Operator: Greetings. Welcome to the Darden Fiscal Year 2026 fourth quarter earnings call. Your line has been placed in a listen-only mode until the question and answer session. This conference is being recorded. I will now turn the call over to Ms. Courtney Aquila.

Courtney Aquila: Thank you, Kevin. Good morning. Thank you for participating on today's call. Joining me are Rick Cardenas, Darden's President and CEO, and Raj Vennam, CFO. As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. A supplemental materials presentation containing information shared on today's call is available on the Financials tab in the Investors section of our website at darden.com. Today's discussion includes certain non-GAAP measurements and reconciliations are included in the presentation. We plan to release Fiscal 2027 first quarter earnings on Thursday, September 24th before the market opens, followed by a conference call. During today's call, all references to industry results refer to the Black Box Intelligence Casual Dining Benchmark, excluding Darden. Black Box Intelligence updated its benchmarks in early May following changes to the underlying brand set, moving average benchmarks up by 150 basis points for same restaurant sales and 25 basis points for same restaurant guest counts. Incorporating this restatement, average same restaurant sales for the industry increased 1.4%, and average same restaurant guest counts decreased 1.8% during our fourth quarter. I will now turn the call over to Rick.

Rick Cardenas: Thank you, Courtney. Good morning, everyone. The fourth quarter was a strong finish to an excellent year, one in which we significantly outperformed the industry. Our restaurant teams continued to execute at a high level, and their commitment to operational excellence helped each of our brands deliver positive same restaurant sales for the quarter. Several of our brands enjoyed record performance on Mother's Day, including the highest-ever traffic day at Olive Garden and LongHorn Steakhouse, and our guest satisfaction results continued to be at or near all-time highs. It was an especially strong year for our three largest brands. Olive Garden met our heightened expectations for the year, delivering 4% same restaurant sales growth, which is above the high end of Darden's long-term framework. LongHorn delivered same restaurant sales growth of over 7% for the year, reflecting their focus on food quality and execution. They ended the year by conducting their ninth annual Steak Master Series — congratulations to Jesse Montalva from the LongHorn Steakhouse in Riverview, Florida, who claimed the championship trophy. Yard House grew total sales by $95 million compared to last year, driven in part by same restaurant sales growth of 5.6% for the year. This marks the fifth consecutive year that all three brands have delivered positive same restaurant sales. We opened 71 new restaurants during the fiscal year, six more than initially planned. Our newest international franchising partners in Spain and India opened their first locations during the year, and our new partner in Canada plans to open their first new restaurant next week. Our franchising and international team has helped our new partners open restaurants more quickly, and they are on pace to open the most international locations in a single year in fiscal 2027. Fiscal 2026 marks our 31st year as a publicly traded company, and Darden has achieved an average annualized total shareholder return of 10% or greater for any 10 fiscal year period when considering stock price appreciation plus dividend yield. I want to focus my comments this morning on how we are able to do this and what gives me confidence for the future. Full service dining is a variety-seeking category. We have a collection of brands that give us reach across multiple dining occasions, guest demographics, price points, geographies, and cuisine types while reducing reliance on any one brand, consumer segment, region, or cuisine. Olive Garden and LongHorn are the two most dominant brands in our portfolio with strong guest relevance and additional room for growth. Yard House, Cheddar's Scratch Kitchen, and Chuy's are incredibly popular brands with significant runway for growth. Ruth's Chris Steak House, The Capital Grille, Eddie V's, and Seasons 52 are differentiated brands with strong positions in their respective categories. Our portfolio creates the scale that enables our brands to benefit from our strategic platform. We have a shared operations philosophy anchored in food, service, and atmosphere, enabled by the best people in the industry. Our four competitive advantages allow our brands to compete more effectively. The power of our scale is demonstrated in our supply chain and technology stack. We source directly from producers and have our own dedicated food distribution network, creating cost advantages and ensuring an uninterrupted supply to our restaurants. Our proprietary POS system serves as the nerve center of our integrated restaurant technology ecosystem, with applications including payroll, guest forecasting, and labor management providing key data and making our restaurant managers' jobs easier so they can spend more time focused on guests and team members. Our scale also helps from a marketing perspective. Across all our brands, we use digital marketing in a targeted, cost-effective way to build brand equity and support incremental sales. Our smaller brands benefit from the learnings generated from our larger brands and can tailor sophisticated media plans to their specific business needs. Our extensive data and insights ensure we continually meet our guests' expectations and allow us to identify opportunities to improve the guest experience and drive incremental sales through continuous menu innovation. Olive Garden's new lighter portions menu is a good example, as is their new protein-forward Calabrian Steak & Shrimp Bucatini that has quickly become a guest favorite. Data and insights have also grounded all the great work Yard House has done on menu optimization — the new burger, pizza, and taco platforms they have rolled out over the past three years are easier to execute and receive higher guest satisfaction scores. Rigorous strategic planning is another one of our advantages. At the Darden Enterprise level, it ensures we have the right portfolio of brands, align strategies, coordinate operations to maximize our portfolio's value, and capture available synergies. At the brand level, it helps identify each brand's distinct advantages and cultivate differentiated positioning, develop a deep understanding of each brand's guests and competitive landscape, and ensure our brands adhere to their strategy so they compete effectively and grow share. Of course, our brands and our platform only matter because of our final advantage — the people who bring them to life every day. Our founder, Bill Darden, said, "The greatest edge we have on our competitors is the quality of our employees reflected each day in the job they do." That is still true today. We have outstanding teams across our 2,200 restaurants backed by our incredible restaurant support center teams, and we have built a compelling employment proposition evidenced by our industry-leading retention. I'm extremely proud that we promoted 1,375 hourly team members into management roles in fiscal 2026. With the right brands, strategy, and teams in place, I am confident we are well-positioned to continue growing the business and creating long-term shareholder value. Now I'll turn it over to Raj.

Raj Vennam: Thank you, Rick, and good morning, everyone. We delivered a strong fourth quarter to close out a great year, with total sales exceeding our expectations and annual earnings above the midpoint of our initial guidance. Results for the year reflect stronger-than-expected same restaurant sales and faster new restaurant openings, despite significant macro pressures including beef inflation that was higher than expected. Throughout the year, we remained focused on what was within our control, balancing investments in the business with a measured approach to inflation. Stronger-than-expected sales allowed us to fund targeted investment to support growth and maintain pricing discipline by only partially offsetting elevated commodity costs, preserving our ability to provide strong value to our guests. In the fourth quarter, we generated $3.7 billion of total sales, 13.7% higher than last year. This was driven by same-restaurant sales growth of 4.6% with positive traffic growth, the addition of 43 net new restaurants including the permanent closure of 15 Bahama Breeze locations, and the benefit of the 14th fiscal week. Same-restaurant sales and same-restaurant guest counts each exceeded the industry benchmark by over 300 basis points for the quarter. Adjusted diluted net earnings per share from continuing operations increased 22.8% to $3.66, including a $0.25 contribution from the extra fiscal week. We generated $678 million of adjusted EBITDA and returned $310 million to shareholders through $172 million in dividends and $138 million of share repurchases. Turning to the fourth quarter P&L compared to last year — food and beverage expenses were flat as commodity inflation of approximately 3% and unfavorable mix was fully offset by pricing. Restaurant labor was 40 basis points lower, driven by productivity improvements and sales leverage even with total labor inflation of 3.2%. Restaurant expenses were flat. Marketing expenses were 10 basis points lower due to sales leverage. This all resulted in restaurant level EBITDA for the quarter improving 50 basis points to 22.1%. Adjusted G&A expenses were flat. Adjusted depreciation and amortization was 30 basis points lower due to sales leverage from the extra fiscal week. Our adjusted effective tax rate for the quarter was 12.8%. In total, our adjusted earnings from continuing operations were $422 million, or 11.3% of sales. Olive Garden increased total sales for the quarter by 11.4%, with same-restaurant sales growth of 2.4%. Traffic was positive, outpacing the industry by 200 basis points. The lighter portion section of the menu created an 80 basis point mix headwind to check. On a two-year basis, Olive Garden same-restaurant sales increased 9.3%. Olive Garden continues to have industry-leading segment profit margin, delivering 24.3% for the quarter, 50 basis points higher than last year, including approximately 50 basis points of margin investment related to the lighter portion section. At LongHorn, total sales increased 21.9%, driven by same-restaurant sales growth of 9.5% and the addition of 27 net new restaurants. LongHorn continues to increase market share, exceeding the industry same-restaurant sales benchmark by 810 basis points this quarter. Over the past three years, LongHorn has grown same-restaurant sales by more than 20%, resulting in average unit volumes of $5.6 million. Segment profit margin for the quarter was 21.2%, 110 basis points above last year. Total sales for the fine dining segment increased 10.9% with positive same-restaurant sales of 1.9%. Segment profit margin was 20 basis points lower than last year, though on a 13-week basis it was actually 20 basis points higher, as Memorial Day is traditionally a low volume week for fine dining. Total sales for the other business segment increased 9.8%, with positive same-restaurant sales of 4.6%, partially offset by the permanent closure of Bahama Breeze. Segment profit margin was 17.9%, 40 basis points higher than last year. For the full fiscal year 2026, same-restaurant sales growth was 4.5%, outperforming the industry. Total sales increased 9.4%, surpassing $13 billion for the first time in Darden's history. Adjusted diluted net earnings per share increased 11.4% to $10.64. We delivered $2.2 billion in adjusted EBITDA and returned $1.4 billion to shareholders with $693 million in dividends and $675 million of share repurchases. Restaurant level EBITDA compressed 20 basis points due to elevated commodity costs and our deliberate approach to not fully price for these costs. This unfavorability was fully offset by sales leverage on G&A and depreciation, resulting in earnings after tax margin that was flat to last year. Over the past seven years, our portfolio has become more balanced and more diversified. In fiscal 2019, Olive Garden represented 50% of sales and 55% of segment profit. By fiscal 2026, that mix has shifted to 42% of sales and 47% of segment profit, with roughly half of the shift driven by consistent growth at LongHorn and the other half from the rest of the brands. We expect new restaurant growth across Darden to remain within the 3% to 4% range over time. Olive Garden would trend toward the lower end of that range, LongHorn toward the higher end, and our smaller brands growing at or above that range. Our approach to pricing has been to consistently price below inflation over time to preserve our value proposition and support traffic. For our fiscal 2027 financial outlook, we expect total sales of $13.6 billion to $13.75 billion, driven by same-restaurant sales growth of 2.5% to 3.5%, 75 to 80 gross new restaurant openings, and 11 Bahama Breeze conversions during the year. Capital spending of approximately $875 million, total inflation of approximately 3% including commodities inflation of approximately 3% and labor inflation of approximately 3.5%. An annual effective tax rate of approximately 13.5% and approximately 114 million diluted average shares outstanding. This results in EBITDA of $2.26 billion to $2.29 billion and diluted net earnings per share between $11.10 and $11.35. Additionally, our board approved an 8% increase to our regular quarterly dividend to $1.52 per share, implying an annual dividend of $6.48. With that, we'll take your questions.

Operator: Our first question today is coming from Lauren Silberman from Deutsche Bank.

Lauren Silberman: I wanted to ask about the overall consumer environment. Any color on the cadence of comps as you moved through the quarter, anything on June, any impact from the rise in gas prices?

Rick Cardenas: Consumer spending remains pretty resilient. Overall the mood with consumers is still a little cautious, but weaker consumer sentiment hasn't necessarily translated into reduced spending. A little different this quarter — our casual brands saw an increase in visits year-over-year from all income groups, including the bottom quintile. Some of that might have been tax refunds, but they did see some increase year-over-year from all income groups. We did see a little softness in guests under 35. In regards to the cadence across the quarter, it was pretty consistent — same-restaurant sales by month were fairly consistent, and the two-year stack is almost the exact same number. We're not going to comment on the quarter to date. It's only three weeks and a little choppy because of our 53rd week and shifting calendar.

Lauren Silberman: How should we think about the cadence of comps or EPS growth throughout fiscal 2027?

Raj Vennam: I would expect first quarter to be kind of low to mid-single digit EPS growth. The rest of the quarters are fairly balanced on a 52-week basis. It's really a function of factors impacting year-over-year comparisons specifically in the first quarter, when we expect to have the highest commodities inflation — roughly 4% in Q1. There are also some near-term costs that are more one-time in nature creating a little more pressure on the first quarter. For the full year and the rest of the quarters, it should be fairly even.

Operator: Our next question is coming from Gregory Francfort from Guggenheim Partners.

Gregory Francfort: I wanted to ask about LongHorn's comp performance — it keeps putting up really good numbers. What's driving that, and how much of it can be applied to the other brands?

Rick Cardenas: LongHorn had a 9.5 comp. Laura and her team are doing an excellent job. A lot of it has been investments in food quality that we've been making for probably the last 10 years. Service is improving. Guests know they're getting high quality steaks. Our steaks cooked correctly scores are at highest-ever levels. It doesn't hurt that there's high beef inflation in the market, so the relative value looks a little better for LongHorn. Specifically in Q4, we had a social media post that went very viral — a tease on bringing back lamb. They sold more lamb, bought more lamb this year than last year, and sold out in half the time. There are things that we can learn at LongHorn and take to other brands, but LongHorn has also learned things from other brands. Not all of our brands are going to do a nine comp every quarter, but we've got a framework and a portfolio that'll let us meet that framework and hopefully exceed it every once in a while.

Operator: Next question is coming from Chris Carril from KeyBanc Capital Markets.

Chris Carril: On the commodity basket guidance of 3%, can you expand on that and touch on specific drivers, specifically beef? Any more on the cadence of commodity inflation expectations?

Raj Vennam: From a commodities perspective in Q1 specifically, beef is going to be somewhere in the mid to high single-digit range because we're wrapping on pretty low inflation a year ago. We started to experience significantly higher beef inflation beginning in Q2 of last year, and for full year fiscal 2026 we ended up around 12% for beef. As we look at fiscal 2027, we expect beef to be in the low single-digits for the full year — we would actually expect some deflation in the second quarter. For the first half, we expect low single-digit inflation, including mid to high in Q1 and slight deflation in Q2. On chicken, our contracts help protect us from market volatility. Over the last three years, our chicken costs have been fairly flat while the broader market has seen roughly 5% annual inflation. We expect seafood to be high single-digits in the front half but normalize as we get to the back half.

Operator: Our next question is coming from Andrew Charles from TD Cowen.

Andrew Charles: Does the same-store sales guidance embed expansion of delivery, either via more brands adopting first party or brands with first party adopting third party?

Rick Cardenas: Right now we're still focused on the brands that have first-party delivery — Olive Garden, Cheddar's, and Yard House. Chuy's already has third-party. There are a few things we don't like about the third-party delivery model, though some have been solved. Others we'd have to see addressed before getting into that — price transparency for our consumers so they know exactly what their entrée costs versus getting it delivered, control of the data, and tips for our employees, just to name three. With the acquisition of Chuy's, we have greater insight into the third-party model. Our guidance does not contemplate any third-party delivery.

Andrew Charles: Should we expect another year in 2027 of increased marketing activity but less of an increase in cost as you find efficiencies?

Raj Vennam: From a marketing perspective, we expect to make some investment even with some cost saves. There's probably another $5 million to $6 million of cost saves next year. We expect marketing expense to go up roughly 10 basis points — think of it as about a $25 million investment year-over-year, and that's contemplated in the guidance.

Operator: Our next question is coming from Danilo Gargiulo from Bernstein.

Danilo Gargiulo: At a high level, can you give us the key takes of your guidance — where do you have highest conviction, what takes you to the higher end versus the lower end for 2027?

Raj Vennam: Our guidance of 2.5% to 3.5% implies flat to positive traffic, with check in the mid to high 2% range. Looking out 12 months, there are a lot of factors that can impact traffic. We expect our pricing to be fairly close to our approximately 3% total inflation. The broader macro plays into that range — if the macro ends up being much better, we'll end up at the higher end. Our portfolio of brands is a huge advantage when it comes to planning, as we can pull different levers across the portfolio to get to our commitments. One thing worth calling out is we have a pretty big step up in growth — 75 to 80 gross openings versus 71 last year, plus 11 Bahama Breeze conversions. Adding those two up, we're looking at roughly 20 more openings year-over-year, which leads to incremental pre-opening costs and some year-one inefficiencies of roughly $15 million or $0.10 of EPS drag. Even with that headwind, our guidance implies EBITDA margin flat to positive. If you add that back, EBITDA margin would be 10-plus basis points expanding.

Danilo Gargiulo: On international expansion — when will we see the highest impact over the next two to three years, and what contribution from an EPS standpoint should we expect?

Rick Cardenas: Our international expansion is franchising, so we get a good percentage of the sales from that, and the EPS contribution should grow as we continue to add franchise restaurants. We're talking low single-digit pennies a year because you're talking maybe 20 to 25 restaurants in a good year for openings. It's still positive but not a monster driver of EPS growth. That said, this will be the most international openings we've ever had at Darden, and we would expect to keep doing that every year for the next few years. When we signed the last three deals in June of last year, we signed 40 restaurants in India, 40 in Spain, and 30 in Canada. We had never signed a development deal for a country and opened it within 12 months — all three are going to open within 12 months. We feel really good about where we are.

Operator: Our next question is coming from David Palmer from Evercore ISI.

David Palmer: On the same-store sales guidance for FY2027 — is it safe to say you're thinking Olive Garden is slightly below but still positive? And how are you thinking about restaurant-level margin for that brand this year, especially with what you're doing with small plates?

Raj Vennam: You can imagine when we look at the portfolio and we're saying 2.5% to 3.5%, we would expect Olive Garden to be closer to the lower end for the year. From a margin perspective, in Q4 they had a 50 basis point increase in segment profit margin even with the 50 basis point headwind from the lighter portion investment. As we look at the full year for next year, I would expect their margins to be flat to positive. They have done a great job managing costs in the rest of the P&L to fund investments, and that's really what's great about Olive Garden — it's an engine that has been fueling growth for Darden through the cash generation it does.

David Palmer: What will be the story of 2027 for Olive Garden? What is the team going to be really focusing on?

Rick Cardenas: Their comps are going to be somewhere in the 2.5% to 3.5% range, probably closer to the bottom, and we're okay with that. We think that's a good place for Olive Garden to be as long as they continue to make investments for the long term so they can be running those comps for the next 20 years. Olive Garden is a brand that's well-positioned to leverage news to drive traffic, and they're continuing to work on some news. We've got several initiatives to continue appealing to core guests — Olive Garden's core guests were the fastest-growing part of Olive Garden in the last quarter, and that's important to us. We're going to continue to follow our marketing filters: it's got to be simple to execute, can't be at a deep discount, and it's got to elevate brand equity. Raj has mentioned we're going to be somewhere in the flat to positive segment profit for Olive Garden even with the growth. You should see some things at Olive Garden this year that you may have seen years ago or some people may have never seen. We're not going to just sit back and let Olive Garden have a very low comp — we're going to make sure they're doing the right things for the long term.

Operator: Next question is coming from Sara Senatore from Bank of America.

Sara Senatore: On guidance, the CapEx outlook looks like a bigger jump than the number of new units. Is that related to the conversions, or is there something else going on?

Raj Vennam: Of the $875 million guidance, roughly $25 million is related to the Bahama Breeze conversions. Close to $350 million is maintenance and IT investment. Roughly $500 million is related to new unit growth. We're also building the pipeline for next year, which is quite strong, and some of those costs come into this year. We hold our brands and development team to a pretty high standard, and our returns on new restaurants have been stellar. We feel like this is good use of capital.

Sara Senatore: Going back to the comment about seeing some growth in spending from lower-income consumers — was the lighter portions menu a factor there?

Rick Cardenas: There could be a lot of different things — tax refunds likely played a role. The Italian category being more promotional, I'm not sure I necessarily saw that from our side. Olive Garden did what they did the year before, but maybe others did. What we wanted to highlight is simply that all of casual dining did pretty well across all the cohorts, and specifically that the bottom quintile was positive year-over-year where in the past they weren't. We'll see if there are more reasons, but it's still early to determine exactly what drove that.

Operator: Our next question is coming from Brian Harbour from Morgan Stanley.

Brian Harbour: Three percent commodity inflation seems pretty good in this environment. Is this a prime example of where your scale really benefits things, particularly your distribution model?

Raj Vennam: Absolutely. Rick mentioned in his prepared remarks the benefit of having our own distribution network, owning our own inventory, and working directly with suppliers. The scale benefit is meaningful — because we can guarantee certain volumes, that helps suppliers feel good about committing to certain prices. Our supply chain team has done an excellent job outperforming the market by mid-to-high single-digit percentage points in multiple years. The scale is a real factor.

Brian Harbour: On the pre-opening costs and margin inefficiency from new units — is that something that stays in the P&L in future years if unit growth continues, or was it more related to the step-up from conversions this year?

Raj Vennam: What I was suggesting is the step-up this year is because of conversions, which creates a roughly 20-unit increase year-over-year. When you look at next year, even if you assume the mid to high percent of our target range for unit growth, it will not be as big a step up. The pre-opening costs will be in the P&L, but year-over-year you won't have the same headwind.

Operator: Our next question is coming from Jon Tower from Citi.

Jon Tower: On Olive Garden, you're featuring smaller plates and protein seems to be becoming a bigger piece of the menu. How are you thinking about balancing what the consumer wants against the strong margins that brand has historically had?

Rick Cardenas: I want to make sure it's clear that we have the lighter portions menu but we're not featuring it anywhere — we're not marketing it or doing anything special. Guests are finding it as they go. On protein, we still have those items at a good margin. As we mentioned, next year with these investments we expect our margins to be flat to positive. We'll continue to find other ways to help fund these things. Olive Garden has to continue to evolve with what consumers are looking for. Right now they're looking for a little more protein — who knows how long that'll last. We can find ways to give them that at Olive Garden and across all of our brands. Let's not go too far in saying Olive Garden needs to be LongHorn with protein — they're going to have some protein on their menu, and they always do.

Jon Tower: Can you refresh your thoughts around the M&A environment and how you see the portfolio growing over time outside of the existing brands?

Rick Cardenas: Our long-term framework does not need acquisitions to hit our targets. M&A doesn't have to be part of that framework, but could give top spin to it. We love the brands we have right now. We're focusing on the organic growth of these brands and building scale that way. Converting the remaining Bahama Breezes is quite a bit of work for our teams. If something comes up, our board will discuss it. Right now, we work with what we have in front of us.

Operator: Our next question is coming from Dennis Geiger from UBS.

Dennis Geiger: On value perceptions at Olive Garden — any change in the scores there? Has the smaller plates menu helped?

Rick Cardenas: Value is still pretty strong at Olive Garden — it's always been a strong brand for value. The lighter portions have very strong value scores. It's not like half our guests are ordering the lighter portion, but those guests who are ordering it are coming back more frequently than they were before, and that frequency continues to build. Value rating is one of the biggest filters we have with whatever we try to add to the menu at Olive Garden. If something detracts from value, we won't put it on the menu. We feel really good about where Olive Garden's value is.

Dennis Geiger: On operational efforts and speed of service at Olive Garden — are you getting credit from guests for that, and what does that opportunity look like in 2027?

Rick Cardenas: Olive Garden has made a pretty meaningful change in the last quarter in their speed. They're focusing on it and doing a great job. John Wilkerson and his team with Shane Elrod are doing an amazing job getting the message out on the importance of speed. They are seeing a very quick change in their speed and great feedback from guests — their service scores and pace of meal scores have gone up significantly, and they still have a lot more to do. Olive Garden is leading the way for Darden, and we're going to continue to learn from them and help see what other brands can do.

Operator: Our next question is coming from Drew Norris from Baird.

Drew Norris: Can you walk through pricing figures by brand, at least Olive Garden and LongHorn in the fourth quarter, and how you're thinking about the cadence of pricing through 2027?

Raj Vennam: For Q4, blended pricing for Darden was 3.8%. Olive Garden was 2.8% and LongHorn was just over 5.3%. As we look at next year, we expect pricing to be about 3%, more in line with inflation. From a quarterly cadence, we expect pricing to be slightly higher than 3% in the first half and lower than 3% in the back half. We expect Olive Garden to be lower than Darden's overall pricing.

Drew Norris: What are you seeing in terms of development cost inflation, and how are cash-on-cash returns coming in for new openings relative to your targets?

Raj Vennam: Construction costs have been fairly flat. Actually, as we go out to bid, we're finding bids coming in a little better than our projections. Costs are holding up — not going down meaningfully, but not going up. From a return perspective, we feel really good. Cash-on-cash is coming in ahead of our expectations. When you look at IRR and net present value of these projects, they are significantly positive with IRR exceeding our cost of capital by multiple hundreds of basis points. We feel really good about the performance of new restaurants.

Operator: Our next question is coming from Jim Salera from Stephens.

Jim Salera: You have implied flat to modestly positive traffic in 2027. We've seen a sustained period of negative traffic for the industry but sustained outperformance from your brands. Can you walk through your expectations for the industry in fiscal 2027 and your ability to continue taking share?

Raj Vennam: We really focus on what we can control. We're not expecting any material change to industry performance — our baseline assumption is the industry is going to be where it's been, and then we ask what we can do to take share. Last year we had positive traffic for the full year in an environment where the industry was negative. We've done that for years through the different initiatives our brands have. Ultimately the biggest and most important thing is execution — superior, consistent execution, which is the fabric of how we think about it at Darden across all our brands.

Jim Salera: Can you give us the traffic figures for Olive Garden and LongHorn in the quarter?

Raj Vennam: For the quarter overall, check growth was 3.3, traffic growth was 1.3, pricing was 3.8, with about 50 basis points of mix. Olive Garden's traffic was up 20 basis points, with pricing of 2.8 and catering contributing about 50 basis points. So think of it as 70 basis points of traffic at Olive Garden and check growth of 1.5, with the lighter portions creating an 80 basis point headwind and some negative mix of 30 basis points. LongHorn's traffic was up 4.2 with check up 5.3, basically in line with their pricing.

Operator: Our next question is coming from Peter Saleh from BTIG.

Peter Saleh: LongHorn's comps were the strongest in more than three years. Do you think there's any trade down from fine dining or trade up from retail happening there?

Rick Cardenas: There's probably some trade down from fine dining. There's also some trade-in from retail, which is what we think is happening. When you think about frequency at fine dining versus frequency at LongHorn and the relative size of LongHorn versus the rest of fine dining, it would need quite a bit of trade to make a real big difference. There's some trade, but I think it's more retail trade.

Peter Saleh: Are you still seeing demand destruction for beef at retail?

Raj Vennam: It hasn't gotten meaningfully better. Last month we saw an 8.5% decline in the volume for steaks at retail — we were seeing as much as 11% at one point, so it's moderated a little, but still pretty high. Retail makes up roughly half of total beef sales, so it's still a meaningful step down.

Operator: Our next question is coming from Jacob Aiken-Phillips from Melius Research.

Jacob Aiken-Phillips: On beef risk management — with cattle supplies already tight, how do you think about disruptions from screwworm and international cattle flows? Could that change the pricing and margin framework?

Raj Vennam: Our perspective is that the short-term risk to beef supplies from screwworm is minimal with no meaningful impact to supplier pricing in the short term. Consumer demand seems to be holding up, and USDA has done a great job communicating that the product is safe to consume. Long-term risks could stem from restrictions on animal movement across state lines, which could potentially disrupt supply chains for a short period. Our supply chain team feels fairly good about the product side and the price. That's why for this year we're expecting low single-digit inflation for beef.

Jacob Aiken-Phillips: You mentioned some softness in guests under 35. Can you give more color — is it an affordability issue or more about how they're choosing occasions across different channels?

Rick Cardenas: It's hard to tell exactly why. Unemployment is the highest for the 20 to 25 age group that it's been in a long time, and there's no specific reason we're hearing that's causing the under-35 softness. It's also not as big a part of our business as the people above 35.

Operator: Our next question is coming from Andrew Strelzik from BMO Capital Markets.

Andrew Strelzik: The other business segment had its best comp performance in a couple of years and built some momentum through the year. Can you unpack what's been driving that better growth trajectory and how to think about the durability of that into 2027?

Rick Cardenas: The other business segment is Yard House, Cheddar's, Seasons 52, and Chuy's. All of the brands were positive this quarter, really driven a lot by Yard House and Cheddar's. Yard House over the last three years has done a lot on their menu — they've really improved their burgers, tacos, and pizza platform, and have other things they want to work on. Cheddar's continues to make improvements in food and service. Chuy's is on the back end of its integration and will now focus on using those tools and continuing to work on recipe consistency across all restaurants. We feel really good about those brands and their trajectory. You should see a little bit more growth on those three brands in the future than you've seen in the past.

Andrew Strelzik: On Olive Garden delivery — now that we're a year-plus in, how are you thinking about mix potential, incrementality, and the growth rate as you've lapped the national rollout?

Raj Vennam: From Uber first-party delivery, in Q4 we were at around 4.7% of total sales, consistent with Q3. We don't expect this to be a meaningful driver incrementally year-over-year going forward, but it's holding fairly steady. Incrementality is still in line — we said roughly 50% incremental and that's what we think we're seeing. Olive Garden off-premise in total this quarter was 27%, which is a pretty good place to be.

Operator: Our next question is coming from John Ivankoe from JP Morgan.

John Ivankoe: Was there any direct or indirect disruption from the recent Gulf crisis — any supplier or distribution surcharges that may have influenced COGS in Q4 or Q1?

Raj Vennam: There was some impact, especially a fuel surcharge, though there's a little bit of a lag in how that works its way through the system. We would expect part of the Q1 inflation reflects some unfavorable impact from elevated fuel prices working through the system. We expect that impact to ease through the fiscal year as prices come down. Through the lens of COGS inflation, it could be tens of basis points approaching 50 to 60 basis points at the peak. Things appear to be starting to calm down, and that should help.

John Ivankoe: Where does Darden stand on the utility front in the near-term outlook?

Raj Vennam: We saw some impact when natural gas peaked during February of this year. Since then it's been fairly steady. Our utilities inflation has been more in the mid-single digit range for the year. As we go into next year, based on the contracts and hedging we have in place, we expect it to be in the low to mid-single digits.

Operator: Our next question is coming from Jim Sanderson from Northcoast Research.

Jim Sanderson: On Olive Garden, the lighter portions mix headwind was 80 basis points in the quarter. How do you see that evolving — will it grow as more consumers take advantage of that menu option, or stabilize as you lap the launch?

Raj Vennam: We would expect that to come down a little bit — 80 basis points is probably the peak. As more consumers come in it will have some impact, but we don't expect it to be a lot more than maybe 10 to 15 basis points, and that would still take a big increase in preference. The bigger part is year-over-year — we started with basically 40% of the system in Q1 last year, so the year-over-year comparison in Q1 this year would be more of a 50 to 60 basis point headwind, working its way down as we go through the year as we lap the phases of the launch.

Operator: Our next question is coming from Brian Vaccaro from Raymond James.

Brian Vaccaro: How is the lighter portion menu performing? It sounds like the preference continues to build, but how is the customer using the platform? And what level of SG&A did you embed in the fiscal 2027 guidance?

Rick Cardenas: We're talking somewhere in the low to mid-single digits total preference. A lot of that is on the weekends at lunch, which is where we had eliminated lunch menus years ago. There's still some preference at dinner, but more of it is lunch on the weekends — it helps fill our restaurants again. As we re-merchandise it and how we talk about it, it might continue to grow. That's why we think maybe tens of basis points of mix in the future, but not 80 like we saw.

Raj Vennam: On SG&A — for marketing, we expect it to go up about 10 basis points, roughly a $25 million investment year-over-year. G&A we expect to be closer to just a little north of $500 million. That can move a little bit based on what happens with mark-to-market.

Operator: Our next question is coming from Jeffrey Bernstein from Barclays.

Jeffrey Bernstein: With my plan to retire in the back half of this calendar year, I just wanted to thank you and your predecessors for your partnership, learnings, and insights over the past many years. I've always appreciated your longer-term perspective on the business, which is a rarity. I applaud your 30-plus year chart demonstrating the 10-year average total shareholder return always at or above 10%. Congratulations on a successful fiscal 2026, and best of luck achieving similar in fiscal 2027 and beyond. It has been an honor to work with you.

Rick Cardenas: Hey, Jeff. I want to say the same thing to you. Thanks for your questions and your comments all these years, and thanks for believing in what we do and thinking about the long term. We're going to miss your questions and what you've helped us with over the years. My predecessors would say the exact same thing if they were on this line. Best of luck to you in your retirement. I was hoping you would be on this call. I look forward to hearing from you some other way. Every once in a while, if you want to give us a call, that'd be awesome. I expect you to have fun in your next endeavor.

Raj Vennam: Thank you, Jeff. I echo everything Rick said. We've always enjoyed the partnership and want to thank you for the time we had the opportunity to spend with you. All the best with your next chapter.

Operator: We've reached the end of our question and answer session. I'd like to turn the floor back over for any closing comments.

Courtney Aquila: Thanks, Kevin. I want to remind you that we plan to release first quarter results on Thursday, September 24th before the market opens, with a conference call to follow. Thanks for participating on today's call. Have a great day.

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