Darden FY 1Q16 Earnings Call Notes

80% of guests are interacting with tablets at tables

“We also continued the roll out of our table-top tablets. The tablets are now on more than half of our restaurants, with 80% of the tables choosing to interact with the devices in those restaurants. We continue to see the same benefits, as we saw during the tests, higher add-on sales, faster dining times, and overall higher guest satisfaction scores. We are pleased with the progress of the rollout, and we expect to complete it by the end of the second quarter.”

Intend to separate 488 properties through sale lease back

“We now intend to separate 488 restaurant real estate properties through the sale leaseback of 64 restaurant properties, and a REIT spend that will include 424 restaurant properties to create an independent company called Four Corners Property Trust, which was discussed in its Form 10 filing last month.”

Beef prices should be much better in 2017

“On beef, as I have said in the past, beef year-over-year comparisons have a lot to do with when you contracted last year. We believe that we are going to start to have some positive advantages in LongHorn, as the beef market starts to weak, and especially, we expect to see some significant improvement in the back half of the year. But as we move into 2017, we think that the beef market is going to be a much better market for us.”

Comps get a little more difficult, but still easy

“although the comparisons are a little bit more difficult — they are a little bit more difficult on the sales side. We still had some weak guest counts in the back half of last year. So I think that we will continue to outperform the industry, as we move forward.”

Wage pressure is a problem

“Wage pressure continues to be a problem. We will continue to monitor it, as we monitor the different states and the different cities and what they are doing with minimum wage. The job market is improving. We are seeing in certain markets today, becoming a little bit more difficult to hire help. So that will eventually put some pressure on our average wage. But right now, I believe that we are managing this very-very effectively.”