Financial Data and Key Metrics Changes - For Q1 2026, Darden Restaurants reported total sales of $3 billion, a 10% increase compared to the previous year, driven by same restaurant sales growth of 4.7% and the acquisition of 103 Chuy's restaurants [16][17] - Adjusted diluted net earnings per share from continuing operations were $1.97, reflecting a 12.6% increase year-over-year [17] - Adjusted EBITDA for the quarter was $439 million, with a return of $358 million to shareholders through dividends and share repurchases [17] Business Line Data and Key Metrics Changes - Olive Garden's same restaurant sales grew by 5.9%, supported by successful marketing initiatives and first-party delivery growth [5][19] - LongHorn Steakhouse achieved same restaurant sales growth of 5.5%, maintaining a strong focus on quality and operational consistency [9][19] - The other business segment, which includes brands like Yard House and Cheddar's, saw a sales increase of 22.5% due to the Chuy's acquisition and positive same restaurant sales of 3.3% [21] Market Data and Key Metrics Changes - The casual dining industry experienced average same restaurant sales growth of 5% and guest count growth of 2.6% during the quarter [4] - Darden's same restaurant sales outperformed the industry benchmark by 90 basis points, placing them in the top decile of the industry [19] Company Strategy and Development Direction - Darden continues to leverage its competitive advantages, including significant scale and extensive data insights, to drive long-term growth [5] - The company is focusing on affordability and menu innovation to attract a broader customer base, particularly through initiatives like lighter portion sizes at Olive Garden [8][9] - Darden plans to open approximately 65 new restaurants in fiscal 2026, reflecting confidence in its development pipeline [22][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the consumer spending environment, noting that sales momentum from the previous quarter continued into Q1 2026 [16][56] - The company anticipates total sales growth for the year to be between 7.5% and 8.5%, with same restaurant sales growth projected at 2.5% to 3.5% [22] - Management acknowledged challenges related to rising beef costs but emphasized a disciplined approach to pricing and cost management [22][88] Other Important Information - Darden's philanthropic efforts include supporting Feeding America by funding refrigerated trucks for food banks, highlighting the company's commitment to community engagement [15] - The company is testing a new lighter portion menu at Olive Garden, which has shown promising initial responses from guests [9] Q&A Session Summary Question: Can you discuss the visibility on food cost outcomes for the remainder of the year? - Management indicated that beef coverage is currently at 25% for the next six months, with significant price increases expected to be unsustainable [25][26] Question: What are the early indications regarding the new portion sizes at Olive Garden? - Management believes the new portion sizes may drive traffic, although it could slightly dilute check averages [27][28] Question: How did the affordability pivot and UberDirect impact costs during the quarter? - Management noted that the segment profit margin was only down 10 basis points, indicating strong business model resilience despite cost pressures [30][31] Question: What is the outlook for casual dining performance? - Management believes casual dining is performing well due to lower pricing compared to other dining segments, with a focus on value and connection [39][40] Question: How is the delivery business performing? - Delivery accounted for about 5% of Olive Garden's sales in Q1, with a strong exit rate post-promotion [80] Question: What are the dynamics driving recent beef price increases? - Supply constraints due to packer cutbacks and import issues are driving prices higher, but management believes these levels are not sustainable [86][88]