Darden Restaurants, Inc. (NYSE:DRI) Q1 2024 Earnings Call Transcript - Page 9 of 19 - InvestingChannel

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

Joshua Long: Great. Thank you for taking my question. When we think about the trends you reported here in the first quarter, I understand that the strength was largely in line with what you were expecting. Curious, if you could dive into any sort of comments around pacing, geographic performance, daypart, day of week, anything there or perhaps sales channel kind of in the to-go business for Olive Garden?

Raj Vennam: Yeah, Josh. I think from a geography perspective, we’re seeing more strength in New England, Northeast, we’re seeing some softness or at least below company average in California, Texas and Florida when we look at the entire portfolio. Now brand by brand, there’s a little bit of variability. But when you look at across our portfolio, that’s the areas where we’re seeing in terms of regional differences. Most others are kind of in between, and so kind of closer to the company average, if you will. But definitely seeing strength in the Northeast and especially New England area overall. From a daypart perspective, we are seeing some lunch getting better at casual brands. And so that’s really it. Outside of that, I don’t know that there’s any additional color we can provide on the sales detail.

Joshua Long: That’s helpful. And then one point of clarification, Raj, there. When we think about maybe California, Texas, Florida being a little bit softer on a relative basis, do we think about that just from a kind of base of comparison? It feels like they were probably stronger over the last couple of years. So maybe it’s just a kind of point of comparison. And then maybe, Rick, when you think about just that opportunity to drive the marketing and messaging, I would totally agree about the opportunity for the balance of operational execution and value to be a big key component in the second half of the year. It doesn’t sound like you need to lean in or change the messaging. Is that correct? I mean you feel good with how you’re communicating that it’s about going out and executing it.

Raj Vennam: Okay. So let me — yeah, you’re right on the year over. It’s really driven by a function of last year on the softness I’m talking about in those markets or the strength because last year, they were in a different place. So that’s a one year — truly a one-year thing, and then I’ll let Rick comment on the marketing.

Rick Cardenas: Yeah, Josh. I think now that we’re seeing that we think we’re getting back to more seasonal patterns. We look at our traffic trends versus pre-COVID. They’re fairly consistent across the last four quarters across most of our brand — actually, in most of our segments. And so we believe what we’re doing is getting us to exactly where we were before without a bunch of marketing with at maybe slightly lower traffic levels because of that marketing. And so we’re going to stick to what we’re doing and see if the patterns dramatically change. And if they do, we have levers to pull that aren’t necessarily deep discounts. And one of them that we just pulled with Never Ending Pasta Bowl was to give our eClub members a preview of Never Ending Pasta Bowl, which again was always in our plan.

It was in our plan at the beginning of this fiscal year. It’s not something we’re doing differently we’re doing it to learn. If we give our eClub members a little bit more reason to be in the club without giving them a discount to be in the club, then maybe that’s going to drive more. So we’re still learning, and we’re looking at digital marketing and other things that we’ve done and we’ve learned throughout COVID. And if we do anything, we could use those levers but not necessarily deep discounts.

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