John Ivanko

John Ivanko asked about the 'Back to the Original Chili's' initiative, focusing on potential changes to cooking platforms like grills and broilers, the need for new equipment, and the associated labor implications.

Answer

CEO Kevin Hochman explained that the reimage program aims to recapture the original Greenville Chili's vibe with a modern approach, including a true margarita bar and highlighting signature items. He mentioned a 2030 heart of house team is exploring bringing flame back into the kitchen with charbroilers, but this is in early testing stages to understand labor deployment, costs, and operational changes.

John Ivanko asked for clarification on the 'getting back to the original Chili's' concept, specifically regarding potential changes to cooking platforms, equipment (like charbroilers), and the associated labor implications.

Answer

Kevin Hochman, President and CEO of Brinker International, explained that the reimage program aims to recapture the original Greenville Chili's vibe with a modern twist, focusing on elements like a margarita bar. He mentioned a cross-functional team is exploring kitchen equipment upgrades, including fryer capacity and bringing 'flame back into the building' with charbroilers, noting that while charbroilers are not expensive, they would require testing for labor deployment and operational changes.

John Ivanko asked about the labor market, specifically demand for kitchen labor and any tightening in various markets, given the broader industry's reliance on undocumented workers (though not at The Cheesecake Factory). He also inquired about the long-awaited Cheesecake Factory app, its past sticking points, planned functionality, and its potential impact on the loyalty program.

Answer

David Gordon, President, reported no change in labor demand by geography, with terrific applicant flow and stable wage inflation, aided by best-in-class retention. Regarding the app, he confirmed it's evolutionary and in scope for a first-half 2026 launch, offering features like reservations, order history, off-premise ordering, and rewards tracking. Etienne Marcus, VP of Finance and Investor Relations, added that the past sticking point was the lack of a rewards program to justify the app's value proposition for consumers, which is now addressed by the growing loyalty membership.

John Ivanko asked about any tightening in the demand for kitchen labor across various markets, given the industry's reliance on certain labor segments. He also inquired about the rationale behind the delayed launch of a Cheesecake Factory app and its anticipated functionality and impact on the loyalty program.

Answer

David Gordon, President, reported no change in labor demand by geography, with strong applicant flow and stable wage inflation, aided by best-in-class retention. He confirmed an app is planned for H1 2026, describing it as evolutionary. Past delays were due to the absence of a rewards program to provide clear consumer value, but the new app will offer reservations, order history, off-premise ordering, and rewards tracking.

John Ivanko asked about Darden's observations on demand destruction at retail, specifically recent data on retail beef demand. He also inquired about lessons learned from past unsuccessful attempts at smaller portions and lower prices in casual dining, and how Olive Garden's current approach to lighter portions differs.

Answer

CFO Raj Vennam confirmed that recent data (last month) shows a low single-digit year-over-year decline in retail beef volume, a shift from prior robust months. CEO Rick Cardenas clarified that Cheddar's Hawaiian sirloin is not a smaller portion. Regarding Olive Garden's lighter portions, he explained that they still offer abundance (with unlimited soup/salad/breadsticks) but add price breadth, catering to a consumer group whose definition of abundance may differ, unlike past attempts where overall portions were already smaller.

John Ivanko inquired about Darden's observation of demand destruction at retail for beef, seeking recent signs and potential implications for restaurant supply. He also asked about historical lessons from unsuccessful smaller portions or value items in casual dining and how Darden's current approach differs.

Answer

Raj Vennam, CFO, clarified that recent (last month) data showed a low single-digit year-over-year volume decline for beef at retail, a shift from prior robust months. Rick Cardenas, President and CEO, distinguished Cheddar's Hawaiian sirloin (not a smaller portion, and LongHorn had success with it previously) from Olive Garden's lighter portions. He explained that Olive Garden's smaller portions still offer abundance with unlimited soup/salad/breadsticks, add price breadth, and cater to a consumer group seeking appropriate portion sizes without changing the entire menu.