Raj Vennam
Senior Vice President, Chief Financial Officer & Treasurer at Darden Restaurants
Thank you, Rick and good morning everyone. Total sales for the first quarter were $2.3 billion, 51% higher than last year, driven by 47.5% same restaurant sales growth and the addition of 34 net new restaurants. Diluted net earnings per share from continuing operations were $1.76. We returned approximately $330 million to our shareholders this quarter, paying $144 million in dividends and repurchasing $186 million in shares.
We had strong performance this quarter, despite increased inflationary pressures with EBITDA of $370 million and EBITDA margin of 16%, 250 basis points higher than pre-COVID. Our sales results were better than expected requiring us to go out and purchase more product on the spot market, in particular, proteins, as our LongHorn and Fine Dining segments had the largest sales outperformance versus our expectations. The market for proteins this quarter was very strong with spot premiums as high as 30% above our contracted rates. This resulted in higher average cost per pound for our proteins contributing to total commodities' inflation for the quarter of approximately 5.5%.
Given the heightened attention on inflation, I want to clarify that we use a conventional approach to calculating the rate of inflation. We're only measuring change in average price holding product mix and usage constant. We follow the same approach for calculating wage inflation rate, in which we keep the hour and job mix constant and only look at change in wage. While we expect higher rates of inflation to persist for the remainder of the year versus what we initially planned, we believe our scale and recent enhancements to our business model enable us to deliver significant margin expansion, while still adhering to our strategy of pricing below inflation.
Now looking at the P&L for the first quarter of 2022, we're providing a comparison against pre-COVID results in the first quarter of 2020, which we believe is a more comparable to normal business operations and with how we've been talking about our margin expansion. For the first quarter, food and beverage expenses were 150 basis points higher, driven by investments in both food quality and pricing significantly below inflation. Restaurant labor was 110 basis points lower, driven primarily by hourly labor improvement, due to efficiencies gained from operational simplifications and was partially offset by elevated wage pressures. Restaurant expenses were also 110 basis points lower due to sales leverage. Marketing spend was $45 million lower, resulting in 220 basis points of favorability. As a result, restaurant-level EBITDA margin for Darden was 20.9%, 290 basis points better than pre-COVID levels.
G&A expense was 30 basis points higher, driven primarily by approximately $10 million of stock compensation expenses related to the immediate expensing of equity awards for retirement eligible employees. Additionally, we had approximately $5 million of expense related to mark-to-market on our deferred compensation. As a reminder, due to the way we hedge this expense, it's largely offset on the tax line. These impacts were partially offset by savings from corporate restructuring implemented in fiscal 2021
Our effective tax rate for the quarter was 12.6%, which benefited from the deferred compensation hedge I just mentioned. Excluding this benefit, our effective tax rate would have been closer to the top end of our guidance range for the year.
Turning to our segment performance. First quarter sales at Olive Garden were flat to pre-COVID, while segment profit margin increased 220 basis points. This was strong performance despite elevated inflation and two-year check growth of only 2.4%. LongHorn had the best sales performance across our segments with sales increasing by 26% versus pre-COVID, while growing segment profit margin by 250 basis points. Sales at our Fine Dining segment increased 24% versus pre-COVID in what's traditionally their slowest quarter from a seasonal perspective. Segment profit margin grew by 490 basis points, driven by strong sales leverage and operational efficiencies, which more than offset double-digit commodity inflation. Our Other segment grew sales by nearly 5% and segment profit margin by 360 basis points. We continue to be excited about the long-term prospects of this segment, as it's driving the strongest underlying business model improvement of all our segments.
Finally, turning to our financial outlook for fiscal 2022. Based on our performance this quarter and expected performance for the remainder of the year, we increased our outlook for the full year. We now expect total sales of $9.4 billion to $9.6 billion, representing growth of 7% to 9% from pre-COVID levels; same restaurant sales growth of 27% to 30% and 35 to 40 new restaurants; capital spending of $375 million to $425 million; total inflation of approximately 4% with commodities inflation of 4.5% and total restaurant labor inflation of 5.5%, which includes hourly wage inflation of about 7%; EBITDA of $1.54 billion to $1.60 billion; and annual effective tax rate of 13% to 14% and approximately 131 million diluted average shares outstanding for the year, all resulting in diluted net earnings per share between $7.25 and $7.60. This outlook implies EBITDA margin growth versus pre-COVID, in line with our previous outlook as higher sales are helping offset elevated inflation.
Before we open it up for questions, I want to remind you about a calendar shift next quarter. Thanksgiving falls in our fiscal second quarter this year, whereas it was in the fiscal third quarter pre-COVID. This will be a net negative to second quarter from a sales perspective.
Now, we'll take your questions.