Financial Data and Key Metrics Changes - The company reported AFFO per share of $0.44, which is up 2.8% from Q2 last year [20] - Rental income for Q2 was $64.5 million, representing growth of over 11% compared to the same quarter last year [20] - The net debt to adjusted EBITDAre was 4.5 times, which is below the stated guidance of 5.5 to 6 times [18] Business Line Data and Key Metrics Changes - In Q2, the company acquired 24 properties for $84 million at a blended cap rate of 6.7% [12] - The automotive sector accounted for 68% of total acquisition volume, indicating a strong focus on this area [12] - The company has diversified its portfolio, with 34% of rent now coming from sectors outside casual dining [8] Market Data and Key Metrics Changes - The company noted that same-store sales for Olive Garden and LongHorn grew nearly 7% for the quarter ended May 2025 [8] - Chili's reported a same-store sales growth of 32% for the quarter ended March 2025, indicating strong performance in the casual dining sector [7] Company Strategy and Development Direction - The company aims to maintain a defensive portfolio focused on central retail and services, which are seen as tariff resistant [9] - The strategy includes modulating acquisitions based on the cost of capital, allowing the company to protect spreads without compromising portfolio quality [6] - The company is committed to maintaining high-quality standards in acquisitions and has a strong competitive advantage in its ability to fluctuate acquisition volumes [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience, highlighting a strong track record with low bad debt expense and effective releasing results [65] - The company anticipates a pullback in consumer spending due to potential recession or high inflation but believes it is well-positioned with low rents [9] - Management indicated that the current market conditions allow for continued execution of the company's strategy, with significant available capital for acquisitions [65] Other Important Information - The company has raised nearly $505 million in equity over the last twelve months, providing significant capacity for acquisitions [17] - The portfolio occupancy remains strong at 99.4%, with 99.8% of base rent collected for Q2 [22] Q&A Session Summary Question: Inquiry about acquisition team capacity - Management stated that the company is appropriately staffed and has the capacity to do more acquisitions if favorable pricing is available [25][27] Question: Impact of cap rate changes on acquisition opportunities - Management indicated that a 25 basis point decrease in cap rates could significantly increase acquisition opportunities, potentially by $100 million to $200 million [29][30] Question: Darden exposure and acquisition strategy - Management confirmed that while they have diversified Darden exposure, they will not hesitate to acquire Darden-related assets if the pricing is favorable [31][32] Question: Deal flow and competitive landscape - Management noted that deal flow has been consistent, but pricing remains a key factor in determining acquisition activity [48][49] Question: Future of veterinary retail property acquisitions - Management expressed interest in the veterinary retail sector, indicating it is a space they are comfortable exploring further [61]

Core Viewpoint - Darden Restaurants Inc. is expected to report strong fourth-quarter results, with analysts predicting a beat and positive guidance for fiscal year 2026, although some of this may already be reflected in the stock's performance [1][4]. Group 1: Financial Performance Expectations - Analysts from Truist Securities predict Olive Garden's same-store sales (SSS) will rise by 6.5% in the quarter, surpassing the 4.5% consensus and likely exceeding investor expectations [2]. - The fourth-quarter same-store sales estimate has been raised to +4.5% and EPS forecast to $3.02, both above the consensus estimates of +3.6% and $2.96 [3]. - For fiscal year 2026, the blended SSS forecast is increased to +3.8% and EPS to $11.05, up from +3.5% and $10.92 respectively [3]. Group 2: Strategic Focus and Market Position - Darden is likely to reaffirm its long-term goal of a 10%–15% total shareholder return, with a greater emphasis on new store openings rather than margin expansion [2]. - Olive Garden, which accounts for approximately 43% of Darden's sales, is seen as a key driver for the company's performance, benefiting from delivery growth and enhanced marketing efforts [5]. - Analysts maintain a bullish outlook on Darden, with expectations of continued earnings upside into fiscal year 2026 despite the stock's elevated price-to-earnings (P/E) multiple of 21x [4][5]. Group 3: Analyst Ratings and Price Forecasts - Truist Securities analyst Jake Bartlett has reiterated a Buy rating on Darden, raising the price forecast from $230 to $252 [8]. - Oppenheimer analyst Brian Bittner has also reiterated an Outperform rating, adjusting the price forecast from $230 to $250 [8].