Darden Restaurants, Inc. (NYSE:DRI) Q3 2023 Earnings Call Transcript

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Rick Cardenas: Hey Katherine, this is Rick. You probably see it just as much as we do. But I can tell you that there’s a big competitor that just went back on TV and they talked about it before, they did it. And you’ve got some of these other competitors that are out there a little bit more on television than they were before. That said, Olive Garden still is usually in the top 2 or 3 of advertising spend in our space, and we’re doing that through branded kind of advertising versus deals.

Operator: Our next question comes from Andrew Strelzik with BMO.

Andrew Strelzik: I just wanted to ask about the customer satisfaction scores you mentioned and you talked about records, I believe, or all-time highs at Cheddar’s and Yard House and maybe Bahama Breeze as well, but not at Olive Garden and LongHorn. It does sound like they’re up, but not maybe as much as some of the others. So I guess I’m just curious what your perception is of the difference between the two, why maybe those aren’t up as much and how that maybe is guiding your strategy going forward? Thanks.

Rick Cardenas: Andrew, this is Rick. Let me start by saying that satisfaction at Olive Garden and LongHorn are significantly high, and our other brands, our fine owning brands are very high. And so it takes a little bit more to move them up significantly versus what we’ve seen at Cheddar’s and Yard House. Cheddar’s and Yard House and others have made significant improvements to their brand, significant improvements to service and significant improvement to value, and customers see that. And so, we’ve had great performance at our — at those brands that I mentioned, having record highs. But I wouldn’t tell you that the others aren’t at or near their records. It’s just Cheddar’s and Yard House actually made a record this quarter.

Andrew Strelzik: Got it. Okay. That makes sense. And maybe just one other one about the value proposition. And obviously, you’re very positive on how that’s driving the comps. We’re coming out of a period now — or the pricing environment overall maybe seems to be settling a little bit. And I’m curious if you’ve gone through the exercise or maybe just an ongoing exercise where you’ve looked at where your brands stand and what are the different pieces of the menu seeing now? I’m curious if there’s any opportunities to address within menus or within brands, now that maybe things have settled a little bit.

Rick Cardenas: I think we always look at what — where we have opportunities within menus, within brands, within regions of the country, and we will never stop. What I would tell you is we feel really good about where our pricing is, and we feel really good that we’ve been able to price well below what most of our competitors have done. And that gives us, as Raj said, some room to take a little bit more pricing if we want to take a little bit more pricing. And so, we will always look, and we generally try to price restaurants into strength and not into weakness, and we have a lot of great data scientists here that help us look at that. And we also talk to our operators and get their perspective. So that won’t change no matter what happens in the economy or what happens with others. We’ll continue to do what we do, and we feel like we’ve earned the right to keep doing what we’ve done.

Operator: Our next question comes from David Palmer with Evercore ISI.

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