Q1 2025 Darden Restaurants Inc Earnings Call Transcript
Key Points
- Darden Restaurants Inc (DRI) reported industry-leading margins and generated more adjusted EBITDA than the prior year, highlighting the durability and cash generation of their business model.
- The company introduced successful new menu items across its brands, such as Olive Garden's Steak Gorgonzola Alfredo and LongHorn Steakhouse's lemon garlic chicken, which have been well-received by guests.
- Darden Restaurants Inc (DRI) has a strong focus on operational execution, including culinary innovation, attentive service, and an engaging atmosphere, supported by effective marketing programs.
- The partnership with Uber for first-party delivery is expected to enhance the take-out experience without disrupting restaurant operations or compromising the business model.
- Darden Restaurants Inc (DRI) continues to invest in maintaining and remodeling its restaurants, spending approximately $200,000 per restaurant annually to keep facilities fresh and inviting.
- Darden Restaurants Inc (DRI) experienced a significant step-down in traffic beginning with the Fourth of July holiday, leading to lower-than-expected earnings results for the first quarter.
- Olive Garden's same-restaurant sales decreased by 2.9%, underperforming the industry benchmark by 40 basis points.
- The fine dining segment faced challenges, with negative same-restaurant sales at both Capital Grille and Eddie V's, resulting in lower segment profit margins.
- Despite the sales rebound in August, the first quarter saw negative same-restaurant sales of 1.1%, impacting overall performance.
- The company acknowledged that the full-service restaurant category has not kept up with the faster pace of the world, indicating a need for improvement in evaluating guest time and capturing quicker-meal occasions.
Hello, and welcome to the Darden fiscal year 2025 first-quarter earnings call. (Operator Instructions) The conference is being recorded. If you have any objections, please disconnect at this time.
I'll now turn the call over to Ms. Courtney Aquilla. Thank you, Courtney. You may begin.
Thank you, Kevin. Good morning, everyone, and thank you for participating on today's call. Joining me 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. These statements are subject to risks and uncertainties that can cause the actual results to differ materially from our expectations and projections.
Those risks are described in the company's press release, which was distributed this morning and is in the filings -- in its filings with the Securities and Exchange Commission. We are
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