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.
Dear Fellow Shareholders, As we look back on scal 2025, we are pleased to report that the disciplined execution of our strategy delivered pro table sales growth, while we remained true to our mission to be nancially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. Throughout the year, Darden demonstrated resilience in a uid consumer environment while continuing to return capital to shareholders and invest in our people and our business. We operate in a dynamic, competitive industry and we have proven we can successfully navigate any environment thanks to the breadth of our portfolio and our winning strategy rooted in Being Brilliant with the Basics and our Four Competitive Advantages. FISCAL 2025 RESULTS Sales & Earnings: Total sales increased 6.0% to $12.1 billion driven by a blended samerestaurant sales1, 2 increase of 2.0% and sales from the acquisition of 103 Chuy's restaurants and 25 net new restaurants. Adjusted diluted net earnings per share from continuing operations increased 7.5% to $9.553, and we delivered $2 billion in adjusted EBITDA3 from continuing operations driven by strong sales growth. Return of Capital: We returned $1.1 billion to shareholders with $659 million in dividends and $418 million in share repurchases, while funding growth. Performance Against Long-Term Framework: Our long-term framework calls for 10% - 15% total shareholder return (TSR) as de ned by EPS growth plus dividend yield over time. For scal 2025, we delivered a TSR of 11.3%. Over our 30-year history as a publicly traded company, Darden has achieved an annualized TSR of 10% or greater for any 10 scal-year period when considering Darden s stock appreciation plus dividend yield. (See Updates to Long-Term Framework later in this letter.) Chuy s Acquisition: We successfully closed the transaction following the merger agreement that was announced on July 17, 2024 adding 103 Chuy s restaurants to our portfolio and welcoming more than 7,000 new team members to the Darden family. EXECUTING OUR STRATEGY At the Darden level, we continued to strengthen and leverage our Four Competitive Advantages Signi cant Scale, Extensive Data & Insights, Rigorous Strategic Planning, and the Quality of Our Employees while our restaurant teams remained focused on Being Brilliant with the Basics. 1 Will not include Chuy's until they have been owned and operated by Darden for a 16-month period (Q4 Fiscal 2026) 2 Does not include Ruth's Chris as they were not owned and operated by Darden for a 16-month period at the beginning of Fiscal 2025 3 Represents a Non-GAAP measure. A reconciliation of GAAP to Non-GAAP numbers can be found at the end of this letter.
In scal 2025, we had the privilege of serving more than 440 million guests. Our teams worked hard to make each one of those occasions an exceptional dining experience by focusing on Culinary Innovation & Execution and providing Attentive Service and Engaging Atmospheres. Some of the highlights include: Culinary Innovation & Execution Return of fan favorites Steak Gorgonzola Alfredo and Stu ed Chicken Marsala at Olive Garden, which were removed from the menu during COVID. Both were improved with higher quality ingredients and easier execution for the restaurant teams, and both ll a gap on Olive Garden s menu for center of the plate, protein-forward dishes. Guest preference for both dishes remains strong. Addition of a healthier chicken dish Lemon Garlic Chicken at LongHorn Steakhouse, which addressed a menu gap and has scored extremely well in guest satisfaction ratings. Launch of a new and improved pizza platform at Yard House featuring higher quality pizzas that are cooked in half the time. The result was a signi cant increase in preference and guest satisfaction. The Cheddar s Scratch Kitchen culinary team leverages Darden s purchasing power to o er great food at a WOW! price. One way they do that is by capitalizing on lower-cost opportunity buys to create limited time o ers (LTOs). During the year, Cheddar s o ered several LTOs that drove strong guest satisfaction scores for price, a ordability and value. They included two grilled pork chops topped with caramelized onions and bourbon glaze for $12.99; a Texas T-Bone for $21.49; and a Bone-in Ribeye for $22.49 each served with honey butter croissants and two sides for that WOW! price. Attentive Service Pace of Meal Guests who visit our restaurants continue to have great experiences, which is re ected in record, or near-record, guest satisfaction scores across all our brands. But, in a world that has gotten faster, full-service restaurants have gotten slower. We know we can improve on valuing our guests time and we have an opportunity to drive incremental sales over time by capturing the occasion for a quicker meal. The opportunities vary by brand, and it is something each brand will continue to focus on over the long term. For example, the Cheddar s Scratch Kitchen business model is fueled by e ciency and the ability to leverage capacity and speed to serve more guests. During the year, they updated their steps of service and, as a result, Cheddar s nished the year with its highest Speed of Service guest satisfaction score in ve years. Convenience In scal 2025, we successfully rolled out rst-party delivery at Olive Garden and began piloting it at Cheddar s.
Guests had been asking us for small-order home delivery options and they continued to show they were willing to pay for the convenience. But we had real concerns about the third-party model. It was important for us to nd a way to address this guest need without disrupting the team member or guest experience, and without compromising our competitive advantages and operational simplicity. Our partnership with Uber Direct addressed our concerns. From a guest perspective, rst-party delivery protects the in-restaurant experience as drivers pick up orders curbside just as our ToGo guests do today. It also enhances the takeout experience by giving guests the option to have someone else pick up their order. This is further enhanced by the fact that we have the same, every-day value menu price for dine in, pick up or delivery. The added cost for delivery is transparent to the guest and, with Uber s technology platform, they can track their order all the way to their delivery address. In terms of the team member experience, our proprietary capacity management system remains in place, allowing us to manage volume so we do not negatively impact restaurant operations or the in-restaurant dining experience. Additionally, our ToGo specialists continue earning tips on these orders. This partnership allows us to strengthen and defend our competitive advantages of Signi cant Scale and Extensive Data & Insights. It enables us to use the scale of Uber s driver network to enhance our scale, and because guests order through our online portal or mobile app, we keep the data. It also allows us to protect our simple operating model. Our teams continue to execute a great curbside ToGo experience, and there has been no signi cant change to our operations. We will continue to gather learnings from having delivery fully rolled out at Olive Garden, and now Cheddar s, as we evaluate its potential for our other brands. Engaging Atmospheres New Restaurants Providing an engaging atmosphere at each one of our restaurants is fundamental to creating exceptional guest experiences. During scal 2025, we tested new, smaller prototypes for Yard House and Cheddar s. These prototypes help lower construction costs and enable the brands to build out their new restaurant pipelines by considering sites that were previously considered too small, ultimately accelerating new restaurant openings. Importantly, these new prototypes preserve the essence of our brands. For example, at the center of every Yard House is their bar with more than 100 beers on tap, which is the cornerstone for their energized vibe. While the new Yard House prototype is signi cantly smaller, it still features 90 di erent beers on tap, as well as their full menu.
Restaurant Maintenance/Remodels Our facilities and remodel teams partner with each brand s operations team every day to ensure we are delivering on the promise to provide engaging atmospheres. Each year, we spend on average approximately $200,000 per restaurant for maintenance and remodels to keep our buildings fresh and inviting. FIVE-YEAR PLANNING PROCESS Rigorous strategic planning is one of our competitive advantages, and for Darden, it 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 strategic role in the portfolio; Identify their distinct advantages and cultivate di erentiated positioning; Develop a deep understanding of their guests and the competitive landscape; and Ensure they adhere to their strategy so they can compete e ectively and grow share. During scal 2025, we completed our ve-year planning process. Each one of our brand leadership teams has a clear understanding of their role in the portfolio and they built a ve-year strategic plan based on that role focusing on what they need to do to win today and into 2030. They have already begun to put their plans in action and will execute them to drive shareholder value. The ve-year planning process also yielded other key outcomes, including the following: Updates to Long-Term Framework Our long-term nancial framework outlines the strategic priorities and performance expectations that guide our sustained value creation. We remain committed to delivering 10% - 15% TSR over time, as de ned by EPS growth plus dividend yield. However, we have updated the framework to re ect a greater emphasis on sales growth with appropriate investments while maintaining or growing margin. As a result, we have increased the contribution from New Restaurant Growth to be 3% to 4%, and Same-Restaurant Sales to be 1.5% to 3.5%. Additionally, we updated how we de ne margin expansion, shifting from EBIT Margin to EAT Margin to more accurately re ect how we view and manage our business. Our updated framework targets EAT margin growth to be at to 20 basis points. This all results in EAT growth contributing 6% to 10% of total shareholder return. Our dividend remains a priority, and the target payout ratio range of 50% to 60% remains unchanged. Share repurchase has been updated from a dollar range to a percentage range of contribution to shareholder return. As a result, Return of Cash is now targeted to contribute 4% to 5% of total shareholder return.
Updates to Long-Term Framework New Restaurant Growth 1 Annual Target (Over Time) Current Updated 2% - 3% 3% - 4% Same-Restaurant Sales EBIT Margin Expansion EAT Margin Expansion Business Performance (EAT Growth) 1% - 3% 10 - 30bps n/a 7% - 10% 1.5% - 3.5% n/a 0 - 20bps 6% - 10% Dividend Payout Ratio Share Repurchase1 Return of Cash 50% - 60% $300 - $500 3% - 5% 50% - 60% 1% - 2.5% 4% - 5% Total Shareholder Return (EPS Growth + Dividend Yield) 10% - 15% 10% - 15% Current: $MM, Updated: % contribution to Shareholder Return When looking at our performance from scal 2019 through scal 2025 relative to the updated framework: New Restaurant Growth inclusive of acquisitions was within the updated range, having grown 3.1%. Same-Restaurant Sales of 2.9% was in the top half of the target range. EAT Margin Expansion was above the midpoint of the updated range, increasing 13 basis points on an annualized basis. This results in annualized EAT growth of 7.6%, near the middle of the range. The dividend payout ratio of 58% was near the top end of the range. Share repurchase contribution to shareholder return was 1%. This culminates in total cash return of 4.1%, despite the issuance of nine million shares of common stock in scal 2020. Altogether, total shareholder return, as de ned by EPS growth plus dividend yield, was 11.6% and within our target range. Achieved Updated Long-Term Framework TSR Over Past Six Years Updated Framework (Over Time) FY19 - FY25 Annualized Return1 New Restaurant Growth2 Same-Restaurant Sales3, 4 EAT Margin Expansion Business Performance (EAT Growth) 3% - 4% 1.5% - 3.5% 0 - 20 bps 6% - 10% 3.1% 2.9% 13 bps 7.6% Dividend Payout Ratio Share Repurchase Return of Cash 50% - 60% 1% - 2.5% 4% - 5% 58% 1.0% 4.1% Total Shareholder Return 10% - 15% 11.6% (EPS Growth + Dividend Yield) 1 Represents performance adjusted figure. A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. the addition of Ruth's Chris and Chuy's Does not include Ruth's Chris as they were not owned and operated by Darden for a 16-month period at the beginning of the fiscal year Will not include Chuy's until they have been owned and operated by Darden for a 16-month period (Q4 Fiscal 2026) 2 Includes 3 4
 • shareholder letter icon 8/4/2025 Letter Continued (Full PDF)
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DRI Shareholder/Stockholder Letter Transcript:

Dear Fellow Shareholders,
As we look back on    scal 2025, we are pleased to report that the disciplined execution of our strategy
delivered pro   table sales growth, while we remained true to our mission     to be    nancially successful
through great people consistently delivering outstanding food, drinks and service in an inviting
atmosphere making every guest loyal. Throughout the year, Darden demonstrated resilience in a    uid
consumer environment while continuing to return capital to shareholders and invest in our people and
our business.
We operate in a dynamic, competitive industry and we have proven we can successfully navigate any
environment thanks to the breadth of our portfolio and our winning strategy rooted in Being Brilliant
with the Basics and our Four Competitive Advantages.
FISCAL 2025 RESULTS

Sales & Earnings: Total sales increased 6.0% to $12.1 billion driven by a blended samerestaurant sales1, 2 increase of 2.0% and sales from the acquisition of 103 Chuy's restaurants and
25 net new restaurants. Adjusted diluted net earnings per share from continuing operations
increased 7.5% to $9.553, and we delivered $2 billion in adjusted EBITDA3 from continuing
operations driven by strong sales growth.

Return of Capital: We returned $1.1 billion to shareholders with $659 million in dividends and
$418 million in share repurchases, while funding growth.

Performance Against Long-Term Framework: Our long-term framework calls for 10% - 15%
total shareholder return (TSR)     as de   ned by EPS growth plus dividend yield     over time. For
   scal 2025, we delivered a TSR of 11.3%. Over our 30-year history as a publicly traded company,
Darden has achieved an annualized TSR of 10% or greater for any 10    scal-year period when
considering Darden   s stock appreciation plus dividend yield. (See Updates to Long-Term
Framework later in this letter.)

Chuy   s Acquisition: We successfully closed the transaction following the merger agreement that
was announced on July 17, 2024     adding 103 Chuy   s restaurants to our portfolio and
welcoming more than 7,000 new team members to the Darden family.
EXECUTING OUR STRATEGY
At the Darden level, we continued to strengthen and leverage our Four Competitive Advantages    
Signi   cant Scale, Extensive Data & Insights, Rigorous Strategic Planning, and the Quality of Our
Employees     while our restaurant teams remained focused on Being Brilliant with the Basics.
1
Will not include Chuy's until they have been owned and operated by Darden for a 16-month period (Q4 Fiscal 2026)
2
Does not include Ruth's Chris as they were not owned and operated by Darden for a 16-month period at the beginning of Fiscal 2025
3
Represents a Non-GAAP measure. A reconciliation of GAAP to Non-GAAP numbers can be found at the end of this letter.

In    scal 2025, we had the privilege of serving more than 440 million guests. Our teams worked hard to
make each one of those occasions an exceptional dining experience by focusing on Culinary Innovation
& Execution and providing Attentive Service and Engaging Atmospheres. Some of the highlights include:
Culinary Innovation & Execution

Return of fan favorites     Steak Gorgonzola Alfredo and Stu   ed Chicken Marsala     at Olive
Garden, which were removed from the menu during COVID. Both were improved with higher
quality ingredients and easier execution for the restaurant teams, and both    ll a gap on Olive
Garden   s menu for center of the plate, protein-forward dishes. Guest preference for both dishes
remains strong.

Addition of a healthier chicken dish     Lemon Garlic Chicken     at LongHorn Steakhouse, which
addressed a menu gap and has scored extremely well in guest satisfaction ratings.

Launch of a new and improved pizza platform at Yard House featuring higher quality pizzas that
are cooked in half the time. The result was a signi   cant increase in preference and guest
satisfaction.

The Cheddar   s Scratch Kitchen culinary team leverages Darden   s purchasing power to o   er great
food at a WOW! price. One way they do that is by capitalizing on lower-cost opportunity buys to
create limited time o   ers (LTOs). During the year, Cheddar   s o   ered several LTOs that drove
strong guest satisfaction scores for price, a   ordability and value. They included two grilled pork
chops topped with caramelized onions and bourbon glaze for $12.99; a Texas T-Bone for $21.49;
and a Bone-in Ribeye for $22.49     each served with honey butter croissants and two sides for
that WOW! price.
Attentive Service

Pace of Meal
Guests who visit our restaurants continue to have great experiences, which is re   ected in
record, or near-record, guest satisfaction scores across all our brands. But, in a world that has
gotten faster, full-service restaurants have gotten slower. We know we can improve on
valuing our guests    time and we have an opportunity to drive incremental sales over time by
capturing the occasion for a quicker meal. The opportunities vary by brand, and it is
something each brand will continue to focus on over the long term.
For example, the Cheddar   s Scratch Kitchen business model is fueled by e   ciency and the
ability to leverage capacity and speed to serve more guests. During the year, they updated
their steps of service and, as a result, Cheddar   s    nished the year with its highest Speed of
Service guest satisfaction score in    ve years.

Convenience
In    scal 2025, we successfully rolled out    rst-party delivery at Olive Garden and began
piloting it at Cheddar   s.

Guests had been asking us for small-order home delivery options and they continued to show
they were willing to pay for the convenience. But we had real concerns about the third-party
model. It was important for us to    nd a way to address this guest need without disrupting
the team member or guest experience, and without compromising our competitive
advantages and operational simplicity.
Our partnership with Uber Direct addressed our concerns.

From a guest perspective,    rst-party delivery protects the in-restaurant experience as
drivers pick up orders curbside just as our ToGo guests do today. It also enhances the
takeout experience by giving guests the option to have someone else pick up their
order. This is further enhanced by the fact that we have the same, every-day value
menu price for dine in, pick up or delivery. The added cost for delivery is transparent to
the guest and, with Uber   s technology platform, they can track their order all the way
to their delivery address.

In terms of the team member experience, our proprietary capacity management
system remains in place, allowing us to manage volume so we do not negatively
impact restaurant operations or the in-restaurant dining experience. Additionally, our
ToGo specialists continue earning tips on these orders.

This partnership allows us to strengthen and defend our competitive advantages of
Signi   cant Scale and Extensive Data & Insights. It enables us to use the scale of Uber   s
driver network to enhance our scale, and because guests order through our online
portal or mobile app, we keep the data. It also allows us to protect our simple
operating model. Our teams continue to execute a great curbside ToGo experience,
and there has been no signi   cant change to our operations.
We will continue to gather learnings from having delivery fully rolled out at Olive Garden,
and now Cheddar   s, as we evaluate its potential for our other brands.
Engaging Atmospheres

New Restaurants
Providing an engaging atmosphere at each one of our restaurants is fundamental to creating
exceptional guest experiences. During    scal 2025, we tested new, smaller prototypes for Yard
House and Cheddar   s. These prototypes help lower construction costs and enable the brands
to build out their new restaurant pipelines by considering sites that were previously
considered too small, ultimately accelerating new restaurant openings.
Importantly, these new prototypes preserve the essence of our brands. For example, at the
center of every Yard House is their bar with more than 100 beers on tap, which is the
cornerstone for their energized vibe. While the new Yard House prototype is signi   cantly
smaller, it still features 90 di   erent beers on tap, as well as their full menu.


Restaurant Maintenance/Remodels
Our facilities and remodel teams partner with each brand   s operations team every day to
ensure we are delivering on the promise to provide engaging atmospheres. Each year, we
spend on average approximately $200,000 per restaurant for maintenance and remodels to
keep our buildings fresh and inviting.
FIVE-YEAR PLANNING PROCESS
Rigorous strategic planning is one of our competitive advantages, and for Darden, it 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 strategic role in the portfolio;

Identify their distinct advantages and cultivate di   erentiated positioning;

Develop a deep understanding of their guests and the competitive landscape; and

Ensure they adhere to their strategy so they can compete e   ectively and grow share.
During    scal 2025, we completed our    ve-year planning process. Each one of our brand leadership
teams has a clear understanding of their role in the portfolio and they built a    ve-year strategic plan
based on that role     focusing on what they need to do to win today and into 2030. They have already
begun to put their plans in action and will execute them to drive shareholder value.
The    ve-year planning process also yielded other key outcomes, including the following:
Updates to Long-Term Framework
Our long-term    nancial framework outlines the strategic priorities and performance expectations that
guide our sustained value creation. We remain committed to delivering 10% - 15% TSR over time, as
de   ned by EPS growth plus dividend yield. However, we have updated the framework to re   ect a
greater emphasis on sales growth with appropriate investments while maintaining or growing
margin.
As a result, we have increased the contribution from New Restaurant Growth to be 3% to 4%, and
Same-Restaurant Sales to be 1.5% to 3.5%. Additionally, we updated how we de   ne margin expansion,
shifting from EBIT Margin to EAT Margin to more accurately re   ect how we view and manage our
business. Our updated framework targets EAT margin growth to be    at to 20 basis points. This all
results in EAT growth contributing 6% to 10% of total shareholder return.
Our dividend remains a priority, and the target payout ratio range of 50% to 60% remains unchanged.
Share repurchase has been updated from a dollar range to a percentage range of contribution to
shareholder return. As a result, Return of Cash is now targeted to contribute 4% to 5% of total
shareholder return.

Updates to Long-Term Framework
New Restaurant Growth
1
Annual Target
(Over Time)
Current
Updated
2% - 3%
3% - 4%
Same-Restaurant Sales
EBIT Margin Expansion
EAT Margin Expansion
Business Performance (EAT Growth)
1% - 3%
10 - 30bps
n/a
7% - 10%
1.5% - 3.5%
n/a
0 - 20bps
6% - 10%
Dividend Payout Ratio
Share Repurchase1
Return of Cash
50% - 60%
$300 - $500
3% - 5%
50% - 60%
1% - 2.5%
4% - 5%
Total Shareholder Return
(EPS Growth + Dividend Yield)
10% - 15%
10% - 15%
Current: $MM, Updated: % contribution to Shareholder Return
When looking at our performance from    scal 2019 through    scal 2025 relative to the updated
framework:


New Restaurant Growth inclusive of acquisitions was within the updated range, having grown
3.1%.
Same-Restaurant Sales of 2.9% was in the top half of the target range.
EAT Margin Expansion was above the midpoint of the updated range, increasing 13 basis points
on an annualized basis.
This results in annualized EAT growth of 7.6%, near the middle of the range.

The dividend payout ratio of 58% was near the top end of the range.
Share repurchase contribution to shareholder return was 1%.
This culminates in total cash return of 4.1%, despite the issuance of nine million shares of common
stock in    scal 2020.
Altogether, total shareholder return, as de   ned by EPS growth plus dividend yield, was 11.6% and
within our target range.
Achieved Updated Long-Term Framework TSR Over Past Six Years
Updated
Framework
(Over Time)
FY19 - FY25
Annualized Return1
New Restaurant Growth2
Same-Restaurant Sales3, 4
EAT Margin Expansion
Business Performance (EAT Growth)
3% - 4%
1.5% - 3.5%
0 - 20 bps
6% - 10%
3.1%
2.9%
13 bps
7.6%
Dividend Payout Ratio
Share Repurchase
Return of Cash
50% - 60%
1% - 2.5%
4% - 5%
58%
1.0%
4.1%
Total Shareholder Return
10% - 15%
11.6%
(EPS Growth + Dividend Yield)
1
Represents performance adjusted figure. A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation.
the addition of Ruth's Chris and Chuy's
Does not include Ruth's Chris as they were not owned and operated by Darden for a 16-month period at the beginning of the fiscal year
Will not include Chuy's until they have been owned and operated by Darden for a 16-month period (Q4 Fiscal 2026)
2 Includes
3
4


shareholder letter icon 8/4/2025 Letter Continued (Full PDF)
 

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