Operator: Thank you. Next question today is coming from Eric Gonzalez from KeyBanc Capital Markets. Your line is now live.
Eric Gonzalez: Hey, good morning, and thanks for taking the question. My question is on the other business segment, since your sales growth in the segment was negative for the first time in a few years. So, I’m wondering if you can give us a sense about what’s happening within that division, which I know includes Cheddar’s. So, I’m wondering if this says something about the low-income consumer, if there’s anything else worth calling out with regards to that division?
Raj Vennam: Yes. Let me start with the other segment and maybe I’ll turn it over to Rick to talk about the consumer in general. So, let’s start. When we look at our other segment, we’re actually pretty happy with the performance overall when you look at the business as a total topline and bottom line, because as much as they had negative same-restaurant sales, they were still above the industry by 20 basis points as a segment. Now, there is — there — I don’t want to get into exactly the details, but there are some things on a year-over-year dynamics, especially at one of our southeast brands that’s primarily weather-bound and patio related, all that stuff, we don’t want to get into those. But, by the way, when we look at traffic for the quarter at the other segment, it was actually very strong at north of 100 basis points gap to the industry positive gap.
So, we feel really good about that. And then other segment was also more profitable this quarter. Even when you exclude the franchise income from Ruth’s, their segment profit was higher than last year. So, I’d say, all-in-all, that’s a pretty good outcome. And then, I’ll have Rick talk about consumer.
Rick Cardenas: Yes, Eric. And I just want to reiterate, we’re really pleased with the performance of our other segment and all of our segments. Profitable sales growth is what we shoot for, and they all had profitable sales growth. Some might have been negative comp, but we still grew. But on the consumer overall, the consumer still continues to appear both resilient, but a little bit more selective as we’ve talked about in our check and we’ve seen that for a couple of quarters. Our data shows we’re gradually moving back to our pre-COVID demographic mix, which — with a bigger change in Q2 and moving back to pre-COVID demographics gets us to feel like we’re getting closer to what normal is. I will say, we had, across all of our segments, household incomes above $200,000 are higher mix than last year, but still below pre-COVID levels.
And incomes below $75,000 are under last year, but still above pre-COVID levels. And the biggest drop was those under $50,000. And this shift was most pronounced, interestingly, in our Fine Dining segment. And last thing, for those under 65 years old — over, I’m sorry, over 65 years old, their frequency has grown from prior quarters and their dining is shifting a little bit more to lunch. So, that gives you a little bit of a check mix there, too. So — but, again, what does that mean for us? What does that mean for the brands that we have? We believe that operators can deliver on their brand promise, which we’ve said before, and value will continue to appeal to consumers. I’m confident we’re well positioned and prepared for what we have to deal with, thanks to the breadth of our portfolio and our astounding team members and what they do every day to create exceptional experiences for our guests.
Eric Gonzalez: That’s really helpful. And as a follow up, while we’re on the topic of the smaller divisions, can you maybe comment on Fine Dining and talk about whether are we out of the woods when it — as it relates to the abnormal seasonality and the post-COVID lapse? Should we start to see positive comps in the back half in that part of the business?
Raj Vennam: Yeah. So, from a Fine Dining perspective, if you recall, we talked about seasonality trends normalizing and we talked about last year. There was some exuberance in the summer months that kind of continued into the fall a little bit. And so, as we look at where we are this quarter, we actually ended the quarter with positive same-restaurant sales in November. And with — as Rick mentioned on his — in his prepared remarks about record Thanksgiving sales, all of our Fine Dining brands and reservation brands had record Thanksgiving sales. So, November was an improvement. If you look at Fine Dining segment in general, is also where we’re seeing the most negative check mix year-over-year, and it’s really driven by alcohol.
Now, I’ll tell you that we are — the preference for alcohol today is actually consistent with where it was pre-COVID, just that last year was a lot higher. And so, we are — year-over-year, that’s a pretty big drag. In fact, I think our Fine Dining mix is almost negative 200 basis points, and that’s really one of the things we’ve noticed. Now, as we get into the holidays and pass, some of that should abate, because we started to see this dynamic in our fiscal Q4 last year. And then last point I’ll make is, as Rick mentioned, we are encouraged to see strong bookings in both reservations and private events going into the holidays.
Eric Gonzalez: Thanks.
Operator: Thank you. Next question today is coming from Andrew Charles from TD Cowen. Your line is now live.
Andrew Charles: Great. Thank you. Rick, does the early access to Never Ending Pasta Bowl for eClub members this quarter leave you encouraged to lean more into the 15 million or so Olive Garden eClub member database in the back half of the year, recognizing this won’t be an avenue for discounting, obviously, as you’re focused on profitable growth. Or is it that it was an immaterial impact just for that extra week of early access in the quarter?
