Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis below for the Company, which contains forward-looking statements, should be read in conjunction with the unaudited consolidated financial statements and the notes to such financial statements included elsewhere in this quarterly report on Form 10-Q (Form 10-Q) and the audited consolidated financial statements and the notes thereto included in our Form 10-K for the fiscal year ended May 26, 2024 (Form 10-K). In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates, and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Item 1A. Risk Factors” section of the Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Forward-Looking Statements” included below in this Form 10-Q.

To facilitate review of our discussion and analysis, the following table sets forth our financial results for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the three and nine months ended February 23, 2025 and February 25, 2024.

			Three Months Ended																		Nine Months Ended
(in millions)			February 23, 2025						February 25, 2024						% Chg						February 23, 2025						February 25, 2024						% Chg
Sales			$	3,158.0					$	2,974.8					6.2%						$	8,805.0					$	8,432.7					4.4%
Costs and expenses:
Food and beverage			953.6						920.2						3.6						2,673.1						2,617.0						2.1
Restaurant labor			995.0						937.1						6.2						2,811.1						2,693.3						4.4
Restaurant expenses			507.1						471.9						7.5						1,443.0						1,368.9						5.4
Marketing expenses			35.4						31.7						11.7						128.9						107.2						20.2
General and administrative expenses			116.7						108.2						7.9						387.2						376.3						2.9
Depreciation and amortization			131.9						117.9						11.9						381.1						340.2						12.0
Impairments and disposal of assets, net			0.1						0.4						(75.0)						1.1						11.0						(90.0)
Total costs and expenses			$	2,739.8					$	2,587.4					5.9						$	7,825.5					$	7,513.9					4.1
Operating income			418.2						387.4						8.0						979.5						918.8						6.6
Interest, net			45.5						36.5						24.7						128.8						103.3						24.7
Earnings before income taxes			372.7						350.9						6.2						$	850.7					$	815.5					4.3
Income tax expense (1)			49.0						37.5						30.7						103.7						95.0						9.2
Earnings from continuing operations			$	323.7					$	313.4					3.3						$	747.0					$	720.5					3.7
Losses from discontinued operations, net of tax			(0.3)						(0.5)						(40.0)						(1.2)						(1.0)						20.0
Net earnings			$	323.4					$	312.9					3.4%						$	745.8					$	719.5					3.7%
Diluted net earnings per share:
Earnings from continuing operations			$	2.74					$	2.60					5.4%						$	6.30					$	5.95					5.9%
Losses from discontinued operations			—						—						NM						(0.01)						—						NM
Net earnings			$	2.74					$	2.60					5.4%						$	6.29					$	5.95					5.7%
(1) Effective tax rate			13.1		%				10.7		%										12.2		%				11.6		%
NM- Percentage not considered meaningful.

The following table details the number of company-owned restaurants currently reported in continuing operations that were open at the end of the third quarter of fiscal 2025, compared with the number open at the end of fiscal 2024 and the end of the third quarter of fiscal 2024.

						February 23, 2025						May 26, 2024						February 25, 2024
Olive Garden						927						920						917
LongHorn Steakhouse						586						575						572
Cheddar’s Scratch Kitchen						182						181						181
Chuy’s1						106						—						—
Yard House						89						88						88
Ruth’s Chris						82						80						79
The Capital Grille						71						66						64
Seasons 52						45						44						44
Bahama Breeze						43						43						43
Eddie V’s						30						30						30
The Capital Burger						4						4						4
Total						2,165						2,031						2,022

1Includes 103 Chuy’s locations acquired on October 11, 2024

OVERVIEW OF OPERATIONS

Financial Highlights - Consolidated

• Total sales increased 6.2 percent and 4.4 percent to $3.16 billion and $8.81 billion for the third quarter and first nine months of fiscal 2025 compared to $2.97 billion and $8.43 billion for the third quarter and first nine months of fiscal 2024 driven by sales from 143 net new restaurants, including the acquisition of 103 Chuy’s restaurants on October 11, 2024, and blended same-restaurant sales increase of 0.7 percent1 and 0.8 percent.1 Our blended U.S. same-restaurant sales for the third quarter of fiscal 2025 were negatively impacted by approximately 1.0 percent and 0.9 percent respectively, due to severe weather and a shift in the timing of the Thanksgiving holiday week. Our blended U.S. same-restaurant sales for the first nine months of fiscal 2025 were negatively impacted by 0.4 percent due to severe weather.

• Our net earnings from continuing operations were $323.7 million and $747.0 million for the third quarter and first nine months of fiscal 2025 compared to $313.4 million and $720.5 million for the third quarter and nine months of fiscal 2024.

• Reported diluted net earnings per share from continuing operations were $2.74 and $6.30 for the third quarter and first nine months of fiscal 2025 compared to $2.60 and $5.95 for the third quarter and nine months of fiscal 2024.

1 Same-restaurant sales results exclude Chuy’s as it has not yet been owned and operated by Darden for a 16-month

period and includes Ruth’s Chris for fiscal November 2025 and forward only.

Outlook

On October 11, 2024, we acquired 100 percent of the equity interest of Chuy’s Holdings, Inc. (Chuy’s Holdings) in an all-cash transaction of $649.1 million in total consideration, $613.7 million in net cash consideration, inclusive of $35.4 million of cash on Chuy’s Holdings balance sheet at closing. We financed the acquisition with a portion of the proceeds from the issuance of a $400.0 million aggregate principal amount of 4.350 percent senior notes due 2027 (2027 Notes) and a $350.0 million aggregate principal amount of 4.550 percent senior notes due 2029 (2029 Notes), which were issued on October 3, 2024. The 2027 Notes will mature on October 15, 2027 and the 2029 Notes will mature on October 15, 2029. Interest on the Notes will be paid semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2025, to holders of record on the preceding March 31 or September 30, as the case may be.

During the second quarter of fiscal 2025, we entered into an exclusive multi-year delivery arrangement with Uber Technologies, Inc. (Uber). The agreement enables our guests to order delivery via Darden restaurant channels, with delivery handled by Uber. The pilot of first-party delivery for Olive Garden began during the second quarter of fiscal 2025 and rolled out to nearly all Olive Garden locations during the second and third quarters of fiscal 2025. A pilot of first-party delivery from a limited number of Cheddar’s Scratch Kitchen locations will begin in the fourth quarter of fiscal 2025.

We expect sales for fiscal 2025 to be approximately $12.1 billion, same-restaurant sales growth of approximately 1.5 percent1 and approximately 50 to 55 new restaurant openings. Additionally, we expect capital expenditures incurred to build new restaurants, remodel and maintain existing restaurants and for technology initiatives to be approximately $650 million. These amounts all include the addition of Chuy’s and our expectations for Chuy’s results from the date of acquisition forward.

1 Same-restaurant sales exclude Ruth’s Chris and Chuy’s as they were not owned and operated by Darden for a 16-month period at the beginning of the fiscal year.

SALES

The following table presents our sales by segment for the periods indicated.

			Three Months Ended															Nine Months Ended
(in millions)			February 23, 2025			February 25, 2024			% Chg			SRS (1)						February 23, 2025			February 25, 2024			% Chg			SRS (1)
Olive Garden			$	1,330.3		$	1,310.2		1.5		%	0.6		%				$	3,831.9		$	3,789.5		1.1		%	—		%
LongHorn Steakhouse			$	768.1		$	730.7		5.1		%	2.6		%				$	2,191.7		$	2,043.5		7.3		%	4.5		%
Fine Dining			$	385.3		$	372.9		3.3		%	(0.8)		%				$	970.2		$	964.4		0.6		%	(3.4)		%
Other Business			$	674.3		$	561.0		20.2		%	(0.4)		%				$	1,811.2		$	1,635.3		10.8		%	(0.5)		%

(1)Same-restaurant sales is a year-over-year comparison of each period’s sales volumes for a 52-week year and is limited to restaurants that have been open, and operated by Darden, for at least 16 months. Accordingly, Chuy’s results will not be included in this calculation until the fourth quarter of fiscal 2026 and Ruth’s Chris results are included for fiscal 2025 November and forward only.

Olive Garden’s sales increase for the third quarter of fiscal 2025 was primarily driven by same-restaurant sales increases, as well as revenue from new restaurants. The increase in U.S. same-restaurant sales for the third quarter of fiscal 2025 resulted from a 4.6 percent increase in average check, which includes a 0.9 increase in off premise catering sales, partially offset by a 3.9 percent decrease in same-restaurant guest counts. Olive Garden’s sales increase for the nine months of fiscal 2025 was primarily driven by revenue from new restaurants, offset by a decrease in same-restaurant guest counts.

LongHorn Steakhouse’s sales increase for the third quarter and nine months of fiscal 2025 was primarily driven by same-restaurant sales increases combined with revenue from new restaurants. The increase in same-restaurant sales for the third quarter of fiscal 2025 resulted from a 3.3 percent increase in average check, partially offset by a 0.7 percent decrease in same-restaurant guest counts. The increase in same restaurant sales for the nine months of fiscal 2025 resulted from a 3.1 percent increase in average check combined with a 1.4 percent increase in same-restaurant guest counts.

Fine Dining’s sales increase for the third quarter and nine months of fiscal 2025 was primarily driven by an increase in average check combined with revenue from new restaurants. The decrease in same-restaurant sales for the third quarter of fiscal 2025 resulted from a 4.0 percent decrease in same-restaurant guest counts, offset by a 3.4 percent increase in average check. The decrease in same restaurant sales for the nine months of fiscal 2025 resulted from a 6.1 percent decrease in same-restaurant guest counts, partially offset by a 2.8 percent increase in average check.

Other Business’ sales increase for the third quarter and nine months of fiscal 2025 was primarily driven by the addition of Chuy’s operating results and revenue from new restaurants. The decrease in same-restaurant sales for the third quarter of fiscal 2025 resulted from a 3.4 percent decrease in same-restaurant guest counts, partially offset by a 3.1 percent increase in average check. The decrease in same restaurant sales for the nine months of fiscal 2025 resulted from a 3.0 percent decrease in same-restaurant guest counts, partially offset by a 2.6 percent increase in average check.

COSTS AND EXPENSES

The following table sets forth selected operating data as a percent of sales for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the quarters and nine months ended February 23, 2025 and February 25, 2024.

			Three Months Ended												Nine Months Ended
			February 23, 2025						February 25, 2024						February 23, 2025						February 25, 2024
Sales			100.0		%				100.0		%				100.0		%				100.0		%
Costs and expenses:
Food and beverage			30.2						30.9						30.4						31.0
Restaurant labor			31.5						31.5						31.9						31.9
Restaurant expenses			16.1						15.9						16.4						16.2
Marketing expenses			1.1						1.1						1.5						1.3
General and administrative expenses			3.7						3.6						4.4						4.5
Depreciation and amortization			4.2						4.0						4.3						4.0
Impairments and disposal of assets, net			—						—						—						0.1
Total operating costs and expenses			86.8		%				87.0		%				88.9		%				89.1		%
Operating income			13.2						13.0						11.1						10.9
Interest, net			1.4						1.2						1.5						1.2
Earnings before income taxes			11.8						11.8						9.7						9.7
Income tax expense			1.6						1.3						1.2						1.1
Earnings from continuing operations			10.3		%				10.5		%				8.5		%				8.5		%

Quarter Ended February 23, 2025 Compared to Quarter Ended February 25, 2024

• Food and beverage costs decreased as a percent of sales primarily due to a 0.9% impact from pricing leverage and a 0.2% impact from cost savings, partially offset by a 0.3% impact from menu mix and other.

• Restaurant labor costs remained flat as a percent of sales primarily due to a 0.9% impact from pricing leverage, a 0.3% impact from manager and team member productivity improvement, partially offset by a 1.1% impact from inflation.

• Restaurant expenses increased as a percent of sales primarily due to a 0.4% impact from inflation and a 0.3% impact from brand mix, partially offset by a 0.5% impact from pricing.

• Marketing expenses remained flat as a percent of sales.

• General and administrative expenses increased as a percent of sales primarily due to a 0.3% impact from Chuy’s transaction and integration costs, a 0.1% impact from inflation and a 0.1% impact from brand mix, partially offset by 0.2% Ruth’s Chris transaction and integration costs during the third quarter of 2024, a 0.1% impact from mark to market adjustments and a 0.1% impact from pricing leverage.

• Depreciation and amortization expenses increased as a percent of sales primarily due to the acquisition of Chuy’s as well as incremental depreciation on new restaurants and other capital investments.

• Impairment and disposal of assets, net remained flat as a percent of sales.

Nine Months Ended February 23, 2025 Compared to Nine Months Ended February 25, 2024

• Food and beverage costs decreased as a percent of sales primarily due to a 0.9% impact from pricing leverage and a 0.2% impact from cost savings, partially offset by a 0.5% impact from menu mix and other.

• Restaurant labor costs remained flat as a percent of sales primarily due to a 0.9% impact from pricing leverage and a 0.3% impact from manager and team member productivity improvement, offset by a 1.2% impact from inflation.

• Restaurant expenses increased as a percent of sales primarily due to a 0.4% impact from inflation, a 0.3% impact from brand mix and other, partially offset by a 0.5% impact from pricing leverage.

• Marketing expenses increased as a percent of sales primarily due to increased marketing and media spend.

• General and administrative expenses decreased as a percent of sales primarily due to a 0.1% impact from incentive pay timing, a 0.1% impact from pricing leverage, and a 0.1% impact from transaction and integration costs in the first nine months of fiscal 2024 related to the Ruth’s Chris acquisition offset by Chuy’s in fiscal 2025, partially offset by a 0.1% impact from mark to market adjustments and a 0.1% impact from inflation.

• Depreciation and amortization expenses increased as a percent of sales primarily due to the acquisition of Chuy’s as well as incremental depreciation on new restaurants and other capital investments.

• Impairment and disposal of assets, net decreased as a percent of sales primarily due to the write-off of acquired Ruth’s Chris assets in the prior year.

INTEREST EXPENSE

Net interest expense increased as a percent of sales for the third quarter and the first nine months of fiscal 2025 primarily due to financing related to the Chuy’s acquisition. See Liquidity and Capital Resources for a description of our senior notes issuance to finance the Chuy’s acquisition.

INCOME TAXES

The effective income tax rate for continuing operations for the quarter ended February 23, 2025 was 13.1 percent compared to an effective income tax rate for the quarter ended February 25, 2024 of 10.7 percent. The effective income tax rate for continuing operations for the nine ended February 23, 2025 was 12.2 percent compared to an effective income tax rate for the nine months ended February 25, 2024 of 11.6 percent. The increase in the tax rate is primarily driven by higher net earnings from continuing operations as well as nondeductible transaction costs related to Chuy’s.

LOSSES FROM DISCONTINUED OPERATIONS

On an after-tax basis, losses from discontinued operations for the third quarter and first nine months of fiscal 2025 were $0.3 million ($0.00 per diluted share) and $1.2 million ($0.01 per diluted share) compared with losses from discontinued operations for the third quarter and first nine months of fiscal 2024 of $0.5 million ($0.00 per diluted share) and $1.0 million ($0.00 per diluted share).

SEGMENT RESULTS

We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, Ruth’s Chris, The Capital Grille, Chuy’s, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger in North America as operating segments. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. Our four reportable segments are: (1) Olive Garden, (2) LongHorn Steakhouse, (3) Fine Dining and (4) Other Business (see Note 7 to our unaudited consolidated financial statements in Part I, Item 1 of Form 10-Q).

Our management uses segment profit as the measure for assessing performance of our segments. The following table presents segment profit margin1 for the periods indicated.

						Three Months Ended																		Nine Months Ended
Segment						February 23, 2025						February 25, 2024						Change						February 23, 2025						February 25, 2024						Change
Olive Garden						23.0%						22.5%						50 BPS						21.7%						21.6%						10		BPS
LongHorn Steakhouse						19.4%						18.7%						70 BPS						18.8%						17.9%						90		BPS
Fine Dining						22.3%						21.8%						50 BPS						18.2%						18.4%						(20)		BPS
Other Business						15.4%						14.9%						50 BPS						14.7%						14.3%						40		BPS
1 Segment profit margin is calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales.

The increases in Olive Garden’s segment profit margin for the third quarter and first nine months of fiscal 2025 was driven primarily by lower food and beverage and restaurant labor costs, partially offset by increased restaurant expenses and marketing costs. The increases in Longhorn Steakhouse’s segment profit margin for the third quarter and first nine months of fiscal 2025 was driven primarily by positive same-restaurant sales and lower food and beverage costs. The increase in Fine Dining’s segment profit margin for the third quarter of fiscal 2025 was driven primarily by lower food and beverage costs, partially offset by negative same-restaurant sales, higher restaurant labor costs and restaurant expenses. The decrease in Fine Dining’s segment profit margin for the first nine months of fiscal 2025 was driven primarily by negative same-restaurant sales

and higher restaurant labor and restaurant expenses, partially offset by lower food and beverage costs. The increases in Other Business’ segment profit margin for the third quarter and first nine months of fiscal 2025 was driven primarily by the addition of Chuy’s operating results and lower food and beverage and restaurant labor costs, partially offset by negative same-restaurant sales and higher marketing costs.

SEASONALITY

Our sales volumes fluctuate seasonally. Typically, our average sales per restaurant are highest in the winter and spring, followed by the summer, and lowest in the fall. Holidays, changes in the economy, severe weather, effects of other conditions may impact sales volumes seasonally in some operating regions. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

Typically, cash flows generated from operating activities are our principal source of liquidity, which we use to finance capital expenditures for new restaurants and to remodel and maintain existing restaurants, to pay dividends to our shareholders and to repurchase shares of our common stock. Since substantially all of our sales are for cash and cash equivalents, and accounts payable are generally paid in 5 to 90 days, we are typically able to carry current liabilities in excess of current assets.

We currently manage our business and financial ratios to target an investment-grade bond rating, which has historically allowed flexible access to financing at reasonable costs. Our publicly issued long-term debt currently carries the following ratings:

• Moody’s Investors Service “Baa2”;

• Standard & Poor’s “BBB”; and

• Fitch “BBB”.

Our commercial paper has ratings of:

• Moody’s Investors Service “P-2”;

• Standard & Poor’s “A-2”; and

• Fitch “F-2”.

These ratings are as of the date of the filing of this Form 10-Q and have been obtained with the understanding that Moody’s Investors Service, Standard & Poor’s and Fitch will continue to monitor our credit and make future adjustments to these ratings to the extent warranted. The ratings are not a recommendation to buy, sell or hold our securities, may be changed, superseded or withdrawn at any time and should be evaluated independently of any other rating.

On October 23, 2023, we entered into a $1.25 billion Revolving Credit Agreement (as amended, Revolving Credit Agreement) with Bank of America, N.A. (BOA), as administrative agent, and the lenders and other agents party thereto. The Revolving Credit Agreement is a senior unsecured credit commitment to the Company and contains customary representations and affirmative and negative covenants (including limitations on liens and subsidiary debt and, prior to the Amendment (as defined below), a maximum consolidated lease adjusted total debt to total capitalization ratio of 0.75 to 1.00) and events of default usual for credit facilities of this type. As of February 23, 2025, we had no outstanding balances and were in compliance with all covenants under the Revolving Credit Agreement. As of February 23, 2025, $58.2 million of commercial paper was outstanding in addition to $0.2 million of letters of credit outstanding, which were both backed by this facility. After consideration of commercial paper and letters of credit backed by the Revolving Credit Agreement, as of February 23, 2025, we had $1.19 billion of credit available under the Revolving Credit Agreement.

Loans under the Revolving Credit Agreement bear interest at a rate of (a) Term SOFR (which is defined, for the applicable interest period, as the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to the commencement of such interest period with a term equivalent to such interest period) plus a Term SOFR adjustment of 0.10 percent plus the relevant margin determined by reference to a ratings-based pricing grid (Applicable Margin), or (b) the base rate (which is defined as the highest of the BOA prime rate, the Federal Funds rate plus 0.500 percent, and the Term SOFR plus 1.00 percent) plus the relevant Applicable Margin. Assuming a “BBB” equivalent credit rating level, the Applicable Margin under the Revolving Credit Agreement is 1.000 percent for Term SOFR loans and 0.000 percent for base rate loans.

On September 16, 2024, we entered into Amendment No. 1 (Amendment) to the Revolving Credit Agreement, which replaced the prior financial covenant (which provided for a maximum consolidated total debt to total capitalization ratio) with a new financial covenant requiring us to maintain, measured as of the end of each fiscal quarter, a maximum consolidated leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 to 1.00 upon our the election as a result of a covered acquisition, subject to customary limitations set forth in the Revolving Credit Agreement). All other material terms and conditions of the Revolving Credit Agreement were unchanged.

The Revolving Credit Agreement matures on October 23, 2028, and the proceeds may be used for working capital and capital expenditures, the refinancing of certain indebtedness, certain acquisitions and general corporate purposes.

On September 16, 2024, we entered into a senior unsecured $600 million 2-year Term Loan Credit Agreement (the Term Loan Agreement) with BOA, as administrative agent, the lenders and other agents party thereto, the material terms of which were consistent with the Revolving Credit Agreement. The intended use of the proceeds was to finance our acquisition of Chuy’s and we subsequently terminated the Term Loan Agreement on October 3, 2024, in connection with the closing of our senior notes issuance discussed below. We did not draw any funds and there were never any outstanding borrowings under the Term Loan Agreement.

On October 3, 2024, we issued and sold $400.0 million aggregate principal amount of 4.350 percent Senior Notes due 2027 (2027 Notes) and $350.0 million aggregate principal amount of 4.550 percent Senior Notes due 2029 (2029 Notes and, together with the 2027 Notes, the Notes), pursuant to the provisions of the Underwriting Agreement, dated September 30, 2024, among the Company and BofA Securities, Inc., Truist Securities, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein. The Notes were issued under the Company’s Indenture, dated as of January 1, 1996, between the Company and Computershare Trust Company, National Association (as successor to Wells Fargo Bank, National Association, successor to Wells Fargo Bank Minnesota, National Association, formerly known as Norwest Bank Minnesota, National Association), as trustee (Base Trustee), as amended and supplemented by the Second Supplemental Indenture, dated as of October 4, 2023, among the Company, the Base Trustee and U.S. Bank Trust Company, National Association, as a successor trustee with respect to the Notes. We used the proceeds from our issuance of the Notes to finance our acquisition of Chuy’s and for general corporate purposes.

The 2027 Notes will mature on October 15, 2027 and the 2029 Notes will mature on October 15, 2029. Interest on the Notes will be paid semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2025, to holders of record on the preceding March 31 or September 30, as the case may be.

As of February 23, 2025, our outstanding long-term debt consisted principally of:

• $500.0 million of unsecured 3.850 percent senior notes due in May 2027;

• $400.0 million of unsecured 4.350 percent senior notes due in Oct 2027;

• $350.0 million of unsecured 4.550 percent senior notes due in Oct 2029;

• $500.0 million of unsecured 6.300 percent senior notes due in October 2033;

• $96.3 million of unsecured 6.000 percent senior notes due in August 2035;

• $42.8 million of unsecured 6.800 percent senior notes due in October 2037; and

• $300.0 million of unsecured 4.550 percent senior notes due in February 2048.

The interest rate on our $42.8 million senior notes due in October 2037 is subject to adjustment from time to time if the debt rating assigned to such series of notes is downgraded below a certain rating level (or subsequently upgraded). The maximum adjustment is 2.000 percent above the initial interest rate and the interest rate cannot be reduced below the initial interest rate. As of February 23, 2025, no such adjustments are made to this rate.

Through our shelf registration statement on file with the SEC, depending on conditions prevailing in the public capital markets, we may from time to time issue equity securities or unsecured debt securities in one or more series, which may consist of notes, debentures or other evidences of indebtedness in one or more offerings.

From time to time, we or our affiliates, may repurchase our outstanding debt in privately negotiated transactions, open-market transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

From time to time, we enter into interest rate derivative instruments. See Note 11 to our unaudited consolidated financial statements in Part I, Item 1 of this report, which is incorporated by reference.

Net cash flows provided by operating activities from continuing operations increased to $1.25 billion for the first nine months of fiscal 2025, from $1.20 billion for the nine months of fiscal 2024. Net cash flows provided by operating activities include net earnings from continuing operations of $747.0 million and $720.5 million in the first nine months of fiscal 2025 and 2024, respectively. Net cash flows provided by operating activities increased in fiscal 2025 primarily due to higher net earnings in fiscal 2025 and the timing of federal income tax payments.

Net cash flows used in investing activities from continuing operations were $1.10 billion for the first nine months of fiscal 2025, compared to $1.18 billion for the first nine months of fiscal 2024. Net cash used in the acquisition of Chuy’s was

$613.7 million during fiscal 2025. Net cash used in the acquisition of Ruth’s Chris was $699.9 million during the first nine months of fiscal 2024. Capital expenditures increased to $472.6 million for the first nine months of fiscal 2025 from $460.8 million for the first nine months of fiscal 2024 reflecting a slight increase in new restaurant construction and remodel spend during fiscal 2025.

Net cash flows used in financing activities from continuing operations were $123.9 million for the first nine months of fiscal 2025, compared to net cash used in financing activities of $158.5 million for the first nine months of fiscal 2024. Net cash flows used in financing activities for the first nine months of fiscal 2025 included repayment of commercial paper of $28.6 million, net proceeds from the issuance of long-term debt of $750.0 million, dividends paid of $494.6 million and share repurchases of $367.2 million. Net cash flows used in financing activities for the first nine months of fiscal 2024 included net proceeds from issuance of short-term debt of $158.7 million, net proceeds from the 2033 Notes of $500.0 million, dividends paid of $472.1 million and share repurchases of $356.6 million. Dividends declared by our Board of Directors totaled $4.20 and $3.93 per share for the first nine months of fiscal 2025 and 2024, respectively.

We are not aware of any trends or events that would materially affect our capital requirements or liquidity. We believe that our internal cash-generating capabilities, the potential issuance of equity or unsecured debt securities under our shelf registration statement and short-term commercial paper or drawings under our Revolving Credit Agreement should be sufficient to finance our capital expenditures, debt maturities and other operating activities through fiscal 2025.

On March 20, 2024, our Board of Directors authorized a new share repurchase program under which we may repurchase up to $1 billion of our outstanding common stock. This repurchase program does not have an expiration and replaced the prior share repurchase authorization. During the quarter and nine months ended February 23, 2025, we repurchased 0.3 million and 2.4 million shares of our common stock, respectively, compared to 0.2 million and 2.3 million shares of our common stock, respectively, during the quarter and nine months ended February 25, 2024.

We are not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, sales, costs or expenses, results of operations, liquidity, capital expenditures or capital resources.

FINANCIAL CONDITION

Our current assets totaled $880.6 million as of February 23, 2025, compared to $822.8 million as of May 26, 2024. The increase was primarily due to an increase in inventories, cash and cash equivalents and prepaid income tax, partially offset by a decrease in receivables, net.

Our current liabilities totaled $2.28 billion as of February 23, 2025, compared to $2.19 billion as of May 26, 2024. The increase was primarily driven by an increase in unearned revenues associated with gift card sales in excess of gift card redemptions and other current liabilities.

CRITICAL ACCOUNTING ESTIMATES

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales, costs and expenses during the reporting period. Actual results could differ from those estimates. We have discussed the development, selection and disclosure of those estimates with the Audit Committee. Our critical accounting estimates have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended May 26, 2024.

APPLICATION OF NEW ACCOUNTING STANDARDS

Information regarding application of new accounting standards is incorporated by reference from Note 1 to our unaudited consolidated financial statements in Part I, Item 1 of this report.

FORWARD-LOOKING STATEMENTS

Statements set forth in or incorporated into this report regarding the expected increase in the number of our restaurants and capital expenditures in fiscal 2025, projections for sales and all other statements that are not historical facts, including without limitation statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Darden Restaurants, Inc. and its subsidiaries that are preceded by, followed by or that include words such as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “estimate,” “project,” “believe,” “plan,” “outlook” or similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of complying with the safe harbor provisions of that Act. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements for any reason to reflect events or circumstances arising after such date. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. In addition to the risks and uncertainties of ordinary business obligations, and those described in information incorporated into this report, the forward-looking statements contained in this report are subject to the risks and uncertainties described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended May 26, 2024 and in our Forms 10-Q (including this report), which are summarized as follows:

• A failure to address cost pressures, including rising costs for commodities, labor, health care and utilities used by our restaurants, and a failure to effectively deliver cost management activities and achieve economies of scale in purchasing;

• Economic and business factors and their impacts on the restaurant industry and general macroeconomic factors including unemployment, energy prices, tariffs and interest rates;

• The inability to hire, train, reward and retain restaurant team members and determine and maintain adequate staffing;

• A failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills;

• Increases in labor and insurance costs;

• Health concerns arising from food-related pandemics, outbreaks of flu, viruses or other diseases;

• Failures to maintain food safety throughout the supply chain and food-borne illness concerns;

• Insufficient guest or employee facing technology or a failure to maintain a continuous or secure cyber network;

• Increased costs related to compliance with privacy and data protection laws and government enforcement, litigation or adverse publicity relating to potential failures thereof;

• A failure to successfully complete our integration of Chuy’s Holdings operations into our business;

• Insufficient or ineffective response to legislation or government regulation may impact our cost structure, operational efficiencies and talent availability;

• Intense competition, or an insufficient focus on competition and the consumer landscape;

• Changes in consumer preferences that may adversely affect demand for food at our restaurants;

• An inability or failure to recognize, respond to and effectively manage the accelerated impact of social media;

• A failure to identify and execute innovative marketing and guest relationship tactics and ineffective or improper use of other marketing initiatives and increased advertising and marketing costs;

• Impacts of climate change, adverse weather conditions and natural disasters;

• The inability to cancel long-term, non-cancelable leases that we may want to cancel or the inability to renew the leases that we may want to extend at the end of their terms;

• Our inability or failure to execute a comprehensive business continuity plan following a major natural disaster such as a hurricane or manmade disaster, including terrorism;

• The impact of shortages, delay or interruptions in the delivery of food and other products from third-party vendors and suppliers;

• Our failure to drive both short-term and long-term profitable sales growth through brand relevance, operating excellence, opening new restaurants of existing brands and developing or acquiring new dining brands;

• A lack of suitable new restaurant locations or a decline in the quality of the locations of our current restaurants;

• Higher-than-anticipated costs or delays to open, close, relocate or remodel restaurants;

• Risks associated with doing business with franchisees and licensees;

• Risks associated with doing business with business partners and vendors in foreign markets;

• Volatility in the market value of derivatives we may use to hedge commodity and broader market prices;

• Volatility in the United States equity markets that may affect our ability to efficiently hedge exposures to our market risk related to equity-based compensation awards;

• Failure to protect our service marks or other intellectual property;

• Environmental, social and governance risk, including disclosure expectations and the impact of third party ratings,

• Litigation, including allegations of illegal, unfair or inconsistent employment practices;

• Unfavorable publicity, or a failure to respond effectively to adverse publicity;

• Disruptions in the financial markets that may impact consumer spending patterns, affect the availability and cost of credit;

• Impairment of the carrying value of our goodwill or other intangible assets;

• Changes in tax laws or treaties and unanticipated tax liabilities; and

• A failure of our internal controls over financial reporting and future changes in accounting standards.

Any of the risks described above or elsewhere in this report or our other filings with the SEC could have a material impact on our business, financial condition or results of operations. It is not possible to predict or identify all risk factors. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. Therefore, the above is not intended to be a complete discussion of all potential risks or uncertainties.