Darden Restaurants, Inc. (NYSE:DRI) Q1 2024 Earnings Call Transcript - Page 16 of 19 - InvestingChannel

Darden Restaurants, Inc. (NYSE:DRI) Q1 2024 Earnings Call Transcript

John Ivankoe: Hi. Thank you. I know in the past, we’ve talked about some different traffic performance from the under 35 consumer and the over 55 consumer. And it is interesting, especially for some of your older consumers who may be on fixed incomes actually could be benefiting from the increase in interest rates, but conversely, the sub-35 consumer, based on where their incomes are, the student loan repayments might actually affect them the most. Maybe it’s a little bit of a real term question, but I wonder if you’re beginning to see behavior differences not just from an income cohort, but from an age cohort and how you see that influencing your business?

Raj Vennam: Yeah, John. Actually, what we are — we are continuing to see actually the consumers below 35 be actually continuing to grow as a mix. In fact, when we look at versus last year versus last quarter and as well as versus pre-COVID, consumers below 35 are still trending better. In fact, and then 55 plus, especially 65-plus is still below pre-COVID and actually a slight decline from last quarter to this quarter. So we — so it feels like from a mix perspective, we’re seeing more younger consumer. And we’re kind of seeing something along the lines of what Rick mentioned on the income spectrum too, where our lower income makes up a bigger percentage of our guest base today than it did before COVID. But we’re not seeing any cracks in that those trends because we’ve been tracking that for a few quarters now and it seems to be holding up pretty well.

Now if is something going to change in the future, we can — and at this point, we don’t have any insight to say whether that’s going to change or not.

John Ivankoe: And in terms of reattracting that 55 or 65 year old, I mean because — I mean, if I would have told you about four years ago, we would have said, gosh, that’s a big change for your business, especially at Olive Garden. Is there a way to kind of reattract that consumer, I assume it wouldn’t be specific to your brands that it would be broadly, but is that an opportunity to maybe re-add that subset of customers?

Rick Cardenas: Hey, John. I think about reattracting any consumer. We’re trying to add one more visit from our loyal guests and we had a lot of loyal guests above 65. I do believe that they were a little bit more spooked on the COVID side and they should have been. If COVID have impacted them a little bit more. And we’re going to continue to focus our efforts. And if we can do some targeted marketing to them, we’ve got a big e-club. We can use our eClub to talk to them and say, hey, come back to Olive Garden. But I don’t think we’re going to do some dramatic things because we’ve actually seen a pretty big increase in our younger consumer. And I think if people would have asked us five years ago to say, hey, we don’t have enough younger consumers, they would have thought, wow, I can’t believe how many consumers you’ve had on the younger side.

So we actually like that consumer. We think that consumer is going to be a strong consumer for us, but we value all of our customers, including those over 65 and we’d love to see them come back more frequently.

John Ivankoe: Understood. Thank you. Sorry.

A – Rick Cardenas: Yeah. Sure. And I want to clarify something that I said to Greg, I said that our operated restaurants will be lower in mix for Ruth’s and not, it’s actually higher. So it should be higher in the future. Sorry about that.

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

Brian Vaccaro: Hi. Thanks. Good morning. Just two quick data items, if you could. Could you share what off-premise mix was for Olive Garden and LongHorn in the quarter? And I know it will be in the 10-Q, but maybe also what was traffic for each of those brands in the quarter?

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