Financial Data and Key Metrics Changes - The company reported same restaurant sales growth of 2.6% for the third quarter, showing sequential improvement from prior quarters [22] - Adjusted diluted net earnings per share from continuing operations increased by 6.9% year-over-year to $2.80 [23] - Adjusted EBITDA for the quarter was $559 million, with total sales for the quarter reaching $3.23 billion [23][28] Business Line Data and Key Metrics Changes - Olive Garden's total sales increased by 1.5%, driven by same restaurant sales growth of 0.6% [25] - Longhorn Steakhouse saw total sales increase by 5.1%, with same restaurant sales growth of 2.6% [26] - The Fine Dining segment experienced a 3.3% increase in total sales, although same restaurant sales were negative at 0.8% [27] - The Other Business segment, primarily driven by the acquisition of Chuy's, saw sales increase by 20.2% [27] Market Data and Key Metrics Changes - The average same restaurant sales for the industry grew by 0.9%, while guest counts decreased by 1.2% [6] - The median same restaurant sales for the industry decreased by 2.3%, indicating a significant disparity between average and median results [6] Company Strategy and Development Direction - The company is focusing on integrating Chuy's and leveraging its existing brands to drive sales growth [18][42] - New smaller restaurant prototypes are being tested to lower construction costs and accelerate new restaurant openings [16][17] - The company plans to open between 60 and 65 new restaurants in fiscal 2026, with a capital expenditure of $375 million to $400 million for new restaurants [28][29] Management's Comments on Operating Environment and Future Outlook - Management noted that same restaurant sales trends improved in January and February, exceeding industry benchmarks by over 100 basis points [21] - The company remains confident in its strategy and business model, which continues to drive success despite external challenges [30] - Management acknowledged that while consumer sentiment is less optimistic, it has not significantly impacted dining out trends [94] Other Important Information - The company has awarded 98 scholarships worth $3,000 each to the children of team members through its Next Core scholarship program [19] - The company is experiencing a general rise in value perception at Olive Garden, attributed to improved operational performance [81] Q&A Session Summary Question: Is the improvement seen more related to the company's own brands or the industry? - Management indicated that Olive Garden and Longhorn continue to perform well, with overall positive trends reflected in guidance for above 3% same restaurant sales growth [34] Question: What degree of flu impact was observed in the quarter? - Management could not quantify the flu's impact but noted that weather had a more significant effect on sales [40] Question: Can you provide insights on the Uber partnership and advertising spend? - Management stated that while Uber is contributing to advertising costs, the company is funding a larger portion and expects modest impacts on overall advertising spend [47][49] Question: Can you elaborate on the EPS guidance for the fourth quarter? - Management explained that inflation is expected to rise to about 3% in Q4, impacting operating margins, which are not expected to grow materially year-over-year [55] Question: What is driving Olive Garden's recent sales momentum? - Management attributed the sales momentum more to menu news rather than delivery, as the delivery rollout occurred late in the quarter [73] Question: How is the company managing inflation and labor costs? - Management noted that commodity prices are being managed effectively, with labor inflation stabilizing in the mid-3% range [77][78] Question: What is the company's exposure to potential tariffs? - Management indicated that about 80% of the cost basket is domestically sourced, with strategies in place to mitigate risks associated with tariffs [87][89]