ORLANDO, Fla., Dec. 20, 2016 /PRNewswire/ -- Darden
Restaurants, Inc., (NYSE: DRI) today reported its financial results
for the second quarter ended November 27, 2016.
Second Quarter 2017 Financial Highlights Versus Same Fiscal
Quarter Last Year
- Total sales from continuing operations increased 2.1% to
$1.64 billion
- Reported diluted net earnings per share from continuing
operations increased 178.3% to $0.64
and increased 18.5% from last year's adjusted diluted net earnings
per share*
- The Company repurchased approximately $19 million of its outstanding common stock
during the quarter
- Same-restaurant sales increased 1.7% for the quarter
|
+2.6% for Olive
Garden
|
|
+1.2% for The Capital
Grille
|
|
+0.7% for Yard
House
|
|
+0.1% for LongHorn
Steakhouse
|
|
+2.7% for Eddie
V's
|
|
-0.3% for Seasons
52
|
|
|
|
|
|
+2.6% for Bahama
Breeze
|
* See the "Non-GAAP Information" below for more
details
"We had another strong quarter with same-restaurant sales growth
significantly outperforming the casual dining industry benchmarks,
especially at Olive Garden," said CEO Gene
Lee. "We remain laser-focused on our operating
philosophy rooted in food, service and atmosphere, and creating
memorable experiences for our guests."
Segment Performance Versus Same Fiscal Period Last
Year
Segment profit represents sales, less costs for food
and beverage, restaurant labor, restaurant expenses and marketing
expenses. Segment profit for fiscal 2017 includes the impact
of additional rent and other tax expense related to the completion
of our real estate strategy, primarily impacting Olive Garden and
LongHorn Steakhouse.
|
|
Q2
Sales
|
|
|
|
Q2 Segment
Profit
|
|
|
|
Real
Estate Impact*
$
|
($ in
millions)
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
|
Consolidated
Darden
|
|
$1,642.5
|
|
$1,608.8
|
|
2.1%
|
|
|
|
|
|
|
|
|
Olive
Garden
|
|
$915.0
|
|
$892.3
|
|
2.5%
|
|
$153.5
|
|
$157.1
|
|
(2.3)%
|
|
(15.8)
|
LongHorn
Steakhouse
|
|
$365.0
|
|
$365.1
|
|
—%
|
|
$52.4
|
|
$54.8
|
|
(4.4)%
|
|
(4.4)
|
Fine
Dining
|
|
$128.6
|
|
$123.3
|
|
4.3%
|
|
$23.4
|
|
$22.4
|
|
4.5%
|
|
(0.1)
|
Other
Business
|
|
$233.9
|
|
$228.1
|
|
2.5%
|
|
$34.6
|
|
$32.3
|
|
7.1%
|
|
(1.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD
Sales
|
|
|
|
YTD Segment
Profit
|
|
|
|
Real Estate
Impact* $
|
($ in
millions)
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
|
Consolidated
Darden
|
|
$3,356.9
|
|
$3,295.8
|
|
1.9%
|
|
|
|
|
|
|
|
|
Olive
Garden
|
|
$1,876.2
|
|
$1,836.9
|
|
2.1%
|
|
$339.8
|
|
$349.1
|
|
(2.7)%
|
|
(37.8)
|
LongHorn
Steakhouse
|
|
$751.3
|
|
$748.9
|
|
0.3%
|
|
$112.5
|
|
$111.9
|
|
0.5%
|
|
(10.2)
|
Fine
Dining
|
|
$242.8
|
|
$236.5
|
|
2.7%
|
|
$40.2
|
|
$40.2
|
|
—%
|
|
(0.2)
|
Other
Business
|
|
$486.6
|
|
$473.5
|
|
2.8%
|
|
$79.4
|
|
$76.1
|
|
4.3%
|
|
(2.7)
|
*Represents the incremental impact to segment profit of the
fiscal 2016 real estate transactions, primarily rent
expense.
U.S. Same-Restaurant Sales Results - Fiscal Calendar
Basis
Olive
Garden
|
September
|
October
|
November
|
Q2
|
YTD
|
Same-Restaurant
Sales
|
1.5%
|
4.5%
|
2.1%
|
2.6%
|
2.3%
|
Same-Restaurant
Traffic
|
(0.7)%
|
1.7%
|
(0.9)%
|
0.0%
|
(0.5)%
|
Pricing
|
1.8%
|
1.1%
|
1.1%
|
1.4%
|
1.6%
|
Menu-mix
|
0.4%
|
1.7%
|
1.9%
|
1.2%
|
1.2%
|
|
|
LongHorn
Steakhouse
|
September
|
October
|
November
|
Q2
|
YTD
|
Same-Restaurant
Sales
|
(0.6)%
|
1.1%
|
(0.4)%
|
0.1%
|
0.4%
|
Same-Restaurant
Traffic
|
(1.1)%
|
(1.3)%
|
(1.0)%
|
(1.1)%
|
(1.2)%
|
Pricing
|
1.6%
|
1.4%
|
1.4%
|
1.5%
|
1.7%
|
Menu-mix
|
(1.1)%
|
1.0%
|
(0.8)%
|
(0.3)%
|
(0.1)%
|
Share Repurchase Program
During the quarter, the
Company repurchased approximately 0.3 million shares of its common
stock for a total cost of approximately $19
million. There is now approximately $485
million remaining under the current repurchase
authorization.
Fiscal 2017 Financial Outlook
The Company reaffirmed its outlook for diluted net earnings per
share of $3.87 to $3.97 and
same-restaurant sales of approximately 1.0% to 2.0%.
Investor Conference Call
The Company will host a
conference call and slide presentation on Tuesday, December 20
at 8:30 am ET to review its recent
financial performance. To listen to the call live, please go
to https://www.webcaster4.com/Webcast/Page/1007/18745 at least
fifteen minutes early to register, download, and install any
necessary audio software. For those who cannot access the
Internet, please dial 1-888-989-8179 and enter passcode
2566158. For those who cannot listen to the live broadcast, a
replay will be available shortly after the call. In addition,
at the conclusion of the call, we will post the slide presentation
from the call on the Investor Relations section of our website at:
www.darden.com that provides more context on our second quarter
fiscal 2017 results.
Darden Restaurants, Inc., (NYSE: DRI) owns and operates more
than 1,500 restaurants that generate $7.0
billion in annual sales. Headquartered in Orlando, Florida, and employing 150,000
people, Darden is recognized for a culture that rewards caring for
and responding to people. Our restaurant brands - Olive
Garden, LongHorn Steakhouse, Bahama
Breeze, Seasons 52, The Capital Grille, Eddie V's and Yard
House - reflect the rich diversity of those who dine with us. Our
brands are built on deep insights into what our guests want. For
more information, please visit www.darden.com.
Information about Forward-Looking
Statements
Forward-looking statements in this communication
regarding our expected earnings performance and all other
statements that are not historical facts, including without
limitation statements concerning our future economic performance,
are made under the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Any forward-looking statements speak
only as of the date on which such statements are first made, and we
undertake no obligation to update such statements to reflect events
or circumstances arising after such date. We wish to caution
investors not to place undue reliance on any such forward-looking
statements. By their nature, forward-looking statements involve
risks and uncertainties that could cause actual results to
materially differ from those anticipated in the statements. The
most significant of these uncertainties are described in Darden's
Form 10-K, Form 10-Q and Form 8-K reports. These risks and
uncertainties include:
Technology failures including failure to maintain a secure cyber
network, food safety and food-borne illness concerns, litigation,
unfavorable publicity, risks relating to public policy changes and
federal, state and local regulation of our business, labor and
insurance costs, failure to execute a business continuity plan
following a disaster, health concerns including food-related
pandemics or virus outbreaks, intense competition, failure to drive
profitable sales growth, our plans to expand our smaller brands
Bahama Breeze, Seasons 52 and Eddie
V's, a lack of availability of suitable locations for new
restaurants, higher-than-anticipated costs to open, close, relocate
or remodel restaurants, a failure to execute innovative marketing
tactics, a failure to develop and recruit effective leaders, a
failure to address cost pressures, shortages or interruptions in
the delivery of food and other products and services, adverse
weather conditions and natural disasters, volatility in the market
value of derivatives, economic factors specific to the restaurant
industry and general macroeconomic factors including interest
rates, disruptions in the financial markets, risks of doing
business with franchisees and vendors in foreign markets, failure
to protect our intellectual property, impairment in the carrying
value of our goodwill or other intangible assets, failure of our
internal controls over financial reporting, an inability or failure
to manage the accelerated impact of social media and other factors
and uncertainties discussed from time to time in reports filed by
Darden with the Securities and Exchange Commission.
Non-GAAP Information
The information in this press
release includes financial information determined by methods other
than in accordance with U.S. generally accepted accounting
principles ("GAAP"), such as adjusted diluted net earnings per
share from continuing operations. The Company's management
uses these non-GAAP measures in its analysis of the Company's
performance. The Company believes that the presentation of
certain non-GAAP measures provides useful supplemental information
that is essential to a proper understanding of the operating
results of the Company's businesses. These non-GAAP
disclosures should not be viewed as a substitute for operating
results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Reconciliations of these
non-GAAP measures are included in this release.
Fiscal Q2 Reported to Adjusted
Earnings Reconciliation
|
|
Q2
2017
|
|
Q2
2016
|
$'s in millions,
except EPS
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
(Benefit)
|
Net
Earnings
|
Diluted
Net
Earnings
Per Share
|
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
(Benefit)
|
Net
Earnings
|
Diluted
Net
Earnings
Per Share
|
Reported Earnings
from Continuing Operations
|
$107.0
|
$27.3
|
$79.7
|
$0.64
|
|
$24.4
|
$(5.7)
|
$30.1
|
$0.23
|
% Change vs Prior
Year
|
|
|
|
178.3%
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Debt retirement
costs
|
—
|
—
|
—
|
—
|
|
35.6
|
13.6
|
22.0
|
0.17
|
Real estate plan
implementation
|
—
|
—
|
—
|
—
|
|
31.0
|
9.6
|
21.4
|
0.16
|
Strategic action plan
and other costs
|
—
|
—
|
—
|
—
|
|
—
|
3.0
|
(3.0)
|
(0.02)
|
Adjusted Earnings
from Continuing Operations
|
$107.0
|
$27.3
|
$79.7
|
$0.64
|
|
$91.0
|
$20.5
|
$70.5
|
$0.54
|
% Change vs Prior
Year
|
|
|
|
18.5%
|
|
|
|
|
|
DARDEN
RESTAURANTS, INC.
NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
11/27/16
|
11/29/15
|
Olive
Garden1
|
842
|
844
|
LongHorn
Steakhouse
|
485
|
479
|
Yard House
|
65
|
62
|
The Capital
Grille
|
56
|
54
|
Bahama
Breeze
|
36
|
37
|
Seasons 52
|
40
|
42
|
Eddie V's
|
17
|
16
|
Darden Continuing
Operations
|
1,541
|
1,534
|
1Includes
six locations in Canada for all periods presented.
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(In millions,
except per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
11/27/2016
|
|
11/29/2015
|
|
11/27/2016
|
|
11/29/2015
|
Sales
|
$
|
1,642.5
|
|
$
|
1,608.8
|
|
$
|
3,356.9
|
|
$
|
3,295.8
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Food and
beverage
|
478.1
|
|
482.1
|
|
971.3
|
|
984.9
|
Restaurant
labor
|
538.1
|
|
523.8
|
|
1,083.9
|
|
1,059.8
|
Restaurant
expenses
|
305.3
|
|
278.0
|
|
609.0
|
|
549.9
|
Marketing
expenses
|
57.1
|
|
58.3
|
|
120.8
|
|
123.9
|
General and
administrative expenses
|
79.5
|
|
101.9
|
|
167.2
|
|
199.0
|
Depreciation and
amortization
|
67.8
|
|
75.3
|
|
134.6
|
|
156.4
|
Impairments and
disposal of assets, net
|
0.1
|
|
7.7
|
|
(7.7)
|
|
6.0
|
Total operating costs
and expenses
|
$
|
1,526.0
|
|
$
|
1,527.1
|
|
$
|
3,079.1
|
|
$
|
3,079.9
|
Operating
income
|
116.5
|
|
81.7
|
|
277.8
|
|
215.9
|
Interest,
net
|
9.5
|
|
57.3
|
|
19.4
|
|
79.7
|
Earnings before
income taxes
|
107.0
|
|
24.4
|
|
258.4
|
|
136.2
|
Income tax expense
(benefit)
|
27.3
|
|
(5.7)
|
|
67.6
|
|
25.1
|
Earnings from
continuing operations
|
$
|
79.7
|
|
$
|
30.1
|
|
$
|
190.8
|
|
$
|
111.1
|
Earnings (loss) from
discontinued operations, net of tax expense
(benefit) of $(0.6), $0.2, $(1.3) and
$3.2, respectively
|
(0.2)
|
|
13.1
|
|
(1.1)
|
|
18.5
|
Net
earnings
|
$
|
79.5
|
|
$
|
43.2
|
|
$
|
189.7
|
|
$
|
129.6
|
|
|
|
|
|
|
|
|
Basic net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.65
|
|
$
|
0.23
|
|
$
|
1.54
|
|
$
|
0.87
|
Earnings (loss) from
discontinued operations
|
—
|
|
0.11
|
|
(0.01)
|
|
0.14
|
Net
earnings
|
$
|
0.65
|
|
$
|
0.34
|
|
$
|
1.53
|
|
$
|
1.01
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.64
|
|
$
|
0.23
|
|
$
|
1.52
|
|
$
|
0.86
|
Earnings (loss) from
discontinued operations
|
—
|
|
0.10
|
|
(0.01)
|
|
0.14
|
Net
earnings
|
$
|
0.64
|
|
$
|
0.33
|
|
$
|
1.51
|
|
$
|
1.00
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
123.1
|
|
128.1
|
|
124.0
|
|
127.7
|
Diluted
|
|
124.9
|
|
|
129.9
|
|
|
125.8
|
|
|
129.7
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
BALANCE SHEETS
(In
millions)
|
|
|
|
|
|
|
|
|
11/27/2016
|
|
5/29/2016
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
116.8
|
|
$
|
274.8
|
Receivables,
net
|
69.8
|
|
64.0
|
Inventories
|
183.6
|
|
175.4
|
Prepaid income
taxes
|
44.6
|
|
46.1
|
Prepaid expenses and
other current assets
|
82.2
|
|
76.4
|
Deferred income
taxes
|
173.1
|
|
163.3
|
Assets held for
sale
|
13.3
|
|
20.3
|
Total current
assets
|
$
|
683.4
|
|
$
|
820.3
|
Land, buildings and
equipment, net
|
2,056.9
|
|
2,041.6
|
Goodwill
|
872.3
|
|
872.3
|
Trademarks
|
575.2
|
|
574.6
|
Other
assets
|
274.1
|
|
273.8
|
Total
assets
|
$
|
4,461.9
|
|
$
|
4,582.6
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
249.6
|
|
$
|
241.9
|
Accrued
payroll
|
109.0
|
|
135.1
|
Other accrued
taxes
|
48.9
|
|
49.1
|
Unearned
revenues
|
336.2
|
|
360.4
|
Other current
liabilities
|
407.6
|
|
400.6
|
Total current
liabilities
|
$
|
1,151.3
|
|
$
|
1,187.1
|
Long-term debt, less
current portion
|
440.5
|
|
440.0
|
Deferred income
taxes
|
260.8
|
|
255.2
|
Deferred
rent
|
266.1
|
|
249.7
|
Other
liabilities
|
489.8
|
|
498.6
|
Total
liabilities
|
$
|
2,608.5
|
|
$
|
2,630.6
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
|
1,522.9
|
|
$
|
1,502.6
|
Retained
earnings
|
424.4
|
|
547.5
|
Treasury
stock
|
(7.8)
|
|
(7.8)
|
Accumulated other
comprehensive income (loss)
|
(83.3)
|
|
(87.0)
|
Unearned
compensation
|
(2.8)
|
|
(3.3)
|
Total stockholders'
equity
|
$
|
1,853.4
|
|
$
|
1,952.0
|
Total liabilities and
stockholders' equity
|
$
|
4,461.9
|
|
$
|
4,582.6
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
|
|
Six Months
Ended
|
|
11/27/2016
|
|
11/29/2015
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
|
189.7
|
|
$
|
129.6
|
(Earnings) losses
from discontinued operations, net of tax
|
1.1
|
|
(18.5)
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
134.6
|
|
156.4
|
Stock-based
compensation expense
|
18.0
|
|
17.3
|
Change in current
assets and liabilities and other, net
|
(49.1)
|
|
(94.2)
|
Net cash provided by
operating activities of continuing operations
|
$
|
294.3
|
|
$
|
190.6
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(135.3)
|
|
(122.2)
|
Proceeds from
disposal of land, buildings and equipment
|
6.9
|
|
311.4
|
Purchases of
capitalized software and changes in other assets, net
|
(12.3)
|
|
(9.7)
|
Net cash provided by
(used in) investing activities of continuing operations
|
$
|
(140.7)
|
|
$
|
179.5
|
Cash flows—financing
activities
|
|
|
|
Proceeds from
issuance of common stock
|
46.0
|
|
62.1
|
Income tax benefits
credited to equity
|
8.3
|
|
12.0
|
Special cash
distribution from Four Corners Property Trust
|
—
|
|
315.0
|
Dividends
paid
|
(139.5)
|
|
(140.6)
|
Repurchases of common
stock
|
(214.7)
|
|
(0.4)
|
ESOP note receivable
repayment
|
0.5
|
|
0.4
|
Repayment of
long-term debt
|
—
|
|
(270.0)
|
Principal payments on
capital and financing leases
|
(1.8)
|
|
(1.6)
|
Net cash used in
financing activities of continuing operations
|
$
|
(301.2)
|
|
$
|
(23.1)
|
Cash
flows—discontinued operations
|
|
|
|
Net cash used in
operating activities of discontinued operations
|
(10.4)
|
|
(31.6)
|
Net cash provided by
investing activities of discontinued operations
|
—
|
|
6.3
|
Net cash used in
discontinued operations
|
$
|
(10.4)
|
|
$
|
(25.3)
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(158.0)
|
|
321.7
|
Cash and cash
equivalents - beginning of period
|
274.8
|
|
535.9
|
Cash and cash
equivalents - end of period
|
$
|
116.8
|
|
$
|
857.6
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2017-second-quarter-results-and-reaffirms-earnings-outlook-for-the-full-fiscal-year-300381852.html
SOURCE Darden Restaurants, Inc.: Financial