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Hello, and welcome to the Darden Restaurants, Inc. Fiscal Year 2026 Third Quarter Earnings Call. Your lines have been placed on listen-only until the question-and-answer session. This conference is being recorded. If you have any objections, please disconnect at this time. I will now turn the call over to Courtney Aquilla. Thank you. You may begin.
Thank you, Kevin. Good morning, everyone, and thank you for participating in today's call. Joining me are Rick Cardenas, Darden Restaurants, Inc.'s President and CEO, and Rajesh Vennam, CFO. As a reminder, comments made during this call will include forward-looking statements as defined in the Private Securities Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release which was distributed this morning and in its filings with the Securities and Exchange Commission. Supplemental materials containing information shared on today's call are available on 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 are included in that presentation. Looking ahead, we plan to release fiscal 2026 fourth quarter earnings on Thursday, June 25, before the market opens, followed by a conference call. During today's call, all references to industry results refer to the Black Box Intelligence casual dining benchmark, excluding Darden Restaurants, Inc. During the fiscal third quarter, average same-restaurant sales for the industry decreased 1.2% and average same-restaurant guest count decreased 3%. Additionally, median same-restaurant sales for the industry increased 0.6% and median same-restaurant guest counts decreased 2.9%. This morning, Rick will share some brief remarks on the quarter and Raj will provide details on our third quarter financial performance and share our updated fiscal 2026 financial outlook. I will now turn the call over to Rick.
Thank you, Courtney. Good morning, everyone. We had a very strong quarter. We generated $3.3 billion of total sales, 5.9% higher than last year, driven by same-restaurant sales growth of 4.2%. We have been consistently outperforming industry same-restaurant sales, and this quarter our gap widened as each of our four largest brands exceeded the industry by more than 400 basis points. All of our segments delivered positive same-restaurant sales as our restaurant teams continue to excel at the basics, once again leading to impressive guest satisfaction scores. Our restaurant teams' ability to consistently deliver exceptional guest experiences is enabled by historically high team member and manager retention levels across our businesses. We began the quarter with very strong holiday sales, and several of our brands generated record Valentine's Day sales, reinforcing that guests choose the brands they trust for these special occasions. We also opened 16 new restaurants during the quarter and we remain confident in our ability to deliver our planned openings for the fiscal year. Olive Garden delivered positive same-restaurant sales of 3.2% for the quarter, driven by strong operational execution, even with three fewer weeks of price-pointed promotions than last year. The restaurant teams are focused on ensuring every guest is offered a free refill on breadsticks and soup or salad. This led to new all-time high guest satisfaction scores for service, and matched their all-time high for overall guest satisfaction. In January, Olive Garden completed the rollout of the lighter portion section of their menu, adding seven more dishes under $15. This platform provides their guests with more choice by offering additional smaller portions of popular dishes at a lower price, and is offered in addition to Olive Garden's regular portion sizes. Since these are existing menu items, there is minimal operational complexity and the restaurant teams can execute at a high level. The lighter portion section of the menu is clearly resonating with our guests and their restaurant teams. In February, fan favorites returned with Four-Cheese Manicotti for a limited time starting at $12.99. Olive Garden also reintroduced two past favorites, Ravioli di Portobello and Braised Beef Tortelloni, meeting strong guest affinity for familiar, craveable dishes. Building on last year's successful reintroduction, Olive Garden recently launched Buy One Take One and is extending the offer for one additional week compared to last year. With the same starting price point of $14.99, guests can choose one entree for their dine-in experience and then take a second entree home. To give guests even more reasons to enjoy it, this year's offer features a new Rigatoni alla Vodka entree for a limited time. Olive Garden is supporting Buy One Take One with increased media. At LongHorn Steakhouse, strict adherence to their strategy rooted in quality, simplicity, and culture continues to drive their momentum as they delivered same-restaurant sales growth of 7.2%. The LongHorn team is deeply committed to ensuring every item they serve meets their high-quality standards. Already this year, they have recertified every manager on their culinary standards, and during the quarter, their directors of operations completed hands-on culinary training in order to expertly assess and coach the behaviors that drive consistent execution. LongHorn people bring the brand to life in their restaurants, and their culture remains a clear differentiator in earning strong team member loyalty, which in turn helps drive guest loyalty. During the quarter, LongHorn was recognized as one of the Best Places to Work by Glassdoor. This award is particularly meaningful as winners are determined solely based on the feedback provided by team members. LongHorn also celebrated five new Grill Master Legends during the quarter. This program is a great example of the intersection of quality and culture, celebrating team members who have each grilled more than 1,000,000 steaks over the course of their career, a milestone that typically takes more than 20 years to reach. Same-restaurant sales for the fine dining segment grew 2.1% for the quarter. All three brands in this segment delivered positive same-restaurant sales, driven by strong private dining sales growth at The Capital Grille and Eddie V’s, and the continued success of the three-course fixed price menu at Ruth's Chris Steak House. Within our other business segment, same-restaurant sales grew 3.9% during the quarter, driven by very strong performance at Yard House and positive same-restaurant sales at Cheddar's Scratch Kitchen and Seasons 52. The Yard House team has done a great job of leveraging their competitive advantage of a socially energized bar and distinctive culinary offerings with broad appeal to drive strong demand for Yard House as a social gathering space. During the quarter, more than half their restaurants set new daily sales records on Valentine's Day. At Cheddar's, the team remains focused on strengthening their competitive advantages of wow price and speed. During the quarter, they maintained their number-one ranking for affordability among major casual dining brands within Technomic's industry tracking tool. I am proud of our performance this quarter and confident in our ability to build on our sales momentum. We remain focused on executing our proven strategy, enabling us to grow sales, increase market share, and make meaningful investments in our business while returning capital to shareholders. We also continue to work in our pursuit of our shared purpose to nourish and delight everyone we serve. One of the ways we do this for our team members and their families is through our NexCore Scholarship Program. Next month, the Darden Foundation will award more than 90 post-secondary education scholarships worth $3,000 each to the children of Darden team members. This is the fourth year of the program, and over time, we have awarded more than $1,000,000 worth of scholarships, helping them reach their educational goals. Finally, I want to thank our team members for their continued hard work and dedication to creating memorable experiences for our guests every day. On behalf of our leadership team and the Board of Directors, thank you for everything you do. I will now turn it over to Raj.
Thank you, Rick, and good morning, everyone. As Rick mentioned, in the third quarter, we generated $3.3 billion of total sales, 5.9% higher than last year, driven by same-restaurant sales growth of 4.2% and the addition of 31 net new restaurants. Our same-restaurant sales exceeded the industry benchmark by 540 basis points during the quarter. Our sales momentum was strong throughout the quarter as we further expanded our positive gap to the industry. Winter weather negatively impacted same-restaurant sales by approximately 100 basis points for the quarter, with more than 40% of our restaurants having to close temporarily in January during winter storm Turn. Underlying strength, sales adjusted for weather, were greater than 5%, a strong performance in what is traditionally a high-volume quarter. Overall, our teams did a great job managing the business through the volatility created by weather. Third quarter earnings were in line with our expectations, delivering mid-single-digit earnings per share growth. Adjusted diluted net earnings per share from continuing operations of $2.95 were 5.4% higher than last year. We generated $579 million of adjusted EBITDA and returned $300 million to our shareholders this quarter by paying $173 million in dividends and repurchasing $127 million in shares. Now looking at our adjusted margin analysis compared to last year, food and beverage expenses were 50 basis points higher, primarily due to elevated beef costs, driving total commodities inflation of approximately 5% for the quarter. Restaurant labor was 20 basis points lower, driven by productivity improvement, as pricing was in line with total labor inflation of 3.3%. Marketing expenses were 10 basis points higher, consistent with our expectations due to incremental marketing activity. Restaurant expenses were 10 basis points lower due to sales leverage. This resulted in restaurant-level EBITDA of 21.0%, 30 basis points lower than last year, as our pricing was 40 basis points below inflation. Adjusted G&A expenses were flat to last year. Leverage from sales growth was offset by 20 basis points of unfavorable mark-to-market expenses on our deferred compensation. Due to the way we hedge mark-to-market expense, this unfavorability is fully offset in taxes. As a result, our adjusted effective tax rate of 12.1% was 130 basis points lower than last year. We generated $341 million in adjusted earnings from continuing operations, which was 10.2% of sales. Looking at our segments, all segments grew sales and segment profit dollars for the quarter driven by positive same-restaurant sales. As Rick mentioned, we continue to make meaningful investments in the business, such as the lighter portion section of the Olive Garden menu. This, along with our measured approach in reacting to elevated beef costs, resulted in headwinds to segment profit margin for the quarter relative to last year. Total sales for Olive Garden increased by 4.7%, driven by strong same-restaurant sales growth as well as the addition of 17 net new restaurants. The sales momentum continued from prior quarters with same-restaurant sales that outperformed the industry benchmark by 440 basis points. Olive Garden delivered a strong segment profit margin of 23.0% for the quarter, which was only 10 basis points below last year. This includes approximately 40 basis points of margin investment related to the addition of the lighter portion section of the menu and the impact of delivery fees. At LongHorn, total sales increased 11.2%, driven by same-restaurant sales growth of 7.2% and the addition of 22 net new restaurants. A sustained sales and traffic outperformance resulted in same-restaurant sales exceeding the industry benchmark by 840 basis points and same-restaurant traffic exceeding by 640 basis points. The LongHorn team remains focused on their strategy, driving strong results and delivering segment profit margin of 18.6%, despite elevated beef costs. Total sales in the fine dining segment increased 4.3%, driven by positive same-restaurant sales of 2.1% and the addition of two net new restaurants. The segment profit margin of 22.0% was 50 basis points lower than last year. The other business segment sales increased 3.2%, with positive same-restaurant sales of 3.9%, partially offset by the permanent closure of Bahama Breeze restaurants. Segment profit margin of 15.6% was flat to last year. Turning to our financial outlook for fiscal 2026, we have updated our guidance to reflect year-to-date results and expectations for the fourth quarter. We now expect total sales growth for the year of approximately 9.5%, same-restaurant sales growth of approximately 4.5%, approximately 70 new restaurant openings, commodities inflation of approximately 4%, an effective tax rate of approximately 12.5%, and adjusted diluted net earnings per share of $10.57 to $10.67, including approximately $0.25 related to the addition of a fifty-third week. For the fourth quarter specifically, our annual outlook implies total sales growth of 13% to 14.5%, which includes the extra fiscal week; same-restaurant sales growth of 3.5% to 5% incorporates the strong trends we have seen through the first three weeks of March; and we expect adjusted diluted net earnings per share between $3.59 and $3.69. As previously announced, we have completed the exploration of strategic alternatives for the Bahama Breeze brand and determined that 14 locations will permanently close and the remaining 14 will be converted to other Darden Restaurants, Inc. brands over the next 12 to 18 months. We believe the commercial locations are great sites that will benefit several of the brands in our portfolio. Our team members remain a priority throughout this process. A majority of team members, including more than 70% of managers who are impacted by the permanent closures, have already been placed in new roles within the Darden Restaurants, Inc. portfolio. Additionally, we intend to keep the restaurant teams from the conversion locations with the new brand or other Darden Restaurants, Inc. brands. We do not expect these actions to have a material impact on our financial results. Now looking forward to fiscal 2027, I would like to provide our thoughts on a few items. First, we expect to open between 75 and 80 new restaurants, in addition to converting 14 Bahama Breeze locations to other Darden Restaurants, Inc. brands. Next, we expect to spend approximately $850 million of capital on the following: approximately $475 million for new restaurants; approximately $25 million for the 14 Bahama Breeze conversions; and approximately $350 million related to ongoing restaurant maintenance, refresh, and technology. Finally, we anticipate an effective tax rate of approximately 13.5% for fiscal 2027 and total interest expense of approximately $200 million. In closing, I want to commend our teams for their efforts in serving our guests. Their dedication is reflected in the strong financial results we deliver and our continued outperformance to the industry. We remain confident in our ability to grow sales, manage costs, and deliver value to our guests and shareholders. We will now open for questions.
分析師問答
Thank you. We will now be conducting a question-and-answer session. Our first question today is coming from Brian Bittner from Oppenheimer. Your line is now live.
Thank you. Good morning. Just as it relates to your same-store sales guidance, the implied outlook for the fourth quarter is that 3.5% to 5% range, which is very impressive. And that is happening despite much tougher comparisons, I think, of nearly 400 basis points in the fourth quarter. I think investors, in general, have been pretty worried about this multi-quarter stretch of tougher comparisons upcoming. So can you help us understand what you believe is driving the ability to lap these so far at least with such ease, particularly at Olive Garden?
Good morning, Brian. Let me start. As we look at guidance for next year, people are looking at this quarter-to-quarter, tougher comparisons versus last year. But the way we think about it is what are the drivers of the business, and how do we continue to build growth over time through the initiatives we have. I think we have shown that over time, we achieve what we commit to. We have been able to show that we can grow. And so as we look specifically with respect to Olive Garden, last year you said it is a tougher compare. But if you think about the drivers of growth last year, they were primarily two. One was Buy One Take One returning for the first time since COVID, and second was the first-party delivery. Well, those two are still in place today. And we are extending our Buy One Take One by an additional week, and Rick mentioned we are also supporting that with additional media. So we build a plan and we build an estimate based on the initiatives we have in place, taking into consideration the macro factor. And I think we feel good about what we are guiding here. And I do not know if you want to add.
Thanks for that, Raj. And just my quick follow-up is related to the relationship of pricing and inflation. Can you talk about that as we are moving forward into the fourth quarter and then into 2027? I know you are not giving exact guidance for next year yet, but you had some pretty meaningful gaps in that dynamic throughout this year, which seem to be narrowing now. So maybe you can just put some color on that for us.
Yes, Brian. Look, I think we have had a pretty big underpricing of inflation through the first three quarters. As we get to Q4, we expect our pricing to catch up to inflation. We expect overall inflation to be in the mid-3s and our pricing to be in the mid-3s. And if you look at our implied guide for Q4, you can see the power of that. When we start getting pricing close to inflation, you see the margins grow meaningfully, and that is what you are seeing in the implied guidance for the fourth quarter. We will share more about next year, but I think the way to think about it is we have given ourselves a lot of flexibility by underpricing inflation over several years. And we feel like we have more power than anybody else in terms of being able to price to cover inflation. It is more of how we choose to run the business, and we have always been focused on long term. To the extent we are achieving our long-term framework of 10% to 15% TSR by not having to price as much, then we do that. But I think you will hear more in the June call.
Thank you. Next question is coming from David Palmer from Evercore ISI. Your line is now live.
Thanks. Quick question and a follow-up. How would you generally explain the same-store sales growth gap between LongHorn and Olive Garden? Is that really simply about the energy around protein and perhaps a little bit of the underpricing of beef costs lately? Or do you think there is something else that would explain the gap that we see between those two brands in terms of comps?
Yes, David. I will start by saying LongHorn has been on a very long path to continue to improve their business to make sure that the guests get a great quality product every day. You heard that in some of the prepared remarks. They have also significantly underpriced beef costs versus the grocery store over time, so the guests are getting an amazing value when they go to LongHorn to eat. Going back to the quality, they have done an amazing job in cooking their steaks. Guests want to come to a restaurant, and if you cannot cook a great steak, why are you open? And LongHorn cooks a great steak very close to 100% of the time, and when they do not, they take care of the guest. The gap between Olive Garden and LongHorn is going to fluctuate. This quarter, LongHorn had to get a little bit more pricing than Olive Garden did. They had a little bit more traffic growth than Olive Garden did. I am not sure they were impacted quite as much by the weather as Olive Garden was. As you think about all of those things, we do not worry about one brand outperforming another brand. We have a portfolio of great brands. There are going to be quarters that one brand outperforms another one, just like we generally outperform the industry. We are very pleased with both of our brands, both Olive Garden and LongHorn, in the performance they have had. I think those can explain some of the big differences. And if Raj wants to add anything else,
The only thing I will add is, as Rick mentioned, we also manage brand-specific strategies. Some of the things we do are depending on how we look at our performance across the portfolio. There were three fewer weeks of price-point promotion at Olive Garden, and that is a decision we made because of how strong we felt the quarter was going to be. That alone is probably about 100 basis points impact to Olive Garden's comps.
Right. That is helpful. Do you see the gap between those two brands growing? Or you just called out a reason why it might narrow, but we see the comparisons getting tougher for Olive Garden. So I know that there is going to be concern that that growth gap will widen against the tougher comparisons. Do you see that gap widening or perhaps narrowing off of some of those artificial hurts that happened in the last quarter? And I will pass it on.
Well, David, again, we are not as concerned with the gap widening or narrowing in our brands as long as the brands continue to grow. The important gap widening for us is Olive Garden's gap to the industry, and Olive Garden's gap to the industry widened in our third quarter. LongHorn's gap widened even more. In the long run, though, the law of large numbers suggests Olive Garden and LongHorn will probably converge over time. I cannot say it is going to happen in Q4. I cannot say it is going to happen next year. Over time, as long as we are not doing anything significantly different in promotional cadence or other things, you would expect those gaps to narrow a little bit. Maybe LongHorn will be above Olive Garden for a while. We just cannot tell you exactly when that will converge.
Thank you. Next question is coming from Lauren Silberman from Deutsche Bank. Your line is now live.
Thanks a lot. Congrats on the quarter. I am going to start with the increasing gas prices. It sounds like you really have not seen much of an impact, given the quarter-to-date strength. But any thoughts on whether there could be a delayed reaction from consumers? And any color on what you have seen historically with high gas prices and how that has impacted different brands?
Yes, Lauren. As quite a few of you have written, the data does not show a really strong correlation between gas prices and restaurant spending. Historically, higher gas prices have had more of an impact on durable goods and less of an impact on services. I have been through a number of these cycles. When there is a sudden and significant price increase in gas, there can be a brief pullback, but that is usually a few weeks. If you recall, the sudden increase in gas prices was a couple of weeks ago. We still had a pretty robust quarter. The biggest driver we see in traffic for restaurants is GDP. If gas prices remain high for a long period of time and make a significant impact to GDP, there may be some softness. In general, we are not too worried about gas prices, and we will be able to react however we need to if they stay really high for a while.
Great. Thank you for that. And just a follow-up on the Q4 guide. The 3.5% to 5% is fairly wide. Any color on what you are embedding through the rest of the quarter? I know there are a lot of moving pieces. Just trying to understand high end versus low end versus current trend. Thank you.
Yes, Lauren. We are trying to embed that there is still some uncertainty, and the range is there to capture that level of uncertainty. We feel like we are in a good place quarter-to-date, and that is taken into consideration. We are also taking into consideration the environment out there and making sure that we do not overpromise. We are being thoughtful and taking into consideration all the factors that are out there.
Thank you. Next question is coming from Christine Cho from Goldman Sachs. Your line is now live.
Hi, thank you so much. I would like to discuss beef prices, particularly as we look ahead to FY2027. I think last call you mentioned you are starting to see some green shoots, but it seems spot prices are still trending upwards and news of the strike also seems to be an incremental headwind. Could you share your directional thoughts on beef and your locked-in rates for the next few quarters ahead? Thank you.
Hey, Christine. Let me start by saying as far as fiscal 2027, we want to wait till June to provide more specifics. For Q4, we have 80% to 85% fixed-price coverage. This is really good coverage relative to the recent past. We have not been able to cover that much in the last several years, so that is a good thing. We are starting to see some willingness from suppliers to contract further, so we have started to lock in some things for fiscal 2027, probably well ahead of where we would have been a year ago or the last few years with respect to the next year. I want to wait till June to really share more specifics. Regarding price, there are a lot of dynamics happening on the supply side. We are not expecting things to get significantly better on the supply side. There is still double-digit demand destruction that we are seeing even in February in retail. Ultimately, where it lands will depend on what happens with demand as prices go up.
Thank you so much. I would also like to circle back on the lighter portion menu rollout at Olive Garden. Any color on how the incidence rates trended since the launch? And is the mix impact tracking in line with your expectations? Also, any new learnings on the guests that are choosing these items? Does the uptake appear primarily value-driven or more health surge/GLP-1 motivated? Thank you.
Hey, Christine. We finished the launch in January, with the rest of divisions going live, and those divisions are seeing the same trends as the divisions that we launched earlier. The good news is we are seeing increased frequency in the guests that are ordering these lighter portions. We are seeing huge value scores and huge scores for portion size. It is a combination of many things. We know that the Olive Garden menu has abundant portions, and abundant means different things to different people. When you get as much soup or salad as you want and as many breadsticks as you want, a lighter portion may be all you are looking for. Whether it is GLP-1 related or not, I do not think it is just GLP-1s. I think a lot of people want smaller portions if you get all these other things. As I said, portion size ratings have gone up significantly and value ratings have gone up significantly for those items. We have seen increased frequency in the guests that are ordering it. It is a significant increase in frequency. A lot of the preference is happening at the weekend lunch when we do not have a lunch menu, so there is a good reason for this lighter portion menu. Finally, the mix impact is about what we thought it would be. Raj mentioned what the margin impact of the mix was, but the mix impact is about where we thought when we first launched the menu.
Thank you. Next question today is coming from Chris Carroll from KeyBanc Capital Markets. Your line is now live.
Hi, good morning. So how should we think about marketing expense now in 4Q in the context of the updated guidance you provided this morning? I presume you will wait to provide any detail on marketing expense for fiscal 2027 in June. Any thoughts on how you are thinking about marketing at a higher level here in a potentially more volatile macro backdrop would be helpful.
Yes, Chris. We have been very clear throughout the year that we expect marketing to be within 10 basis points as a percent of sales versus last year. That is how we are looking at it because one of the things we had this year that we mentioned along the calls was we had an RFP for media-wide that translated into meaningful cost saves, actually north of 10 basis points as a percent of sales. That is helping us increase marketing activity. Even in quarters where you do not see growth as a percent of sales, we are actually buying more because we had those savings to help.
Okay. Got it. Thank you. And then to give Olive Garden a little bit of a break here and change directions, can you comment on the improvement that you saw in the fine dining segment? How are you thinking about the segment going forward? How much of a benefit to the comp in the quarter was from the strong Valentine's Day that you mentioned? Thanks.
Yes, Chris. As we mentioned, fine dining— all three fine dining brands were positive same-restaurant sales in the quarter. It was not just driven by Valentine's Day. I do not think that would be a meaningful driver—maybe tens of basis points for the whole quarter for Valentine's Day. We had really good private dining, as we mentioned, for The Capital Grille and Eddie V’s. The three-course price fixe menu for Ruth's Chris is really resonating. We ran it for, I think, five or six weeks this quarter, and it is resonating with guests. We are seeing guests that were lapsed to Ruth's Chris come back and we are seeing guests that have ordered that come back. We think this is a good platform for them. We are pleased that all the brands in fine dining were positive this quarter. It has been a little bit of time since that has happened. We cannot tell you what we think going forward, but everything we have is contemplated in our guide, and our guide is a strong guide. I would think that fine dining would be doing okay in the fourth quarter.
Thank you. Our next question today is coming from Sara Senatore from Bank of America. Your line is now live.
Quick housekeeping. I think I missed it. Can you run through the price and mix that were in the comp and maybe give a little bit of color? I think you mentioned LongHorn had more price than Olive Garden, but how did the brands compare to the average?
Yes, Sara. At the Darden Restaurants, Inc. level, our comps were 4.2%. Our check growth was 3.5%. Pricing was basically 3.4%, so 10 basis points of positive mix. Looking at Olive Garden, their pricing was 2.8%, but they also had catering help. Catering grew by about 130 basis points, which we do not count as traffic, but for all practical purposes, that is increasing traffic. If you take that into consideration, their traffic was up basically 100 basis points. They had some investment, like we talked about, the investment in lighter portions impacted the check by roughly 60 basis points. Uber fees helped a little bit with about 50. The way we look at it is Olive Garden's comps—while the traffic we print might be negative 0.4%—when you add back the weather and the catering, basically a positive 2% comp on traffic. For LongHorn, the same-restaurant sales of 7.2% included traffic of 3.3% and the check growth of 3.9%. Pricing was 4.4%, so they had a negative mix of 50 basis points.
Okay. Thank you. That is very helpful. In terms of the decision to run fewer weeks of price-pointed promotions, as you said, maybe 100 basis points, but then this quarter running an extra week of the Buy One Take One and supporting it with more marketing—presumably, all those things were planned well in advance. I just wanted to confirm that because I was not sure if the decision to go from fewer weeks last quarter to one more week this quarter indicated something about the promotional intensity or what the results were versus your expectation. Just trying to reconcile those two decisions or maybe just tougher compares or something else entirely. Curious about that.
Yes, Sara. As big as Olive Garden is, we cannot move on a big dime. We had planned both of those things quite a while ago. We had planned running fewer price-point weeks in Q3 and planned on adding a week of Buy One Take One in Q4 well early in this fiscal year, maybe even before the fiscal year started. The reason that we moved the three weeks out—we eliminated a promotion in the third quarter—was because we believed that weather would get back to a normal five-year average, and so we would have some weather tailwinds for us this quarter. There were headwinds, so that was something that happened. If—and Raj mentioned what would have happened if there was not that kind of weather headwind—we would have had a 2% comp in traffic. We plan these long time ahead of time. This is not a reaction to promotional intensity anywhere else. If you recall, when we added Never-Ending Pasta, we came back, I think it was seven weeks, maybe eight weeks, and then within a year or two, it was up to twelve. That was a planned decision we made. I cannot tell you the Buy One Take One will get to twelve weeks, but I can tell you that when we launched Buy One Take One last year, we never intended it to be as short as it was.
Next question today is coming from Jon Tower from Citi. Your line is now live.
Hey, thanks for taking the questions. Maybe starting, could you dig into the delivery for Olive Garden during the quarter? I think you have been running about 4% mix last period. Did much change? And going forward, how are you thinking about pulsing it as you are moving into the fourth quarter? Obviously, there is a different macro dynamic happening right now and there are delivery fees on top of it. I am curious if there is going to be a brighter spotlight on that relative to previous quarters?
Yes, Jon, a couple of things. Uber was 4.7% of sales for Q3. We did do some media support. When we took that four-week promotion out—so three weeks less price-pointed—we took that one out in January. We replaced it with just a delivery message that had no offer. It was just, 'Hey, Olive Garden delivers.' Then in February, we added an offer to the Olive Garden delivery—free delivery like we did last year. Last year in Q3, we were roughly 0.8% in delivery. Last year in Q4, we were 3.5%. You saw that big jump when we started marketing delivery in Q4. In Q4 this year, I am not going to tell you if we are going to do marketing for delivery, but if we do, it would be a secondary message. I would think the jump in delivery from Q3 this year to Q3 last year will not be the same in Q4 because that is when we had the big spike. We still believe that delivery should be a little bit higher than last year. We have said this before. I think LongHorn has done some of this already. LongHorn did this at lunch years ago, and lunch is growing pretty fast with a good lunch platform—smaller items, sandwiches, etc.—that has grown over time. They already have different sizes of some steaks. If you think about their filet, they have two different size filets. They have sirloins. They have two different kinds of ribeyes—one is bone-in, one is not. They have different sizes for chicken, different sizes for salmon. They have a lot of that already. They are looking at other things that they can do to bring portions that might not be as big for people that do not want such big portions. The same thing with Ruth’s Chris: if you think about the three-course price fixe menu at Ruth's Chris, it is one of their smaller filets, etc. We have opportunities in all of our brands to look at something like this. It might not be as broad as we do at Olive Garden because most of these menus in other brands have a variety of sizes.
Thank you. The next question today is coming from Brian Harbour from Morgan Stanley. Your line is now live.
Yes, thanks. Good morning, guys. Maybe I will ask the income cohort question. Anything that you would call out about income bands that may have shifted in the quarter? Also in fine dining, is there any group that you think has come back more?
Hey, Brian. From an income perspective, we are seeing growth across all households with income above $50k, and the biggest growth is coming from households over $150k. That is generally what we are seeing across all brands. In fine dining, we are seeing decent growth as we go above $150k as well, but $200k-plus is where we are seeing the most growth. That is where we see even bigger disparity between the below $75k, below $100k, and then the above $200k or $150k.
Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over to Courtney for any further or closing comments.
This concludes our call. I want to remind you that we plan to release fourth quarter results on Thursday, June 25, before the market opens, with a conference call to follow. Thanks for participating.
Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.