Darden Restaurants, Inc. (NYSE:DRI) Q2 2024 Earnings Call Transcript

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Rick Cardenas: Hey, Danilo, this is Rick. You think about our margin, we’ve been fairly consistent over the years that we are searching for profitable sales growth and we have — we had just updated our long term framework, we put that back out, where we’d be at 10 to 30 basis points a year in margin expansion, and any one year it could be above that or below that and we are going to get that through executing our strategy, leveraging our scale to be able to take cost out of the system and still over in a long term price below inflation to provide a better dining experience using our back to basics operating philosophy and our great operators out in the field that execute better than the restaurant next door. If we do those things and we have done those things, we will continue to drive profitable sales growth.

There may be years that our margins are little bit less than that because we’re gaining even more market share, and we’re willing to do that. There may be years on the opposite side where we still gain share, but we have margin expansion opportunities. As Raj mentioned, we don’t look at it quarter-to-quarter. We think about it over the long run.

Danilo Gargiulo: Thank you. And then can you comment on the technology road map, and what excites you the most about it? You recently mentioned about kind of the AI implementation to improve the level of staffing in the stores. What do you think is going to be unfolding in the next few years? Thank you.

Rick Cardenas: Yes, Danilo. Over the last few years, we’ve focused a lot of energy and technology on improving the guest experience, primarily in the off premise segment, making it easier to order, pick up and pay. We’re working on our tech plans for the next few years, but I would think that AI would be a little bit more part of that, especially on the back of the house things, maybe not necessarily as consumer facing. Our goal with technology is to eliminate friction, and we’ve eliminated a lot of friction for the guest on the to go experience on being able to put their name on waitlist. Now we want to eliminate friction in our team, eliminate our management friction to make it easier for them. So they don’t have to spend as much time doing what we think are non-value added tasks, ordering, receiving, scheduling, which is value added, but if we can make it easier for them to schedule, they can spend less time doing that and spend a lot more time with their team and with their guests.

And so, the technology investments we’re making — we may be making in the future, you might not see a whole lot of impact on that from the consumer. You will see it from the consumer because our teams are going to be better trained and so that’s what we are focusing on.

Danilo Gargiulo: Thank you. [indiscernible]

Operator: Thank you. We reached end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.

Kevin Kalicak: Thank you. That concludes our call. Remind you that we plan to release third quarter results on Thursday, March 21 before the market opens with a conference call to follow. Thanks again for your participation and have a happy holiday.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.

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