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)

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Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

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Total Return to Investors (last year)

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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

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Greetings, and welcome to the Darden Restaurants Fiscal Year twenty twenty five Q4 Earnings Conference Call Webcast. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. You may be placed in the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Courtney Aquilut, Senior Director of 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 Vanam, 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 the 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 are included in the presentation. Looking ahead, we plan to release fiscal twenty twenty six first quarter earnings on Thursday, September 18, before the market opens, followed by a conference call. During today's call, all reference to the industry results refer to the Black Box Intelligence casual dining benchmark excluding Darden.

During the fiscal fourth quarter, average same restaurant sales for the industry grew 30% and average same restaurant guest counts grew 0.9. This morning, Rick will share some brief remarks on the quarter. Raj will provide details on our fourth quarter and full year financial results as well as share our fiscal twenty twenty six financial outlook. Then Rick will close with some final comments. Now I will turn the call over to Rick.

Thank you, Courtney, and good morning, everyone. We had a strong quarter with same restaurant sales and earnings growth expectations. I'm proud of the great work by our restaurant teams throughout the quarter, particularly on Mother's Day as several brands achieved sales records for that day. The return of Olive Garden's buy one, take one offer for the first time in five years combined with the continued strength of off premise, drove their impressive sales during the quarter. Olive Garden's marketing strategy to meaningfully communicate strong value, create urgency and introduce food news continue to resonate as guests are motivated by news and compelling price points.

Buy One Take One with a starting price point of $14.99 allowed guests to choose one entree for their dining experience and then take a second one home. The take home selections leveraged Olive Garden's existing $6 take home platform, minimizing operational complexity. During buy one, take one, Olive Garden's same restaurant sales gap versus the industry increased to four fifty basis points. With delivery available nationwide the entire quarter, Olive Garden continued to see order volume grow week to week, while retaining higher than average sales per transaction versus curbside pickup orders. This combined with continued growth in catering and curbside to go drove overall takeout sales to grow nearly 20% over last year.

At the end of the quarter, Olive Garden launched a campaign to promote delivery across multiple channels, including television advertising with a compelling and memorable offer, 1,000,000 free deliveries, partially funded by Uber. We continue to see strong incrementality with average weekly deliveries per restaurant nearly doubling during the last two weeks of the quarter. The Olive Garden team continued to execute at a high level, which led to an all time high guest satisfaction score for the quarter. I am extremely proud of how Dan Kiernan and his team managed the business throughout the year and the strong momentum they have generated heading into the new fiscal year. At Longhorn Steakhouse, their ongoing commitment to quality, simplicity and culture continues to drive their momentum.

Their entire team remains obsessed with serving the highest quality steaks in casual dining. This includes having industry leading specifications and ensuring they perfectly season and grill every steak they serve. To support this, during the quarter, Olive Garden validated each one of their grill masters' expertise with the eighth Annual Steakmaster Series, their internal grilling competition and training program. Congratulations to Tim Crane from the Longhorn Steakhouse in Independence, Missouri, who claimed the championship trophy. This focus on ongoing training continues to pay off, as Longhorn ended the year with an all time high Stakes Grow Correctly score as well as a new all time high guest satisfaction score for the quarter.

Laura Williamson and her team have done a great job of building on the business momentum at Longhorn. For the fiscal year, their same restaurant sales increased 5.1 and they reached a major milestone by surpassing $3,000,000,000 in total sales. These results reflect the strength of their focused strategy. Last quarter, we announced Cheddar's Scratch Kitchen had begun piloting Uber Direct. It was a successful pilot and as of last week, delivery is now available in all but eight Cheddar's restaurants.

Paid media and email support began earlier this week, partially funded by Uber. The Cheddar's marketing team also continues to build on its use of connected television, debuting the first thirty second spot in Cheddar's history during the quarter. The spot was developed at no cost to Darden, thanks to the scale of our CTV media spend across our portfolio. In addition to Olive Garden and Longhorn, Cheddar's also received an all time high guest satisfaction score for the quarter, as did Ruth's Chris Steakhouse and Eddie V's. We know that engaged, well trained team members helped drive operational success and two of our brands were recognized for their people practices during the quarter.

Longhorn and the Capital Grille received the Employer of Choice Awards from Black Box Intelligence for casual dining and fine dining respectively. The award recognizes exemplary performance in managing turnover rates, fostering an inclusive workplace culture and implementing best in class people practices. Overall, I am pleased with our results. Our adherence to our winning strategy anchored in our four competitive advantages and being brilliant with the basics led to a successful year. Our strategy remains the right one for the company and we will continue to execute it to drive growth and long term shareholder value. Now, I will turn it over to Raj.

Thank you, Rick, and good morning, everyone. As Rick said, fiscal twenty twenty five was another strong year driven by disciplined execution of our strategy. In the fourth quarter, same restaurant sales continued sequential improvement from prior quarters with our Casual brands gaining significant market share. This resulted in sales and earnings exceeding our expectations for the quarter. Furthermore, we finished the year with same restaurant sales at the top of our initial guidance range and earnings in the upper half of the range despite the slower than expected start to the year.

Now looking at the fourth quarter. We generated $3,300,000,000 of total sales, 10.6% higher than prior year. This was driven by same restaurant sales growth of 4.6% with positive traffic growth, the acquisition of 103 Chuy's restaurants and the addition of 25 net new restaurants, which include the permanent closure of 22 underperforming restaurants. Same restaurant sales exceeded the industry benchmark for the quarter and were in the top decile of the industry. Adjusted diluted net earnings per share from continuing operations increased 12.5% to $2.98 We generated $582,000,000 of adjusted EBITDA and returned $215,000,000 to shareholders through January in dividends and $51,000,000 of share repurchases.

Turning to the fourth quarter P and L compared to last year. Food and beverage expenses were 60 basis points lower as commodities inflation was better than expected at approximately 1.5%. Restaurant labor was 10 basis points lower as productivity gains more than offset higher performance based compensation and pricing below total labor inflation of approximately 3.5%. Restaurant expenses were 20 basis points higher, driven by brand mix with the addition of Chewy's and the impact of first party delivery at Olive Garden, partially offset by sales leverage. Marketing expenses were flat at 1.3% of sales, consistent with our expectations.

This all resulted in restaurant level EBITDA for the quarter improving 50 basis points to 21.6%. Reopening costs were 10 basis points higher as we accelerated our new restaurant pipeline, opening 19 restaurants during the quarter. Adjusted G and A expenses were 30 basis points higher due to higher incentive compensation accrual compared to the fourth quarter last year and unfavorable mark to market expenses on our deferred compensation. Because of the way we hedge mark to market expense, this is largely offset in the tax line. Interest expense increased 20 basis points due to the financing expenses related to the Chuyse acquisition.

And our adjusted effective tax rate for the quarter was 12.2%, with tax expenses down 20 basis points because of the mark to market hedge impact I referenced earlier. In total, our adjusted earnings from continuing operations were $352,000,000 which was 10.7% of sales. In the fourth quarter, all of our segments grew total sales with three of the four segments growing same restaurant sales and segment profit margin. Olive Garden increased total sales for the quarter by 8.1% with strong same restaurant sales growth of 6.9% and the addition of 15 net new restaurants. Olive Garden same restaurant sales outperformed the industry benchmark by three ninety basis points for the quarter.

Uber direct delivery fees positively benefited check mix by about 40 basis points in the quarter. These fees were passed on to Uber with the revenue fully offset in restaurant expenses. Olive Garden continues to have industry leading segment profit margin, delivering 23.8 for the quarter, which is 100 basis points higher than last year. At LongHorn, total sales increased 9.3%, driven by same restaurant sales growth of 6.7% and the addition of 16 net new restaurants. LongHorn continues to increase market share with strong and sustained sales growth, exceeding the industry same restaurant sales benchmark by three seventy basis points this quarter and eight fifty basis points on a two year basis.

Segment profit margin for the quarter was 20.1%, 80 basis points above last year. Total sales for Fine Dining segment increased 2.3%, driven by the addition of six net new restaurants, which includes the permanent closure of two underperforming restaurants. Same restaurant sales were negative for the quarter, resulting in segment profit margin lower than last year. While the fine dining category as a whole continues to be challenged, we are seeing sequential improvement in guest traffic from households earning $150,000 and above. Total sales for the Other Business segment increased 22.4 with the acquisition of Chewy's and positive same restaurant sales at Yardhouse and Cheddar's.

This positive growth was partially offset by the permanent closure of 20 restaurants during the quarter, including 15 Bahama Breeze restaurants. Positive sales momentum and continued productivity improvements at Your House and Cheddar's contributed to a 17.5% segment profit margin for the Other Business segment, 10 basis points higher than last year. The integration of Chuy's is progressing as planned with synergies on track and a neutral impact to EPS for fiscal twenty twenty five, which is in line with our expectations. As we look at our annual results for fiscal twenty twenty five, we had same restaurant sales growth of 2%, outperforming the industry by 170 basis points. Total sales increased 6%, surpassing $12,000,000,000 for the first time in our history.

Adjusted diluted net earnings per share from continuing operations increased 7.5% to 9.55 We delivered $2,000,000,000 in adjusted EBITDA from continuing operations, driven by strong sales growth, and we returned $1,100,000,000 to shareholders with $659,000,000 in dividends and $418,000,000 in share repurchases. Looking at our fiscal twenty twenty five full year P and L. Restaurant level EBITDA grew 40 basis points, driven by disciplined and pricing leverage. This favorability was partially offset by the increased depreciation and amortization expense, resulting in operating income margin that was 10 basis points higher than last year. Financing expenses related to Chuy's acquisition increased adjusted interest expense 20 basis points from last year.

This all resulted in adjusted earnings from continuing operations of 9.4%, which was 10 basis points below last year. As I mentioned earlier, we permanently closed 15 underperforming Bahamas B's restaurants as well as a few restaurants at other brands. These closures will result in a headwind to our fiscal twenty twenty six total sales growth, but are expected to be slightly positive to earnings. Fiscal twenty twenty six is a fifty three week year, and we anticipate a positive impact from the extra week on diluted net earnings per share from continuing operations of approximately $0.20 Now turning to our financial outlook for fiscal twenty twenty six. We expect total sales growth of 7% to 8%, including approximately 2% from additional week same restaurant sales growth of 2% to 3.5% and opening 60 to 65 new restaurants capital spending between $700,000,000 and $750,000,000 total inflation of 2.5% to 3% with commodities inflation of approximately 2.5% and total labor inflation of approximately 3.5% EBITDA of $2,160,000,000 to $2,190,000,000 an annual effective tax rate of approximately 13% and approximately $117,000,000 diluted average shares outstanding for the year, all resulting in diluted net earnings per share between $10.5 and $10.7 This morning, we also announced that our Board approved a 7% increase dividend to $1.5 per share, implying an annual dividend of $6 Now turning to our long term financial framework, which outlines the strategic priorities and performance expectations that guide our sustained value creation.

We remain committed to delivering 10 to 15% total shareholder return as defined by EPS growth plus dividend yield. However, we're updating the framework to reflect greater emphasis on sales growth with appropriate investments while maintaining our growing margin. As a result, we're increasing new restaurant growth to 3% to 4%, same restaurant sales growth to 10.5%. Additionally, we're updating how we define margin expansion, shifting from EBIT margin to earnings after tax margin to more accurately reflect how we view and manage our business. There are three primary drivers of this change.

First, due to the way we hedge mark to market expense on our deferred compensation, the impact in G and A is largely offset in the tax line. Second, current lease accounting guidelines result in an ongoing negative impact to interest and depreciation with an offsetting benefit in restaurant expense. And third, to account for any interest expense associated with any future acquisitions. Our updated framework targets EAT margin growth to be flat to 20 basis points. This all results in EAT growth contributing 6% to 10% of total shareholder return.

Our dividend remains a priority, and the target payout ratio range of 50% to 60% remains unchanged. Share repurchase is being updated from a dollar range to a percentage range of contribution to shareholder return. Return of cash is now targeted to contribute 4% to 5% of total shareholder return. Looking at our performance since 2019 relative to the updated framework, New restaurant growth, inclusive of acquisitions, was within the updated range, having grown 3.1%. Same restaurant sales of 2.9% is in the top half of the target range.

And eat margin expansion was above the midpoint of the updated range, increasing 13 basis points on an annualized basis, resulting in an annualized EAT growth of 7.6% near the middle of the range. The dividend payout ratio of 58 is near the top end of the range and share repurchase contribution to shareholder return was 1%, culminating in total cash return of 4.1% despite the issuance of 9,000,000 shares of common stock in fiscal twenty twenty. Total shareholder return, as defined by EPS growth plus dividend yield, was 11.6% and within our targeted range. Additionally, our thirty year over our thirty year history as a publicly traded company, Darden has achieved an annualized total shareholder return of 10% or greater for any ten fiscal year period when taking into account Darden's stock appreciation plus dividend yield. Finally, our strong operating model generates significant and durable cash flows.

Since fiscal twenty nineteen, we've grown EBITDA by about $800,000,000 and are on track to reach nearly $1,000,000,000 in EBITDA growth by the end of fiscal twenty twenty six. Our balance sheet at the end of fiscal twenty twenty five is well positioned with adjusted debt to EBITDA of 2.1x. This is at the low end of our targeted range of 2x to 2.5x despite the additional debt related to the acquisition of Chewy's and Ruth's Chris over the past two years. Now I'll turn it back to Rick.

Strategic planning And at the Garden level, it ensures that we have the right portfolio of brands, we align strategies and coordinate operations to maximize our portfolio's value, and we capture the available synergies across all our brands. For our brands, our strategic planning process allows us to determine the strategic role in the portfolio, identify their distinct advantages and cultivate differentiated positioning, develop a deep understanding of their guests and the competitive landscape and ensure they adhere to their strategy so they can compete effectively and grow share. During the quarter, we completed our five year planning process. Each of our brands has a clear understanding of their role in their portfolio and they have built a five year strategic plan based on that role, focusing on what they need to do to win today and into 02/1930. They have already begun to put their plans in action and will execute them to drive shareholder value.

Additionally, there were some other key outcomes from that process that I would like to share. As Raj mentioned, we made the decision to close 15 Bahama Breeze locations in May, leaving the 28 highest performing Bahama Breeze restaurants in our portfolio. After further review, we have made the difficult decision that these remaining locations and the Bahama Breeze brand are not a strategic priority for us. We also believe that this brand and these restaurants have the potential to benefit from a new owner. Consequently, we will be considering strategic alternatives for Bahama Breeze, including a potential sale of the brand or converting restaurants to other Darden brands.

Excluding any one time potential impacts, which are unknown as of today, we do not expect these strategic alternatives, including a potential sale, to have a material impact on our financial results. We also signed a definitive agreement to sell the eight Olive Garden locations in Canada to Recipe Unlimited, the largest full service operator in Canada, and we are on track to close that deal soon. These eight restaurants will become franchised, and upon close, Garden and Recipe Unlimited will enter into an area development agreement to open 30 more Olive Gardens over the next ten years. Their expertise in the Canadian market will help the Olive Garden better operate locally and accelerate the brand's ability to grow throughout the country. Our international franchising team led by Brad Smith is focused on growing our global presence.

Today, have 154 franchise locations, which includes 63 United States and 91 outside the Continental United States. One of the benefits of the Ruth's Chris acquisition was the scale it added to our franchise business. The increase in revenue from adding 74 Ruth's Chris franchise locations has allowed the team to grow faster. We were able to add the resources and systems to help our franchisees better operate our brands that would have taken us longer if we had not added the Ruth's Chris restaurants. And the team has been busy signing new area development agreements with international partners.

In addition to the agreement with Recipe Unlimited, we also have new agreements with partners in India Spain, each of which calls for the development of 40 Olive Garden locations as well as an agreement with our existing Ruth's Chris franchise partner in Asia for the development of six Capital Grill locations. Brad and his team are doing a great job and I'm excited about the growth prospects of our international franchising business. Also, as you may have seen from our eight ks filing this morning, after thirty three years with Darden, Dan Kiernan will be retiring as President of Olive Garden on August 31. Dan has worked in the industry since he was 16 and began his career at Olive Garden as a manager in training. For the last seven years, he has led Olive Garden to new heights and has been a tremendous steward of the brand.

As I said earlier, Dan and his team have generated strong business momentum. And following the successful completion of their five year business plan, Olive Garden is well positioned for this leadership transition. One of the benefits of our scale is having a deep bench of talent to fill leadership roles. I am pleased that we have another proven operator to lead Olive Garden. John Wilkerson, who has led Cheddar's for the past seven will be the next President of Olive Garden, and he will work closely with Dan over the next ten weeks to ensure a smooth transition.

John is a thirty year Darden veteran who has done an excellent job of rebuilding the fundamentals of Cheddar's and setting the brand up for growth. John will continue reporting to me. John's replacement of Cheddar's is Mark Cooper, currently President of Seasons fifty two and Bahama Breeze. Laurie Kastler, who has led operations at Seasons for fifty two years Seasons fifty two for eleven years sorry, Lori, didn't want to age you has been named President of Seasons fifty two. Mark and Lori will report to John Martin, Group President.

In addition to Cheddar's and Seasons fifty two, John Martin will retain responsibility for Yardhouse, the Capital Grille and Eddie V's. He will also lead Bahama Breeze as we consider strategic alternatives for the brand. Additionally, I am pleased to share that Thomas Hall has been named President of Chewy's. For the past seven years, Tom has served as Executive Vice President of Operations for Longhorn. Tom lets me report to Todd Burrows, Group President, who is responsible for Chewy's and Ruth's Chris as well as Darden's development and international franchising teams.

With these changes, I am confident we have the right leaders in place across all our brands to compete effectively and grow share. Finally, last month, Darden celebrated its thirtieth year as a publicly traded company. I was delighted to ring the opening bell at the New York Stock Exchange with several team members with thirty or more years of service, including Lavelle Rutledge, our longest tenured team member at fifty two years. That moment was a great reminder of an enduring quote from Bill Darden. He said, the greatest edge we have on our competition is the quality of our employees reflected each day in the job they do.

Our people drive our success and I want to congratulate our teams on a strong quarter and a successful year. On behalf of our leadership team and the Board of Directors, thank you for your continued dedication and commitment to nourishing and delighting our guests and each other. Now we'll take your questions.

Thank you. We'll now be conducting a question and answer session. Our first question is coming from Eric Gonzalez from KeyBanc Capital Markets. Your line is now live.

Hi, thanks for the question and congrats on the really strong same store sales results. Obviously, you're executing at a very high level. It's really hard to deny the fact that the industry seems to be in a strong position, particularly some of the larger chains in full service. So perhaps you can give us your perspective on why casual dining is having a bit of a moment right now? And relatedly, I'm curious what your thoughts on how some of the smaller chains or independents may be faring in this environment, whether you think the independents are struggling with the same affordability perception issues that you might have in fast food?

Yes, Eric. Thanks for the question. Thanks for the comments on our quarter. As we look across what's been going on over the last five or six years, as you recall, we've been very prudent in keeping our pricing below inflation because we knew that over time pricing matters if you take it too much. And what we believe is happening right now in the casual dining space is our is consumers are figuring out that casual dining is a great value.

And so they're coming to casual dining more. And we're starting we're seeing that across our brands and some of the industry. And so without commenting on what's happened in other places, we think that's a big part of it. Consumers want to go out and spend their hard earned money, and we think we're taking some wallet share from fast food and fast casual.

Maybe if I can, as a follow-up, ask about the unit growth outlook, the 60 to 65 units this year. Your long term range in your algorithm is 3% to 4%. So I think that 60% to 65% implies 2.7% to 3%. So I guess I'm when we might see a ramp in unit growth and which brands might be the largest contributor?

Yes, Eric. I'd say from when you look at 60% to 65, you're right, it could imply 2.7% to three But as you look at actually how we're ramping up growth from where we're starting, we're actually building the pipeline. Our development team has done a great job. We expect to be in the three plus range over the next five years. And we are actually we have a pretty strong pipeline.

As you know, these things take time to build up. But I think we have new practices and processes in place. And from a brand mix, as we've said initially, as you look at next year, I'd say between Olive Garden and LongHorn, we're going to probably have 40 to 45 openings. And then Yard House might be in the mid single digits. And then you have all the other brands contributing probably another 15 or so.

But as we look into the future, we expect the other brands to become a bigger part of the mix. But we do think there's huge opportunity for still LongHorn to be in the 25 to 30 openings a year and then Olive Garden to be in that 20 ish range for the foreseeable future. But then we're also, as I said, the other brands will start to contribute even more as we move into the next few years.

Thank you. Next question is coming from Chris O'Cull from Stifel. Your line is now live.

Yes, thanks. Raj, my question was on the updated long term framework. Does the new margin expansion target reflect a different view on the long term restaurant margin opportunity or even the rate of reinvestment you expect to make in the business?

Yes, Chris, it does a little bit. What we're trying to figure out is, one, let me just start with the just by changing the definition, we're getting a more holistic view because there's a lot of contraction between the G and A and D and A and then tax and interest. So that's why we wanted to get the bottom line number. So that's one. But two, does it imply restaurant level EBITDA maybe not growing at the rate we've targeted in the past?

Yes. Because we're saying that we're going to make investments with a greater emphasis on sales growth. And if sales growth drives even more margin, that's good. But we are going to try to find ways to reinvest to get for the long term.

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

Thank you. Regarding Uber Direct at Olive Garden, curious about what you can share about mix and same store sales contribution in fiscal 4Q and what you're contemplating for mix and same store sales contribution from it in fiscal twenty twenty six? And also, is there anything different about the incremental margin from that from the base business?

Hey, David. So I think we said on Q for Q4, the mix impact from just the fees was about 40 basis points. Uber Direct was about 3.5% of total sales at Olive Garden. So and I think we talked about in the past what contribution would be to incremental sales and we've said it's 40% to 50. So if you kind of go with that and take in the impact of the fees, it's roughly about 2% incremental sales impact to the quarter.

We are not ready to talk about the future in terms of what the impact would be for next year. But when we did advertise, the exit rate was about 5% of total sales. That included the free delivery offer. And from a margin perspective, we do not expect this to have a meaningful impact of negative on margin any negative impact or positive impact on margin. Because if you look at how we structure the deal, a lot of the fees are just passed on to Uber, but there isn't any margin difference on the base.

And the minimal the geography impact is pretty minimal. You're talking about maybe 10 basis points at best. But then there's also positive. People are buying more through that that helps offset. And you saw that in the fourth quarter.

Olive Garden has a pretty strong positive mix. And I think as we signaled a few times, if Uber Direct contributes even more than we expect going into this year, we're going to reinvest some of that into the business to drive long term growth.

All right. Thank you for that. And with regard to Uber Direct and other brands, I would assume that this is going as you would have expected for Olive Garden. Are there other dolls that you think are particular to LongHorn and the other brands that you'll want to figure out before you do over direct at those brands that you think might be an additional hurdle? Or are you kind of seeing probably what you need to see from this as a lever that could apply to your other brands? And thank you.

Yes, David. As we launched it in Cheddar's, and got pretty similar answers to Olive Garden, we were able to ramp it up faster and get it into most of the restaurants faster. The other brands, we'll continue to look at. We have some thoughts on what brand might go next. But we want to make sure that every brand that adds delivery has a great experience for there to go.

And so we mentioned that there were eight Cheddar's restaurants that didn't that aren't live. That's because they didn't earn the right to have delivery. That doesn't mean that our other brands don't have a great experience. But there are other brands might have a little less on the curbside space and those kind of things. So they might not even be able to have curbside pickup.

And as you recall, we don't want the Uber drivers to come into our restaurant. We want that to be just like another curbside experience. So we're looking through our portfolio to see what we can do on some of the brands that might not have as much curbside, to see if we want to add. But the last thing I'll say on this is, we are not pushing Uber Direct on any brand. Every brand has their president and their leaders and they choose if they want to do it.

We can veto if they get it and there are some brands that we would probably veto, but I don't think those brands are thinking about doing it. So without getting into which brand is next, we do have another brand that we think we're going to work on, but it will probably not start until some time right at the beginning of the next calendar year.

Thank you. Next question today is coming from Andrew Charles from TD Cowen. Your line is now live.

Great. Thank you. Rick, it's a good segue to my I'm curious, are you prioritizing expanding, rolling out Uber Direct across the remaining brands that make sense, recognizing it's not going be all of them? Or is there aptitude to see how Olive Garden would perform on the Uber marketplace?

Right now, our priority is to continue to see how Olive Garden and Cheddar's perform in Uber Direct. Marketplace is something that has challenges for us and we've said what those challenges are. And that's why we developed this Uber Direct offer with Uber, which was the perfect thing for us and a really great thing for Uber. So we'll continue to see how this goes before we determine whether we want to even be on the marketplace at all.

Okay. That's helpful. And then Raj, just a follow-up question. With the outlook for 2026 inflation of 2.5% to 3%, can you segue how that's going to look between food and labor?

Yes, Andrew. So the food is we're expecting food to be about 2.5% and labor to be about 3.5%.

Thank you. Next question is coming from Lauren Zimmerman from Credit Suisse. Your line is now live.

Thank you very much and congrats on the quarter. I wanted to follow-up on the fiscal twenty twenty six guidance for the EPS. If your top line comes in stronger than expected, how are you thinking about flowing through to earnings versus reinvesting back in the business? And I guess that kind of applies a bit to the long term.

Yes. Lauren, I think if you look at our framework, we said we're going to try to get EAT margin to be flat to positive. So we're not going to do it at the cost of giving up margin, but we're going to we're okay if we if the incremental sales just flow through at the current restaurant level margins and then reinvest the rest. So there's ways to do that and that's kind of how we're thinking about it.

Okay. Thanks. And then on the two to 3.5% comp growth, obviously a very strong momentum in the business. Can you just talk about how you're thinking about the cadence of comp as we move through the year?

Well, maybe I'll just start by saying, if you look at fourth quarter was obviously pretty strong for us and some of the momentum from that has carried on into June, June. But as we look at the twelve month out, there's obviously there's a lot of macro uncertainty. And so we thought looking at twelve months, we just it's prudent to kind of go with this range where we reflect the uncertainty because we are going to start wrapping on some of this growth as we get into the back half of the year. And so that's incorporated into guidance. I don't want to get too much into the cadence, but I think it's fair to assume that we'll start stronger.

And from a year over year perspective, should be stronger in the first half.

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

Yes, thanks. Good morning, guys. Raj, what roughly what pricing do you expect to run-in the coming year? And I guess just how about like longer term? I mean, is sort of continuing to restrain that sort of key to all the brands as we think about the long term plan?

Yes, Brian. For fiscal twenty twenty six, I would expect us to be in that mid-2s for pricing. I think first quarter is going to be close to 2% and then we'll probably get into the mid- to high 2s as we get through the year. Obviously, it depends on how inflation comes in. But our bias but it will still likely be below total inflation.

And our bias is as Rick just mentioned earlier, we've been very disciplined with respect pricing and that is not going to change anytime soon. That's the philosophy. We try to price as little as possible and still get the returns we could get. And it's worked well for us and we always play the long game and we'll continue to do that.

Okay. And you're talking about sort of reserving the right to reinvest. I mean, it sounds like you're just being more top line focused right, in the current algo. So, I mean, to some extent, what form would that take? Would it be more on the food side? How would that actually show itself in the brands?

Yes, Brian. Yes, you got it right. We are going to focus a little bit more on top line growth and on just grabbing margin. And that will that can take place in many ways. Every brand has a different way to do that.

Olive Garden is testing some things right now, which would bring their mix down a little bit, to be more have some more affordability. And because of the strength of Uber Direct, they're able to do that. Other brands might make some investments in labor to speed up the process. But it's only as we continue to grow sales will we make some of these investments. We think these are the right long term investments to be able to set the company up for the next thirty for the next five years.

And the investments that we're making, especially on the menu, whether it's in mix or in affordability, will benefit both dine in and off premise.

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

Thank you. I guess just wanted to ask about fine dining. You mentioned that the category has been pressured, but I think unlike some of your other larger casual dining, you might be lagging some peers. The question is maybe broader about like sort of the approach to the portfolio and your decision to sell some Bahama Breeze, which I know is not in fine dining. But is there sort of a limit to the span of control that you can have in terms of the number of brands?

Is the acquisition of Ruth's, would that have played any role in Fine Dining maybe being a little bit softer just in terms of managerial resources? I'm just trying to understand sort of as you think about the portfolio, feels like there's a little bit more movement now than I've seen in the past. And I'm trying to sort of think through what might be influencing that.

Yes, Sarah. I'll start with the end of your question. The movement in portfolio being I think you're being you're talking about leadership. We have if we look if you look back a couple of years ago, we were in a position where we had leaders that are getting closer to retirement age. And so we wanted to set the company up for success over the long term and we made some changes a year ago. And one of those leaders has retired, we were ready for it with the changes we're doing this year. So we're really planful of what we do. In regards to the span of control of the people that we have, now you look at how we've structured the company, on people.

The two largest brands report to me Olive Garden and LongHorn and the other brands report to two proven leaders, Todd Burrows and John Martin. And so we think we've got it set up correctly. The number of brands really doesn't isn't a reason that fine dining has gone through the challenges they've gone through. Fine dining has been hit with a consumer that during COVID, we had a lot of growth in fine dining. I don't know what the other brands had, but we had growth in fine dining.

And those consumers were not necessarily consumers that we had seen before and they went back to the normal patterns. And so we don't feel at all that our size and scale has hurt fine dining. In fact, we have even stronger leaders there when we've got now we have a President of the two fine dining brands, Capgra and ADV's, led by John Martin. And one of our fine dining brands that we have is Roots Chris, which we've said many times whenever you add a brand, we're going to go through some challenges during integration and that will impact same restaurant sales and they're one of those. So we feel really good about where our fine dining brands are.

And then lastly, on the decision on Bahama Breeze, we have when we look at our portfolio and we try to determine what brands we add to our portfolio, we have criteria. And that criteria should be what we look at to keep brands in our portfolio. And we made the decision that Bahama Breeze doesn't meet the criteria anymore. And we think that they have a lot of growth potential with another owner. We were not going to be putting a lot of investment into Bahama Breeze.

And so to give those team members and those managers growth opportunities, it's better for them to be under a different ownership.

Got it. Okay. And then just a quick follow-up. You had mentioned $150,000 improvement sequentially at Fine Dining. Is there anything else that you can comment on about the demographics?

I mean, thought is that the other benefit that casual dining might be facing is just having less exposure to low income consumers. So anything you've been very helpful in sort of parsing out kind of under 50 and sort of some of the dynamics. Any updates there?

Yes, Sarah. I think so from a consumer demographic perspective, let me just kind of parse out a little bit. I think when you look at casual dining in general, we're seeing growth across most income cohorts. The only group that is still soft is the below 50,000 households. And in fact, if you actually look at the 150,000 plus that's actually where we're seeing a little bit more growth on casual dining.

And then when you look at fine dining, you're actually seeing pullback at with households below $150,000 And then only place where we're seeing some growth or stabilization is about $150,000 households. The other dynamic with specifically is that the urban versus suburban that we had discussed. That suburban traffic is actually still at running at 95% of pre COVID levels, so holding up pretty well. But urban is still in the low 80s. It's like 82% or something in Q4.

So it's not clearly a lot less than where it was before COVID. And now I will say one other thing on Fine Dining and then wrap it up is just really when you look at their retention to pre COVID, it has stabilized. We're seeing that more stable month to month and quarter to quarter in the last few months. So that's a good sign that things are starting to stabilize there.

Thank you. Next question today is coming from Peter Saleh from BTIG. Your line is now live.

Great. Thanks for taking the question and congrats on a great quarter. I wanted to ask about the incrementality that you're seeing in the Uber Direct business, the 40% to 50% at Olive Garden. Can you just comment a little bit about who these customers are? Are they higher income?

I mean, I'm assuming they're are they new to the brand? Or is it just increased frequency? Just trying to understand how the customer is using Olive Garden through Uber Direct.

Yes, Peter. Right now, delivery customer has very minimal overlap in dining. We are seeing higher guest frequency for delivery versus dine in guests, and a higher percentage of them are newer lapsed guests versus pickup or dine in. So we've got a lot of consumers that haven't been to Olive Garden in over a year that are using delivery service. And nearly 40 of our pickup consumers have tried delivery.

And then the last thing on the consumer demographics, they are younger and slightly higher income, which you would expect.

Great. That's very helpful. And then just lastly on price going forward, I know you're taking less price than inflation. When you talk about reinvestment, is it are you considering maybe even taking less price going forward? Or is it just reinvesting back in quality?

Darden Restaurants (DRI) Q4 2025 Earnings Call Transcript

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