilities, childcare, all of those things would help with the non-discretionary side, help discretionary spend.

Jim: Yeah, Jim you know the consumer is really focused on what at what price they're paying in everywhere not just in restaurants, and if you think about it.

Speaker Change: The costs that they have on the non discretionary costs, they've been growing faster than than.

Speaker Change: <unk> for quite a few years and that eats into discretionary spending so if inflation in the non discretionary gets better that may give them a little bit more discretionary and if you're considering you know food at the grocery store or food.

Speaker Change: Non discretionary when then yes that should help them, but we'd like to see some some lower inflation in things like are things that people have to buy them.

Speaker Change: Rent utilities.

Speaker Change: Child care all of those things would help.

Speaker Change: On the non discretionary side helped discretionary spend.

Unknown Executive: That's great. Thanks for the color, guys. I'll be back in the queue.

Speaker Change: That's great. Thanks for the color guys I'll hop back in the queue.

Rajesh Vennam: And then from all other restaurant expenses, it's probably going to be more than that two and a half to 3%. And that's how we're getting to that overall being closer. Okay, great. Thanks for the detail on that.

Yeah.

Sarah Senatore: Thank you. Our next questions come from the line of Sarah Senator with Bank of America. Please proceed with your questions. Great. Thank you. I guess I wanted one clarification on the question. Please, the clarification is just mentioned pricing, 100% in all of garden pricing below inflation, but your food margins were better than we had expected. I just wanted to understand what the dynamic might have been across brands, whether there was any mix. I mean, presumably all of them are chosen the best food margins. It just helped me unpack that a little bit.

Speaker Change: Thank you our next questions come from the line of Sara Senatore with Bank of America. Please proceed with your questions.

Rajesh Vennam: And then I could maybe try to tie that to the consumer. As you mentioned earlier, one of the concerns or chief concerns for the consumer is just kind of overall inflation. If we see inflation maybe come in at the lower end of your expectations, is it possible that that could also provide a better than expected lift on the comp side, given that consumers maybe feel a little bit better about, you know, how far their dollar goes? Just trying to think of kind of a catalyst path for the consumer into 2025.

Rajesh Vennam: What might make the results from the consumer be better than what you're anticipating. Yeah, Jim, you know, the consumer is really focused on what that price they're paying everywhere, not just in restaurants. And if you think about the cost that they have on the non-discretionary costs, they've been growing faster than wages for quite a few years, and that eats into discretionary spending. So if inflation in the non-discretionary costs gets better, that may give them a little bit more discretionary spending.

Sara Harkavy Senatore: Great. Thank you.

Rajesh Vennam: And if you're considering, you know, food at the grocery store or food, a non-discretionary, then yes, that should help. But we'd like to see some lower inflation in things like things that people have to buy, rent, utilities, child care, all of those things would help, with the non-discretionary side, help discretionary.

Sara Harkavy Senatore: All I can say I wanted one clarification one little question.

Operator: That's great. Thanks for the call, guys. I'll hold back in the queue.

Sara Harkavy Senatore: The clarification is just on.

Speaker Change: And pricing.

Speaker Change: O olive garden and pricing below inflation.

Speaker Change: Margin was better than we had expected so I just wanted to understand like what's the dynamic.

Speaker Change: Across brands, whether they were going to work I mean, they can't really all of them are sourced in the fast food margin. So you can just help me unpack that a little bit and then I do have a question.

Sarah Senatore: And then I do have a question about the demand environment. Yes, Sarah, good morning. So, so when we look at the fourth quarter, yes, our pricing was across garden was below inflation. I think our pricing was closer to 2.5; inflation was around 3. So there is a bar; I think Delta was almost 70 basis points, but that again goes back to the testament of our teams and our ability to manage through this through different cycles, right? Two different environments. We've talked about how in a in a in a slow growth environment, we can, you know, we should see cost get better, but also we should see our own the controllables be even more coming, coming even better.

Sarah: Yeah, Sarah good morning, so so when we look at the fourth quarter, Yes, our pricing was across Darden was below inflation I think our pricing was closer to deploying half inflation was that aren't tree.

Operator: Thank you. Our next question comes from the line of Sara Senatore with Bank of America. Please proceed with your question. Great, thank you.

Speaker Change: So there is about I think that that Delta was almost 70 basis points, but that again goes back to the testament of our teams and our ability to manage through this through different cycles right two different environments. We've we've talked about how in a in a in a slow growth environment. We can we you know we could we should see costs get better but also.

Speaker Change: We should see our own there that the controllable be even more coming coming in even better. So ultimately it's just a testament to our teams how well they manage the business to float with the focus on getting to getting to the direct tons, we need to get for the business.

Sarah Senatore: So, ultimately, it's just the testament to our teams, how well they manage the business to focus on getting to the returns we need to get for the business. Okay, and that those controllables fit in even in this the car line. There's some, yeah. Okay, got it. Thank you.

Speaker Change: Okay and that does controllable in even in the Cogs line.

They're just there's some yes.

Rajesh Vennam: I guess I wanted one clarification and then a question, please. The clarification is that, you know, you mentioned pricing like 1% at Olive Garden and pricing below inflation, but your food margins were better than we had expected. So I just wanted to understand, like, what the dynamic might have been across brands, whether there was any mix. I mean, presumably, Olive Garden has some of the best food margins. So if you could just help me unpack that a little bit, and then I do have a question about the demand environment. Yes, Sara, good morning.

Speaker Change: Okay got it.

Rajesh Vennam: So when we look at the fourth quarter, yes, our pricing across Darden was below inflation. I think our pricing was closer to two and a half, while inflation was around three. So there's about, I think the delta was almost 70 basis points. But that again goes back to the testament of our teams and our ability to manage through this through different cycles, right, in different environments. We've talked about how, you know, in a slow growth environment, we can we, you know, we can, we should see costs get better, but also we should see our own controllables be even more coming, coming even better.

Sarah Senatore: And then there's a question on demand is, you know, to some of the earlier comments you've made, you know, the perhaps the demand environment is, you know, softer than expected and into far as, you know, the issue with your conferences. You're still taking share, but I'm interpreting it to mean perhaps it versus where we expected.

Speaker Change: And then also a question on on demand.

Some of the earlier comments you've made.

Speaker Change: Perhaps the demand environment is.

Speaker Change: South cares unexpected and insofar as the issue with your counsel you still taking share, but I havent kept breaking its mean, perhaps it versus where we expected given.

Sarah Senatore: Given the low income consumer primarily, I think I'm trying to get this asked when, you know, we think about where that expectation was when you acquired groups and kind of doubled down on fine dining. You know, had you anticipated something more robust, or there was always an expectation of normalization, and even in that context, the acquisition makes sense. Hey, Sarah. This is Rick. The, you know, when we acquired roots, we think about an acquisition over a long, long period of time. We're not as worried about the next quarter or the quarter after the acquisition. Now, would we have liked the consumer at the below meeting income to continue to go to fine dining?

Speaker Change: Given the low income consumer primarily I think that.

Speaker Change: Yes.

Speaker Change: When we think about.

Speaker Change: Where that expectation wise when you acquire agree with them kind of doubled down on I'm fine dining and had you anticipated something more robust or there was always an expectation of normalization and even in that context.

Speaker Change: The acquisition that phone.

Rick: Hey, Sara this is Rick the you know when we acquired Ruth's, we think about an acquisition over a long long period of time, we're not as worried about the next quarter or the quarter. After the acquisition now would we have liked the consumer at the below median income to continue to go to fine dining absolutely, but you know anytime we make.

Rajesh Vennam: So ultimately, it's just a testament to our teams, how well they manage the business to focus the focus on getting to getting to the returns we need to get for the business. Okay, and that those controllables sit in even in the COGS line. There is some, yes.

Rick Cardenas: Absolutely. But, you know, anytime we make an acquisition, there could be a chance that it's because we're going into a slowdown, and maybe there's a little bit of a better opportunity for price discovery there. So I would never read into when we make an acquisition into a certain category or not. Remember, we have criteria for our M&A, and, you know, when any of our M&A will happen as long as we find the brands that meet the criteria and we get price discovery and we agree on a price, and we'll do that deal. We're not worried about the environment that we're going into or that we're coming out of because these are long, long-term investments for us.

Speaker Change: Acquisition.

Speaker Change: There could be a chance that it's because we're getting going into a slowdown and maybe there's a little bit of a better opportunity for price discovery. There. So I would never read into when we make an acquisition into a certain category or not remember we have criteria for M&A and you know Ruth's met every one of that criteria and we were able to agree on a price.

Speaker Change: That's why it happened at the time it happened and generally that's when any of our M&A will happen as long as we find the brands that meet the criteria and we get price discovery and we agree on a price then we'll do that deal we're not worried about the environment that we're going into whether we're coming out of because these are long long term investments for us.

Unknown Executive: That makes sense.

Speaker Change: That makes sense. Thank you.

Speaker Change: Thank you our next questions come from the line of Jeffrey Bernstein with Barclays. Please proceed with your questions.

Rajesh Vennam: Okay, I got it. Thank you. And then the question on demand is, you know, in line with some of the earlier comments you've made that perhaps the demand environment is, you know, softer than expected. And insofar as you know, the issue with your comps is that you're still taking share, but I'm, I'm interpreting it to mean perhaps it versus where we expected, given the low income consumer, primarily, I think, I'm trying to, I guess, ask, when you think about where the expectation was when you acquired Ruth and kind of doubled down on fine dining, you know, had you anticipated something more robust, And even in that context, the acquisition makes sense. Hey Sara, This is Rick.

Jeffrey Bernstein: Our next questions come from the line of Jeffrey Bernstein with Barclays. Please proceed with your questions. Great. Thank you.

Ricardo Cardenas: You know, when we acquired Ruth's, we thought about an acquisition over a long, long period of time. We're not as worried about the next quarter or the quarter after the acquisition. Now, would we have liked the consumer at the below-median income to continue to go to fine dining? Absolutely. But, you know, anytime we make an acquisition, there could be a chance that it's because we're going into a slowdown and maybe there's a little bit of a better opportunity for price discovery there. I would never look into when we make an acquisition in a certain category or not.

Ricardo Cardenas: Remember, we have criteria for our M&A, and, you know, Ruth met every one of those criteria, and we were able to agree on a price. So that's why it happened at the time it happened, and generally that's when any of our M&A will happen. As long as we find the brands that meet the criteria and we get price discovery, and we agree on a price, then we'll do that deal. That makes sense.

Great. Thank you.

Operator: Thank you. Thank you. Our next questions come from the line of Jeffrey Bernstein with Barclays. Please proceed with your question. Great, thank you.

Jeffrey Bernstein: Rick, my first question, just on the weekend condition, you mentioned in the back half, it does seem like within your portfolio, at least, Olive Garden was hit harder and I guess relative to the industry as well, which I think is contrary to past economic slowdowns when most people look at Olive Garden as the more defensive value brand. So I'm just wondering, as you take a step back, what do you think has changed this go-around? How much of it is maybe internally what you're doing versus maybe what the competition is doing? And if you can give any sequential color on the trends through the quarter or into June, just to kind of get a sense of how we're starting fiscal 25, that will be great. And then I had one follow up.

Rick: Rick My first question just on the the weakening conditions you mentioned in the back half it does seem like within your portfolio at least olive garden was hit harder than I guess relative to the industry as well.

Ricardo Cardenas: Rick, my first question is on the weakening conditions you mentioned in the back half. It does seem like within your portfolio, at least, Olive Garden was hit harder, and I guess relative to the industry as well, which I think is contrary to past economic slowdowns when most people look at Olive Garden as the more defensive value brand. I'm just wondering, as you take a step back, what do you think has changed this go-around?

Rick: I think it's contrary to past economic slowdowns when most people look at Olive garden is the more defensive value brand. So.

Speaker Change: So I'm just wondering as you take a step back what do you think has changed this go around.

Ricardo Cardenas: How much of it is maybe internally what you're doing versus maybe what the competition's doing? If you can give any sequential color on the trends through the quarter or into June, just to kind of get a sense of how we're starting fiscal 25, that would be great.

Speaker Change: Much of it is maybe internally what you're doing versus maybe what the competition is doing and if you can give any sequential color on the trends through the quarter or into June just to kind of get a sense of how we're starting fiscal 'twenty five that would be great and then I had one follow up.

Rick Cardenas: Sure, Jeff, I'm not going to talk about the trends into fiscal 25 where we are. And I think Raj had mentioned that the quarterly fourth quarter we were pretty consistent month, you know, month a month a month a month. So, but what I will say for Olive Garden, you know, in prior slowdowns, Olive Garden outperformed; they outperformed on same restaurant sales, and at that time they were taking more pricing than everybody else. We outperformed this quarter in traffic, and we've continued to outperform the industry in traffic for the last many years, and we only took 1% pricing.

Ricardo Cardenas: Sure Jeff, I'm not going to talk about the trends into fiscal 25 where we are, and I think Raj had mentioned that the quarterly, fourth quarter, we were pretty consistent month over month, you know, month to month to month. But what I will say for Olive Garden, you know, in prior slowdowns, Olive Garden outperformed, they outperformed on same restaurant sales, and that time, they were taking more prices than everybody else. We outperformed this quarter in traffic, and we've continued to outperform the industry in traffic for the last many years, and we only took one percent of the price.

Speaker Change: Sure, Jeff I'm, not going to talk about the trends into into fiscal 'twenty five or we are in I think Raj had mentioned that the quarterly for fourth quarter, we were pretty consistent month over month, you know month to month to month, so, but what I will say for Olive garden, you know in prior slowdowns Olive garden outperformed the outperformance same restaurant sales in that time, they were taking more pricing.

Speaker Change: And everybody else.

Speaker Change: We outperformed this quarter in traffic.

Speaker Change: And we've continued to outperform the industry in traffic for the last many years and we only took 1% pricing whereas.

Rick Cardenas: What I would tell you is that if we would have taken the pricing that the industry took in the third quarter or in the fourth quarter, I'm sorry, Olive Garden would have been positive and would have performed even more. And so this is a long game for us. The other thing that we aren't that we're not pulling are things that everybody or not everybody but people used to pull in slowdowns, couponing, deep discounting, and all those other things, and we're not doing that, even at a time that our competitors have ramped up deep discounting on television, and you know, Olive Garden still outperformed in traffic.

Ricardo Cardenas: What I would tell you is that if we had taken the pricing that the industry took in the third quarter or in the fourth quarter, I'm sorry, Olive Garden would have been positive and would have performed even better. And so this is a long game for us.

Speaker Change: I would tell you that if we would've taken the pricing that the industry took in the third quarter or in the fourth quarter I'm, sorry, Olive garden would have been positive and would have performed even more and so this is a long game for us. The other thing that we arent that that we're not pulling or things that that everybody or not everybody, but people used to pull in slowdowns couponing deep discount.

Ricardo Cardenas: The other thing that we aren't doing, that we're not pulling are things that everybody, or not everybody, but people used to pull in slowdowns, couponing, deep discounting, and all of those things, and we're not doing that, even at a time that our competitors have ramped up, didn't outperform in comp sales, but as I said, we only took 1%. And so we're really, really And maybe that's why we didn't outperform on the sales side, but we did continue to outperform on the traffic side. And I just want to say their gap in fiscal Q4 was 60 basis points in traffic, and their two-year gap is 530 basis points in traffic. So we feel pretty good with where we are. Absolutely.

Speaker Change: King.

Speaker Change: The list of those things and we're not doing that even at a time that our competitors have ramped up discounting deep discounting on television.

Speaker Change: And you know olive garden still outperformed in traffic.

Rick Cardenas: Didn't outperformed in Comp Sales, but as I said, we only took 1% pricing, and so we're really proud of that, and we'll continue to do that. And maybe that's why we didn't outperformed on the sales side, but we did continue to outperformed on the traffic side. And I just want to say their gap in fiscal Q4 was 60 basis points in traffic, and their 2-year gap is 530 basis points. in traffic. So we feel pretty good with where they are. Absolutely.

Speaker Change: Didn't outperform in comp sales, but as I said, we only took 1% pricing.

Speaker Change: And so we're really really proud of that and we'll continue to do that and maybe that's why we didn't outperform on the sales side, but we did continue to outperform on the traffic side and I just want to say they're gap in fiscal.

Speaker Change: Q4 was 60 basis points in traffic and their two year gap is 530 basis points in traffic. So we feel pretty good with where they are.

Rajesh Vennam: And then my follow-up, Raj, as you think about, well, as you're setting up a guidance for Fiscal 25, you mentioned how in Fiscal 24, you beat your initial EPS guidance despite seemingly falling short on the initial Fiscal 24 comp guidance. And as you look to 25, I'm wondering, just as we enter the year, if there was a risk that it's the same scenario where, I mean, just looking at the fourth quarter, your comps were below the fiscal 25 guide.

Speaker Change: Absolutely.

Rajesh Vennam: And then my follow-up, Rajesh, just think about, well, as you're setting up the guidance for fiscal 25, you mentioned how in fiscal 24, you beat your initial EPS guidance, despite seemingly falling short on the initial fiscal 24 comp guidance. And as you look to 25, I'm wondering, as we enter the year, it seems like maybe if there was a risk that it's the same scenario where I mean, just looking at a fourth quarter, your comps were below the fiscal 25 guide. So what levers do you have on the margin and earning side to maybe beat the comp, if the comps were again full short as we move through fiscal 25? It would seem like you don't have as much opportunity with inflation easing as maybe you had this past year.

Speaker Change: And then my follow up.

Speaker Change: Raj as you think about well, it's just setting up the guidance for fiscal 'twenty five you mentioned.

Speaker Change: Fiscal 'twenty for you you beat your initial EPS guidance, despite seemingly falling short on the initial fiscal 'twenty four comp guidance.

Speaker Change: And as you looked at 25 I'm wondering just as we entered the year. It seems like maybe if there was a risk that if the same scenario, where I mean, just looking at the fourth quarter. Your comps were below the fiscal 'twenty five guide so what levers do you have on the margin and earnings side to maybe beat the if the comps would again fall short as we move through fiscal 'twenty five it would seem like you don't have as much opportunity.

Rajesh Vennam: So what leverage do you have on the margin and earnings side to maybe beat the – if the comps were to again fall short as we move through fiscal 25, it would seem like you don't have as much opportunity with inflation easing as maybe you had this past year. So how do you think about the outlook for fiscal 25 if the comps were to fall short? Thank you. Hey Jeff.

Speaker Change: With inflation easing as maybe you had this past year. So how do you think about the outlook for fiscal 'twenty five if the comps were to fall short. Thank you.

Rajesh Vennam: So how do you think about the outlook for fiscal 25, if the comps were to fall short? Thank you. Hey, Jeff. So I don't want to get into the exact details, but let me say, at a very high level, and talk about how we think about philosophically, right? If the environment is such that the sales continue to be weaker, that also implies the demand is weaker, and the inflation should be a little bit better. So let's start with that. And in fact, if you look at last year, that was part of the reason we were able to exceed their earnings guidance even with the sales off.

Speaker Change: Hey, Jeff.

Rajesh Vennam: So I don't want to get into the exact details, but let me stay high level and talk about how we think philosophically, right? If the environment is such that sales continue to be weaker, that also implies that demand is weaker, and inflation should be a little bit better. So let's start with that. And in fact, if you look at last year, that was part of the reason we were able to exceed the earnings guidance, even with the sales off. That's not all of it, but it's partial.

Jeffrey Andrew Bernstein: I don't want to get into the exact details, but let me say very high long stay at a high level and talk about how we think about philosophically right. If if if the environment is such that the sales continue to be weaker that also implies that demand is weaker and then the inflation should be a little bit better. So let's start with that and in fact, if you look at it.

Last year Dallas part of the reason, we were able to exceed the earnings guidance, even with the sales. So that's not all not all of it but that's a partial the other part of it is how we manage through the best to how our teams managed through the cycles as I said earlier, our restaurant teams and our teams had the support center work very hard to kind of.

Rajesh Vennam: That's not all of it, but that's partial. The other part of it is how we manage through how our teams manage through the cycles. As I said earlier, our restaurant teams and our teams at the support center work very hard to kind of have these targets, and we work towards them, and we're always trying to get better. And there's just even more push on that when things are a little bit softer on the top line. So that's kind of how I talk about it. I don't want to get into the specifics because this is a big business is very complex.

Rajesh Vennam: The other part of it is how we manage the business, how our teams manage through the cycles. As I said earlier, our restaurant teams and our teams at the support center work very hard to kind of, you know, have these targets, and we work towards them, and we're always trying to get better. And there's just even more push on that when things are a little bit softer on the top line. So that's kind of how I talk about it. I don't want to get into the specifics because, you know, this is a big business. It's very complex.

Jeffrey Andrew Bernstein: You now have these targets and we work towards them and we're always trying to get better and Theres, just even more push on that when things are a little bit softer on the topline.

Jeffrey Andrew Bernstein: So that's kind of how I would talk about it I don't want to get into the specifics because you know this is this is it.

Jeffrey Andrew Bernstein: This is a big business is very complex. There are a lot of nuances there was a lot of but there's a lot that goes in to get to where we need to get to and we feel I.

Rajesh Vennam: There are a lot of nuances. There's a lot of, but there's a lot that goes in to get to where we need to get to. And we feel, I think if you just look back, it shows that we have the ability to get there two different ways. Understood.

Operator: There are a lot of nuances. There's a lot that goes into getting to where we need to get to. And we feel – I think if you just look back, it shows that we have the ability to get there in different ways. Thanks a lot.

Jeffrey Andrew Bernstein: I think if you just look back and shows that we have the ability to.

Jeffrey Andrew Bernstein: Get there two different base.

Speaker Change: Understood. Thanks Raj.

Unknown Executive: Thanks, Raj. Thank you.

Speaker Change: Thank you our next questions come from the line of David Palmer with Evercore ISI. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of David Palmer with Evercore ISI. Please proceed with your question. Thanks. Good morning.

David Palmer: Our next questions come from the line of David Palmer with Evercore ISI. Please proceed with their questions. Thanks.

Speaker Change: Thanks, Good morning, Olive Garden's strategy has been to sort of set itself up as a well positioned everyday value and strong.

Ricardo Cardenas: Olive Garden's strategy has been to sort of set itself up as a well-positioned everyday value and strong consumer service. Do you see the consumer recognizing this? Are the consumer satisfaction scores at Olive Garden doing as well versus the peer group in Italy as, say, Longhorn or Texas Roadhouse are doing in the stake? Yeah, David, I won't comment on how they're doing versus their competition, but I can tell you that Olive Garden, both internally and externally, their value ratings have increased over this last year.

David Palmer: Good morning. Olive Garden strategy has been to sort of set itself up as a well-positioned everyday value and the strong consumer service. Do you see the consumer recognizing this? Like are the consumer satisfaction scores at Olive Garden doing as well versus the peer group in Italian as say Longhorn or Texas Roadhouse are doing in stake? Yeah, David. I won't comment on how they're doing versus their competition, but I can tell you is Olive Garden both internally and externally. Their value ratings have increased over this last year. And they're pretty close to the top end of the value and overall in the measures we look at.

Speaker Change: Service.

David Sterling Palmer: Do you see the consumer recognizing this like are they are the consumer satisfaction scores at olive garden.

David Sterling Palmer: Doing as well versus the peer group and Italian and say longhorn or Texas Roadhouse are doing in stake.

David: Yeah, David I won't comment on how they're doing versus their competition, but I can tell you is olive garden, both internally and externally they're value ratings have increased.

Ricardo Cardenas: And they're pretty, pretty close to the top end of the value and overall, in the measures we look at. I also mentioned they were kind of at the highest levels of guest satisfaction in this fiscal year. But again, they continue, and all of our brands, most of our brands, I think all of our brands were at or at or above their value perceptions externally versus last. Yeah, I guess I'm, I'm wondering why you think the traffic share gains are not stronger? Is that it?

David: Over this last year, and and they're pretty pretty close to the top end of our value and overall in.

David: In the and the measures we look at I also mentioned they were kind of at the highest levels of guest satisfaction in this fiscal year, but again they continue in all of our brands most of our brand I think all of our brands, we're at or at or above their value perceptions externally versus last year.

Rick Cardenas: I also mentioned they were kind of at the highest levels of guest satisfaction in this fiscal year. But again, they continue in all of our brands. Most of our brands, I think all of our brands were at or above their value perceptions externally versus last year.

Rick Cardenas: Yeah, I guess I'm wondering why you think the traffic share gains are not stronger. Is it just simply the consumer awareness of the value that's at all of garden, or is it perhaps something about the Italian category, such as the ease of trading down to add home pastas is a little easier. We're seeing very strong growth in, for instance, reos sauces lately. So, you know, we're seeing scratch cooking really picking up in at home. We're not seeing a strong stake demand at home. So, I'm wondering if there's sort of an interaction index with at-home trade down that's stronger in the Italian category.

Speaker Change: Yeah, I guess I'm wondering why you think the traffic share gains are not stronger is it.

Ricardo Cardenas: Is it just simply the consumer awareness of the value that's at Olive Garden, or is it perhaps something about the Italian category, such as the ease of trading down to at-home pastas a little easier? We're seeing very strong growth in, for instance, Rao's sauces lately, so we're seeing scratch cooking really picking up in restaurants. But we're not seeing as strong a steak demand at home, so I'm wondering if there's sort of an interaction index with at-home trade-down that's stronger in the Italian category. Do you have any thoughts on that? Well, there may be interaction and trade and trade down to at home because of the median income consumer; it's not necessarily the Italian.

Speaker Change: Is it just simply the consumer awareness of the value that's at Olive garden or is it perhaps something about the Italian category, such as such as the ease of trading down to at home passes a little easier and we're seeing very strong growth and forget for instance, rayos sources lately. So.

Speaker Change: We're seeing scratch cooking really picking up.

Speaker Change: In at home.

Speaker Change: Not seeing as strong a stake demand at home. So I'm wondering if there's sort of an interaction index with at home trade down it's stronger in the Italian category do you have any thoughts on that.

Rick Cardenas: Do you have any thoughts on that? Well, there may be interaction and trade in trade down to add home because of the median income consumer. It's not necessarily the Italian, but I can tell you when, you know, where we compete in the full service base. Olive Garden was at 75th percentile in their traffic. So, and again, you know, when you're comparing how they're doing in full service and then you're putting in this at home, everybody's dealing with the at home as well, not just Italian. And then finally, you know, the competitors had ramped up the very deep discounting.

Speaker Change: Well, there may be interaction and trade and trade down to at home because of the median income consumer it's not necessarily the Italian.

Ricardo Cardenas: But I can tell you where we compete in the full service base, Olive Garden was at 75th percentile in their in their in their traffic. So and again, you know, when you're comparing how they're doing in full service, and then you're putting this at home, everybody's dealing with this at home as well, not just Italian.

Speaker Change: But I can tell you when you know where we compete in the full service based Olive garden was at 75th percentile and are in there and their traffic so and again.

Speaker Change: When you're comparing how they're doing in full service and then you were putting in this at home everybody is dealing with the with the at home as well not just Italian.

Ricardo Cardenas: And then finally, you know, the competitors have ramped up very deep discounting, and while we didn't see that actually impacting Olive Garden or other brands because the trends kind of stayed similar, what we did interestingly is a little bit of a shift from QSR to some of those competitors. And so that might be where they're trying to take some share from, but we did see that, and that lifted the industry index for some of those, and maybe one of those competitors, which is a big part of the index. So there's a little bit of a nuance in how the index works, especially when you're taking share from another category, another part of the index. Great, thank you very much. Thank you. Our next questions come from the line of Dennis Geiger with UBS. Please proceed with your, Great. Thanks, guys. Just wondering if you could speak to the development environment a bit more.

Speaker Change: And then finally, you know the competitors had ramped up the very deep discounting and while we hadn't we didn't see that actually impacting.

Rick Cardenas: And while we hadn't, we didn't see that actually impacting Olive Garden or other brands because the trends kind of stayed similar. What we did see, interestingly, is a little bit of a shift from QSR to some of those competitors. And so, that might be where they're, where they're trying to take some share from. But we did see that, and that lifted the industry index in some of those, and maybe one of those competitors, which is a big part of the index. So, there's a little bit of a nuance in how the index works, especially when you're taking share from another category, another part of the index.

Speaker Change: Olive garden, where other brands because they are the trends kind of stayed similar what we did see interestingly is a little bit of a shift from Q S are to some of those competitors and so that that might be where they're where they're where they're trying to take some share from but we did see that and that lifted the industry index.

Speaker Change: In some of those and maybe one of those competitors, which is a big part of the index. So there's a little bit of a nuance in how the index works, especially when you're taking share from another category. Another part of the index.

Unknown Executive: Great.

Speaker Change: Great. Thank you very much.

Unknown Executive: Thank you very much. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you our next questions come from the line of Dennis Geiger with UBS. Please proceed with your questions.

Dennis Geiger: Our next questions come from the law and of Dennis Geiger with the UBS. Please proceed with your questions. Great. Thanks, guys.

Ricardo Cardenas: Seems like consistent expectations as it relates to new builds. But anything, you know, you're seeing there sort of on timing, thinking about build costs, etc. Yeah, Dennis, you know, I will let me start by saying that the new restaurant projection we have for next year is within our long-term framework. So while it's lower than we like it to be, it's still within our long-term framework. And recall, the new restaurants also include M&A.

Dennis Geiger: Great. Thanks, guys. Just wondering if you could speak to the development environment a bit more it seems like consistent expectations.

Dennis Geiger: Just wondering if you could speak to the development environment a bit more. Seems like consistent expectations as it relates to new builds. But anything, you know, you're seeing there sort of on timing, thinking about build costs, et cetera. Yeah, Dennis, you know, I will. Let me start by saying that the new restaurant projection we have for next year is within our long-term framework. So, while it's lower than we like it to be, it's still within our long-term framework, and recall, new restaurants also include M&A. So, you know, we bought, we bought about 80 restaurants from Ruth Chris that were part of last year.

Dennis Geiger: As it relates to new builds but anything youre seeing there sort of an on timing are thinking about build costs etcetera.

Dennis Geiger: Yeah.

Speaker Change: Yeah. Dennis are you know I I will let me start by saying that the new restaurant projection. We have for next year is within our long term framework. So while it's lower than we'd like it to be it's still within our long term framework and recall new restaurants also include M&A.

Ricardo Cardenas: So, you know, we bought about 80 restaurants from Ruth's Crisps that were part of last year. Now, that's not impacting this year, but it is part of our framework. Construction costs are still quite a bit higher than they were before COVID.

Speaker Change: So you know we bought we bought about 80 restaurants from Ruth's, Chris that were part of last year.

Rick Cardenas: Now, that's not impacting this year, but it is part of our framework. Construction costs are still quite a bit higher than they were before COVID, but the levels are normalizing more, and it's still taking a little longer to get construction starts. We're just trying to figure out ways to improve our process, to potentially get starts moving a little bit faster, and maybe there's some things that we can do to help municipalities with kind of working on permitting and other things. But, you know, we feel pretty good about our pipeline for next year. We'd like to see it higher for the years after, but we're not going to just build restaurants and put a number out there that we don't think that we can hit.

Speaker Change: Now that's not impacting this year, but it is part of our framework construction.

Speaker Change: Construction costs are still quite a bit higher than they were before COVID-19.

Ricardo Cardenas: But the levels are normalizing more, and it's still taking a little longer to get construction starts. We're just trying to figure out ways to improve our process to potentially get starts moving a little bit faster. Maybe there's some things that we can do to help municipalities with kind of working on permitting and other things, but we feel pretty good about our pipeline for next year. We'd like to see it higher for the years after, but we're not going to just build restaurants and put a number out there that we don't think that we can hit. And we feel pretty good about where we are. And again, Raj showed you where we have been for the last five years in our new unit growth. It was almost 3%.

Speaker Change: But the levels are or are normalizing more and it's still taking a little longer to get construction starts were just trying to figure out ways to improve our process to potentially get starts open starts moving a little bit faster and maybe there's some things that we can do to help municipalities with.

Speaker Change: Kind of working on permitting and other things, but you know we feel pretty good about our pipeline for next year, we'd like we'd like to see it higher for the years after.

Speaker Change: But we're not going to just build restaurants and put a number out there that we don't think that that we can hit and we feel pretty good about where we are and again Raj showed you where we were for the last five years in our new unit.

Rick Cardenas: And we feel pretty good about where we are. And again, Raj showed you where we were for the last five years in our new unit growth. It was almost 3%; it was 2.9% was at the high end of our framework. So, we don't necessarily think year to year; we think long.

Speaker Change: Growth it was almost 3% it was 2.9% was at the high end of our framework. So so we don't necessarily think year to year, we think long term.

Ricardo Cardenas: It was 2.9% was at the high end of our framework, so we don't necessarily think year-to-year. We think long-term. Thanks, Rick. And one more, just curious if you could comment a little more on sort of what your expectations are for the industry promotional environment for the year. Is what we're seeing sustainable? Can it increase?

Unknown Executive: Thanks, Rick.

Speaker Change: Thanks, Rick and one more just curious if you could comment a little more on sort of what your expectation is for the industry promotional environment for the year is what we're seeing sustainable can can it increase I know, there's a million factors that they have.

Dennis Geiger: And one more.

Dennis Geiger: Just curious, if you could comment a little more on sort of what your expectation is for the industry promotional environment for the years, is what we're seeing sustainable? Can it increase? And there's a million factors that go into this, but just giving your perspective, would love any thoughts on what, you know, over the next three quarters or so, what the industry environment on promo discounting, et cetera, looks like in your opinion. Thank you. Yeah, Dennis, you know, I think my perspective is, we like what we're doing better, right? We don't think that we think that everyday low value and continue to focus on our core equities is more sustainable than deep discounting to try to drive people in.

Ricardo Cardenas: I know there's a million factors that go into this, but just given your perspective, we'd love any thoughts on what, you know, over the next three quarters or so, what the industry environment looks like in your opinion. Thank you. Yeah, Dennis, you know, I think my perspective is that we like what we're doing better, right? We don't think that, we think that everyday low value and continuing to focus on our core equities is more sustainable than deep discounting to try to drive people in. Others can do that, and we'll continue to play this long game. You know, and over time, you have to keep working on that.

Speaker Change: The window of this but just given your perspective would love any thoughts on what you know over the next three quarters or so what the industry environment on promo discounting et cetera.

Speaker Change: Looks like in your opinion thank you.

Dennis Geiger: Yeah Dennis.

Dennis Geiger: You know I think my perspective is we like what we're doing better right. We don't think that we think that everyday low value and continue to focus on our core equities is more sustainable than deep discounting.

Dennis Geiger: To try to drive people in others can do that and we will continue to play. This play this long game.

Rick Cardenas: Others can do that, and we'll continue to play this, play this long game. You know, and over time, you have to keep wrapping on that. If you do a deep discount and it stays the same way, you have to do even more than next year; you have to do more television. And we just think we'd rather do more great food, more great service. And let's wrap that. And so, again, I can't comment on what other people think is sustainable or not. We just think our business the way we do it is more sustainable.

Dennis Geiger: And over time, you have to keep wrapping on that if you do have a deep discount and it stays the same way you have to do even more the next year you have to do more TV and we just think we'd rather do more great food more great service and lets wrap that and so.

Operator: If you do a deep discount and it stays the same way, you have to do even more the next year, you have to do more television, and we just think we'd rather do more great food, more great service, and let's wrap that. And so, again, I can't comment on what other people think is sustainable or not. We just think our business, the way we do it, is more sustainable. Thank you. Thank you.

Dennis Geiger: Again, I can't comment on what other people think as sustainable or not we just think our business. The way we do it is more sustainable.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you our next questions come from the line of Peter Saleh with V. T. I G. Please proceed with your question.

Operator: Our next questions come from the line of Peter Saleh with BTIG. Please proceed with your questions. Great. Thanks. Raj, I wanted to ask about the flat mix, which I think you mentioned was a pretty meaningful improvement from what you've seen in the past couple quarters. Can you just give us a little bit more detail on what's driving this? Is this alcohol mix improving, entrees, you know, consumers trading up to more expensive entrees, or is it appetizers? And is there any way to dissect this by income cohort?

Peter Saleh: Our next questions come from the line of Peter Salah with BTIG. Please proceed with questions. Great. Thanks. Roger, I wanted to ask on the flat mix, which I think you mentioned was a pretty meaningful improvement from what you've seen in the past couple of quarters. Can you just give us a little bit more detail on what's driving this? Alcohol mix improving on trades; you know, consumers trading up to more expensive on trades is appetizers. And is there any way to dissect this by income cohort? Are you seeing more improvement from the lower income, higher income?

Peter Mokhlis Saleh: Great. Thanks, Raj I wanted to ask on the on the flat mix, which I think you mentioned was a pretty meaningful improvement from what you've seen in the past couple of quarters can you just give us a little bit more detail on what's driving this is this alcohol mix improving entrees consumers trading up to.

Peter Mokhlis Saleh: More expensive entrees appetizers and is there any way to dissect. This by our income cohort are you seeing.

Peter Mokhlis Saleh: More improvement from the lower income higher income anything you can gleam there.

Peter Saleh: Anything you can gleam there?

Rajesh Vennam: Yeah, Peter. Yeah, just to start, that was specifically at Olive Garden and Longhorn. And so when we look at, and it's different for both brands. So when you look at Longhorn, the mix was driven by some add-ons, increased add-ons. They had a great; you know, they also had a new lamp on tray that actually that was that that did really well. There was add-on, you know, Parvajan crusting. People wanted to get more of that. So there were things like that that were helpful with the mix. What we, alcohol is kind of fairly stabilized. So it's not necessarily a headwind anymore.

Peter Mokhlis Saleh: Hey, Peter Yeah, just to start that was specifically at olive garden Longhorn and so when we look at it and its different for both Brian. So when you look at longhorn the.

Rajesh Vennam: Are you seeing more improvement from the lower income and higher income? Anything you can gleam from there? Hey Peter. Yeah, just to start, that was specifically at Olive Garden and Longhorn. And so when we look at it, it's different for both brands. So when you look at Longhorn, the mix was driven by some add-ons, increased add-ons. They had a great, you know, they also had a new lamb entree that actually did really well. There was, you know, Parmesan crusting; people wanted to get more of that. So there were things like that that were helpful with the mix. What we do is alcohol is kind of fairly stabilized.

Speaker Change #100: The mix was driven by some add ons increased add ons. They had a great. You know they also had a new lamp entre that actually that was that that did really well. There was AD you know Paragon crusting people wanted to get more of that so there were things like that that were that were helpful with the mix.

Speaker Change #100: Alcohol is kind of fairly stabilized so it's not necessarily a it had been anymore.

Rajesh Vennam: So it's not necessarily a headwind anymore. And so that's probably helping. But when you look at Olive Garden, the same thing where people are not, we're not seeing as much trade down within whether it's whether it's the entree trade down or not getting add-ons. So just in general, more stabilization. And so maybe this is, you know, the guest that's coming in today is not managing the check as much

Rajesh Vennam: And so that's probably helping. But when you look at Olive Garden, the same thing where people are not, we're not seeing as much trade-down within the, whether it's the, whether it's the on trade trade-down or not getting add-ons. So just in general, more stabilization. And, and so maybe this is, you know, the guest that's coming in today is not managing the check as much. And so that's different from maybe some of the guests that were coming in earlier in the fiscal year. Great.

Speaker Change #100: And so that's probably helping but when you look at olive garden. The same thing where people are not we're not seeing as much trade down within the attitude that whether its the entre trade down or not getting add ons. So just in general more stabilization and and and so maybe this is you know the gas that's coming in today is not managing the check as much and so.

Speaker Change #100: That's different from maybe some of the guests that were coming in earlier in the fiscal year.

Rajesh Vennam: And so that's different from maybe some of the guests that were coming in earlier in the program. Great, thank you very much. Thank you. Our next questions come from the line of Jeff Farmer with Gordon Haskett.

Speaker Change #101: Great. Thank you very much.

Unknown Executive: Thank you very much. Thank you.

Speaker Change #102: Thank you our next questions come from the line of Jeff Farmer with Gordon Haskett. Please proceed with your questions Greg Good morning.

Jeff Farmer: Our next questions come from the law and of Jeff Farmer with Gordon and ask it. Please proceed with your questions. Great.

Operator: Please proceed with your question. Good morning.

Operator: And thank you. There are just a couple of quick follow-ups. With the 1 to 2% FY25 Same-Source Sales Guide. You pointed to the 2.5% to 3% menu pricing, but can you give us a little bit of color as it relates to both traffic and mix assumptions for FY25 guidance? Yeah, I think it's fair to assume that our check is probably going to be in that range of two and a half to three. So you can back into the implied traffic.

Jeff Farmer: Good morning. And thank you. Just a couple of quick follow-ups with the one to two percent FY25 same for sales guidance. You pointed to the two-and-a-half to three percent menu pricing, but can you give us a little bit of color as it leads to both traffic and mix assumptions for FY25 guidance? Yeah, I think it's fair to assume that our check is probably going to be in that range of two-and-a-half to three, so you can back into the implied traffic. So we do expect the mix to be fairly flat. Okay, and then I might have missed it, but GNA dollars and FY25, did you provide that guidance?

Thank you just a couple of quick follow ups with the 1% to 2% FY 'twenty five same store sales guidance.

Speaker Change #103: You pointed to the 2.5% to 3% menu pricing, but can you give us a little bit of color as it relates to both.

Speaker Change #104: Traffic and mix assumptions for FY 'twenty five guidance.

Speaker Change #105: Yes, I think it's fair to assume that our check is probably going to be in that range of two and a half to three so you can back into the implied traffic. So we do expect mix to be fairly flat.

Rajesh Vennam: So we do expect mixed to be fairly flat. Okay, and then I might have missed it, but, uh, G&A dollars in FY25, did you provide that guidance? You did not miss it, we haven't talked about it, the GNA for this year should be closer to 450 million, and fiscal 25 should be closer to 450 million, and I think that's going to be spread fairly evenly from the second through the fourth quarter, with the first quarter to be 20 million higher than the other three quarters. It's just typical that we have a little bit more in the first quarter.

Speaker Change #106: Okay, and then I I might've missed it but ER G&A dollars in FY 'twenty five did you provide that guidance.

Rajesh Vennam: You did not miss it; we haven't talked about it. The GNA for this year should be closer to 450 million. For fiscal 25, it should be closer to 450 million, and I think that's going to be spread fairly evenly from second to the fourth quarter, with the first quarter to be 20 million higher than those three quarters. It's just typical that we have a little bit more in the first half. I appreciate it.

Speaker Change #107: You did not miss it we haven't talked about it the G&A for this year, we should be closer to 450 million for fiscal 'twenty five should be closer to a $450 million.

Speaker Change #108: And I think that's going to be spread fairly evenly from second through the fourth quarter with the first quarter there'll be $20 million higher than those three quarters. It's just typical that we have a little bit more in the first half I appreciate it. Thank you.

Speaker Change #107: Yeah.

Speaker Change #109: Thank you our next questions come from the line of Jon Tower with Citi. Please proceed with your questions.

Rajesh Vennam: Thank you. Thank you. Our next questions come from the line of Jon Tower with Citi. Please proceed with your questions. Great, thanks. Appreciate taking them.

John Tower: Our next questions come to the line of John Tower with City. Please proceed with your questions. Great, thanks. Appreciate taking them.

Speaker Change #110: Great. Thanks, I appreciate you taking them.

John Tower: Going to the cost-sounding equation, it was pretty impressive, even with the comp that you put up in the fourth quarter, how you were able to manage labor and the other op-extence line very well, and I'm just curious if you could dig into how you expect those lines to play out in fiscal 24 or better said. Do you think a lot of the management that you're able to put in across labor as well as the other op-ext can carry forward into fiscal 25, offsetting some of that inflation that you're seeing? Yes, John. If you look at the drivers this year, we talked about improved productivity.

Jon Michael Tower: Going to the cost side of the equation it was pretty impressive even with the comp that you put up in the fourth quarter. How you were able to manage labor and the other op expense line very well and I'm. Just curious if you could dig into how you expect those lines to play out in fiscal 'twenty four or better said do you think a lot of the vantage, but that you were able to put them put in across labor as well.

Operator: Going to the cost side of the equation, it was pretty impressive, even with the comp that you put up in the fourth quarter, how you're able to manage labor and the other operational expenses very well. And I'm just curious, if you could dig into how you expect those lines to play out in fiscal 24, or better said, you know, do you think a lot of the management that you're able to put in across labor as well as the other op ex can carry forward into fiscal 25, kind of offsetting some of that inflation that you're seeing? Hi John.

Jon Michael Tower: The other opex can carry forward into fiscal 'twenty, five kind of offsetting some of that inflation that you're seeing.

Jon Michael Tower: Yeah.

John: Hey, John So if you look at the drivers. This year, we talked have already improved productivity that was a part of that was also driven by lower turnover and so there maybe a few quarters, where we will still get a little bit of that benefit but as we look to next year I would expect we would expect cogs to be better because commodities inflation is likely going to be.

Rajesh Vennam: So if you look at the drivers this year, we talked about improved productivity, and part of that was also driven by lower turnover. And so there may be a few quarters where we'll still get a little bit of that benefit. But as we look to next year, I would expect COGS to be better because commodities inflation is likely going to be, as I said, closer to that 2%, and then with pricing being a little bit more, you should get some leverage on that line.

Rajesh Vennam: Part of that was also driven by lower turnover. There may be a few quarters where we'll still get a little bit of that benefit, but as we look to next year, we would expect COGS to be better because commodity inflation is likely going to be, as I said, closer to that 2%, and then pricing being a little bit more, you should get some leverage on that line. We do expect to continue to look at other op-ext. That's one of the things non-guess-facing costs is where we spend a lot of time looking at how do we continue to get better, and that's the power of the platform.

John: As I said closer to that two 2% and then pricing being a little bit more you should get some leverage on that line. We do expect to continue to look at other opex right. That's one of the things non guest facing costs is where we spend a lot of time looking at how do we continue to get to get better and that's the power of the platform. That's the power of having this this big does that.

Rajesh Vennam: We do expect to continue to look at other OPEX, right? That's one of the things; non-guessing costs is where we spend a lot of time looking at how do we continue to get better? And that's the power of the platform.

Rajesh Vennam: That's the power of having this big multiple brands and being able to learn from each other. The last piece is there is some continuing synergies from Roots acquisition that we talked about.

John: Now multiple brands and being able to learn from each other and the last piece is you know there is some continuing synergies from roots acquisition that we talked about we got about half of this year, we're going to get the rest next year. So those are all different drivers of how we get that margin growth.

Rajesh Vennam: We got about half this year; we're going to get the rest next year, so those are all different drivers of how we get that margin growth. Thank you.

John: Yeah.

Speaker Change #113: Got it thank you and I know a lot has been talked about today on the marketing side. So I'm just curious one more I guess on the topic.

John Tower: I know a lot has been talked about today on the marketing side, so I'm just curious one more on the topic. In terms of the way that you're speaking to the consumer, I know you're using traditional television as a primary means to communicate all of Garden's message, but I'm just curious if you could dig into what you're doing on social and how you might be changing the brand's perception on those platforms. Or even in traditional media, are you going after different date parts in terms of where you're advertising, even platforms where you're advertising through linear media, maybe just more information there would be great.

Speaker Change #114: In terms of the way that you're speaking to the consumer I know you're using traditional TV is as a primary means to communicate olive garden's message, but I'm. Just curious if you could dig into what youre doing on social and how you might be changing the brand's perception on those platforms or even in traditional.

Speaker Change #114: Media like are you going after.

Speaker Change #114: Different day parts in terms of where your advertising. Even you know platforms are what were your advertising through linear media, maybe just a more information there would be great.

John Tower: Yeah, John, for several years we've been building our internal digital media capabilities, and we've done all of Garden's. The only one on television. Everybody else does spend marketing, and it's in digital, and we've been testing things like connected television. We've been testing other things to help drive our traffic. And because we've been testing, this allows us to kind of move them into other brands to see how they work. We do a lot of test and learn, and so we don't expect our media to grow significantly over year because we think we're more efficient with the tests that we do.

John William Ivankoe: Yeah, John for for several years, we've been building, our internal digital media capabilities and we've done you know olive garden's the only one on TV everybody else does spend marketing and it's in digital and we've been testing things like connected TV. We've we've been testing other things that you know to help drive.

Rajesh Vennam: That's the power of having this big, you know, multiple brands and being able to learn from each other. And the last piece is, you know, there are some continuing synergies from the Roots acquisition that we talked about. We got about half this year; we're going to get the rest next year.

John William Ivankoe: Drive our traffic and because we've been testing this allows us to kind of move them into other brands to see how they work we do a lot of test and learn and and so we don't expect our media to grow significantly year over year, because we think we're more efficient with the test that we do and so as we continue to do that.

John Tower: And so, as we continue to do that, we know what the right times to put messages out there are, we know what days, and we know all those things. So we're not necessarily going to think about ramping up a communication of a certain day part unless the brand thinks it's the right thing to do. And so we might see some brands talk about a certain day part or not, but we are using our digital that we've learned over the years, and we have an internal team here that's great at what they do, and we'll continue to focus on that.

You know we know what the right times just to to put messages out there we know what days and we knew all those things. So you know, we're not necessarily going to we're not necessarily going to think about ramping up a.

John William Ivankoe: Communication of a certain day part unless the brand thinks it's the right thing to do.

John William Ivankoe: And so they might we might see some brands talk about a certain day part or not but we are using our digital that we've learned over the years and we have an internal team here that's great at what they do and we will continue to focus on that.

Speaker Change #116: Thank you.

Unknown Executive: Thank you.

Speaker Change #117: Thank you our next questions come from the line of Chris I'll call with Stifel. Please proceed with your questions.

Chris O'Call: Our next questions come from a line of Chris O'Call with Stiefel. Please proceed with your questions. Yeah, thanks.

Chris: Yeah. Thanks, Rick you mentioned several sales building opportunities earlier, but I was wondering if you think there are any opportunities to improve throughput during high demand peak periods at Olive Garden I'm, assuming you know the restaurants are still in a wait during traditional peak periods like Friday and Saturday night.

Rick Cardenas: Rick, you mentioned several sales building opportunities earlier, but I was wondering if you think there are any opportunities to improve throughput during high demand peak periods at Olive Garden. I'm assuming you know the restaurants are still on a wait during traditional peak periods, like Friday and Saturday nights. Yeah, Chris, I think not just at Olive Garden, but Olive Brands can do more to improve throughput in our peak periods. We can get a little bit quicker in what we do to make sure that the guests don't feel rushed, but they don't feel like they're waiting for a lot of things.

Chris: Yeah, Chris I think not just at olive garden, but all our brands can do more to improve throughput in our peak periods, we can get a little bit quicker than what we do to make sure that the guest doesn't feel rushed but they don't feel like they're waiting for a lot of things. So we do think that there's opportunities.

Rick Cardenas: So we do think that there's opportunities and not just at Olive Garden. And if we can do that better, we should get some, at least some traffic in that day if people were walking away. But in the long run, getting a little bit more a little bit quicker, maybe better for us any day, not just on the peak periods.

Chris: And not just at Olive garden, and if we can do that better we should get some at least some traffic in that day, if people were walking away, but in the long run getting getting a little bit quicker maybe better for us any day not just on the on the peak periods.

Speaker Change #119: Okay, and then Raj Olive Garden's segment margin contracted I think 70 basis points this quarter, while the other segments or the other.

Rick Cardenas: Okay. And then right, Olive Garden segment margin contracted. I think 70 basis points is quarter while the other segments are the other segments, so some considerable your rear expansion. Can you help us understand what drove that pressure? And do you see other factors putting pressure on Olive Garden, this going into fiscal 25? No, Chris, I think it's actually just kind of normalizing what there should have been, right? Last year, I think we had a little too high margin. I mean, to be 22.8% segment profit margin is industry-leading. I mean, that's just, that's just really high.

Rajesh Vennam: Segment saw some considerable year over year expansion can you help us understand what drove that pressure and do you see other fact that those factors putting pressure on olive garden this going into fiscal 'twenty five.

Chris I: No Chris I think it's actually just kind of normalizing what there should have been right last year I think we we we had a little too high market I'm going to be a 22.8% segment profit margin is industry, leading Ah I mean, that's just a that's just a really high that would be aspirational for a lot of brands in this industry so to be able to.

Rick Cardenas: That would be aspirational for a lot of brands in this industry. So to be able to get to those levels, and frankly, it goes back to our decision to not price as much. And we had talked about it last year. We didn't think we didn't think 23.5% segment profit was the right number. That was a little too high. And so it's really giving back a little bit of that. But we don't expect that to be like as we move forward; we don't expect that to be a drag going forward. It's just more of; there were some things that needed to be normalized.

Chris I: Get to those levels and frankly, it goes back to the day, our decision to not price as much right. So and we had talked about it last year. We don't we didn't think we we didn't think 'twenty, 3.5% segment profit was the right number that was a little too high and so it's really giving back a little bit of that but we don't expect that to be.

Chris I: Like our AR as.

As you know.

Chris I: As we look move forward, we don't expect that to be a drag going forward. It's just more of there were some things that needed to be normalized.

Unknown Executive: Perfect.

Speaker Change #122: Perfect. Thanks, guys.

Unknown Executive: Thanks, guys. Thank you.

Speaker Change #123: Thank you our next questions come from the line of Danilo Gargiulo with Bernstein. Please proceed with your questions.

Rajesh Vennam: So those are all different drivers of how we get that margin. In terms of the way that you're speaking to the consumer, I know you're using traditional television as a primary means to communicate all of Darden's message, but I'm just curious if you could dig into what you're doing on social media and how you might be changing, you know, the brand's perception on those platforms or even in traditional media. Are you going after, you know, different time parts in terms of where you're advertising, even, you know, platforms, where you're advertising through linear media?

Danilo Gargiulo: Our next questions come from a lot of Genello Garjula with Bernstein. Please proceed with your questions. Russ, given your focus on more profitable traffic and cost control, cost management in this environment, can you help us understand the flow through of the marginal dollars today? And how it compares with the marginal dollar flow through back in say 2019? Genello, I think the flow through from the marginal dollar is not that different. It is actually fairly similar. It's just there are other things that are more non-variable cost that we're also looking at. So it's not that that's how we're getting to that.

Rajesh Vennam: Maybe just more information there. Yeah, John. For several years, we've been building our internal digital media capabilities. And we've done, you know, Olive Garden is the only one on television; everybody else does marketing, and it's in digital. And we've been testing things like connected televisions; we've been testing other things that, you know, to help drive, www.youtube.com www.youtube.com.uk Thank you.

Operator: Our next questions come from the line of Chris O'Call with Stiefel. Please proceed with your question. Yeah, thanks.

Speaker Change #123: Okay.

Speaker Change #124: Russ given your focus on more profitable traffic and cost control of course management.

Speaker Change #125: Can you help us understand the flow through the <unk>.

Russ: Marginal dollar today.

Speaker Change #127: And how it compares with the marginal dollar flow through back in say 2019.

Danilo Gargiulo: Yeah, Danilo I think the flow through from the marginal dollar is not that different it is actually fairly similar is yes. There are other things that are more non variable costs that we're also looking at so it's not that's how we're getting to that.

Rajesh Vennam: So, but but from a high level, if you look at across the portfolio, somewhere around 35 to 40% is probably the right flow through to think about it.

Danilo Gargiulo: But from a high level, if you look at across the portfolio somewhere around 35% to 40% is probably the right flow through to think about it and I don't think that's any different from where we were before in 2019.

Rick Cardenas: And I don't think that's any different from where we were before in 2019.

Rick Cardenas: Thank you. And Rick, just from a long-term perspective, can you share maybe the rationale in timing behind this recent executive changes? And in particular, what you're expecting from your team in their newly created roles and specifically if you can comment on cost promotion and kind of this role of the Chief Business Development Officer, what you're expecting out of that. Thank you. Yeah, Danilo, you know, as I said in the federal marks, these changes help set us up for future growth and developing our leaders. So if you think about Todd and John, elevating their roles a little bit, Todd leading Development, International and Franchising and Ruth Chris, and those all have early good synergies for Todd, right?

Speaker Change #129: Okay. Thank you.

Ricardo Cardenas: Rick, you mentioned several sales building opportunities earlier, but I was wondering if you think there are any opportunities to improve throughput during high-demand peak periods at Olive Garden? I'm assuming, you know, the restaurants are still on a wait during traditional peak periods, like Friday and Saturday night. Yeah, Chris, I think not just at Olive Garden but all our brands can do more to improve throughput in our peak periods. We can get a little bit quicker in what we do to make sure that the guest doesn't feel rushed, but they don't feel like they're waiting for a lot of things. So we do think that there are opportunities, and not just at Olive Garden. And if we can do that better, we should get at least some traffic on that day if people were walking away.

Rajesh Vennam: But in the long run, getting a little bit quicker may be better for us any time, not just on the Okay. And then, Raj, the Olive Garden segment margin contracted, I think, 70 basis points this quarter, while the other segments saw some considerable year-over-year expansion. Can you help us understand what drove that pressure, and do you see those factors putting pressure on Olive Garden? Going into fiscal 25, no, Chris, I think it's actually just kind of normalizing what they should have been right last year. I think we had a little too high a margin. I mean, to be 22.8% segment profit margin is industry leading. I mean, that's just really high.

Danilo Gargiulo: Rick.

Speaker Change #130: Just from a long term perspective can you share maybe the rationale and timing behind these recent executive changes and in particular, what are you expecting from your team in their newly created roles and specifically if you can comment on.

Speaker Change #131: Promotion and kind of the smaller the chief business development officer, and what you're expecting out of that thank you.

Speaker Change #132: Yeah Danilo you know it is.

Rajesh Vennam: That would be aspirational for a lot of brands in this industry. So to be able to get to those levels, and frankly, it goes back to our decision not to price as much, right? So, and we had talked about it last year, we didn't think 23.5% segment profit was the right number. That was a little too high.

Speaker Change #133: I said in the prepared remarks are these changes help set us up for future growth.

Speaker Change #134: In developing our leaders. So if you think about Todd and John elevating their role is a little bit Todd leading development internationally, and franchising and Ruth's, Chris and those all have really good synergies for Todd right. So development in new restaurants, that's for all brands, but international franchising with them with the <unk>.

Rick Cardenas: So development in new restaurants, that's for all brands, but international franchising with a percent of restaurants that Ruth's Chris has this franchise, it's actually a pretty good synergy there. Plus, as I said, Todd came to us from Rare Hospitality when we bought them, so he knows what it's like after the system's integration and how to help people assimilate more. And he'll help Rick, who's a new president, become a great president. So, and then finally, as I mentioned, you know, having an operator's perspective and new restaurant development, I think is a pretty good, pretty good thing to do.

Speaker Change #134: Set of restaurants at Ruth's, Chris has its franchise, it's actually a pretty good synergy there.

Speaker Change #134: Plus as I said Todd came.

Speaker Change #134: Came with a came to us from rare hospitality when we bought them. So he knows what it's like after the systems integration and how to help people assimilate more and he'll help Rick who's our new president become a great president.

Speaker Change #134: So and then finally as I mentioned, you know having an operator.

Speaker Change #134: Specter of a new restaurant development I think is a pretty good a pretty good thing to do we think about how to do the turnovers better how to get it make sure we have more plan full and telling them that the brands. When we think the restaurants can open so there arent moves and delays. So we can get those a little bit better. So that's really where we're taught.

Rick Cardenas: You know, we think about how to do the turnovers better, how to get, you know, make sure we're more playful and telling the brands when we think the restaurant's going to open, so there aren't moves and delays, so we can get those a little bit better. So that's really where Todd comes into play. And then on John's side, if you think about, you know, the special restaurant group with five brands and John leading all five, that was a lot. And so how do we help bring him up and bring the new presidents underneath John, who are all proven leaders and all have a good future here with us, while John can help them become even better, better brand presidents.

Speaker Change #135: It comes into play and then on John side.

Speaker Change #135: If you think about you know the specialty restaurant group with five brands and John leading all five Oh that was a lot and so how do we help bring him up and bring the new President's underneath Jon which are who are all proven leaders and all have a good future here with us while John can.

Speaker Change #135: Them become even better better brand presidents a couple of them you know one of them is a is a former finance person, but he's got a great operations a knowledge and he actually was a restaurant manager. Many many years ago, but John can help mark become a better general manager and think more about operations, you've got Fallon Farrell, who.

Rick Cardenas: A couple of them, you know, one of them is a former finance person, but he's got a great operations knowledge, and he actually was a restaurant manager many, many years ago. But John can help Mark become a better general manager and think more about operations. So you've got Fallon Farrell, who's now going to be leading Capitol Grill and ADVs. Actually, Fallon started at Capitol Grill as a team member, and she worked at Capitol Grill for many years. Then she led training for Capitol Grill and ADVs, and now she then she led ADVs for quite a while in operation.

Speaker Change #135: Now going to be leaving capital grille, and Eddie V's actually felling started a capital grille does the team member and she worked at cap a girl for many years and then she led training for capital grille, and Eddie V's and now. She then she let Eddie V's for quite a while in operation. So she can see how do we bring some synergies in the support center for capital grille and Eddie V's.

Rick Cardenas: So she can see how do we bring some synergies in the support center for Capitol Grill and ADVs to help leverage those brands better. But while working for John, who can continue to develop her for the future. And then I think about Brian Clemens, Brian, you know, his history. He started at Big Bar Brands years ago. He spent many years at Longhorn to understand how Longhorn and a simple operating model works, and he spent time at Olive Garden leading Olive Garden operations, and that's a big system. And how do you think about a big system when you've got Yard House, who's, you know, passing AD restaurants and we want to continue to grow them, and he can help with a more system thinking at Yard House.

Speaker Change #135: To help leverage those brands better, but while working for John who can continue to develop her for the future and I think about Brian Clemens, Brian you know his.

Speaker Change #135: Tree he started at a big bar brands years ago.

Speaker Change #135: Many years at longhorn to understand how how longhorn and simple operating model works and he spent time at olive garden, leading olive garden.

Operations, and that's a big system and how do you think about a big system when you've got yard house, whose you know passing 80 restaurants, and we want to continue to grow them and he can help with more system thinking at yard house. So we think it's a really great move for all of them and Laura I Didnt mentioned you know Laura.

Rick Cardenas: So we think it's a really great move for all of them. And Laura, I didn't mention, you know, Laura is one of a great leader here at Darden, and she spent nine years at Longhorn; she really knows Longhorn. And, you know, she's got a great relationship with Todd; she'll be able to continue to talk to Todd, and the team at Longhorn is rallied around her. So, you know, our reasoning behind that is to get people ready while other people are basically retirement eligible. And so we want to make sure that they're here to help them progress.

Speaker Change #135: He was one of them a great leader here at Darden and she spent nine years at longhorn should really knows longhorn.

Speaker Change #135: And you know she's got a great relationship with Todd she'll be able to continue to talk to Todd and the team at Longhorn is rallied around her so you know our our our reasoning behind that is to get people ready while other people are.

Speaker Change #135: Our basically retirement eligible and so we wanted to make sure that they are here to help them.

Speaker Change #135: Progressing you know what are our retirement programs are not saying that anybody's, leaving anytime soon but this gives them a chance to develop people well, while they're still around.

Rick Cardenas: And you know what our retirement programs are, and not saying that anybody's leaving anytime soon, but this gives them a chance to develop people while they're still around. Okay, thank you.

Speaker Change #136: Great. Thank you.

Andrew Barish: Thank you. Our next questions come from the line of Andy Barish with Jeffries.

Speaker Change #137: Thank you our next questions come from the line of Andy Barish with Jefferies. Please proceed with your questions.

Rajesh Vennam: And so it's really giving back a little bit of that. But we don't expect that to be like a, you know, as we move forward; we don't expect that to be a drag going forward. It's just more of, There were some things that needed to be normalized. Perfect. Thanks, guys. Thank you. Our next questions come from the line of Danilo Gargiulo with Bernstein. Please proceed with your questions. Raj, given your focus on more profitable traffic and cost control, and cost management in this environment, can you help us understand the flow through of the marginal dollar today and how it compares with the marginal dollar flow through back in, say, 2019? Danilo, I think the flow through from the marginal dollar is not that different. It is actually fairly similar.

Andrew Barish: Please proceed with your questions. Hey guys, two quick ones. Just been here in some commentary on a softer Florida market where you guys, you know, kind of over index. Any thoughts there? And then if you could give us the Olive Garden to go mix, you know, for the fiscal year 24 versus 23. And is there. You know, any, any trends you're seeing there, any impact on maybe some of the same store sales components just not remembering how you guys calculate that fully. All right.

Andrew Marc Barish: Hey, guys two quick ones just.

Andrew Marc Barish: Been hearing some commentary on our software, Florida market, where you guys. You know kind of over index any thoughts there and then if you could give us that olive garden to go mix you know for the fiscal year 24 versus 23 and is there.

Andrew Marc Barish: Any any trends youre seeing there any impact on maybe some of the same store sales components, just not remembering how you guys calculate that fully.

Andrew Marc Barish: All right, Andy let's start with the the the trains themselves. So if we actually look at the last quarter and I might have mentioned in the prior quarter or two but.

Rajesh Vennam: It's just there are other things that are more non-variable costs that we're also looking at. So it's not that's how we're getting to that. So, but from a high level, if you look across the portfolio, somewhere around 35 to 40% is probably the right flow through to think about, and I don't think that's any different from where we were before in 2019. Thank you. And Rick, just from a long-term perspective, can you share maybe the rationale and timing behind these recent executive changes? And, in particular, what you're expecting from your team in their newly created roles?

Rajesh Vennam: And let's start with the trends themselves. So if we actually look at the last quarter, and I might have mentioned the prior quarter, too, but Florida, Texas, and California generally were a little bit weaker. We saw that not just Florida, but you know, Texas and California, and that did contribute to the top line being where it was. And so that's, you know, I don't know that we have a strong rational explanation for why one of the thoughts was maybe some of these markets that open faster coming out of COVID might be the ones where we're seeing a little bit softness and maybe a little bit strength on the ones that open a little bit later coming out of COVID.

Ricardo Cardenas: And specifically, if you can comment on the kind of spot promotion and this role of the Chief Business Development Officer, what you're expecting out of that? Thank you. Yeah, Danilo, as I said in my previous remarks, these changes help set us up for future growth and development of our leaders. So if you think about Todd and John elevating their roles a little bit, Todd leading development, international, and franchising, and Ruth's Chris, those all have really good synergies for Todd, right?

Ricardo Cardenas: So development in new restaurants, that's for all brands, but international franchising with the percent of restaurants that Ruth's Chris has is franchised, it's actually a pretty good synergy there. Plus, as I said, Todd came to us from Rare Hospitality when we bought them, so he knows what it's like after the system integration and how to help people assimilate more, and he'll help Rick, who' So, and then finally, as I mentioned, having an operator's perspective on new restaurant development is, I think, a pretty good thing to do.

Ricardo Cardenas: You know, we think about how to do the turnovers better, how to get, you know, make sure we're more planful in telling the brands when we think the restaurant's gonna open so there aren't any moves and delays, so we can get those a little bit better. So that's really where Todd comes into play. And then on Jon's side, if you think about, you know, the specialty restaurant group with five brands and Jon leading all five, that was a lot.

Ricardo Cardenas: And so how do we help bring him up and bring the new presidents underneath Jon, who are all proven leaders and all have a good future here with us, while Jon can help them become even better brand presidents?

Ricardo Cardenas: A couple of them, you know; one of them is a former finance person, but he's got great operations knowledge, and he actually was a restaurant manager many, many years ago. But Jon can help Mark become a better general manager and think more about operations. You've got Fallon Farrell, who's now going to be leading Capital Grill and ATVs. Actually Fallon started at Capital Grill as a team member, and she worked at Capital Grill for many years, and then she led training for Capital Grill and ATVs, and now she has led ATVs for quite a while in operations, so she can see how we can bring some synergies in the support center for Capital Grill and ATVs to help leverage those brands better, but while working for Jon, who can continue to develop her for the future.

Ricardo Cardenas: And then I think about Brian Clemens. Brian, you know, his history. He started at Big Bar Brands years ago. He spent many years at Longhorn to understand how Longhorn, in a simple operating model, works. And that's a big system. And how do you think about a big system when you've got Yardhouse, who are passing 80 restaurants, and we want to continue to grow them, and he can help with more system thinking at Yardhouse?

Ricardo Cardenas: So we think it's a really great move for all of them. And Laura, I didn't mention, you know, Laura is one of the great leaders here at Darden. And she spent nine years at Longhorn.

Speaker Change #139: Florida, Texas, and California, generally, we're a little bit weaker we saw that not just Florida, Texas.

Speaker Change #139: Texas, and California, and that did contribute to the top line being that it was.

Speaker Change #139: And so that's that's you know I I I don't know that we have a strong rational explanation for why one of the thoughts was maybe it's all of these markets that opened a faster coming out of COVID-19 might be the ones, where we're seeing a little bit softness and maybe a little bit strength on the ones that opened a little bit later coming out of Covid, but that's just a hypothesis but.

Rajesh Vennam: But that's just a hypothesis. But that the facts are you're seeing some strength in the New England market and other things, and not as much in California, Texas, and Florida. As we look at our to go mix, but to go mix at Olive Garden was basically at I think for the year 24%, which is fairly similar to last year, not a huge not not much change. And Longhorn is at 14%. I think we saw a little bit of an improvement year over year, like a point or so at Longhorn on the quarter, but that's just fairly stabilized there.

Speaker Change #139: That's the facts are you seeing some strength in the new England market and other things and not as much in California, Texas and Florida as we look at our to go mix to go Max at Olive Garden was basically at a I think for the year, 24%, which is fairly similar to last year not a huge not not much change in longhorn is at 14%.

Speaker Change #139: I think we saw a little bit of an improvement year over year like a point or sorry at longhorn on the quarter, but that's just fairly stabilized there and I think there was another question.

Unknown Executive: And I think it was another question about some mix. I can't. What was that? It was there another one, Andy, that I missed. Yeah, just if the to-go trend had had had changed or, you know, declined if that was impacting any of the components of same store sales, but it doesn't sound like that. No, it's not. Yeah. Okay. Thank you.

Speaker Change #140: Uh huh.

Speaker Change #141: I cant what was there a lot of it was there another one Andy that I missed yeah no. It just if they if the to go trend had had changed or or you know decline if that was impacting any of the components of your same store sales, but it doesn't sound like that no.

Speaker Change #142: No it's not yet.

Speaker Change #143: Okay. Thank you.

Speaker Change #143: Yeah.

Speaker Change #144: Thank you our next questions come from the line of Brian Vaccaro with Raymond James. Please proceed with your questions.

Ricardo Cardenas: So she really knows Longhorn. And, you know, she's got a great relationship with Todd. She'll be able to continue to talk to Todd, and the team at Longhorn has rallied around her. So, you know, our reasoning behind that is to get people ready while other people are basically retirement eligible. And so we want to make sure that they're here to help them progress. And you know what our retirement programs are. Not saying that anybody's leaving anytime soon, but this gives them a chance to develop people while they're still around. Great. Thank you. Thank you. Our next questions come from the line of Andy Barish with Jeffries.

Unknown Executive: Our next questions come from the line of Brian Vicaro with Raymond James.

Operator: Please proceed with your question. Hey guys, two quick ones just been hearing some commentary on a softer Florida market where you guys, you know, kind of over index any thoughts there and then if you could give us the Olive Garden to go mix, you know, for the fiscal year 24 versus 23 and is there, You know any any trends you're seeing there any impact on maybe some of the same store sales components just not remembering how you guys calculate that fully All right, Andy, let's start with the the trends themselves.

Brian Vaccaro: Please proceed with your questions. Hey, thanks. Good morning. I know we're running long. So just two quick ones for me.

Brian Michael Vaccaro: Hey, Thanks, and good morning, I know, we're running them off so just two quick ones for me can you provide traffic and check for olive garden and longhorn in the fourth quarter, and then Raj did I hear correctly blended price up two and a half to three for the fiscal 'twenty five and that seems stable. So does that suggest you've taken price recently.

Operator: So if we actually look at the last quarter, and I might have mentioned the prior quarter too, but Florida, Texas, and California generally were a little bit weaker. We saw that not just in Florida but, you know, Texas and California, and that did contribute to the top line being where it was. And so that's, you know, I don't know that we have a strong rational explanation for why. One of the thoughts was maybe some of these markets that opened faster coming out of COVID might be the ones where we're seeing a little bit of softness and maybe a little bit of strength on the ones that opened a little bit later coming out of COVID. But that's just a hypothesis.

Rajesh Vennam: But that's the facts; you're seeing some strength in the New England market and other things and not as much in California and Texas. As we look at our to-go mix, our to-go mix at Olive Garden was basically at, I think, for the year, 24%, which is fairly similar to last year, not a huge, not much change. And Longhorn is at 14%.

Brian Vaccaro: Can you provide traffic and check for Olive Garden and LongHorn in the fourth quarter? And then Raj, did I hear correctly blended price up two and a half to three for the fiscal 25 and that seems stable. So does that suggest you've taken price recently and could see that range as early as the first quarter. Thank you.

Speaker Change #146: And could see that range as early as the third quarter. Thank you.

Brian Michael Vaccaro: Yeah.

Rajesh Vennam: Yeah, Brian, the blended. Let me start with the later question first. Yes, the blended is not two and a half to three. We have taken some pricing. Yeah, typically we take some in June. So there's some pricing. So you should start to see some of that in the quarter for the fourth quarter. Our total check road was 2.2% at garden level. I think Olive Garden was more like a one, three, and Longhorn was probably in the three. Each percent Longhorn has positive traffic. Their traffic; that traffic goes. I think in the quarter was 0.8. So in the total SRS is 4.

Rajesh Vennam: I think we saw a little bit of an improvement year over year, like a point or so at Longhorn in the quarter, but that's just fairly stabilized, and I think that was out of the, I can't, what was the last one, was there another one, Andy, that I missed? Yeah, no, just if the trend for to-go shopping had changed or, you know, declined, if that was impacting any of the components of same-store sales, but it doesn't sound like that. No.

Brian: Yeah, Brian the blended front, let me start with the latter question first yes, the blended isn't that two and a half to three we have taken some pricing Oh, we do we are yeah. Typically we take something in June so theres. Some pricing. So you should start to see some of that in the quarter for the for the fourth quarter. Our total check growth was 2.2.

As a percent of Darden level, I think olive garden was more like a one three and <unk>.

Brian: Longhorn was probably in the three ish percent longhorn has positive traffic there.

Brian: That traffic growth I think in the quarter was <unk> eight so that the total srs's foresaw the check growth was that arent treated.

Rajesh Vennam: So the check road was around. Thanks very much.

Speaker Change #147: Thanks very much.

Jake Bartlett: Thank you. Our next questions come from the line of Jake Bartlett with the Truest Securities.

Speaker Change #148: Thank you our next questions come from the line of Jake Bartlett with Truest Securities. Please proceed with your questions.

Operator: Thank you. Thank you. Our next questions come from the line of Brian Vaccaro with Raymond James.

Operator: Please proceed with your question. Hey, thanks. Good morning.

Jake Bartlett: Please proceed with their questions. Great. Thanks for taking the question.

Operator: I know we're running late, so just two quick ones for me. Can you provide traffic and check for Olive Garden and Longhorn in the fourth quarter? And then Raj, did I hear correctly the blended price was up two and a half to three for the fiscal 25? And that seems stable.

Speaker Change #149: Great. Thanks for taking the question I wanted to dig in on that last question and the answer a little bit more and that's pricing at all of garden.

Jake Bartlett: You know, I wanted to dig in on that last question and the answer a little bit more, and that's pricing at All of Garden. You know, pricing is accelerated to 1% in the fourth quarter. We talked about comps being similar across the brand in 25 and pretty stable. So pricing throughout the year, does that imply that you're going to see a pretty big step up in menu price at all of Garden or, you know, should we expect kind of a similar, much more cautious pricing at all of Garden throughout the whole year.

Jake Rowland Bartlett: You know pricing decelerated to two 1% in the fourth quarter, you talked about comps being similar across the brands in 'twenty, five and pretty stable pricing throughout the year, just does that imply that youre going to see a pretty big step up in menu price at Olive garden, where should we expect kind of a similar much more cost.

Pricing at Olive garden throughout the whole year.

Jake Rowland Bartlett: Okay.

Rajesh Vennam: I'm sorry, I was on mute. Jake, if you look at all of Garden's pricing for Q for the year, fiscal year, they were actually close to mid-trees. And so that's pretty consistent, you know, not not all the way to where Darden was. You know, blended was four. So they're about, you know, 50 or 70, 80 basis points below Darden. And as we think about next year, they're not going; we would expect them to be maybe in the, you know, 30, 40 basis points range of where Darden might end up. So I don't expect this to be as bigger a gap.

Speaker Change #151: I'm, sorry, I was on mute.

Jake Rowland Bartlett: Hey, Jake if you look at olive garden's pricing for a Q4 the year fiscal year deal would actually close to mid threes and so that's pretty consistent you know not not all the way to where darden was blended was forced or thereabout.

Jake Rowland Bartlett: If there are 70 80 basis points below Darden as we think about next year, they're not going up we would expect them to be maybe in the 30 40 basis points range of where the Arden might end up so I don't expect this to be as big of a gap, but we're still we're not talking about huge pricing actions right. We talked about there is always some timing of.

Rick Cardenas: But still, we're not talking about huge pricing actions, right. We talked about there is always some timing of the quarter to quarter. But on the year, if we think two and half to three, all of Garden is probably closer to two and half. Got it, but I think that that would imply that, you know, in the near term, you'd be caking up pricing, you know, and all of Garden in this environment, this macro environment. I'm wondering whether you think that creates a little bit of risk to traffic, even from where we started.

Jake Rowland Bartlett: The quarter to quarter, but on the year, which would think two and a half to three olive garden is probably closer to two and a half.

Rajesh Vennam: So does that suggest you've taken price recently and could see that range as early as the first quarter? Thank you. Yeah, Brian, the blended, let me start with the latter question. Yes, the blended is in the two and a half to three.

Speaker Change #152: Got it but I think that that would imply that in the near term you'd be taking up pricing and all of that.

Speaker Change #152: In this environment this new.

Speaker Change #153: The macro environment I'm wondering whether you think that creates a little bit of risk to traffic even from where we started.

Rick Cardenas: If you may mention that, but then I also just had to follow up on the past Recovery Act in California. And you guys have, you know, a decent presence there. And, you know, I think we haven't gotten a lot of commentary about the impact. Seems like some pretty seismic impacts in California impact on labor, but also shift in demand, maybe from limited service into casual dining. So any any comment there on what you've seen over the last few months as they're as the faster recovery action implemented.

Hum.

Speaker Change #154: And should that but then I also just had a follow up on the past recovery Act in California, you guys have.

Speaker Change #154: A decent presence there and you know I think.

We haven't gotten a lot of commentary about the impact seems like some pretty seismic impacts.

Speaker Change #154: California.

Speaker Change #154: Impact on labor, but also shifting demand maybe from.

Limited service and she into casual dining so any any comment there and what you've seen over the last few months says or as the fast recovery actions implemented.

Rick Cardenas: Hey, Jake, this is Rick. You know, I'm going to start on the fact act with saying that our employment proposition is great in California. So we've got a great one there on average. Our team members are in well over $20 an hour. You know, and California only represents about 5% of our restaurant. So it's not like it's over index for us. We haven't seen a real impact in wages since the FAST Act came about. But unfortunately, we have seen many closures, the fast food restaurants in that time. And so, you know, our California performance for the quarter was still not as strong as the company, as you said.

Hey, Jake this Rick I'm, you know I'm going to start on the fast act with saying that our employment proposition is great in California. So we've got a great when they're on average of team members are in well over $20 an hour.

Speaker Change #154: And California, only represents about 5% of our restaurants, so it's not like it to over index for us.

Speaker Change #154: We haven't seen a real impact on wages and since the fast that came about but unfortunately, we have seen many closures of fast food restaurants in that time, and so you know our California performance for the quarter was still not as strong as it is as the company as you said, but.

Rick Cardenas: But, as Raja said, you know, we did see some softness in California, but I think that was more related to some weather there than anything else. But again, you know, we haven't seen a whole lot of change in our wages. Our employment proposition is great in California. But we have seen some fast food restaurants, unfortunately, have to close because... of the Act.

Speaker Change #155: As Rajeev said, we did see some softness in California, but I think that was more related to some some weather there than anything else.

Speaker Change #155: But again you know we haven't seen a whole lot of change in our wages our employment proposition is great in California.

Speaker Change #155: But we have seen some fast food restaurants, Unfortunately have to close because of the act.

Rajesh Vennam: Thank you. Any price at all card now in this environment? So Jake, I'll go back to the pricing actions. Some of this is timing of when you take actions every year. There's a little bit of pricing action, right? And this year or in the law in fiscal 24, we did not have any pricing action until pretty late into maybe Q4, middle of Q4. So that's just already there. It's not, it's not a lot of pricing on top. Some of that is also moving to years, right? Some restaurants in different markets as things change with the environment and minimum wage.

Thank you.

Speaker Change #156: You know price at Olive Garden now in this environment.

Speaker Change #155: Yeah.

Rajesh Vennam: We have taken some pricing. We had, yeah, typically, we take some in June. So there's some pricing. So you should start to see some of that in the quarter. For the fourth quarter, our total check growth was 2.2% at Darden. I think Olive Garden was more like a 1.3, and Longhorn was probably in the three-ish percent.

Jay: So Jay I'll go back to the pricing actions that some of this is timing of when you take actions every year, there's a little bit of pricing action right and this year are in the late in fiscal 'twenty. Four we did not have any pricing action until pretty late into maybe Q4 middle of Q4. So that's just already there it's not a it's not a lot of.

Jay: On top of that some of that is also moving tiers right. Some restaurants in different markets as things change with the environment and minimum wage we make some adjustments, but nothing crazy. If you look at I mentioned earlier and in response to a different question. We have taken a lot less pricing at olive garden. So we're not worried about where they are I mean, if you look at all water.

Rick Cardenas: We make some adjustments. But nothing crazy. If you look at, I mentioned earlier in response to a different question, we have taken a lot less pricing at Olive Garden. So we're not worried about where they are. I mean, if you look at over the five years, cumulatively, their caterer is probably more than the three and half range, and the industry is closer to 5% plus. So we feel like there's a better, the great value proposition at Olive Garden. And we try to keep prices as low as we can, and you've seen that.

Jay: Five years cumulatively there their CAGR, it's probably more in the three and half range. When the industry is closer to 5% plus so we've we feel like there's a bedroom great value proposition that long at olive garden and ER.

Jay: We we we try to keep prices as long as we can and you've seen that.

Unknown Executive: Great.

Speaker Change #158: Great. Thank you very much.

Rajesh Vennam: Longhorn has positive traffic. Thanks very much. Thank you. Our next questions come from the line of Jake Bartlett with Truist Securities. Please proceed with your questions.

Unknown Executive: Thank you very much. Thank you.

Speaker Change #159: Thank you. Our next question comes from the line of Gregory Frankfurt with Guggenheim Securities. Please proceed with your questions.

Operator: Great, thanks for taking the question. You know, I wanted to dig in on that last question and answer a little bit more, and that's pricing at Olive Garden. You know, pricing decelerated to 1% in the fourth quarter.

Gregory Francfort: Our next question comes from a line of Gregory Frankfurt with Guggenheim Securities.

Rajesh Vennam: We talked about comps being similar across the brands in 2025 and pretty stable pricing throughout the year. Does that imply that you're going to see a pretty big step up in menu prices at Olive Garden, or should we expect kind of a similar, much more cautious pricing at Olive Garden throughout the whole year? I'm sorry. I was on mute.

Gregory Francfort: Please receive their questions. Hey, thanks for the question. My question is just a, I think it was asked on unit growth earlier in the call. And you guys were suggesting make sense to look at the long term. I think you're opening up 15 to 20 or so Olive Gardens a year, which is one of the faster paces of growth. We've seen it a long time. How many stores do you think Olive Garden could have on a long-term basis? You have a lot of competitors that are up at 1200, 1700 stores with a lot lower AUVs.

Gregory Ryan Francfort: Hey, Thanks for the question. My question is just a I think it was asked on unit growth earlier in the call and you guys were I'm, suggesting makes sense to look at the long term I think you're opening up 15 to 20 or so olive gardens, a year, which is one of the faster pace of growth we've seen it a long time.

Rajesh Vennam: Hey, Jake. If you look at Olive Garden's pricing for Q, for the year, fiscal year, they were actually close to the mid-threes. And so that's pretty consistent, you know, not all the way to where Darden was, you know, blended was four. So they're about 50 or 70, 80 basis points below Darden. As we think about next year, they're not going – we would expect them to be maybe in the, you know, 30, 40 basis points range of where Darden might end up.

Speaker Change #161: How many stores do you think olive garden could have on a long term basis, you have a lot of competitors that are up at 1200 700 stores with a lot lower au vs. I'm just sort of curious how you how you come up with a long term target for olive garden.

Rick Cardenas: I'm just sort of curious how you come up with a long-term target for Olive Garden.

Rick Cardenas: Thanks. Hey, Greg. Let me start by saying every time we come up with a target for Olive Garden, we blow past it. So we haven't really talked about a target for Olive Garden for a lot of years. What we have found over the last five or ten years is that we can open more Olive Gardens and markets that Olive Gardens are already in, where prior to that, we weren't doing that as much. Convenience is important to consumers, and we'd rather be a little closer where they live. And so we do believe there's opportunities to open Olive Gardens for the foreseeable future.

Greg Good: Hey, Greg Oh, let me start by saying every time, we come up with a target for olive garden, we blow past. It. So we haven't really talked about a target for olive garden for a lot of years, but we have found over the last you know five or 10 years is that we can open more olive garden's in markets that olive garden's variety in where they were prior to that we werent doing that as much.

Rajesh Vennam: So I don't expect this to be as big of a gap. But still, we're not talking about huge pricing actions, right? We talked about how there is always some timing from quarter to quarter. But on the year, if we think two and a half to three, Olive Garden is probably closer to two and a half. Got it. But I think that that would imply that, you know, in the near term, you'd be taking up pricing, you know, in this environment, this, this, you know, macro environment. I'm wondering whether you think that creates a little bit of risk to traffic, even from where we started. If you can, maybe, answer that?

Greg Good: Convenience is important to consumers and we'd rather be a little closer to where they live and so we do believe there's opportunities to open olive garden's for the foreseeable future.

Rick Cardenas: And we don't think we're near the top of the Olive Garden limit yet.

Greg Good: And we don't think we're near the top of the of the Olive garden limit yet.

Greg Good: Okay.

Unknown Executive: Greg, did you have any other questions? No, that was it. I appreciate the perspective.

Speaker Change #163: Greg did you have any other question.

Greg Good: None of that that that was it I appreciate the perspective. Thanks.

Unknown Executive: Thanks.

Unknown Executive: Thank you so much.

Speaker Change #164: Thank you so much.

Speaker Change #164: Yeah.

Andrew Trelzick: Thank you.

Speaker Change #165: Thank you our next questions come from the line of Andrew Charles <unk> with BMO capital markets. Please proceed with your questions.

Andrew Trelzick: Our next questions come from the line of Andrew Trelzick with BMO Capital Markets. Please proceed with your questions. Hey, good morning. Thanks for taking the questions. I just had two quick ones from me. It's been a lot of discussion about the low-income consumer. I think last quarter you said that you saw growth with a hiring consumer at all of your segments. So also we can get an update there on how that is trending if that's still what you're realizing. And then my second question is about the balance sheet, and you mentioned leverage being below the target.

Andrew Michael Charles: Hey, good morning, excuse me thanks for taking the questions I just had two quick ones for me. It's been a lot of discussion about the low income consumer I think last quarter. You said that you saw growth with the hiring consumer at all of your segments.

Ricardo Cardenas: But then I also just had a follow-up on the Fast Recovery Act in California, and you guys have, you know, a decent presence there. And, you know, I think we haven't gotten a lot of commentary about the impact, seems like some pretty seismic impacts in California, impact on labor, but also shift in demand, maybe from limited service into casual dining. So any comment there on what you've seen over the last few months as the Fast Recovery Act has been implemented? Hey, Jake, this is Rick.

Ricardo Cardenas: You know, I'm going to start on the FACTS Act with saying that our employment proposition is great in California. So we've got a great one there. On average, our team members earn well over $20 an, You know and California only represents about 5% of our restaurants, so it's not like it's over indexed for us We haven't seen a real impact in wages in since the FAST Act came about But unfortunately we have seen many closures of fast-food restaurants in that time and so you know our California performance for the quarter was still not as strong as the Cal as the company as you said But or as Rajesh said you know we did see some softness in California But I think that was more related to some some weather there than anything else But again, you know we haven't seen a whole lot of change in our wages our employment proposition is great in, California But we have seen some fast-food restaurants unfortunately have to close because of, Thank you. Thank you. You know, price at Olive Garden now in this environment. So, Jake, I'll go back to the pricing actions. Some of this is timing of when you take actions.

Rajesh Vennam: Every year, there's a little bit of pricing action, right? And this year, or in fiscal 24, we did not have any pricing action until pretty late into maybe Q4, the middle of Q4. So that's just already there. There's not a lot of additional pricing on top. But some of that is also moving tiers, right? Some restaurants in different markets, as things change with the environment and minimum wage, we make some adjustments. But nothing crazy.

Rajesh Vennam: If you look at, I mentioned earlier in response to a different question, we have taken a lot less pricing at Olive Garden. So we're not worried about where they are. I mean, if you look at the five years, cumulatively, their CAGR is probably more in the three and a half range when the industry is closer to 5% plus. So we feel like there's a better, great value proposition at Olive Garden. And, you know, we try to keep prices as low as we can. And you've seen that.

Andrew Michael Charles: So we could get an update there on how that is trending if that's still what you're realizing and then my second question is about the balance sheet and you mentioned a leverage being below the target it's been that way for a bit now so.

Rajesh Vennam: It's been that way for a bit now.

Rajesh Vennam: So I'm just curious how you're thinking about what might narrow that gap or how you're thinking about leverage in the balance sheet. Thanks, Andrew. Let's start with the question around the incomes. We are seeing the higher income being a little bit better. It varies from brand to brand. And as you can imagine, when you think about a brand that grew traffic for Longhorn, for example, they actually had growth pretty much across all income segments. But from a fine dining perspective, you're seeing growth at the higher end, up higher end. I wouldn't say that's just the median household.

Andrew Michael Charles: Just curious how you're thinking about you know what might narrow that gap or how you're thinking about leveraging the balance sheet going forward. Thanks.

Andrew Michael Charles: Andrew let's start with the question around the incomes are we are seeing the higher income being a little bit better a dip and it varies from brand to brand and acts as as you can imagine when you think about a brand that grew traffic for longhorn for example, they actually had growth pretty much across all income segments.

Operator: Great. Thank you very much. Thank you. Our next questions come from the line of Gregory Francfort with Guggenheim Securities. Please proceed with your question.

Operator: Hey, thanks for the question. My question is just a rephrase of what I think was asked about unit growth earlier in the call. And you guys were suggesting it makes sense to look at the long term. I think you're opening up 15 to 20 or so Olive Gardens a year, which is one of the faster paces of growth we've seen in a long time. How many stores do you think Olive Garden could have on a long-term basis? You have a lot of competitors that are up at 1200 1700 stores with a lot lower AUVs.

Ricardo Cardenas: I'm just sort of curious how you came up with a long-term target for Olive Garden. Thanks. Hey, Greg.

Ricardo Cardenas: Let me start by saying every time we come up with a target for Olive Garden, we blow past it. So we haven't really talked about a target for Olive Garden for a lot of years. What we have found over the last, you know, five or 10 years is that we can open more Olive Gardens in markets that we are already in, where prior to that, we weren't doing that as much.

Ricardo Cardenas: Convenience is important to consumers, and we'd rather be a little closer where they live. And so we do believe there are opportunities to open olive gardens for the foreseeable future. And we don't think we're near the top of the olive garden limit.

Andrew Michael Charles: But from a fine dining perspective, youre seeing growth at the higher end up hiring a I wouldn't say that's just the median household it's actually has to go up north of 150 to see where we're seeing some growth.

Rick Cardenas: It actually has to go up north of 150 to see where we're seeing some growth. And then the pullback is mostly at the lower, at the below middle median household income. And then the other segments are either other income groups or cohorts are either stable or growing. And then on the balance sheet, you know, we always work with our board to figure out what's the best way to kind of really position ourselves. We like the flexibility we have. And as we always said, we want to use our balance sheet to get productive assets over time.

Operator: Greg, did you have any other questions? No, no, that was it. I appreciate the perspective. Thanks. Thank you. Thank you. Our next questions come from the line of Andrew Strelzik with BMO Capital Markets. Please proceed with your question. Hey, good morning. Excuse me. Thanks for taking the questions. I just had two quick ones from me.

Andrew Michael Charles: And then the pullback is mostly at the lower below Middle median household income and then the other segments or the other other income groups of cohorts are either stable or growing.

Operator: There's been a lot of discussion about the low income consumer. I think last quarter, you said that you saw growth with the higher end consumer at all of your segments. So I was hoping we could get an update on how that is trending, if that's still what you're realizing. And then my second question is about the balance sheet. And you mentioned leverage being below the target. It's been that way for a bit now.

Andrew Michael Charles: And then on the balance sheet, you know, we always work with our board to figure out what's the best way to kind of really position ourselves.

Andrew Michael Charles: Did we we liked the flexibility we have and as we've always said we want to use our.

Rajesh Vennam: So I'm just curious how you're thinking about, you know, what might narrow that gap, or how you're thinking about leveraging the balance sheet? Andrew. Let's start with the question around income. We are seeing higher income being a little bit better, but it varies from brand to brand.

Rajesh Vennam: And actually, as you can imagine, when you think about a brand that grew traffic for Longhorn, for example, they actually had growth pretty much across all income segments. But from a fine dining perspective, you're seeing growth at the higher end. I wouldn't say that's just the median household; it actually has to go up north of 150 to see where we're seeing some growth. And then the pullback is mostly at the lower end, at the below-middle median household income. And then the other segments are either; other income groups or cohorts are either stable or growing.

Rajesh Vennam: And then on the balance sheet, you know, we always work with our board to figure out what's the best way to kind of really position ourselves. We like the flexibility we have. And as we've always said, we want to use, you know, our balance sheet to get productive assets over time. And, you know, so that philosophy remains the same. Great, thank you very much. Thank you. We have reached the end of our question and answer session.

Andrew Michael Charles: Our balance sheet to get productive assets all of our time on and I said, that's still the philosophy remains the same.

Rajesh Vennam: And so, that's still the philosophy remains the same.

Andrew Michael Charles: Yeah.

Unknown Executive: Great. Thank you very much.

Speaker Change #166: Great. Thank you very much.

Unknown Executive: Thank you.

Speaker Change #167: Thank you we have reached the end of our question and answer session I would now like to turn the floor back over to Courtney Aquila for closing remarks.

Unknown Executive: We have reached the end of our question-and-answer session.

Rajesh Vennam: I would now like to turn the floor back over to Courtney Aquila for a closing remark. That concludes our call. I want to remind you that we plan to release our first quarter results on Thursday, September 19th before the market opens, with a conference call to follow. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. BF-WATCH TV 2021, [inaudible]

Courtney Aquilla: I would now like to turn the floor back over to Courtney Aquilla for closing remarks.

Courtney Aquilla: That concludes our call. I want to remind you that we plan to release first quarter results on Thursday, September 19, before the market opens, with the conference call to follow. Thank you for participating in today's call.

Speaker Change #168: That concludes our call I want to remind you that we plan to release first quarter results on Thursday September 19th before the market opens with a conference call to follow thank you for participating in today's call.

Unknown Executive: Thank you.

Speaker Change #169: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time they enjoy the rest of your day.

Unknown Executive: This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. Thank you.

Speaker Change #169: Yeah.

[music].

Speaker Change #169: Yeah.

Speaker Change #169: Yeah.

Speaker Change #169: [music].