Darden Labor Costs Suspect

Darden Restaurants, Inc. (NYSE: DRI) reported improving Q1 numbers and the herd seems to be running strong. The labor expense item caught my eye; up a whopping 4.7% . Revenues were up 3.3%. Linda Dimopoulos CFO touched on the point in the most recent conference call transcript carried by Seeking Alpha “...The second structural impact is that of labor expenses that have been rising due to the increased FICA tip expense, resulting from the higher level of tip reporting by our employees....” There was no comment on what to expect in the future. With an aging population will the legal cheap labor pool of servers continue. This line item will most likely experience negative pressures. The analysts on the call missed this point or chose to ignore it.