DRI
#Thanks <UNK> and good morning everyone
Let me start by saying I’m very pleased of our performance during the quarter
Our teams did a great job managing through some difficult circumstances recovering from the hurricanes
Total sales from continued operations were 1.88 billion, an increase of 14.6%
Same restaurant sales grew 3.1% and adjusted net earnings per share were $0.73, an increase of 14.1% from last year’s diluted net earnings per share
Given our consistent positive results, I’m more convinced than ever that our success has been driven by the strategy we implemented three years ago
Our intense focus on improving the food, service and atmosphere in our restaurants combined with relevant integrated marketing remains a winning strategy for our brands
The long-term investments we have made and will continue to make and these areas are paying-off and we will work hard every day to better execute in these critical areas
This back-to-basics operating philosophy is coupled with Darden’s four competitive advantages; one, leveraging our significant scale to create a cost advantage, two, using extensive data insights to improve operating fundamentals and to better understand our guests and communicate with them more effectively, ensuring our brands systematically go through our rigorous strategic planning process, and four, cultivating our results oriented people culture to enable growth
Together our operating philosophy and competitive advantages give me confidence in our ability to continue to deliver our long-term framework overtime
Turning to Olive Garden
Same-restaurant sales grew 3% outperforming the industry benchmarks excluding Darden by 400 basis points
This was Olive Garden’s 13th consecutive quarter same-restaurant sales growth driven by our focus on simplification and flawless execution, which continues to result in high guest satisfaction scores
Our promotional strategies and core menu are working together to create everyday value, and drive increased frequency for our most loyal guests and our strong-to-go performance which grew 12%
During the quarter, we ran our two most popular value promotions, Buy One Take One, which appeals to our guest need for convenience and Never Ending Pasta Bowl which highlights our brand pillar of never ending abundance
Both promotions leveraged brand equities and were supported by strong integrated marketing campaigns highlighted by Olive Garden’s most anticipated event of the year The Pasta Pass
This year in addition to making 22,000 pasta passes available we introduced the first of its kind Pasta Passport which included all the benefits of the Pasta Pass plus a trip of a lifetime to Italy
Once again, all pasta passes were claimed online immediately
The volume of social media and PR buzz surrounding this event illustrates the strong emotional connection our fans have with the Olive Garden
LongHorn Steakhouse had strong quarter as the investments we have been making for last two years are significantly improving consumer perceptions and motivating guests to visit more frequently
Same restaurant sales grew 3.8%, outperforming the industry benchmarks, excluding Darden, by 480 points
This was LongHorn’s 19th consecutive quarter of same restaurant sales growth
The emphasis LongHorn’s leadership has placed on simplification like reducing their menu items by nearly 30% has led to higher levels of execution
At the same time, they continue to enhance the quality of guest experience with strategic investments in food, service and atmosphere
As I mentioned last quarter same restaurant sales at LongHorn’s new markets continue to grow at a higher rate than in the established markets
Consumers in these new markets are discovering what makes LongHorn special, while at the same time fully realizing the value proposition that inherently exists in the brand
This performance trend is not new to LongHorn
We have seen it play out over the past 20 years as I have been associated with the brand
Now I will update you on the Cheddar's integration
The Cheddar's team is doing a great job managing the complexity of this integration which also includes integrating the two largest franchisees which were recently acquired
Merging three different operating systems into the Darden network isn’t easy but is going exactly as planned
We are at an important point in the integration progress as we transition from planning to execution
Integration related activity is peaking as we transition distribution networks including our main line distributor, produce suppliers and smallware suppliers, convert point of sales systems in 10 restaurants per week which also includes two weeks of training for restaurant prior to conversion, fully transition Cheddar's payroll system on to the Darden payroll platform and finally, we just completed open enrollment and Cheddar’s team members will be transition to Darden benefits at the beginning of the calendar year
It is our intent to integrate Cheddar’s and the two acquired franchise systems as fast as possible in order to position the brand to take advantage of the scale, synergies another benefits of Darden infrastructure
We realize this is having a short-term negative impact on sales momentum, but we believe the long-term benefit will far outweigh the short-term impact
Rick will provide an update on synergies in his remarks in just a moment
I want to thank the integration team for this outstanding work on this project
They have developed a comprehensive plan and are executing that plan at high levels
The more we learn about Cheddar’s the more excited we become of the long-term growth prospects
They are the undisputed value leader in casual dining with a large loyal guest base and average approximately 6,300 guests per week, per restaurant
Let me close by saying the holidays are the busiest time of the year for our restaurant teams as they help our guests celebrate with co-workers family and friends
On behalf of our management team and the Board of Directors, I want to thank our 175,000 team members for all due to create memorable guest experiences during the special time of the year
We remain focused on getting better every day and I look forward to making even more progress in the new year ahead
And now I’ll turn it over to Rick
Brett as Rick said, we are making no further comments on the pending tax legislation
We will update our guidance in January once the bill is passed
So, for everybody else who wants to ask as a question on it, we’re not going to answer them
As far as the consumer landscape, I think you were referring to that our GAP to NAV or our GAAP to benchmarks may have shrunk a little bit and we’ve been pretty clear and we said we preferred to operate in an environment with a stronger industry and if our GAAP shrinks a little bit, that’s okay with us
As I said in my prepared remarks, I think we had a great quarter considering everything that transpired, we saw strength in all our businesses, we started in a pretty big hole in September
I think it feels pretty good out there
I would say when I look at the benchmarks, I’m seeing about 3% growth in what the consumer is paying
So, I don’t feel it’s still the environment all that promotional right now
I know they could be getting that in a couple of different ways where they’re getting it through price or mix
But I feel like it’s fairly positive out there right now and I just feel good
I think the consumer is using the whole menu, they’re not all that reactive to what people are doing from an incentive standpoint
Hey good morning <UNK>
I continue to see ---+ when I look over the landscape the brands that are well positioned have strong value equations are continuing to take share
This is approximately $100 billion category that has been growing approximately 2%
And for those that are well positioned, I feel like they are going to continuing to do well
If your value propositions are little off and your offering is not resonating with the consumer, it could be a struggle
I think focusing on the overall industry benchmarks is somewhat dangerous because it’s been such deviation in the performance of the people that are doing well compared to the people who aren’t
So, I can’t comment and give you guidance on what we think calendar ‘18 might look like
We’ve given you what we think guidance is for the back half of our fiscal year, we always get a little nervous in December, January, February and March because weather is out of our control
We can’t control that
And if we have a bad winter, that could put pressure short-term on our same restaurant sales
But we don’t think that has any impact on the overall momentum of the business
So, as I said earlier to Brett’s question, we feel pretty good about how the consumer is reacting to our brands right now
A lot in there <UNK>
Let me start with the off-price sales
I take back to where, we identified a couple of years ago that the consumer needs data of convenience
The consumers are still looking at that for convenience
We’ve got some brands that really can satisfy that express the Olive Garden
We’ve done a great job with that
I think that’s probably, a more permanent part of our equation today
I don’t see that need state going away, I see that need state increasing
And I think we’ll continue to come up with innovative way to meet that need
As far as, we start thinking about delivery and as we’ve said before, we’ve got multiple tests going on in the marketplace, we are trying to learn
We believe that someone is going to rise up and create some scale in the space and we’ll watch those third-party delivers
We’re also watching competitors that are doing it themselves
We have a small test, we’re doing ourselves
And we’ll watches whole space kind of develop
And we’ll decide, how we’re going to participate in that
We are still very attracted to the large party delivery catering in Olive Garden where average order is over $300. That makes a lot more sense for us to market and pursue than running around delivering $10 entrees at this point in time
So, for us, it’s a wait and see
We’re very engaged in the process, where all the third-party delivery companies and we’re very engaged with our own activity around that
So, to us, so what see how these things develops
We have a filter that we run every decision through
And the first question we ask is how does our team member win if we make a decision
The second is how does our guest win if we make a decision and we believe one of our four competitive advantages is our culture even as the employee market has tightened, our retention rates have not moved it all, they actually improved a little bit
We’ll continue to invest in our team members, we believe we have great training programs, 50% of our management comes from our team member ranks which we believe are offering growth opportunities to our team members
And I think we’re doing the right thing, we’re not trying to manage to when these awards were – we’re just doing the right thing for our team members every single day and then if we then get an award that’s great
But I think you can see it in our results, we’re doing a good job taken care of our guests and we take care of our guests, we win
No, I don’t think, I think the exact opposite
I think this is a way for people to trade in the casual dining and having an experience for under $14 ---+ under a $14 check average was made from scratch food that is at a higher quality than most comparable operations they are competing against
We look at the data and the research, we’re just really impressed with the loyalty, we’ve been out doing what we call dine arounds, where our team goes out and dine with guest
And we continue to learn more and more about the admiration they have for our brand
And the accessibility the brand provides for people who probably couldn’t go out to eat in a full service casual dining environment except they can go to Cheddars and make it work inside their budget
This is a very strong brand, when I think about ---+ I know there is a little bit of concern about where the comps are and this doesn’t surprise us at all, it happened at Yardhouse, it happened at Longhorn and I believe the only ---+ Longhorn only ever had one negative full year of same restaurant sales decline and that was during the integration in its 30 some year history
The other thing I would add is that, we’ve acquired two large franchise operations inside of Cheddar's that make up approximately 35% of the system
Those restaurants, there are 54 of them I believe or approximately 54 are a significant drag on the base Cheddar restaurants that were the real base of the company owned operations that we bought
Those restaurants are dragging it down, well over percent
As we standardize the menus, because the menus were somewhat different and their pricing philosophies were somewhat different, as we’ve standardize the menus we are getting some negative check, that’s drag and it sound to
These are decisions we have to make for a long-term
And lastly as I mentioned in my remarks, integration is hard and we believe, when we look back on our couple of our last acquisitions, we didn’t go fast enough, we let integration drag on too long
And so, we made the determination during this fund that we’re going push hard and get to the other side quicker and that’s what we’re doing and we actually integrated the two franchise systems first, so they’ve actually had the most activity because their systems were so weak
And I will close up by just saying the most important thing for us to do is to get our POS systems in these restaurants so that we can start getting the data that we get to analyze our other businesses to help us make the right strategic choices as we move forward to drive this brand
Let’s not get hung up on short term quarter-to-quarter comps, this business does 6,300 guests a week, has incredible loyalty and is the undisputed value leader
Once we get to the other side of this which will be another 6, 9, 12 months, this business will be a good growth driver for Darden
12%
Yeah, I think <UNK>, every year we start off with a detailed plan for each of our business
The first thing that we look at it is what investments do we even make into the business, either through employee, experience into the guest and already be able to grow our market share and compete more effectively
We look at our advantages and we’ve always come back to that and how do we make scale work for us and that’s really, really important and so we’re not really talking about next year or next fiscal year but we’re constantly looking at how do we make our experience better?
I mean you’re really asking me to look into a crystal ball and try to project what’s happening, I mean what’s going to happen
We think our advantages and if we continue to make the right investments, whether it’s underpricing and inflation, whether that’s improving the food quality, whether that’s improving the employee experience
The way we look at it how do we increase our share of the $100 billion category, both through same restaurant sales growth and new restaurant growth
And we look at the value equation for each of our businesses and we look at Cheddar's and Olive garden
The price value relationship is really important, as we move up the continuing [ph] the we experience becomes more important
So, I am not sure ---+ if the overall industry does continue to improve, I’m telling you right now, we’re working as hard as we possibly can to get as much of that share as possible
And however, it plays out, it plays out
But we are not all that ---+ we look at the benchmarks, we report them out to you guys, but we are not sure that’s always the total opportunity because we look at the top five or six players in the industry and say if they’re doing something that we ought to try to be able to beat them not just the benchmark
Well, I think the biggest thing that we constantly think about is the employee experience and how do we ensure that we have the best team members out there to bring our brands alive
Great brand management is much more difficult in the restaurant space than it is in consumer-packaged goods where you just put your brand up on a shelf and you do some advertising
We have employees that ---+ team members that bring our brands to life every single day
So, when I think about the investment ---+ if we think about investments in general, they have nothing to do with what’s going on with legislation
We think about how do we improve the overall experience? And the competition for team members I think is going to be the most important element moving forward
How do we get great team members to bring our brands to life?
I mean we are not going to talk about anything that has ---+ you tie this to meaningful benefits of tax reform, we’re not talking about anything I am sorry David, about tax reform
We will talk about general investments and how we think about it but I think I’ve already answered that question
Yes
We’re approximately 30% online now and it continues to grow
And we do incentivize people to do that
Because we get a lot of data when they we get via online
And so, that’s an important part of the process, it just helps to simplify the operation and we’ll continue to try to migrate as much of that business over as possible
At the end of the day, we got a lot of people calling in orders, when they are driving home
That’s hard to do those online, while you’re driving
But we’ll continue with more people over the best we can
No
Let me clarify
Those negative two is inclusive of the two franchise systems that we ---+ what they call the Grier restaurants that were purchased by Cheddar’s right before we bought them
And then we purchased their next largest franchisee, which we refer to as a CMP shortly thereafter
They make up 35% of the overall system
So, in essence, we’re doing 3 integrations at once and their system has grown dramatically
Now what I said and maybe I wasn’t clear, was that, the 35% of the restaurants that were franchised and now company owned are dragging same restaurant sales down by 100 basis points
And… Were they in 1Q as well?
Yes
CMP wasn’t just a Grier restaurant
And we have negative check in the approximately 45 Grier restaurants that we brought, because we had to standardize the menu
So that negative check is part of the drag
And this franchise ---+ these are great restaurants, great people but our franchise system that was run a little bit independently of the core company owned restaurants
So, there is going to some effort and energy to get them up to the operating standards of the company restaurants
Completely understand
So, it wouldn’t be correct to compare it down 1.4 to down 2 and you had a little bit of a different composite of the base?
Yes, that would be correct
You could do that
Okay
Because the CMP restaurants are a drag
And then you mentioned that the middle of FY 2019, is now the target ---+ ahead of schedule for the integration correct?
Yeah, it is fiscal 2019. Sorry, Matt it’s for the synergies not the integration
So, the integration, we expect to have most of the integration work done on the system side by the end of this fiscal year, but we do expect them to have to continue to learn how those systems works and then take those systems and use the data that we have to help improve the performance in fiscal 2019 that’s fair
That’s where I think we were saying the integration is going to take 18 months, it’s the integration, the system is going to take less time than that, it’s just the learning and the understanding the data is going to take a little longer
But we do expect that the synergies on a run-rate basis, we will get by the middle of fiscal 2019 versus the run-rate basis we thought will be at the end of fiscal 2019. So, sorry messed up the question there
So, I guess if everything is moving forward, would it be correct to assume that potentially you could be looking to reaccelerate growth of the Cheddar’s brand or bring it back to a little bit more meaningful growth perhaps sooner than maybe what you would have thought say six months ago?
Matt, just because the integration is going a little bit faster, it’s still takes time to find sites and other things and when you’ve got a site pipeline that could be 18 months, it will take us a little longer just to rebuild that pipeline
We do expect to open restaurants in FY 2019, and we’ll talk about the number of openings et cetera when we give you the fiscal 2019 outlook
But it’s just going to take us a little while to build up that pipeline
Again, using the data that we use to help find the greater site
So, I would still expect us to open restaurants at least at the pace that we’re opening them today in fiscal 2019, but we’ll tell you more about that when we talk in 2019. Matt Kirschner Understood
And then last question, is there anything that you wanted tell us about the hurricanes as far as on the cost structure, did they impair, did you have any waste of food in the quarter that should be noted or called out that was meaningful to the margins or disparity in same store sales as far as recovering happening a little maybe regionally seeing a little bit of stronger strength in pockets
Or is it pretty much a ---+ or everything that you reported is sort of national trends?
<UNK>, thanks for that
What happened for the quarter, when we originally talked about the quarter we thought it would be down 60 basis points in the same restaurant sales and down $0.035 in - or $0.03 I’m sorry in EPS
What it turned out was the restaurants that we had in Florida, impacted and they were closed for quite a while so that impacted us in total by about 50 basis points in close days
And those are higher volume restaurants in the system average
But then we did get some bounce back in Florida
And so, each brand was impacted differently, but for the company for Darden it was slightly negative in comps for the entire quarter
So, it wasn’t negative 60 basis points, it’s was just slightly negative
On an EPS basis, it turned out to be about $0.02 unfavorable instead of $0.03, because the comp impact wasn't as bad
Now, the $0.02 is primarily proactive things that we did to make sure that the restaurants were boarded up and so they were ---+ they didn’t have any as much damage
We did have some food inventory write-off, we had some restaurants that were closed maybe a week and so that food has to be written-off
But we’re also very proactive before the hurricanes come to help mitigate any food write-off
So again, it was about $0.02 for the quarter instead of three and it was about slightly negative in comp instead of 0.6.
Alright
So, let’s start with Olive Garden, the 12% quarter I thought was I think is a really strong To Go quarter
We think about the future; the consumer need state is going to continue ---+ is going to need to continue to increase for the convenience for us to continue to growth that
We’re doing well over $0.5 million on average inside an Olive Garden box and To Go we’ve got restaurants that are doing well over $1 million To Go
So, as we think about going in into the future, you know we need consumer needs state to continue to grow
We’ll continue to innovative
I think one of the biggest things we can do on Olive Garden to Go is improve our operations as the business has improved, Dave and Dan and the team continue to work on coming up with better systems to handle the volume
It's actually an interesting business because I do a lot of pickups like at 11:15 and 11:30. And so they can use the [indiscernible] before it fills up to handle the volume
So, I think there is some operational improvements that we can make
We can continue to improve the offering to stay relevant to the guest and continue to remind the guest that its available
We have said ---+ we’re publicly on the record saying that we think overtime if the consumer need state continues to grow that this can be 20% of our business
Primarily because the type of food travels so well and we can do it more so than just entrees that we can do bulk and bulk is where we want to be
Let me move to LongHorn, we’ve been making great investments in LongHorn for the last two years, Todd and his team has done a great job of ---+ we’ve increased the size of the stakes, we’ve removed complexity in the kitchen and as we’ve mentioned we’ve taken the SKUs down, some of that through the menu, some of that through the promotional activity that we’ve done, reducing the number of new items that we introduced on a quarterly basis
And what we’re finding is we had a lot of stuff on menu items on our menu that really were duplicative and what the feeling ---+ the need they were feeling for the consumer, and we removed them and it just helps us operate much more efficiently
I believe all our businesses, all our brands, our menus are too complicated, too complex, we have items that continue to work and do the same thing over and over and over again versus having one great fried appetizer instead of having three great fried appetizers
And the more we can simplify the operation, the better the execution gets, the quality increases and the overall value the consumer is having an impact
And LongHorn historically has been a high food cost low labor cost operation
And we have simplified that operation to be able to bring the labor cost down and increase the productivity while improving the overall quality of the food product
And even as much as we’ve reduced it already, I think there’s still further reduction to be done in the LongHorn menu to improve the ---+ to simplify the operation
Those are very small kitchens that have to stay simple in order to cook the great steaks in a timely manner
That’s fairly easy
The systems having been invested in, in those restaurants, they are working on very old POS systems and so big difference in this integration than some of the others where the Cheddar's team is actually pulling from us to get this information in restaurant where some of our past integrations, there’s been a little push back because they had good systems and we are just the changing systems to change the systems
Here our systems are superior
They want the systems as soon as they can get them and they have just been ---+ they have been great to work with
We believe overall the benefits package is going to be much stronger for those team members
We think there’s a huge upside in Cheddar's in increasing their retention
Right now, their employee retentions are above the average of the industry and we believe that if we can take them from 120% team member turnover down to our norm of 70% it's going to have a huge impact on the overall operation
So, we believe and all indications are that they like the systems that we’re bringing
Ian has done a great job working with his teams and talking about the systems that we are implementing and getting feedback
So, I think this is going to really enhance their performance overtime
Yes, it's almost 30% and we’ve got different tests out there and we’ve got different products in different market
So, it’s somewhere, it’s approximately 25% to 30%
We’ve done a really good job; the management is done a really good job there of getting back on our pathway
Delivering that brand in the consumer differently than how Olive Garden delivers their brand to the consumer
And it has a lot to do with the promotional cadence and new product introductions
Yes
We were definitely seeing an increase in frequency in LongHorn
We measured that every quarter with our tokens
Yes, <UNK>, the holiday impact is minimal versus last year
The holiday shift moving Christmas basically from a Sunday to a Monday, it’s really not going to be much different than it was last year
Yes
And last year's holiday shift was about 20 basis points unfavorable
So, it shouldn’t be much different than this year
So pretty much flat this year
The industry is fighting for consumers, their consumers discretionary dollars
And I’ve said on this call before, we’re not just fighting amongst ourselves, we’re fighting for those dollars that have been spent in other places
I do think that overall, the industry is being a little more rationale
I think there has been some okay innovation and I think we’re attracting consumers again
I don’t think there is a macro trend out there that says that we’re pushing people and I think the industry is doing a better job
Good observation on the high-end category because our high-end brands with the hurricanes travel really came to a halt and they were disproportionately impacted and they had ---+ they really came back strong both Cap Grille and Eddie V's
I would also say that Texas has not stopped being a drag
That business was for 18 months, we had pretty good presence in our high-end restaurants in Texas and that had really been a constant drag and that’s kind of flipped for us now
And the Texas restaurants are doing better and not dragging so, on a high end the consumer, it feels really good out there, the consumers out there people are celebrating, I think our brands are very well positioned, Sean Martin is doing an incredible job leading Eddie Vs, and really maximizing those restaurants and put up a great number, very, very excited about that
And we’re opening a few restaurants in Eddie Vs, which is really good growth for us
Yeah, we expect to analyze the bill when it’s signed
We’re beginning to analyze it now, but we expect to have the impact of tax reform in early January ahead of ICR
Yeah
Andy, we are as you said bumping up close to our high end of our long-term framework
And it's just that, as we’ve said there are years that we could be above it, years where we can be below it
Right now, we have given you our share count for the year, which is 126 million shares
So, you could probably see that we don’t anticipate buying a whole a lot right now
But we did last year go over our $200 million
So, as we think about our return of capital, we’ll see what other uses we have for that capital and whether we’re going to go ahead and buyback shares
But right now, we’ve given you I guess the best indication of what our share count will be for the end of the year
Well, actually for the average for the year
Couple of things, one is we’re ramping on a really strong last half of last year as you think about growth and inflation as we said for the year is going to be 2%, around 2 and it's just slightly higher than where we had anticipated
It's still around 2 but slightly higher on to be around 2 range and before
But we still have you’ve done the math, somewhere in the double-digit growth rates in the back half of the year
So, we don’t ---+ while we consider that a deceleration, it's still above our long-term framework growth rate if you think about earnings after tax and our long-term framework we say 7 to 10% and that would still be above that
Yeah, I think one thing about LongHorn, we’re finetuning the menu as we pull it back
I think it’s a little bit different than the competitor that you mentioned
You know we had a lot of menu items that really weren’t working that hard for us and we’re introducing a lot of new products on a quarterly or every six weeks basis that weren’t working hard
And you’re very familiar with LongHorn Howard and a great LongHorn experience is a forceful way in a hot baked potato with sour cream and real butter
So, as we simplify our operation, we’re executing it at a higher level
We need to get the stakes cooked correctly, we need to get the food out faster and that’s what simplification has done for us
And I am really not going to comment on our competitors’ strategy
Well I think the answer ---+ there’s two parts to your answer, we don’t know who we are going to partner with yet and number, I don’t like the current economics of the partnership
And so, I am trying to understand ---+ we are trying to understand their profit model and we are trying to understand our profit model doing internally
And once we get a pretty good understanding of both those models and they are well developed I think I will have some leverage in negotiating this with a third-party or doing it ourselves
So, I am not hesitant on the business
I think the business is a good business
I am just not going to live with that current economics
We will do ourselves before we live with their economics
I understand them
They are not favorable enough for me
And I am not going to give them their discount and there’s too much profit in there because they don’t have scale yet
And so, we are trying to understand what that model looks like and what it looks like for us from a profitability standpoint, and we can pinpoint what their profit is and got to get to a better resolution if they want to do it for us
If not, we will do ourselves
Yes, <UNK>
The 2% to 3% is the long-term framework we have for a couple of reasons
One is people
We have to make sure we have enough people to open these restaurants and open them strongly and doing a great job with it
We think if we get too high above the 3% across Darden, it puts a strain on the people that we have in knowing the brand
There are some brands that are going to be above the 3% range and some brands are going to be below the 2% range but across Darden we think 2% to 3% is the right investment
And we do know that all of these restaurants on average are creating significant amount of value
But we also have other ways to return capital and to spend our capital, whether it’s in dividends or share buyback
So, we want to balance all of our capital spending including new restaurants, we think 2% to 3% is the right amount
Yes
I think the independent growth is happening in more of the big cities
And we see that, more of a real issue for our upscale brands
In Yard House and Seasons 52 and Bahama Breeze whether they’re located more in these upscale suburban areas or urban areas
We’re not seeing an influx of casual dining restaurants in suburbia that are privately owned
This is an urban phenomenon and not really impacting LongHorn and Olive Garden
We’re fairly long right now in beef
So, we’re covered and our teams are making good decisions along the way
<UNK>, we’ve had a lot of work at LongHorn and Simplification to improve labor productivity
And again, they’ve also had some deep deflation over the last few years that help margins
We still think there is margin improvement for LongHorn going forward
Maybe not to the level that we’ve seen over the last couple of years, because eventually the beef deflation is going to become beef inflation and we’re going to continue invest in quality at LongHorn
And we’re just not ready to talk more about individual brand margins going forward
Although, if you look across Garden compared to our competitors we are the only ones drawing margins to really overtime, over last few years or actually the last six months
So, we feel good about where our margin is
We don’t want to go too high on our margin, because we think value is important and that getting too far out of line with what the consumer is willing to pay
But we still have costs that we can go after, we saw our productivity gains that we can do to continue to expand our margins across Garden 10 to 40 basis points, which is what’s in our long-term framework
Give us a second to find that out
It’s probably in a couple of years, but it’s not next fiscal year, I’m pretty sure
53-week, I think it’s
We’ll get back to you on that
Thanks
And I think we’re ready to conclude the call
I want to remind everyone that we plan to release third quarter results on Thursday March 22, before the market opens with the conference call to follow
Thanks everyone for participating in today’s call
And have a happy holiday season
