Darden Restaurants Earnings Call Nuggets: Industry Trends Outlook and Abundance Strategies

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Darden Restaurants (NYSE:DRI) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.

Industry Trends Outlook

David Tarantino – Robert W. Baird & Company: My question is related to the trends you are seeing in March. Drew, I think you mentioned that the industry trends have started to improve in March. I was just wondering, if you can maybe talk about your business and maybe give us a sense of the magnitude of the improvement that you’ve seen and whether you are currently running in line with what you’ve planned for the current quarter?

Clarence Otis Jr. – Chairman and CEO: David, this is Clarence, and we will talk about the industry, but not about our business, which is our practice. What we would say, and I think Malcolm Knapp was on Bloomberg yesterday. So, this is comments that he made, and he is (out) for a lot of reasons has a very good look at what’s going on in the industry. The turn in March has been significant. I mean February was a month that was down mid-single digits in the casual dining part of the industry and March is a positive month. So, a pretty significant turn. We think February suffered beyond weather, from really, as Drew mentioned, the consumer just weren’t prepared despite all the conversation for the payroll tax increase and there was a pretty rapid spike up in gasoline prices, but March indicates that consumers have adjusted. When we talked about our expectations for the year from a same-restaurant perspective, from an earnings perspective, we assume that the industry would bounce back.

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David Tarantino – Robert W. Baird & Company: I guess just maybe a quick follow-up on that. As you look at the overall consumer environment, it has been choppy lately and I guess how are you viewing the March trend? Is this consistent with what your economic models and your thoughts on the overall consumer environment should be going forward? How should –?

C. Bradford Richmond – SVP and CFO: Yeah, I think we look beyond the month and so as we look back over to last 12 months, our point of view is the next 12 is not going to be all that different. So GDP growth is roughly 2%, a little bit less than that. It’s going to be roughly 2% going forward is how we think about it, maybe slightly more than that, but there’s probably equal probabilities on slightly more slightly less and so that’s sort of how we’re planning the business around that point of view.

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