Darden Restaurants, Inc.

Hello, and welcome to the Darden fiscal year 2024 third quarter earnings call. Your lines have been placed on a listen-only mode until the question and answer session. To ask a question, you may press star 1 on your touchtone phone. We ask you to please ask one question and one follow-up. This conference is being recorded. If you have any objections, please disconnect at this time. I'll now turn the call over to Mr. Kevin Kalachak. Thank you. You may begin, Kevin.

Thank you, Kevin. Good morning, everyone, and thank you for participating on today's call. Joining me today are Rick Cardenas, Darden's President and CEO, and Raj Vinam, 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 presentations 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. Looking ahead, we plan to release fiscal 2024 fourth quarter earnings on Thursday, June 20th, before the market opens, followed by a conference call. During today's call, Any reference to pre-COVID when discussing third quarter performance is a comparison to the third quarter of fiscal 2020. Additionally, all references to industry results during today's call refer to Black Box Intelligence's casual dining benchmark, excluding Darden, specifically Olive Garden, Longhorn Steakhouse, and Cheddar Scratch Kitchen. During our fiscal third quarter, industry same restaurant sales decreased 4.2%. And industry same restaurant guest counts decreased 6.5%. This morning, Rick will share some brief remarks on the quarter, and Raj will provide details on our financial results and an update to our fiscal 2024 financial outlook. Now I'll turn the call over to Rick.

Thank you, Kevin. Good morning, everyone. I'm proud of our results this quarter. Each one of our segments grew total sales and profit in an operating environment that was tougher than we anticipated. We continued to outperform the industry benchmarks for same restaurant sales and traffic. Total sales were $3 billion, an increase of 6.8%, and adjusted diluted net earnings per share were $2.62, which was in line with our expectations. We opened 16 restaurants during this quarter. Fiscal year to date, we have opened 43 restaurants in 22 states, seven of which were reopenings. The quarter started well with strong holiday performance in December, but unfavorable winter weather negatively impacted January traffic. And while February results improved, we experienced some underlying softness we had not seen in the months leading up to January. The lower income consumer does appear to be pulling back, and the mix of guests based on income is now in line with pre-COVID. I am proud that even as industry traffic trends weakened, we were able to gain share. We continue to focus on controlling what we can control, leveraging and strengthening our four competitive advantages of significant scale, extensive data and insights, rigorous strategic planning, and our results-oriented culture, and executing our back-to-basics operating philosophy anchored in food, service, and atmosphere. Our restaurant teams continue to perform at their best, especially during our busiest times. the Capital Grill set their all-time total monthly sales record. In February, Eddie V's set their all-time total weekly sales record, and Olive Garden established a new sales record for Valentine's Day. Our internal guest satisfaction metrics reflect our team's focus on being brilliant with the basics. All of our brands remained at or near all-time highs for overall guest satisfaction during the quarter. Additionally, within the casual dining, polished casual, and fine dining segments of Technomics Industry Tracking Tool, a Darden brand was ranked number one for overall experience. The brands were Longhorn Steakhouse, Seasons 52, and Ruth's Chris Steakhouse. Our team's ability to execute at a high level is driven by strong leadership and team member engagement across our brands. We work hard to ensure our results-oriented culture is a competitive advantage for us, and our industry-leading retention rates confirm it is in an area of strength. During the quarter, we completed our biannual engagement survey, and our results showed that our overall level of engagement is at an all-time high. Also during the quarter, three of our brands were recognized as industry leaders in black box intelligence. Longhorn, the Capital Grill, and Season 52 each received the Employer of Choice Award. Now let me provide a quick update on Ruth Chris. We are in the final stage of integration and remain on track to complete the major changes by the end of the fiscal year. We successfully completed the migration onto our HR platform at the end of December and all restaurants have now successfully transitioned to our distribution network. Currently, we are halfway through converting the restaurants over to our point of sale system, and we are on track to complete that work by the end of May. This is the most challenging part of integration, and I'm really proud of the focus the Ruth's Chris team continues to have on delivering exceptional guest experiences. This can be seen in the fact that Ruth's Chris was named America's favorite chain restaurant in Technomic's annual survey that was released during the quarter. The survey measures perceptions of service and hospitality, unit appearance and ambiance, food and beverage, convenience, and value. In addition to Ruth's Crisp, Seasons 52, Bahama Breeze, Longhorn, and the Capital Grill were all ranked in the top 10. Overall, I am pleased with our performance this quarter. We continue to manage the business for the long term by executing against our strategy and controlling what we can control. We also continue to work in pursuit of our shared purpose to nourish and delight everyone we serve. One of the ways we do this is for our team members and their families is through our next course scholarship program. Earlier this month, the Darden Foundation awarded more than 100 post-secondary education scholarships worth $3,000 each to children of Darden team members. Education is one of the greatest equalizers in our country, and I'm thrilled that we can create a lasting impact on the lives of our team members' families through this program. Finally, I want to thank our 190,000 team members for everything you do to create exceptional experiences for our guests. You are the reason brands continue to be recognized as great places to work and top dining destinations. Now, I will turn it over to Raj.