On this page of StockholderLetter.com we present the latest annual shareholder letter from DARDEN RESTAURANTS INC — ticker symbol DRI. Reading current and past DRI letters to shareholders can bring important insights into the investment thesis.

 •  8/5/2024 Letter Continued (Full PDF)
 •  8/7/2023 DRI Stockholder Letter
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 •  DRI Benford's Law Stock Score = 95

DRI Shareholder/Stockholder Letter Transcript:

Dear Fellow Shareholders:
Fiscal 2024 was a successful year, despite the challenging sales environment that emerged in the back
half of the year. Our teams did a great job of executing our strategy as we pursued our mission to be
financially successful through great people consistently delivering outstanding food, drinks and service
in an inviting atmosphere, making every guest loyal.
We succeeded by strengthening and leveraging our Four Competitive Advantages, while ensuring our
restaurant teams remained focused on executing our Back-to-Basics Operating Philosophy to drive the
highest levels of execution.
Fiscal 2024 Results
While sales results were weaker than we anticipated, earnings exceeded our initial expectations for the
year. Total sales grew 8.6% to $11.4 billion driven by same-restaurant sales growth of 1.6% and sales
from 39 net new restaurants. We also closed on the acquisition of Ruth   s Chris Steak House and
successfully integrated 78 company-owned restaurants and 5,000 Ruth   s Chris team members into
Darden. Ruth   s Chris was accretive to our full-year EPS results by $0.10.
Our sales growth, combined with strong cost management by our teams and the acquisition of Ruth   s
Chris, drove $1.8 billion in EBITDA1 from continuing operations, an increase of 50% compared to five
years ago. As a result, we delivered adjusted diluted net earnings per share growth of 11% to $8.881.
Additionally, we returned $1.1 billion to shareholders in the form of dividends and share repurchases.
When evaluating our performance within the context of our long-term framework of 10-15% Total
Shareholder Return (TSR)     as measured by EPS growth plus dividend yield     we delivered a TSR of
14.2% for fiscal 2024, which is near the high end of our range. Over the last five years, we have been
able to achieve annualized TSR of 11.7%. This is well within our target range despite the issuance of
nine million shares of common stock in fiscal year 2020 and other business disruptions from COVID.
Our Proven Strategy
Our ability to drive profitable sales growth is a testament to the strength of our business model and
adherence to our proven strategy, anchored in our Four Competitive Advantages of Significant Scale,
Extensive Data and Insights, Rigorous Strategic Planning and Results-Oriented Culture. At the brandlevel, our restaurant teams are relentlessly focused on executing our Back-to-Basics Operating
Philosophy anchored in food, service and atmosphere.
1
Represents a Non-GAAP measure. A reconciliation of GAAP to Non-GAAP numbers can be found at the end of this letter.

Our Four Competitive Advantages
1. Significant Scale
Our scale enables deep relationships with our supplier partners and creates cost advantages our
brands could not achieve on their own. It also allows us to have our own dedicated distribution
network, ensuring an uninterrupted supply chain to our restaurants. Further, our size creates a G&A
benefit by enabling us to centralize shared support functions and the associated costs.
2. Extensive Data & Insights
The depth of our data enables us to glean rich insights that are shared across our brands and lead to
smarter, faster and more impactful decision making. We are also able to better understand guest need
states and communicate with them more effectively, while eliminating friction from the guest
experience and measuring our overall marketing impact. Finally, these insights help us optimize our
menus by making better purchasing and pricing decisions based on guest data and historical trends.
3. Rigorous Strategic Planning
At the Enterprise level, our Rigorous Strategic Planning ensures we have the right portfolio of brands;
we align strategies and coordinate operations to maximize our portfolio   s value; and we capture the
available synergies across our brands. For our Brands, our strategic planning process allows us to
determine their distinct advantages and strategic role in the portfolio; identify and cultivate
differentiated positioning; develop a deep understanding of the competitive landscape; and ensure
they adhere to their strategy in order to compete effectively and grow share.
4. Results-Oriented Culture
Our team members are our greatest asset, and we are proud of the culture we have built. Our team
members bring our brands to life each day, and we know engaged teams are vital to creating
memorable guest experiences. We conduct engagement surveys with hourly team members and
management twice a year through Gallup, and Darden   s overall engagement is well above the average
for both U.S. and International companies as measured by Gallup. In fact, our most recent survey
results showed that our overall level of engagement is at an all-time high.
All four of our competitive advantages are unmatched in the full-service dining industry, allowing our
brands to compete more effectively and provide even greater value for our guests.
Our Back-to-Basics Operating Philosophy
Throughout the year, our restaurant teams continued to execute at a high level by remaining intensely
focused on being brilliant with the basics. Key to this is having well-trained, tenured team members.
Our manager and team member retention is at or above pre-COVID levels, and our teams benefit from
this day-to-day staffing consistency. We know engaged team members are vital to creating great guest
experiences, which is why we provide our teams with training programs that not only enhance their
skillsets, but build on the unique culture of our brands, further strengthening engagement.

For example, LongHorn Steakhouse recently completed their seventh Steak Master Series. Over the
course of two months, thousands of culinary team members compete in this highly engaging grilling
competition and training program for the right to be crowned champion. Similarly, Yard House
completed its first Best on Tap competition during the year. Known for having more than 130 beers on
tap, Yard House tested its bartenders from every restaurant giving them the opportunity to showcase
their beverage knowledge, bartending expertise, and service skills.
Programs like these not only help us develop our people, they give us an opportunity to celebrate team
members who play a critical role in the guest experience and who serve as torchbearers for their
brand   s culture.
Expanding Our Portfolio of Iconic Brands
On July 17, 2024, we announced our intent to acquire Chuy   s. We are thrilled to welcome another
iconic brand to our portfolio. Founded in Austin, Texas, in 1982, Chuy's serves made-from-scratch TexMex inspired dishes in a fun, eclectic atmosphere that offers a unique,    unchained    look and feel. They
currently operate 101 restaurants in 15 states generating total revenues over $450 million.
As we consider adding to our portfolio, we use a set of criteria to evaluate a potential brand. It should
be a full-service dining concept with broad guest appeal, have the ability to grow at a greater rate than
the target included in our long-term framework, and be big enough to impact our financial
performance over time. To be an excellent fit, a brand must also strengthen our strategy by enhancing
our scale, fitting our culture, and complementing our portfolio of iconic brands.
Chuy   s is an excellent fit. Just as our competitive advantages will benefit Chuy   s, they will further
amplify these advantages. Additionally, they are a great cultural fit     we share a similar Back-to-Basics
Operating Philosophy, as well as the same passion for our people. Finally, Chuy   s complements our
existing portfolio by allowing us to access the popular Mexican dining category, which we do not
compete in today.
We expect to close on the deal in the second quarter of fiscal 2025, following a 30-day go-shop period,
and subject to customary closing conditions. We have an experienced team ready to ensure integration
proceeds as smoothly as possible, after closing. Total acquisition and integration-related expenses are
expected to be approximately $50 to $55 million, pre-tax.
Excluding acquisition and integration-related expenses, we expect the impact from this transaction will
be neutral to diluted net earnings per share in fiscal 2025. By fiscal 2027, we anticipate this transaction
will be 12 to 15 cents accretive to our diluted net earnings per share.
Nourish & Delight Everyone We Serve
As a company that employs more than 190,000 team members, serves more than one million guests
a day and operates 2,000-plus restaurants across all 50 states, we strive to nourish and delight
everyone we serve     our team members, guests and communities. We consider this our higher
purpose and also integral to achieving our mission.

Serving Our Team Members
Our team members are at the heart of everything we do. Because of our size, we are able to help them
grow in their careers. We invest in our people   s success     from competitive pay and benefits to the
broad range of training and development opportunities we provide     while providing an inclusive and
supportive culture. Most importantly     through mentorship, collaboration and a commitment to
promoting from within     we consistently identify potential in our team members, spark their
development and support career growth with Darden or wherever their paths take them.
Investing In Their Success
We only succeed when our team members succeed, which is why we invest in them by providing
excellent opportunities throughout their Darden experience. This includes pay and benefits, and
training and development, all in an environment that is welcoming, inclusive and supportive.
Our hourly team members are the face of our brands. These roles are critical for our operations and a
source of our future restaurant leaders. Across all our brands, our hourly team members earn, on
average, more than $23 per hour, inclusive of income earned through gratuities.
Beyond pay, we provide valuable programs designed to help our team members be at their best. This
includes access to a variety of health benefits so eligible team members can choose from a menu of
options that best fit their needs and those of their family. This year, we invested an additional $3
million in subsidies to reduce or keep flat the medical premiums that our hourly team members pay,
and it marks the seventh consecutive year we have done so.
We also work to help our team members, and their families, thrive. For many of our team members,
English is not their first language. To help them succeed and grow their careers, we offer a program
called Fast Fluency that provides the opportunity to learn English for free. Additionally, our Next
Course Scholarship program     through the Darden Foundation     supports our team members   
families by helping their children achieve their educational goals. Over the past two years, nearly 200
children of team members have been awarded a post-secondary scholarship worth $3,000 each.
Pathways to Growth
Our hourly workforce is a primary source of talent to fill management roles. With more than 2,000
locations and 9,000 leadership positions across our restaurants, we can provide a pathway for
thousands of individuals across the country to advance from entry-level jobs into management roles. In
fact, we promote approximately 1,000 hourly restaurant team members into management each year.
In fiscal 2024, we promoted 1,100 hourly team members into our Manager-in-Training program, 285
restaurant managers into General Manager or Managing Partner roles and 22 GMs/MPs to Directors
of Operations. The extensive training programs we have in place for team members and leaders
ensure we are able to continually foster a strong pipeline of talent to meet the growth of our business.

Ensuring an Inclusive and Diverse Culture
At Darden, everyone is welcome to a seat at our table. When Bill Darden opened his first restaurant in
1938, he employed anyone willing to work hard, work smart and grow with the company     without
regard to race, gender or background. We carry this important legacy forward today. We believe there
is strength in bringing together a diversity of cultures, perspectives and ideas. The result fuels our
growth as a company and creates great places to work for our team members who extend that sense
of welcome and belonging to our guests.
To do this, we are focused on strengthening our pipeline of diverse leaders. Out of more than 1,400
restaurant leaders who were promoted from within in fiscal 2024, 40% were people of color and 48%
were women. We continue to support our restaurant teams in the hiring and development of talent so
our teams reflect the diversity of our industry and the communities we serve.
Serving Our Guests
In fiscal 2024, we served 420 million guests. We have the privilege of helping our guests celebrate
life   s special moments     big and small. They trust us with these occasions, which is why our restaurant
teams are so passionate about providing great food, with attentive service in an engaging atmosphere
every shift, every day.
Their focus on executing at the highest level was especially apparent during the busiest times in our
restaurants. Throughout the year, several of our brands achieved record-level performance when our
guests were counting on us the most. Olive Garden delivered record Valentine   s Day and Mother   s Day
sales. During the busy holiday season, Ruth   s Chris, The Capital Grille, Seasons 52 and Eddie V   s each
set all-time daily sales records on Thanksgiving Day, and The Capital Grille set their all-time total
monthly sales record during December.
Our internal guest satisfaction metrics are another leading indicator that we are creating great guest
experiences. Several of our brands reached new all-time highs for overall guest satisfaction for the full
fiscal year, including Olive Garden, Yard House, Cheddar   s Scratch Kitchen, Seasons 52 and Bahama
Breeze.
Additionally, five of our brands were recognized in Technomic   s    America   s Favorite Chain Restaurant   
survey. The survey measures perceptions of service and hospitality, unit appearance and ambiance,
food and beverage, convenience, and value. Ruth   s Chris Steak House was ranked as America   s
Favorite Chain restaurant, while Seasons 52, Bahama Breeze, LongHorn Steakhouse and The Capital
Grille all ranked in the top 10.
Creating exceptional experiences and lasting memories for our guests is why our team members do
what they do. They are passionate about being of service and committed to earning our guests    loyalty.



 8/5/2024 Letter Continued (Full PDF)