Darden Restaurants, Inc. (DRI) Earnings Call Transcript & Summary

Thank you, Donna. Good morning, and thanks for being with us on today's call. With me are Rick Cardenas, Darden's President and CEO, and Raj Vennam, our CFO. As a reminder, comments we make on this call will contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Such statements carry risks and uncertainties that might cause actual results to differ materially from what we expect and project; those risks are described in the press release the company distributed this morning as well as in its filings with the Securities and Exchange Commission. A presentation of supplemental materials with information shared on today's call can be found under the Financials tab in the Investors section of our website at darden.com. Today's discussion includes certain non-GAAP measurements, and reconciliations of these measurements appear in the presentation. Looking ahead, we intend to release fiscal 2027 2nd quarter earnings on Friday, December 18, before the market opens, with a conference call to follow. On today's call, any references to industry results mean the Black Box Intelligence casual dining benchmark excluding Darden on a calendar aligned basis. Darden moved from a 53-week fiscal year last year to a 52-week fiscal year this year, which has created an offset of 1 week between the fiscal periods we report and the comparable calendar periods used in the industry benchmark. Consequently, industry trends should be compared with Darden's comparable calendar results, which helps account for the 1-week shift and is meant to give a clearer year-over-year comparison. On a comparable calendar basis, average same-restaurant sales for the industry rose 2.4%, and average same-restaurant guest counts fell 0.2% in our first quarter. During today's call, we will refer to comparable calendar periods when discussing our same restaurant sales results. This morning, we will offer some brief remarks on the quarter and provide details on our financial results; now I will turn the call over to Rick.

Thanks, Courtney, and good morning to everyone. Fiscal '27 got off to a solid start in the first quarter. Our results came in as we expected, and every segment posted positive same-restaurant sales. All quarter long, the restaurant teams did an excellent job managing the things within their control. They've stayed committed to solid operating fundamentals, and guest satisfaction scores for our brands are at or near all-time highs for the quarter. Just as important, they keep moving forward on their strategic priorities aimed at supporting long-term growth. At Olive Garden, same-restaurant sales rose 1% in the quarter. The brand kept combining menu innovation with strong value. The Calabrian Summer deal delivered distinctive flavors at a low entry price, while the garlic-themed season provided diners with additional options plus a number of protein-rich dishes. In the quarter, Olive Garden had been set to promote one of its key brand equities — endless soup, salad and breadsticks — yet quickly pulled back from the planned marketing push once outside events sparked broader consumer anxiety regarding lettuce. Olive Garden is a brand in a strong position to leverage news to generate traffic, and its famous Never Ending Pasta Bowl promotion illustrates this best. This year's version debuted at the beginning of Q2, and we're quite happy with the early results. Two bold new menu items are bringing extra excitement this year: Spicy Alfredo sauce and Crispy Shrimp Fritta offered as a protein topping. Demand for protein-forward choices continues to be strong among guests, and Olive Garden has recorded higher buy-ups for unlimited protein toppings alongside Never Ending Pasta Bowl. To back the NEPB launch, Olive Garden reintroduced its Never Ending Pasta Pass following a 6-year hiatus. Considerable social media buzz was generated by the Olive Garden team, with 3 million devices logged in for the Pasta Pass sale. Every one of the 10,000 passes sold out immediately. Taken more broadly, the response demonstrated the deep connection guests feel with the brand and the value and abundance they find at Olive Garden. This shows how well-liked Olive Garden is, and YouTube's YouGov Best Sites 2026 report on U.S. restaurant brand rankings confirmed that again. According to that report, the brand came in at #1 among casual dining brands for consideration when eating out across several generational cohorts, millennials included. Olive Garden likewise took the #1 spot among casual dining brands for service, dining experience and value. Although Olive Garden has delivered solid sales growth across the last several years, the weekday daypart remains a significant opportunity. I'm eager about a number of initiatives the team is pursuing that are meant to strengthen our value proposition and bring in more traffic. Olive Garden is set to launch, later in this quarter, the marketing backing it had already planned for its famous all-you-can-eat soup, salad and breadsticks lunch deal at an attractive price. The team also intends to try out a fresh lunch offering that provides a very strong value proposition and delivers the generous portions that make Olive Garden distinctive. At dinner, the team continues to test additional dishes with more protein, building on the success of new core menu items like Calabrian Steak and Shrimp Bucatini, which has rapidly turned into a guest favorite. LongHorn Steakhouse recorded same-restaurant sales growth of 6.8% for the quarter. That momentum stems from disciplined commitment to a clear strategy focused on quality, simplicity and culture across many years. Sustaining that momentum is tough, and the team stays unwaveringly committed to delivering 14 excellent shifts each week, every week. LongHorn continues putting money into food quality as well, and in the second quarter we'll roll out new dishes and menu upgrades aimed at boosting value and variety at both lunch and dinner. Our remaining business segment reported same-restaurant sales growth of 4.5%, fueled by a highly impressive 10% same-restaurant sales increase at Yard House. With a wide-ranging menu and a bar that thrives on social energy, Yard House naturally serves as a gathering spot for group occasions such as sporting events. That held true during the World Cup, which gave Yard House a terrific chance to strengthen ties with its loyal guests. That also increased brand recognition by attracting a large number of first-time visitors, who were able to try all the menu upgrades the team has rolled out in recent years — among them the new burger, pizza, taco and pasta platforms. Yard House is a growth brand with strong potential, with 13 new restaurants slated to open in this fiscal year, which will let even more guests discover the brand. Five of those openings will be conversions of Bahama Breeze restaurants, and half of the remaining locations will use the new smaller Yard House prototype; that prototype will become the primary one moving forward, helping reduce construction costs and allowing the brand to evaluate even more sites while still delivering its impressive AUV of $10.5 million. I want to recognize Brian Clements and the Yard House team for what they've achieved. They hit $1 billion in sales for the trailing 52 weeks just last week, which makes Yard House Darden's third billion-dollar brand. Looking more broadly, our team's progress this quarter has me feeling good. How our portfolio performed underscores why it matters to have distinctive brands, each with a clear strategy backed by Darden's scale and other competitive advantages. We're sticking with the same priorities: running our restaurants at a high level, building guest loyalty, investing in our people and brands, and deploying capital in ways that support long-term shareholder value. In Q1, we additionally convened our yearly leadership gatherings, bringing together general managers and managing partners representing all of our 2,200-plus restaurants. Those leaders occupy the single most impactful role within the company, and having the chance to engage with them and learn their concerns is enormously valuable. Throughout these meetings, I detected robust involvement and consensus regarding the definition of success for fiscal '27. The takeaway was unmistakable. Our brands are in sync and committed to staying disciplined. Our achievements extend past the four walls of our restaurants. Everything we do carries a larger mission — nourishing and delivering happiness to everyone we serve, including the communities where our guests and team members live. We address those communities in part through efforts to combat hunger. This year, the Darden Foundation and Penske are providing refrigerated trucks to an additional 7 Feeding America food banks, which will aid food distribution in areas of considerable need. Once these are added, over the course of the past 6 years the program will have supplied a truck to more than 60 Feeding America food banks. Naturally, none of our charitable contributions could happen without the enthusiasm restaurant crews show for feeding and pleasing the people we serve; speaking for our leadership group and Board of Directors, I thank each of our over 200,000 employees for the dedication and concern they demonstrate daily in supporting our guests and the communities around them; at this point I'll pass things along to Raj.

Thanks, Rick, and good morning, everyone. Darden delivered another strong quarter in Q1, with sales and earnings growth coming in as we expected. The World Cup gave Yard House same-restaurant sales a lift of roughly 180 basis points. That said, the tournament weighed on our other brands, producing a net hit to Darden's same-restaurant sales of about 80 basis points. Most of that effect landed early in the quarter, which shows up in the steady improvement in traffic as the quarter went on; that trend has accelerated further as we move through September; during the first quarter, total sales reached $3.2 billion. That figure came in 5.1% above the prior year, powered by positive same-restaurant sales growth and 53 net new restaurants added; on a comparable calendar basis, same-restaurant sales rose 3.2%. Diluted net earnings per share from continuing operations came to $2.05, up 4.1% versus last year's adjusted net earnings per share; EBITDA came in at $464 million, and we returned $406 million to shareholders — $184 million through dividends and $222 million via share repurchases. Turning to our margin analysis against last year's adjusted performance, Food and Beverage expenses ran 30 basis points higher. Our pricing matched commodities inflation of 3.5%. The rise in cost of sales stemmed from the mix of sales growth across brands, with a larger contribution from brands whose food and beverage costs run above the company average. Restaurant labor came in 30 basis points lower, thanks to productivity gains and the mix of sales growth across brands. Restaurant expenses held flat, with inflation offset by pricing. Marketing expenses were flat as well; we ran incremental marketing activity during the quarter, funded by cost savings from the prior year initiatives that started in last year's second quarter. All of this produced restaurant-level EBITDA of 18.8% for the quarter, flat versus last year and in line with our expectations. Preopening costs were 10 basis points higher as we keep ramping up new restaurant growth. G&A expense as a percent of sales was flat to last year, and our effective tax rate for the quarter was 12.9%. All told, earnings from continuing operations totaled $234 million, or 7.3% of sales. In the first quarter, every one of our segments grew total sales and posted positive same-restaurant sales growth. LongHorn kept up its strong momentum, Fine Dining posted another quarter of positive same-restaurant sales growth, and Yard House led growth within the Other Business segment. Although segment profit margin performance varied across the portfolio, strong margin expansion at several of our brands helped offset the margin investment at Olive Garden and the impact of winding down Bahama Breeze, leaving restaurant-level margins consistent year over year at the consolidated level. That speaks to the power of our portfolio. For the fourth quarter, Olive Garden's total sales rose 2.2%, reflecting 20 net new restaurant additions and a 1% gain in comparable calendar same-restaurant sales, even with a number of unusual headwinds during the period. Same-restaurant guest counts took a hit of 150 to 200 basis points from the World Cup as well as elevated consumer worry about lettuce. Beyond that, the lighter portion section of the menu produced a 50 basis point mix headwind on the check. We also were up against a high-growth quarter a year ago that featured the Uber Direct $1 million free deliveries promotion and 1 week of Never Ending Pasta Bowl within the comparable calendar period; measured on a 2-year basis, Olive Garden same-restaurant sales rose 7%, which reinforces the brand's continued strength. Olive Garden still holds the industry-leading segment profit margin, delivering 20.4% for the quarter. Segment profit margin fell 20 basis points versus last year, a year that included the margin investment of roughly 30 basis points tied to adding the lighter portion section to the menu. At LongHorn, total sales grew 10.9%, fueled by comparable calendar restaurant sales growth of 6.8% and 29 net new restaurant additions. LongHorn keeps gaining market share and posted its 22nd consecutive quarter of positive same-restaurant sales growth. Across the past 3 years, same restaurant sales are up 17%, with minimal marketing spend, which highlights the strength of the brand strategy. Segment profit margin came in at 18%, 60 basis points above last year. Total sales for the Fine Dining segment rose 6.2%, driven by positive comparable calendar same-restaurant sales of 1% and the addition of 6 net new restaurants. Segment profit margin was 50 basis points below last year. Total sales for the Other Business segment grew 3.6%, driven mainly by positive comparable calendar same restaurant sales of 4.5%, as the permanent closure of Bahama Breeze's restaurants more than offset the addition of 16 net new restaurants at the other brands. Segment profit margin was 15.8%, 30 basis points below last year, driven by costs associated with winding down Bahama Breeze. Last, as we shared in this morning's press release, we are reaffirming every aspect of our financial outlook for fiscal 2027, culminating in diluted net earnings per share of between $11.10 and $11.35 for the year. As a reminder, Thanksgiving moves out of our fiscal third quarter last year and into our second quarter this year. We expect that calendar shift to create a headwind of approximately 1% to second quarter sales, with an offsetting benefit in the third quarter. The impact will differ across brands depending on holiday operating schedules, benefiting our fine dining brands, Seasons 52 and Yard House, in the second quarter, while creating a second quarter headwind for the rest of the brands in our portfolio. You can see that calendar shift reflected in the guidance we’ve given for the full year, and it really comes down to how things fall across the quarters. To wrap up, this quarter stands as more evidence that sticking with our strategy and executing consistently let our teams work through headwinds we didn’t anticipate and still deliver results that matched what we expected. Our portfolio’s strength and durability keep us well placed to create long-term value for shareholders. With that, we’ll open it up to your questions.

Raj, from what I gather, Olive Garden raised what it charges for the Never Ending Pasta Bowl promotion this year. What I'm wondering is whether that came from the company feeling more optimistic about how consumers are doing, or whether there might have been some other factors driving that higher price? And I have a follow-up after that.

Yes, Chris. So when you look at it, the previous time we increased the price at Olive Garden — on an EPB — was when we brought it back following COVID, and essentially it sat at $13.99 for close to 5 years. Looking at how we've handled pricing over the years, we've stayed quite disciplined, always thinking about making sure the consumer still feels good about the value and abundance they get. So one thing we've done is actually add more to the offer. If you consider some of the items we added to the never-ending possible, like the Spicy Alfredo, Shrimp Fritta, and protein add-ons, those are helping too; and by the way, we didn't actually raise the price on a protein buy-up, which is unlimited proteins for $4.99. So it's a compelling great value. From what we've seen so far this quarter at Olive Garden, that choice has clearly paid off.

All right. You brought up lunch as an opportunity at Olive Garden. Could you talk a bit about how traffic has been trending lately during that daypart, and perhaps say more about your remarks on strengthening value there?

Chris, it's Rick here. Rather than addressing recent traffic trends, what we've seen at Olive Garden is a longer-term pattern that goes back to when COVID ended. Think about what we did before COVID — we had done a fair amount of marketing around our lunch platform, whether that was soup, salad and breadsticks or the sandwich platform. Then we halted that marketing, and once COVID passed, we simply hadn't restored it. As a result, lunch has shown somewhat more deterioration than any other daypart. So we felt the time had come, and it was already part of our 5-year plan, to focus on lunch. We believed it was the right moment to address it and to do more with it. Unfortunately, during the quarter we ran into a problem: we weren't able to promote the lunch offer we had wanted to promote. That's why we're doing it in this quarter. On variety, we had also cut back somewhat at lunch when we simplified the menu. So we're going to — we're testing a few — we will be testing some offers that bring variety to the lunch menu while still delivering compelling value; we feel really good about it. Raj and I tried the food yesterday. It's amazing. We feel really good about what that offer will be as we begin testing sometime this quarter. And we hope that once the test proves successful, we'll be saying more about it in the back half of this fiscal year.

Can you give a bit more detail about how Olive Garden's sales moved through the first quarter? And how are you viewing that brand for the rest of the year? Maybe relative to the consolidated guidance? Then, Rick, I know you mentioned the favorable reaction to Never Ending Pasta Bowl. So any color you can offer on the current quarter would be useful.

I'll begin with the question about that cadence; and then if you want to — if Rick wants to chime in on how NEPB performed, we'll get to that. So looking at the quarter, as I said in my prepared remarks, we actually saw trends get better as the quarter went on. I think on a calendar basis, August was our strongest when we look at it, and September is actually even stronger than that. I don't want to get into the exact numbers, but I can tell you that positive traffic has actually accelerated further into September. So we feel good about the underlying business trends we're seeing.

And I would add Never Ending Pasta Bowl to that. As we mentioned during the prepared remarks, 10,000 Pasta Passes were sold in the second quarter, and we've seen a great deal of guest response to that, along with a lot of redemption of that Pasta Pass; that being said, results at the start of Never Ending Pasta Bowl this quarter have also come in a little better than we expected. So our guidance for the year takes all of that into account, but we feel really good about how NEPB has begun. Our buy ups are somewhat higher than they were previously. And as Raj said in an answer a moment ago, we did not raise the price on the protein buy-ups, and that protein is unlimited as well. So the Spicy Alfredo sauce is performing really well; guests have really embraced the new items we've added, and NEPB is working well for us.

Understood. And then perhaps just on the protein remarks. Rick, I believe you said during your prepared remarks that there's an opportunity — at Olive Garden with additional protein-forward choices. So how do you view that over the longer term? And then any thoughts on what that could mean for check or margins at the brand would be useful.

Yes. Over the long term, we will keep searching for additional items at Olive Garden that have some protein added. The second promotion we ran this year, the garlic promotion, included many protein options, and a few of those, our highest priced item in that promotion, performed the best. So I think people, guests want great value at a fitting price for what they're being offered. I won't comment on what the margin implications will be down the road from what we do or the check implications, because we still have other things we're looking at. But as we get closer to those things, we'll let you know. But the promotion was strong for us and the protein was a well-received hit, including an appetizer that has some protein on it, too.

Regarding the better trends we saw during the quarter and into September, could you expand a bit more on what's driving that? Perhaps help us grasp what portion comes from the latest concerns easing versus what comes from your own efforts?

Brian, I'd say it's partly one and partly the other. Some of it is external — I noted a tougher comparison as the quarter began — plus the World Cup and some lettuce-related concerns; all of those were dragging a bit earlier in the quarter. Yet as those pressures let up, our underlying trends kept getting better; and then there are steps we've taken ourselves. I think we've discussed at length what we did with Never Ending Pasta Bowl. I think there's been a lot of activity around how we rolled out the investments we're making to be sure the offer remains compelling and justifies the price. And so it's — and Rick just mentioned the proteins. I mean that's still tremendous value for the guest when unlimited proteins are available for $4.99. And we added Shrimp Fritta as one more protein option, and that's performing really well, too. So our teams' actions are contributing in ways that are helping.

And regarding pricing specifically, could you bring us up to date on where things stand for the second quarter, and perhaps what you expect from the model across the year? I know you showed it in your slide deck, but commodities look really well controlled. Can you remind us what you're projecting for the overall commodity basket in 2Q?

Sure, Brian. Let me begin with pricing. For the quarter, pricing was essentially — the first quarter came in at 3.7%. I expect that to ease as the year progresses, dropping to basically the low to mid-2s by the end — by Q4. So expect a slight moderation as we move through the year. The second quarter will probably land in what you'd call the mid-3 range, and then it will decline as the year goes on. From a commodities inflation standpoint, for the year, we're still anticipating 3%. I would expect the second quarter to fall in the 2.5% to 3% range, and then the back half to be nearer to 3%. And at present, commodities are pretty much in line with what we anticipated heading into the fiscal year. While there is some shifting among the categories. In aggregate, we're tracking quite close to where we thought we'd be at the start of the fiscal year.

Rick, I get that over the long run the correlation is low, but could you remind us how the Olive Garden business has performed in the past when there are these sharp spikes in gas prices? And I suppose, a secondary question for Raj. We reaffirmed 2027 EPS guidance, so how should we think about the effect of fuel surcharges that your distributors charge?

Andrew, I'm not sure whether you have a headset on or something, but your line keeps cutting in and out; so it's difficult to follow your question. Could you give that another try?

All right. Is this coming through more clearly for you now?

Not really. Just take your time. Slow down, and perhaps then it'll work.

Sure. Thanks, Rick. So I understand that over the long term the correlation is low, but could you remind us how the Olive Garden business has performed in the past when there are acute spikes in gas prices? And then as a follow-up for Raj regarding the reiterated 2027 EPS guidance, how should we think about the impact of fuel surcharges that your distributors charge?

Okay. I think we've got it. So the correlation is pretty low; and I'd say the impact of gas prices isn't necessarily any different for Olive Garden and other brands, except perhaps for the consumer who has to drive farther to get to an Olive Garden and some others. As you can see, gas prices kept rising across the quarter, and Raj noted that our results got better as the quarter went on, and the early part of the second quarter is showing some fairly solid performance at Olive Garden. So gas prices don't appear to be a problem. There are a few reasons why. First, prices of $4 a gallon or higher don't shock people the way they did the last time they spiked years back. Also, the share of people's wallets that gas consumes is smaller now than it was 10 or 15 years ago. So the impact doesn't seem to be as large. Yet should fuel costs remain elevated over an extended period, there is a possibility that this begins to pressure the category. Finally, in my view it does affect that lowest-quintile consumer — the shopper we see less frequently in our mix than is the case in other dining categories.

And Andrew, regarding fuel, yes — we do have a variable fuel charge that moves based on diesel prices. We’ve factored some of that into our guidance; but if prices remain elevated through the year, and if I’m to quantify the risk at a high level, we’re talking about tens of basis points of incremental commodity inflation. But when you consider it as a percent of sales for Darden, you’re likely looking at roughly 10 to 15 basis points at a very high level, with $6-plus diesel prices sustained across the entire fiscal year.

To kick things off, I'd be interested to hear a bit more about whether your approach to social media might shift at all during this year. We've noticed some fairly good results at campus locations that have run for multiple years from other competitors, including some over roughly the last 12 months, in terms of the way they communicate, especially with younger consumers. And I'd like to know how you're approaching that not just broadly but also within each of the individual brands at Darden.

Sure, Jon. I'm not going to talk about individual brands, but what I can tell you is that every one of our brands has a robust social media presence, and that shows up in the size of their audiences and in the level of engagement and passion people feel for our brands. Our social media approach is rooted in making our brands come alive in a way that's authentic. So, without making this too disjointed, it really is about being genuine in how those brands — how the folks working in social media, or how those brands think about — or how those people think about our brands, and in the channels that matter most to our guests; so we do have influencer partnerships. We work with influencers who already hold a love and affinity for our brands. You can see that reflected in some of the messages that go out on Instagram and TikTok and other platforms; but there are also other people who aren't influencers yet draw a lot of views simply because they love our brand. So we're engaging with social media in those kinds of ways. And finally, we aren't necessarily targeting a particular age cohort, but we are on TikTok. Every one of our casual brands is on TikTok, and we're in the process of extending it to the rest of them. You'll be seeing more from us on social media across the next year or so as we keep shifting similar marketing into the digital space. But we're very pleased with what we're doing and with being authentic in how we use it.

All right, thank you for that. And then, given that you gave us some detail on how Olive Garden performed in the quarter and quarter-to-date, could you share comparable detail regarding Longhorn and how it has been performing?

Jon, what I'd tell you is that LongHorn continues to hold up. LongHorn has been strong — it has had solid momentum in both traffic and sales. As I noted in my prepared remarks, on a same restaurant basis their sales are up 17% versus 3 years ago. And when you consider how much growth they've seen since COVID, you're talking 40-plus percent. So it's — yes, I don't want to get too granular about the exact figure, and they achieved all of that with no marketing. I mean, they're essentially spending under basically 0.4% of sales on marketing. And much of that is simply the basic stuff that has to be there, like menus and similar items.

Maybe I'm partly building on what was just said, but let me pick up on that. Speaking of which — the two of you tend to talk about consumers in general terms. Certain segments of the restaurant industry have been showing signs of weakening. Are you noticing — and I mean right now, as of today — what's your read on how consumers are behaving, given that when energy prices, interest rates, and the stock market get choppy, things can get a little shaky in the short run.

David, honestly, I'd tell you that across the quarter, consumers really haven't shifted much in our view. We saw very little change, and after going through this quarter's trends, we're feeling pretty good about them. From where we sit, the consumer really hasn't moved much. On the outside, I'd point out that consumer sentiment has declined. Even with that, spending continues; people are staying resilient. They're spending at casual dining. And within our casual dining brands, we aren't seeing any shifts in the demographic mix. There are small movements here and there, but overall Asian income is unchanged. And so — and we always return to this: we know that casual dining, or eating out, whether casual or full service, is still the #1 category where customers want to treat themselves and truly splurge. We'll keep concentrating on the things within our control—delivering a great experience and giving value to each guest. So if the consumer is hesitating, that's not something we're observing.

That's great. I just wanted to return to Cheddar's and Yard House — obviously, excellent work with those brands. For those of us who don't have them nearby, could you just explain what's going well there? And you mentioned you were at least working on the box a little bit. I believe that was on Yard House. Where are the ROIs going to land on these brands? And do you think this is like — are we talking high single-digit unit growth long term in both of these? Or could that even edge up a bit? And I'll pass it on.

Yes, David. Thanks for your questions on some of the brands. Regarding Yard House, we're quite happy — and with both brands, Yard House and Cheddar's — let me begin with Yard House — we're very pleased with how it performed. You saw the 10% comp we posted recently — we're accelerating unit growth, and we've spent the past few years developing a new prototype; this year we'll actually open more than single digits, simply because of converting Bahama Breeze restaurants. Still, our aim for Yard House over the long term would be the higher single digits, not double digits. Our view is that keeping expansion under 10% for each of our brands is the ideal approach, largely because of the staffing required to operate these restaurants and the need for those teams to truly grasp the brands. Turning to Cheddar's — and I'll explain afterward why we see this working for both — the situation there mirrors that. At Cheddar's, growth remains somewhat slower. As operations keep improving, they'll be stepping up growth, and over time we should see them in the mid-single digits; our attention is on the new prototype we'd already rolled out; now for both brands, what has accomplished that; and it's a strong emphasis on food. Yard House has put a tremendous emphasis on its food, considering the platforms we discussed earlier, delivering solid gross value and better service. Cheddar's has followed the same path; food has been our focus. We’ve just rolled out a new burger—it’s fantastic—and we’ve also launched some other new items. With Cheddar’s, the emphasis is somewhat more on entering markets where we already perform strongly, since people recognize the brand there, rather than expanding everywhere. So our growth focus for Cheddar’s is on markets where we already have a Cheddar’s presence, and we’re seeing fairly good results there. So—and I’ll let Raj discuss the ROI.