With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are food services and hotels and casinos.

Fortune Sector Leaders: Hotels, Restaurants, and Leisure

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-377-Darden Restaurants

Operating out of Orlando, Fla., the group's dine-in restaurant portfolio includes some of the country's most-recognized franchises including Olive Garden, Cheddar's, and Longhorn Steakhouse.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-372-Darden-Restaurants

The multi-brand restaurant operator is the parent of international dining chains including Olive Garden, LongHorn Steakhouse, Bahama Breeze, the Capital Grille, Eddie V's, and Yard House.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Google tops the list once again, marking its eighth appearance and fifth time as No. 1.

Fortune 100 Best Companies to Work For

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Darden Restaurants owns and operates a portfolio of full-service restaurants in the U.S. and Canada. Its well-known brands include Olive Garden, LongHorn Steakhouse, Ruth’s Chris Steak House, the Capital Grille, and Eddie V’s Prime Seafood, among others. Darden is also the former owner of Red Lobster, which the company sold to Golden Gate Capital in 2014 for $2.1 billion. The company was founded in 1968 when William Darden opened the first Red Lobster restaurant in Lakeland, Fla.

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Darden Restaurants (DRI): Company Profile, Stock Price, News, Rankings

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Darden Restaurants

darden restaurants

Greetings, and welcome to the Darden Restaurants Inc. Q3 Fiscal Year twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Courtney Aquila, Senior Director, Finance and Investor Relations. Please go ahead, Courtney.

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 Raja Nand's 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 uncertainty that can 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. Looking ahead, we plan to release fiscal twenty twenty five fourth quarter earnings on Friday, June 20, before the market opens followed by a conference call. During today's call, all reference to industry results refer to Black Box Intelligence Casual Dining average benchmark excluding Darden.

During the fiscal third quarter, average same restaurant sales for the industry grew 0.9% and average same restaurant guest counts decreased 1.2. Additionally, due to a significant divergence between average and median results, we are sharing that the median same restaurant sales for the industry decreased 2.3% and median same restaurant guest counts decreased 4.2%. This represents the largest disparity between average and median observed in recent years. 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 twenty twenty five financial outlook. Now, I will turn the call over to Rick.

Thank you, Courtney, and good morning, everyone. Overall, I am pleased with our performance this quarter and proud of how our teams managed their business and controlled what they could control. Raj will share specifics, but when you exclude weather impacts, which were even greater than last year's challenging weather, same restaurant sales at all four of our segments were positive. Our ability to deliver profitable sales growth in this challenging environment is a testament to the strength of our business model and adherence to our proven strategy, which is anchored in our four competitive advantages and our restaurant team's commitment to being brilliant with the basics. Several of our brands set sales records during the Christmas and New Year's holidays, as well as on Valentine's Day, which reinforces the strength of our portfolio and the guest loyalty our teams work so hard to earn.

During the quarter, Olive Garden launched an updated menu featuring fan favorites, steak gorgonzola Alfredo and stuffed chicken marsala, the two most requested entrees that Olive Garden fans asked to bring back. In January, Olive Garden's marketing featured the return of these favorites along with four cheese manicotti for just $12.99 plus a three meat manicotti for a limited time. During the six weeks fan favorites was on air. Olive Garden's base traffic and sales trends improved significantly. They also experienced high levels of social media engagement, while preference for both items was strong and grew throughout the duration of the offer.

The Olive Garden team continues to use news to appeal to core guests as well as value seekers in this environment. For the first time since before COVID, they are bringing back their signature buy one take one limited time offer. With a price starting at $14.99 guests choose from seven entrees for their dining experience and then take a second entree home. This has historically been a high traffic driving promotion for Olive Garden. Their eClub members are enjoying early access to this offer this week and it will be available to everyone starting on Monday.

In the first week of February, Olive Garden completed their rollout of Uber Direct, making delivery available in all restaurants except the six locations that cannot offer curbside to go. Our partnership with Uber Direct strengthens Olive Garden's ability to value their guests' time by bringing their favorite dishes directly to their doorstep using Olive Garden's online ordering platform and leveraging Uber's delivery network. Additionally, delivery provides Olive Garden with a meaningful sales building opportunity over time. Without any marketing support during the quarter, the volume of delivery orders grew week to week, while maintaining a higher check average than curbside pickup orders. In the fourth quarter, the Olive Garden team started to drive awareness of delivery with modest digital activity and will fully leverage their earned and owned channels to target their biggest fans.

This will ensure a smooth transition for the newly launched restaurants and establish a baseline from which they will measure future marketing efforts. They are targeting the end of this fiscal year for a more expansive awareness building campaign, including TV advertising with a compelling and memorable offer, partially funded by Uber. We are pleased with the success of the rollout of Uber Direct at Olive Garden. We heard from the operators how seamless it was. And just this week, we began to pilot at Cheddar Scratch Kitchen.

The Cheddar's team is currently testing it in 10 locations with a plan to deploy it more broadly across their system. At Longhorn Steakhouse, strict adherence to their strategy rooted in quality, simplicity and culture continues to drive their momentum. The restaurant team is focused on execution to ensure every item they serve meets their high quality standards. This includes having industry leading specifications and ensuring they perfectly season and grill every steak served to their guests. This level of focus continues to pay off resulting in an all time high Steaks Real Quickly score in the third quarter.

Longhorns people bring their strategy to life in their restaurants and the Grill Master Legends program is an excellent example of the intersection of quality and culture. The program celebrates extraordinary team members who have grilled more than 1,000,000 steaks over the course of their career, which typically takes more than twenty years to accomplish. Longhorn leadership recognizes these legends with a surprise party in their restaurant that includes their family, friends and loyal guests. During the third quarter, they included inducted five more Grill Masters into this exclusive club, bringing the total to 30. To further build on their leadership and food quality, LongHorn is bringing back grilled lamb chops and fire grilled corn during the fourth quarter.

These two guest favorites along with last year's viral sensation, Parmesan Crusted Lamb Chops will be featured for a limited time. Successfully opening new restaurants is a key part of our ability to create value for our shareholders and help our brands reach their potential. Working with our development team, we are testing new smaller prototypes for some of our brands. These prototypes help lower construction costs and enable the brands to build out their new restaurant pipelines by considering sites that would have been too small in the past, ultimately accelerating new restaurant openings. During the quarter, Yard House and Cheddar's both opened these prototypes and they are performing at or above expectations.

Each one is roughly 20% smaller and cost approximately 15% less to build than their legacy restaurant prototype. They also preserve the essence of the brand. For example, while it's significantly smaller, the New Yard House prototype still features their full menu and offers 90 different beers on tap. Now let me provide a quick update on Chewy's. The planning phase of the integration is complete and the actual work is underway.

On Monday, Chuy's will convert to our human resources platform, which includes our people management systems, payroll and benefits. Our platform streamlines key day to day activities which improves efficiency and allows managers to spend more time focused on running their restaurant. The next major milestone will be supply chain transitions that will take place in phases beginning in June, followed by the point of sale transition starting in late summer. Integration is never easy and I'm proud of how the entire Chewy's team has remained focused on executing at a high level while adapting to change. Every day, we work in pursuit of our shared purpose to nourish and delight everyone we serve.

One of the ways we do this for our team members and their families is through our Next Core scholarship program. Recently, the Darden Foundation awarded 98 post secondary education scholarships worth $3,000 each to the children of Darden team members. This is the third year of the program and over that time we have awarded nearly 300 scholarships, helping team members and their families across the country. To wrap up, I'm proud of the focus and commitment our teams continue to display. On behalf of our leadership team and the Board of Directors, I want to thank all of our team members for everything you do to nourish and delight our guests and each other.

Thank you, Rick, and good morning, everyone. Third quarter earnings results were in line with our expectations, even though the top line was impacted by unfavorable weather. The quarter started with a negative gap to the industry average in December, but turned positive in January and February with both months exceeding the industry benchmark by well over 100 basis points. Winter weather and Thanksgiving holiday shift into the third quarter negatively impacted same restaurant sales for the quarter by approximately 100 basis points and 90 basis points respectively. As a reminder, Thanksgiving shift helped our fine dining brands and negatively impacted casual dining.

After adjusting for these impacts, our same restaurant sales were 2.6% for the quarter, a sequential improvement from prior quarters. For the first three weeks of the fourth quarter, we're seeing further improvement in our sales trends. Overall, our teams continue to do a great job managing the business through the volatility created by weather. In the third quarter, the acquisition of 103 restaurants and the addition of the acquisition of one hundred and three Chuy's restaurants and the addition of 40 net new restaurants. Both our same restaurant sales and same restaurant guest counts for the quarter were in the top quartile of the industry.

Adjusted diluted net earnings per share from continuing operations of 2.8 was 6.9% higher than last year. We generated $559,000,000 of adjusted EBITDA and returned $217,000,000 to our shareholders by paying $164,000,000 in dividends and $53,000,000 in share repurchases. Now looking at our adjusted margin analysis compared to last year, Food and beverage expenses were 70 basis points lower, driven by pricing leverage as commodities inflation was less than 0.5% with almost all categories better than our expectations. Restaurant labor was flat with productivity improvements fully offsetting the impact of pricing below total labor inflation of approximately 3.5%. Restaurant expenses were 20 basis points higher driven by the brand mix with the addition of Chewy's.

Marketing expenses were 10 basis points higher consistent with our plan. Our restaurant level EBITDA of 21.1 for the quarter was 50 basis points higher than last year. Adjusted G and A expenses as a percent of sales were flat to last year. Interest expense increased 20 basis points, driven by the financing expenses related to the Chuy's acquisition. And our adjusted effective tax rate for the quarter was 13.4%.

In total, our adjusted earnings from continuing operations were $330,000,000 which was 10.5% of sales. In the third quarter, all of our segments grew total sales and segment profit margin. Total sales for Olive Garden increased by 1.5% driven by same restaurant sales growth of 0.6%. Olive Garden's GAAP to the industry benchmarks increased significantly following the launch of fan favorites limited time offer, outperforming the industry benchmarks by 180 basis points in January and February basis points in February. They are maintaining their momentum through the first three weeks of March.

Olive Garden continues to have strong segment profit margin delivering 23% for the quarter, which is 50 basis points higher than last year. At Longhorn, total sales increased 5.1%, driven by same restaurant sales growth of 2.6% and the addition of 14 net new restaurants. Longhorn same restaurant sales growth adjusted for the Thanksgiving shift and weather was 5%, a strong performance in what is traditionally their highest volume quarter. Through the first three weeks of March, Longhorn has seen strong traffic and same restaurant sales growth further increasing their positive gap to the industry. Segment profit margin for the third quarter was 19.4%, seventy basis points above last year.

Total sales at Fine Dining segment increased 3.3%, though the same restaurant sales were negative 0.8% for the quarter. Thanksgiving

a busy day for our Fine Dining brands and the shift of the holiday from the second quarter last year into the third quarter this year led to a positive sales impact that was mostly offset by the negative weather impacts during the quarter. Adjusted for holiday shift and weather impacts, Fine Dining same restaurant sales decreased approximately 1%, which continues the sequential improvement from prior quarters. Fine Dining segment profit margin of 22.3% improved 50 basis points from last year. The Other Business segment sales increased 20.2%, primarily driven by the acquisition of Chewy's. Segment profit margin of 15.4% was 50 basis points better than last year.

Turning to our financial outlook for fiscal twenty twenty five, we've updated two items in our guidance to reflect our year to date results and expectations for the fourth quarter. We now expect 118,300,000.0 diluted average shares outstanding for the year and adjusted diluted net earnings per share of $9.45 to $9.52 which excludes approximately $47,000,000 of pre tax transaction and integration related costs. All other items remain unchanged. For the fourth quarter specifically, our annual outlook implies total sales of $3,230,000,000 to $3,260,000,000 same restaurant sales growth above 3% and adjusted diluted net earnings per share between $2.88 and $2.95 Now looking forward into fiscal twenty twenty six, we wanted to provide our thoughts on a few items. First, we plan to open between sixty and sixty five new restaurants.

We expect to spend between $375,000,000 to $400,000,000 of capital for new restaurants and $300,000,000 to $325,000,000 of capital related to ongoing restaurant maintenance, refresh and technology. We anticipate an effective tax rate between thirteen percent and thirteen point five percent for fiscal twenty twenty six. And finally, fiscal twenty twenty six will include a fifty third week, contributing approximately $0.2 in additional diluted net earnings per share. In closing, I want to commend our teams for their outstanding efforts in serving our guests. Their dedication is reflected in the strong financial results we delivered.

We remain confident in our strategy and the strength of our business model, which continues to drive our success. Now, we'll open it up for questions.

Thank you. We'll now be conducting a question and answer session. Our first question is coming from Jon Tower from Citi. Your line is now live.

Great. Thanks for taking the question. And just curious, I appreciate all the color in the quarter today and across the brands. I'm curious if you could maybe speak to whether you believe that the improvement you're seeing is more related to your own brands or the industry. And specifically, you'd mentioned on the last earnings call that you'd started to see improvement in visits and guest making between 50,000 to 100,000 a year.

And I'm just curious how that played out in your fiscal third quarter and perhaps what's happening quarter to date to the extent you can provide some color?

Hey, John. Quarter to date, I'm really pleased with the performance of our brands. Olive Garden and Longhorn have continued to perform well and the rest of our brands are continuing to improve their performance. Without commenting directly on what's going on with the rest of the industry, it's only three weeks into our quarter, but we feel pretty good about where we are. And that's reflected in our guidance of above 3% same restaurant sales growth for Darden.

As it relates to the consumer between $50,000 and $100,000 dollars it's not growing quite as much as it was before, but it's still growing when you adjust for weather. Outside of across all income groups, adjusting for weather, the only income group that was negative across our casual brands was below $50,000 All of Billings were positive when you adjust out that bad weather this quarter.

Thank you. Next question is coming from David Palmer from Evercore ISI. Your line is now live.

Thanks. Just a follow-up on that. To what degree do you think there was a flu impact in the quarter? But then separately, when it comes to casual binding, one of the things we're noticing is that it's holding up remarkably well given what we're seeing in other segments within restaurants. I don't know if you're noticing that in your own insights work and thinking about reasons for that.

I mean, I'm not sure we can make too much sense of it. And then lastly, I just wanted to ask you about your plans on M and A. Are they shifting now that you're further along with Ruth's and seeing what's happening with perhaps some valuations elsewhere? Thank you.

if I can get all three parts of that question. Flu impact, we don't really necessarily do a lot of work on checking on weather I mean, I'm sorry, temperature for people, but we check that temperature in the community climate stuff. So I can't tell you if flu had a big impact or not. Maybe it did. That said, I think our bigger impact was weather versus prior year.

When you think about consumers and casual dining and what's been going on, I think there we have seen that casual dining is holding up a little bit better than maybe some other segments. And dining out continues to be the number one category where consumers tend to treat themselves in splurge. And you actually treat yourself in splurge a little bit more in casual dining and fine dining than you do in other segments. So maybe that's what it is. We're going to continue to focus on providing an excellent experience and deliver value to our guests that choose to dine with us and especially the ones that come into our restaurants.

And in the M and A, we're just on the process of starting the Chuy's integration work. And as we always say, we'll continue to talk to our Board to figure out what the best uses of our capital are, but we want to continue to focus on integrating Chuy's.

Thank you. Next question today is coming from Eric Gonzalez from KeyBanc Capital Markets. Your line is now live.

the Uber partnership. I think you mentioned at the end of the fiscal year, you'd be launching a more expansive awareness campaign that included TV advertising. I know you said it'd be partially funded by Uber, but can you level set our expectations on whether we should expect a meaningful uptick in advertising spend? And regarding Uber's contributions, I'm sure you don't want to give specifics, but I was wondering how long that subsidy will last?

Eric, I will say, we're spending we're funding more of the total spend for that advertising than Uber is, but Uber is funding quite a bit of it. I wouldn't say it's hugely meaningful impact on advertising for the quarter. It's really the last couple of weeks of the quarter. And we expect it to last just a few weeks and then we'll continue to see what we're going to do going forward. And everything that I just told you is contemplated in our guidance for the quarter.

And Raj will probably talk about the marketing spend in total for the quarter.

Yes. Eric, I think we're still going to fall within that 10 to 20 basis points for marketing spend like we talked about in terms of year over year growth.

Is there anything you could tell us about '26 and the implications there?

I think we're still early for '26. I think what we said, if you go back to the comments we made along the way with respect to marketing over time, we would expect it to grow, but at a measured pace, because we're going to be very deliberate and we're going to just make sure that as we invest in marketing, that's actually getting a return on investment. And we feel like we have over the last year and half, two years even further improved our analytics around it and effectiveness of media. So maybe sometimes we may not need to spend as much dollars to get the same impact because we're further we're continuing to get better at more efficient and effective media.

Thank you. Next question is coming from Brian Bittner from Oppenheimer. Your line is now live.

Thanks. Good morning. Raj, as it relates to the EPS guidance for fourth quarter, the range implied, I think based on our math, it seems to imply flattish operating margins. So is that correct? And if so, it just seems a tad conservative with the comp sales being over 3%.

So can you unpack the operating margins in the fourth quarter for us a little bit more?

Sure, Brian. So it's a great question. Let me start by really pointing out the biggest dynamic shift. What's the big dynamic here is that Q4 our inflation, overall inflation is going to be we expect it to be about 3%. From if you look at the first three quarters, our overall inflation was in the low 2% s.

It was basically 2% to 2.2% range. So this is a big step up in that part of it is just a function of what we're wrapping on, but our pricing is still below 3%. So we actually have this different dynamic. So yes, that's really the big driver. And your interpretation is right in terms of operating profit not growing materially year over year.

Okay. And just my follow ups on Olive Garden delivery. Last time you spoke with us, you talked about delivery mixing as about 1.5% of sales in the initial pilot units. Of course, that was with no marketing support. Now you have delivery fully rolled out across your asset base.

Can you update us on any additional learnings and or surprises, particularly now that you have some digital marketing support, some awareness around the channel? Just any incremental update on that would be awesome. Thanks.

Yes, Brian. I'm going to start by saying it's still early in our delivery kind of lifespan, very early, but we're really pleased with our pilot and the rollout. And as I said, I think on the prepared remarks, in the initial pilot restaurants, the number of orders kind of week to week grew and are now about double what they were per week when we started. And our restaurants that weren't in the pilot, all the other restaurants are following that same pattern. And now at the end of the third quarter, our pilot restaurants were running around 2.5% of sales in delivery, and the other restaurants were following that same pattern.

Then we started doing a little bit of marketing, just sending some communication to our e clubs and that communication didn't give an offer. It just said, hey, do you almost like do you know Olive Garden delivers? And we saw some pretty good response there. And so our non pilot restaurants, the other restaurants kind of came up that curve a little bit faster and they're pretty close to what the pilot restaurants are. So we feel really good about the communication and where we're going on delivery itself.

And I will also repeat that the operators have said it's very seamless for them. Because of the way we piloted or we partnered with Uber, it's essentially our curbside to go for the operators with someone else picking up the food and that's an Uber person instead of an Uber driver instead of the guest. So it's pretty seamless for our operators. We feel really good about it.

Thank you. Next question today is coming from Sara Senatore from Bank of America. Your line is now live.

Great. Thank you very much. Just I guess two questions, one sort of a follow-up. The first is, if you could just talk about bringing back the buy one, take one. Is that a response to something you're seeing in the operating competitive environment?

Or I think in the past recently you've talked about just kind of increasing the pace of news. So just trying to understand if things have changed and that's what's prompted that. And then my second question is actually maybe not a follow-up, it's about the new prototypes for some of these other businesses. I know you said that they were performing above plan, but are the volumes consistent with the standard larger prototypes? Just as we think about accelerating unit growth, does that translate into a consistent level of accelerating revenue growth?

Yes, Sarah. I would say, for Buy One Take One, when we eliminated promotions, what we said was we want to eliminate promotions that were at a deep discount, that were hard to execute, that added new menu items and did all of those other things that made it really more challenging for our restaurants. And when we brought back the Never Ending pasta Bowl, we brought it back in a little bit of different construct. We had a little bit of different price point on it than we had before. So it wasn't a deep discount.

It still was brand building because it was talking about abundance, which is one of Olive Garden's advantages. And it wasn't a bunch of new items. So it was items that we already have on our menu, and we just gave consumers a reason to come in. And that we kind of took that forward to buy one, take one, which has been historically our second best traffic driving promotion. So it fits all of our filters where in the past buy one take one didn't.

It was at a deep discount. We added new items to do that. And so this time, we're bringing back buy one, take one with really core menu items as the buy one and our $6 take home items as the take one at a price point that's not at a huge discount, but it's at a limited time, which is what we want our guests to want to come in. So as we were doing all of our core menu advertising, that was great to build the brand, but in an environment that guests want a reason to come in more quickly, that's where the kind of limited time came. So nothing dramatically has changed in our strategy and it really wasn't because of things going out in the marketplace.

We just believe that this is the right way to communicate our brand at a that fits all of our filters. And in another interesting way, it gets people to remember that we've got this $6 take home. It just so happens that you get it free on the buy one take one, but it kind of gives people thoughts in the future on the take home. In regards to the new prototypes, again, really early, when we open those prototypes, when we open the restaurants, they're doing significant traffic and significant sales. So we know that they can do the same kind of sales and traffic that an existing restaurant does.

So it's not the size of the restaurant that will do anything. So these restaurants are opening very strongly. And partly because, for example, at Yard House, we have almost the same number of tables in this Yard House as we do in others. We just have a few fewer seats because some of those Yard House have a lot of eight top booths that don't really get utilized very well. So that and they take up a lot of space.

So if we eliminate some of the eight top boots and make them even six tops or four tops that are bigger four tops, we still get rough almost the same number of tables, but with fewer seats and the seats weren't being utilized before. Still has a big bar, still has 90 beers on tap and still has a kitchen that's a little smaller because of some things that we did in kitchen design. So we feel really good about the prototypes and their sales driving ability.

Okay. Thank you. Very helpful insights. Appreciate it.

Thank you. Next question is coming from Brian Harbour from Morgan Stanley. Your line is now live.

Yes, thanks. Good morning, guys. With the Olive Garden kind of sales momentum you talked about, Rick, I mean, you cited the Uber mix for some of the pilot stores, but is that a material part of it yet for the overall system? Would you attribute it more to just some of the menu news so far? I mean, how would you kind of characterize what has driven Olive Garden in recent months?

Yes, Brian, I would characterize it more about the menu news than the delivery, especially in the quarter because our delivery rollout started January, ended in February. So it wasn't even in most of restaurants in December and Olive Garden had a pretty strong December. So we believe it's more based on the menu and bringing back those two fan favorites with an addition of manicotti at a starting up price point. The two fan favorites were very well received and continue to grow preference, as I mentioned. Now I will also say in delivery, as I mentioned, the pilot restaurants ended the quarter around 2.5% of sales in delivery and the other restaurants got pretty close to that as we jumped into marketing, but that didn't happen until Q4.

Okay, great. Thanks. Raj, can you talk a little bit more about inflation and just I guess I was surprised that sort of on the food side that was still favorable in the quarter. We have seen some items move back up. But what specifically is driving in the fourth quarter?

How does that kind of shape how you think about as we enter '26? I know you're not going to talk about that yet, but are you seeing pretty stable labor inflation? Do you think that that could perhaps ease a bit or where are we on that front?

So Brian, the biggest dynamic within inflation as you kind of alluded to earlier was the commodities shift. So if we look at our the year, first three quarters, I'd say chicken and seafood were basically slightly deflationary and Q4, they're both expected to be inflationary. And in fact, our supply chain team has done a great job of locking in great contracts. We're still buying well below market on chicken and our contract is actually double digit percentage better than the market. And so that's what's caused a little bit of a disconnect between what you're seeing in the market and what you're seeing at the Darden level inflation.

Now as we look at labor has actually been fairly steady. The last two quarters has been in the 3.5%, which is actually a significant improvement from where we were going back a couple of years, right. So it's come down a lot. It's been more stable in that mid-3s. And if you think back to before COVID for multiple years, our labor inflation was in that range, three to three mid-3s.

So I would say we're happy to see that it has stabilized in that range. So I wouldn't say we would expect it to get a lot better or a lot worse at this point. But it's a place we know how to operate with. It's at a level that we've operated before. And it's too early to comment on fiscal twenty twenty six commodities.

Thank you. Next question today is coming from Dennis Keiger from UBS. Your line is now live.

Great. Thanks guys. Rick, I wanted to ask

a little bit more on value at Olive Garden and specifically maybe the customer value scores for the brand that you've seen, any kind of notable uptick just in recent months as you kind of leaned in on some attractive price points on new items etcetera. Anything to highlight there, especially in the environment that we're in?

Yes, Dennis, value at Olive Garden has had a general kind of rise over time and it's been gradually continuing to uptick. It's not like it took a step change when we added the manicotti at $12.99 starting at, it didn't have a step change, but it did we are continuing to see value scores improve. But remember value isn't all about price. It's about the experience you get in the restaurant. And our value scores have been growing throughout this time even with pricing at a higher rate, which was because inflation was higher.

That's because we continue to operate better in our restaurants. Guests are seeing more value in the unlimited first course. And the more we tell people about it, the more we give them their unlimited first course, the higher our value ratings get.

That's helpful. And then just on Uber, just anything on incrementality, recognizing it's very early days, but have you kind of observed anything or have any additional thoughts maybe on what incrementality may look like even though it's early? Thank you.

Yes, Dennis. You said it's early and I'm going to continue to say that it's still early. But we've been seeing about 40% to 50% incrementality, and that's without significant awareness advertising. So, and I will say this is contemplated in our guidance, but it's somewhere 40% to 50%.

Thank you. Next question is coming from David Tarantino from Baird. Your line is now live.

Hi, good morning. Raj, I was hoping you could tell us what Darden's exposure to potential tariffs might be. I guess, how would you frame up that exposure? And if you are exposed on some is

is top of mind here. So as we think about the situation with tariffs is still very fluid, right? I mean, obviously, we're still trying to figure out how this is going to play out. But I think for us as we look at our cost basket, today as we look at our cost basket, about 80% is actually domestic source. So there's really only 20% that's truly that's imported.

Of that, there is a portion that we could switch easily to domestic. It's just a function of the price being better, we're going outside. But as we look at our situation, even for the stuff we import, we're not the importer of record. So pretty much all products are negotiable, right? So we'd be working with our suppliers.

So our team, our supply chain team is working on strategies to kind of mitigate risk, whether it's through initially obviously in the near term inventory management, but in the longer term, alternate sourcing methods and just really also further negotiations with vendors and kind of really trying to figure out how to deal with it. But hopefully, that gives you an idea of the maximum level of exposure.

Darden Restaurants (DRI) Q3 2025 Earnings Call Transcript

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