Q2 2025 Darden Restaurants Inc Earnings Call Transcript
Key Points
- Darden Restaurants Inc (DRI) reported a strong quarter with positive same-restaurant sales at three of its four largest brands: Olive Garden, LongHorn Steakhouse, Yard House, and Cheddar's Scratch Kitchen.
- The Olive Garden's Never Ending Pasta Bowl promotion was successful, achieving the highest refill rate ever and higher protein add-ons compared to last year.
- LongHorn Steakhouse exceeded expectations with a 7.5% same-restaurant sales growth, outperforming the industry benchmark by 650 basis points.
- Cheddar's Scratch Kitchen achieved its best-ever retention level and ranked first among casual dining brands for affordability in Technomic's survey.
- Darden Restaurants Inc (DRI) generated $2.9 billion in total sales, a 6% increase from the previous year, and returned $308 million to shareholders through dividends and share repurchases.
- Fine Dining segment sales decreased by 3.8%, with negative same-restaurant sales across all fine dining brands, impacted by the Thanksgiving holiday shift and hurricanes.
- The integration of Chuy's is expected to take longer than the Ruth's Chris integration due to the rollout of a new point-of-sale system.
- Hurricanes Helene and Milton caused disruptions, with one Cheddar's restaurant in Asheville, North Carolina, remaining closed due to damage.
- Despite positive sales, Olive Garden's gap to the industry has narrowed, partly due to not engaging in significant discounting promotions.
- Marketing expenses increased by 30 basis points due to extended media spending for the Never Ending Pasta Bowl promotion.
Greetings, and welcome to the Darden Restaurants Inc. Q2 fiscal year 2025 earnings conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded.
It's now my pleasure to turn the call over to your host, Phil McClain, Vice President, Finance and Investor Relations. Please go ahead, Phil.
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 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 morning in its filings with the Securities and Exchange Commission.
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