Darden Restaurants, Inc.

Welcome to the Darden Fiscal Year 2021 Third Quarter Earnings Call. Your lines have been placed on listen only until the question and answer session. To ask a question, you may press star 1 on your touchtone phone. Please limit yourself to one question and one follow-up to allow everyone an opportunity. This conference is being recorded. If you have any objections, please disconnect at this time. I will now turn the call over to Mr. Kevin Kalkak. Thank you. You may begin.

Thank you, Jack. Good morning, everyone, and thank you for participating on today's call. Joining me on the call today are Gene Lee, Darden's Chairman and CEO, Rick Cardena, COO, and Raj Banam, 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, and in its filings with the Securities and Exchange Commission. We are simultaneously broadcasting a presentation during this call, which is posted in the investor relations section of our website at Darden.com. Today's discussion and presentation include certain non-GAAP measurements, and reconciliations of these measurements are included in the presentation. We plan to release fiscal 2021 fourth quarter earnings on June 24th before the market opens, followed by a conference call. This morning, Gene will share some brief remarks, Rick will give an update on our four operating priorities, and Raj will provide more detail on our financial results and share our outlook for the fourth quarter and a partial outlook for fiscal 2022. Now, I'll turn the call over to Gene.

Thanks, Kevin, and good morning, everyone. It's hard to believe it's been a year since the pandemic began to significantly impact our business. When I reflect back on everything that has transpired, it is clear to me the strategy we developed six years ago provided a strong foundation to help us navigate this period of unprecedented change and uncertainty. Our portfolio of iconic brands has been focused on executing our back-to-basics operating philosophy while leveraging our four competitive advantages of significant scale, extensive data and insights, rigorous strategic planning, and our results-oriented culture. And while our four competitive advantages were critical to our business and operational success this past year, our significant scale and results-oriented culture have played an outsized role in our ability to emerge stronger. Our significant scale enabled us to quickly react to the turbulent operating environment. The depth and breadth of our supply chain relationships ensured that we could adjust our product supply as needed without experiencing any significant interruptions. We have our own dedicated distribution network and the assurance of an uninterrupted supply chain provided consistency and a high level of certainty for our operators. Our scale also enabled us to significantly accelerate the development of online ordering and several other digital initiatives and cascade them across our brands quickly and effectively. The robust expansion of our digital platform over the past year has provided us a richer set of first party data on new and existing guests. Finally, our scale provided us with multiple levers to pull to ensure we had the liquidity we needed during the early days of COVID-19. As soon as our liquidity needs were solved for, our brands were able to focus on strengthening their value propositions and transforming their business models. As our founder, Bill Darden, said, the greatest competitive advantage our company has is the quality of our employees, evidenced by the excellent job they do every day. Throughout this past year, Darden and our brands have emerged stronger, and our success is a direct result of our team members and their relentless commitment to delivering safe and exceptional guest experiences. That is why we've continued to invest in our team members throughout the past year. Since March of 2020, we've invested more than $200 million in our people through programs such as paid sick leave. COVID-19 emergency pay, and covering insurance payments and benefit deductions for team members who were furloughed. These investments also include our recent decision to provide all hourly restaurant team members up to four hours of paid time off for the purpose of receiving the COVID-19 vaccine. In addition, these investments include the one-time bonus we announced today, totaling approximately $17 million, which will impact nearly 90,000 hourly team members. As we continue to grow our business and welcome guests back into our restaurants, continuing to attract and retain the best talent in the industry will be critical to our success. While we're proud that on average our hourly restaurant team members earn more than $17 per hour today, which includes our servers and bartenders who earn more than $20 an hour, I'm excited about the investment we made this morning. Beginning Monday, every hourly team member, tipped and non-tipped, will earn at least $10 per hour, inclusive of TIP income. Additionally, we are committed to raising that amount to $11 per hour in January 2022 and to $12 per hour in January 2023. These investments further strengthen our industry-leading employment proposition. Lastly, I continue to be impressed and inspired by our team members who have shown extraordinary resilience and passion during the past year. Once again, I thank you for your commitment to delivering exceptional guest experiences in our dining room and through curbside to go. You are the heart and soul of our company, and on behalf of the management team, we're extremely grateful to you.