Darden Restaurants (DRI) risk factors, FY2025 10-K

Risks Relating to Inflation and Macroeconomic Disruption

1. 01Certain economic and business factors and their impacts on the restaurant industry and other general macroeconomic factors, including unemployment, energy prices and interest rates that are largely beyond our control may adversely affect consumer behavior and our sales and results of operations

Risks Related to Human Capital

1. 02The inability to hire, train, reward and retain restaurant team members and determine and maintain adequate staffing may impact our ability to achieve our operating, growth and financial objectives
2. 03A failure to recruit, develop and retain effective leaders or the loss or shortage of personnel with key capacities and skills could impact our strategic direction and jeopardize our ability to meet our business performance expectations and growth targets
3. 04We may be subject to increased labor and insurance costs

Risks Relating to Health and Safety

1. 05Health concerns arising from food-related pandemics, outbreaks of flu, viruses or other diseases may have an adverse effect on our business
2. 06A failure to maintain food safety throughout the supply chain and food-borne illness concerns may have an adverse effect on our business

Risks Relating to Information Technology, Cybersecurity and Privacy

1. 07investments and other expenditures to comply with new legal requirements, investigate security incidents, remedy cybersecurity issues, recuperate lost data, prevent future compromises and adapt systems and practices to react to the changing threat environment
2. 08We may incur increased costs to comply with privacy and data protection laws, and, if we fail to comply or our systems are compromised, we could be subject to government enforcement actions, private litigation and adverse publicity

Risks Related to the Integration of Chuy’s

1. 09The inability to successfully integrate the Chuy’s brand’s operations into our business could harm our ability to achieve the sales growth, cost savings and other benefits we expect to be able to realize from Chuy’s operations

Risks Related to the Restaurant Industry

1. 10We face intense competition, and if we have an insufficient strategy or focus on competition and the consumer landscape, our business, financial condition and results of operations could be adversely affected
2. 11We are subject to changes in consumer preferences that may adversely affect demand for food at our restaurants
3. 12Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could have a material adverse impact on our business
4. 13A failure to identify and execute innovative marketing and guest relationship tactics, ineffective or improper use of other marketing initiatives, and increased advertising and marketing costs could adversely affect our sales and results of operations
5. 14Climate change, adverse weather conditions and natural disasters could adversely affect our sales or results of operations

Risks Relating to Our Business Model and Strategy

1. 15A majority of our restaurants are operated in leased properties and as a result, we are committed to long-term lease obligations that we may not be able to cancel if we want to close a restaurant location and we may be unable to renew the leases that we may want to extend at the end of their terms
2. 16Our inability or failure to execute on a comprehensive business continuity plan following a major natural disaster, such as a hurricane or manmade disaster, at our corporate facility could have a materially adverse impact on our business
3. 17We may lose sales or incur increased costs if our restaurants experience shortages, delays or interruptions in the delivery of food and other products from our third party vendors and suppliers
4. 18Our failure to drive both short-term and long-term profitable sales growth through brand relevance, operating excellence, opening new restaurants of existing brands, and acquiring new restaurant brands could result in poor financial performance
5. 19A lack of availability of suitable locations for new restaurants or a decline in the quality of the locations of our current restaurants may adversely affect our sales and results of operations
6. 20We may experience higher-than-anticipated costs or delays associated with the opening of new restaurants or with the closing, relocating and remodeling of existing restaurants, which may adversely affect our results of operations
7. 21We face a variety of risks associated with doing business with franchisees and licensees
8. 22We face a variety of risks associated with doing business with business partners and vendors in foreign markets
9. 23Volatility in the market value of derivatives we may use to hedge exposures to fluctuations in commodity and broader market prices may cause volatility in our gross margins and net earnings
10. 24Volatility in the United States equity markets affects our ability to efficiently hedge exposures to our market risk related to equity-based compensation awards
11. 25Failure to protect our service marks or other intellectual property could harm our business
12. 26Environmental, Social, and Governance (ESG) matters, our reporting of such matters, or sustainability ratings could negatively impact our business, results of operations and financial condition

General Risks

1. 27Litigation, including allegations of illegal, unfair or inconsistent employment practices, may adversely affect our business, financial condition and results of operations
2. 28Unfavorable publicity, or a failure to respond effectively to adverse publicity, could harm our reputation and adversely impact our guest counts and sales
3. 29Disruptions in the financial and credit markets may adversely impact consumer spending patterns and affect the availability and cost of credit
4. 30Impairment of the carrying value of our goodwill or other intangible assets could adversely affect our financial condition and results of operations
5. 31Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results
6. 32Failure of our internal controls over financial reporting and future changes in accounting standards may cause adverse unexpected operating results, affect our reported results of operations or otherwise harm our business and financial results