Key Points from Darden’s recently reported financial results for its fiscal 4Q22 ended 5/29/22.
- A +3% menu price increase for fiscal 2022 was half annual inflation of +6% as Darden competes by keeping things affordable.
- Commodity inflation of +12% during FY4Q22 is expected to increase to mid-teens during FY1Q23 before moderating significantly later in the year & ending flat during FY4Q23.
- Hourly wage inflation was +9% during the quarter.
- Consumer sentiment is at the lowest level in 60 years with less impact on higher-end consumers.
- If consumers & traffic slow dramatically, then inflation should fall in parallel.
- A sharp reduction in marketing spend reveals declining confidence in traditional TV ads.
- Olive Garden’s to-go sales mix was 25% of which 60% is digital.
- Market cap is in-line with FY19 level.