Darden Restaurants, Inc. Q3 FY2026 earnings call

• Strong quarter with $3.3 billion total sales, 5.9% higher than last year, driven by 4.2% same-restaurant sales growth. • Outperforming industry same-restaurant sales, with each of four largest brands exceeding industry by over 400 basis points. • All segments had positive same-restaurant sales, high team member and manager retention. • Olive Garden had 3.2% same-restaurant sales growth, completed lighter portion menu rollout, record Valentine's Day sales. • Longhorn had 7.2% same-restaurant sales growth, recognized as best place to work by Glassdoor. • Fine dining segment had 2.1% same-restaurant sales growth, private dining sales growth. • Other business segment had 3.9% same-restaurant sales growth, strong performance at Yard House, Cheddar's maintained affordability ranking

Olive Garden: Total sales increased by 4.7%, driven by same-restaurant sales growth of 3.2% and 17 net new restaurants. Segment profit margin was 23%, 10 basis points below last year. Longhorn: Total sales increased 11.2%, driven by same-restaurant sales growth of 7.2% and 22 net new restaurants. Segment profit margin was 18.6%. Fine dining segment: Total sales increased 4.3%, driven by positive same-restaurant sales of 2.1% and 2 net new restaurants. Segment profit margin was 22%, 50 basis points lower than last year. Other business segment: Sales increased 3.2%, driven by positive same-restaurant sales of 3.9% and partial offset by permanent closure of Bahama Breeze restaurants. Segment profit margin was 15.6%, flat to last year

• Fiscal 2026 total sales growth expected ~9.5%, same-restaurant sales growth ~4.5%, ~70 new restaurant openings, commodities inflation ~4%, effective tax rate ~12.5%, adjusted diluted net earnings per share $10.57 - $10.67 including ~25 cents from 53rd week. • Fourth quarter total sales growth 13% - 14.5% (including extra week), same-restaurant sales growth 3.5% - 5%, adjusted diluted net earnings per share $3.59 - $3.69. • Fiscal 2027 expect 75 - 80 new restaurants plus converting 14 Bahama Breeze locations, ~$850 million capital spend, effective tax rate ~13.5%, total interest expense ~$200 million

Q: Brian Bittner on same store sales guidance and ability to lap tougher comparisons.

A: Raj Vinam and Rick Cardenas discuss drivers of growth, initiatives, and that they've shown ability to achieve commitments.

Q: David Palmer on same-store sales growth gap between Longhorn and Olive Garden.

A: Rick Cardenas explains Longhorn's focus on quality, pricing, traffic growth, and that gaps fluctuate.

Q: Lauren Zimmerman on gas prices impact and Q4 guide.

A: Rick Cardenas says gas prices don't strongly correlate with restaurant spending, and Q4 guide range reflects uncertainty.

Q: Christine Cho on prices, locked-in rates, and lighter portion menu at Olive Garden.

A: Rick Cardenas and Raj Vinam discuss pricing, locked-in rates, and positive trends in lighter portion menu.

Q: Chris Carroll on marketing expense and fine dining segment.

A: Raj Vinam and Rick Cardenas talk about marketing expense and fine dining segment performance.

Q: Sarah Senator on price and mix.

A: Raj Vinam provides details on price and mix for different brands.

Q: John Tower on Olive Garden delivery and lighter fare opportunity.

A: Rick Cardenas and Raj Vinam discuss Olive Garden delivery and potential for lighter fare in other brands.

Q: Brian Harbor on income cohort and fine dining.

A: Rick Cardenas discusses income cohort growth and fine dining segment growth.

Q: Jeffrey Bernstein on fiscal 26 guidance and EPS.

A: Raj Vinam explains fiscal 26 guidance and EPS.

Q: Jim Solero on beef demand destruction and traffic.

A: Rick Cardenas and Raj Vinam discuss beef demand and traffic drivers.

Q: Andrew Charles on Olive Garden catering and Bahama Breeze conversions.

A: Rick Cardenas talks about Olive Garden catering and Bahama Breeze conversions.

Q: David Tarantino on commodity cost outlook.

A: Raj Vinam discusses commodity cost outlook.

Q: Danilo Gordrillo on turnover rate and labor productivity.

A: Rick Cardenas discusses turnover rate and labor productivity.

Q: Gregory Frankfurt on AI tools.

A: Rick Cardenas talks about AI tools and their use.

Q: Jeff Farmer on off-premise mix.

A: Raj Vinam and Rick Cardenas discuss off-premise mix.

Q: Dennis Cocker on tax rebates.

A: Raj Vinam talks about tax rebates.

Q: Andrew Strelzyk on commodity inflation and new units.

A: Raj Vinam discusses commodity inflation and new unit growth.

Q: Johnny Blanco on operational excellence and AI.

A: Rick Cardenas talks about operational excellence and AI.

Q: Brian Vaccaro on casual dining segment gap and G&A.

A: Rick Cardenas and Raj Vinam discuss casual dining segment gap and G&A