Darden Restaurants, Inc.

Greetings, and welcome to the Darden Restaurant's Q2 fiscal year 2026 earnings conference call and webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad, and we ask you to please ask one question and one follow-up to return to the queue. If anyone should require operator assistance, please press star 0. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Courtney Aquila, Vice President, Finance and Investor Relations. Courtney, please go ahead.

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 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 risk 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 the filings with the Securities and Exchange Commission. We are simultaneously broadcasting a presentation during this call, which is available on the Financials tab in the Investors section of our website at Darden.com. Today's discussion and presentation includes certain non-GAAP measurements and reconciliations of these measurements are included in the presentation. Looking ahead, we plan to release fiscal 2026 third quarter earnings on Thursday, March 19th, before the market opens, followed by a conference call. During today's call, all references to industry results refer to the Black Box Intelligence casual dining benchmark, excluding Darden. During our fiscal second quarter, average same restaurant sales for the industry grew 1.3%, and average same-restaurant guest counts decreased 0.4%. Additionally, median same-restaurant sales for the industry grew 1.9%, and median same-restaurant guest counts decreased 0.5%. This morning, Rick will share some brief remarks on the quarter. Raj will provide detail on our second quarter financial performance and share our updated fiscal 2026 financial outlook. Then Rick will close with some final comments. Now I'll turn the call over to Rick.

Thank you, Courtney, and good morning, everyone. We had a strong quarter that exceeded our sales expectations as each of our segments delivered positive same restaurant sales. Commodity headwinds were stronger than we anticipated as beef prices remained at historically high levels throughout the quarter. Our restaurant teams did a great job of being brilliant with the basics during the quarter, driving record or near record guest satisfaction scores across all of our brands. At the Darden level, we continue to leverage our four competitive advantages to enable our brands to compete effectively and continue providing strong value to our guests. The power of our scale enables us to continue to price below inflation over the long term and not pass all the costs on to our guests, while the breadth of our portfolio enables our brands to stick to their strategy, even if they are overly impacted by a single commodity. We opened 17 new restaurants during the quarter and are on pace to exceed our planned openings for the full fiscal year. These new restaurants opened faster than planned, collectively contributing 40 additional operating weeks versus our plan for the quarter. This is a testament to the outstanding job Todd Burrows and the entire development team, led by Mark Braun, have done to strengthen our pipeline. Olive Garden delivered positive same restaurant sales at 4.7% for the quarter, driven by the success of the never-ending pasta bowl promotion and first-party delivery, combined with strong operational execution that led to all-time high guest satisfaction scores. For the fourth consecutive year, the starting price for never-ending pasta bowl was $13.99. Preference was strong, and refill rates reached a record high, demonstrating that guests continue to find abundance and meaningful value at Olive Garden in this environment. First-party delivery through our partnership with Uber Direct continue to drive strong results. This channel attracts younger, more affluent guests who crave Olive Garden at home, value convenience, and order more frequently. These guests have a higher check average than dine-in guests. Uber Direct sales represented 4% of total sales for the quarter, and approximately half of that was incremental. As we have discussed on recent calls, Across the portfolio, we are placing a greater emphasis on sales growth and reinvesting to drive long-term success. At Olive Garden, the success of first-party delivery is helping fund investments such as the addition of the lighter portion section on their menu, which features seven existing dishes with a smaller portion and a lower price. This section is designed to give guests more choices and is offered in addition to the Olive Garden's regular portion sizes. Olive Garden has seen a double-digit increase in affordability perceptions from guests who order from the lighter portions menu and an increase in frequency among these guests, which should help build traffic over time. Forty percent of restaurants offered this menu during the quarter, and they added another 20 percent of locations early in the third quarter. Olive Garden plans to complete the rollout system-wide in January. As we begin the third quarter, the Olive Garden team is poised to build on their momentum. They are currently offering two fan favorites for a limited time, ravioli de portobello and braised beef tortelloni. Thousands of Olive Garden fans requested the return of these iconic dishes, which included multiple online petitions to bring them back. Starting for Longhorn Steakhouse, the team's ongoing commitment to their strategy, rooted in quality, simplicity, and culture, continued to guide their success as they delivered strong top-line momentum driven by same restaurant sales growth of 5.9%. Their relentless focus on executing every dish on their menu to their high standards was reflected in an all-time high Stakesville correctly score for the quarter. Their ability to consistently operate at this high level is enabled by having one of the most experienced teams in the industry. In fact, Longhorn further strengthened their impressive retention by setting their record low for team member turnover during the quarter. The investments Longhorn has made in food quality, combined with their grilling expertise, have built strong guest loyalty. And to further build on their leadership in food quality, Longhorn brought back a guest favorite for the holidays, the 14-ounce, seven-pepper-crusted New York strip with brown butter sauce, which was met with enthusiastic reviews by guests and social media influencers. Same restaurant sales for our other business segment grew 3.1% during the quarter, driven by strong performance at Yardhouse, During the quarter, Yardhouse's Oktoberfest event returned for the fifth year. This event continued to deepen guest engagement and drive results through limited-time menu offerings that strengthened Yardhouse's competitive advantages of a socially energized bar and distinctive culinary with broad appeal. The event also featured a $5 refillable beer stein that was a hit with guests, with all steins selling out within the first few weeks. Also during the quarter, Yardhouse began rolling out first-party delivery through our partnership with Uber Direct. While the impact on total sales won't be as significant as what we've seen at Olive Garden, the team is pleased with the initial results and plans to continue rolling it out to additional restaurants in the third quarter. Same-restaurant sales for the fine dining segment grew 0.8% for the quarter, given by strong performance at Roosker Steakhouse and improving trends at the Capitol Grill. As guests continued to seek price certainty, Roost Crisp brought back its limited-time offer, featuring a three-course menu for $55. It was a key driver of sales and traffic growth and featured a new eight-ounce prime thick-cut strip and two guest favorites, stuffed chicken and salmon and shrimp. Each entree came with a soup or salad, an individual side, and a dessert. The Capitol Grill's Wagyu and Wine event returned during the quarter. featuring a choice of a Dave Finney wine and Wagyu burger for $35. This event delivered strong guest preference and sales momentum at the Capitol Grill continued to grow throughout the quarter. I am pleased with our performance as we move back into the back half of our year. Our brand teams have the appropriate plans in place, and the power of Darden positions us well to win in a competitive environment. Now I'll turn it over to Raj.