ORLANDO, Fla., March 21, 2019 /PRNewswire/ -- Darden
Restaurants, Inc., (NYSE: DRI) today reported its financial results
for the third quarter ended February 24, 2019.
Third Quarter 2019 Financial Highlights, Comparisons Versus
Same Fiscal Quarter Last Year
- Total sales increased 5.5% to $2.25
billion driven by the addition of 39 net new restaurants and
a blended same-restaurant sales increase of 2.8%
- Same-restaurant sales by brand:
|
+4.3% for Olive
Garden
|
|
-2.7% for Cheddar's
Scratch Kitchen
|
|
+3.8% for LongHorn
Steakhouse
|
|
-2.1% for Yard
House
|
|
+4.3% for The Capital
Grille
|
|
-1.3% for Seasons
52
|
|
+3.7% for Eddie
V's
|
|
-3.7% for Bahama
Breeze
|
- Reported diluted net earnings per share from continuing
operations increased 3.4% to $1.80
and increased 5.3% from last year's adjusted diluted net earnings
per share*
- The Company repurchased approximately $74 million of its outstanding common stock
* See "Non-GAAP Information" below for more details
"Our strong top-line results exceeded the industry this quarter
resulting in significant market share gains," said CEO Gene Lee. "This sales performance, coupled with
strong operating profit growth, is a testament to our strategy and
the outstanding focus and execution by our restaurant teams who
create exceptional dining experiences for our guests every
day."
Segment Performance
Segment profit represents sales,
less costs for food and beverage, restaurant labor, restaurant
expenses and marketing expenses.
|
|
Q3
Sales
|
|
|
|
Q3 Segment
Profit
|
|
|
($ in
millions)
|
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
%
Change
|
Consolidated
Darden
|
|
$2,246.5
|
|
$2,128.4
|
|
5.5
|
%
|
|
|
|
|
|
|
Olive
Garden
|
|
$1,130.2
|
|
$1,073.2
|
|
5.3
|
%
|
|
$247.0
|
|
$226.7
|
|
9.0
|
%
|
LongHorn
Steakhouse
|
|
$483.2
|
|
$452.8
|
|
6.7
|
%
|
|
$96.4
|
|
$89.9
|
|
7.2
|
%
|
Fine
Dining
|
|
$174.5
|
|
$164.4
|
|
6.1
|
%
|
|
$44.3
|
|
$40.3
|
|
9.9
|
%
|
Other
Business
|
|
$458.6
|
|
$438.0
|
|
4.7
|
%
|
|
$67.5
|
|
$65.5
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD
Sales
|
|
|
|
YTD Segment
Profit
|
|
|
($ in
millions)
|
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
%
Change
|
Consolidated
Darden
|
|
$6,281.3
|
|
$5,946.0
|
|
5.6
|
%
|
|
|
|
|
|
|
Olive
Garden
|
|
$3,180.3
|
|
$3,014.6
|
|
5.5
|
%
|
|
$649.7
|
|
$593.4
|
|
9.5
|
%
|
LongHorn
Steakhouse
|
|
$1,326.2
|
|
$1,245.0
|
|
6.5
|
%
|
|
$232.5
|
|
$214.0
|
|
8.6
|
%
|
Fine
Dining
|
|
$451.2
|
|
$427.1
|
|
5.6
|
%
|
|
$94.5
|
|
$86.6
|
|
9.1
|
%
|
Other
Business
|
|
$1,323.6
|
|
$1,259.3
|
|
5.1
|
%
|
|
$181.6
|
|
$182.8
|
|
(0.7)
|
%
|
U.S. Same-Restaurant Sales Results
|
Q3
|
YTD
|
|
Olive Garden
|
LongHorn
Steakhouse
|
Olive Garden
|
LongHorn
Steakhouse
|
Same-Restaurant
Sales
|
4.3%
|
3.8%
|
4.4%
|
3.3%
|
Same-Restaurant
Traffic
|
0.1%
|
0.5%
|
0.3%
|
0.0%
|
Pricing
|
1.8%
|
1.8%
|
1.9%
|
1.7%
|
Menu-mix
|
2.4%
|
1.5%
|
2.2%
|
1.6%
|
Dividend Declared
Darden's Board of Directors declared
a regular quarterly cash dividend of $0.75 per share on
the Company's outstanding common stock. The dividend is payable
on May 1, 2019 to shareholders of record at the close of
business on April 10, 2019.
Share Repurchase Program
During the quarter, the
Company repurchased approximately 0.7 million shares of its common
stock for a total cost of approximately $74
million. Fiscal year-to-date, the Company repurchased
approximately 1.6 million shares of its common stock for a total
cost of approximately $166 million.
As of the end of the fiscal third quarter, the Company had
approximately $346 million remaining
under the current $500 million
repurchase authorization.
Updated Fiscal 2019 Financial Outlook
The Company
increased its financial outlook for fiscal 2019 based on
year-to-date results and its expected performance for the fourth
quarter.
|
Current
(03/21/19)
|
Prior
(12/18/18)
|
Total sales
growth
|
Approx.
5.5%
|
5.0% to
5.5%
|
Same-restaurant sales
growth
|
2.5% to
2.7%
|
Approx.
2.5%
|
Effective tax
rate
|
Approx.
10%
|
10% to 11%
|
Diluted net earnings
per share from continuing operations
|
$5.76 -
$5.80
|
$5.60 -
$5.70
|
Diluted average
common shares outstanding for the year
|
125M to
126M
|
Approx.
126M
|
Investor Conference Call
The Company will host a
conference call and slide presentation on Thursday, March 21 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/1007/29533 at least
fifteen minutes early to register, download, and install any
necessary audio software. Prior to the call, a slide presentation
will be posted on the Investor Relations section of our website at:
www.darden.com. For those who cannot access the Internet, please
dial 1-888-396-9924 and enter passcode 3047110. For
those who cannot listen to the live broadcast, a replay will be
available shortly after the call.
About Darden
Darden is a restaurant company featuring
a portfolio of differentiated brands that include Olive
Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen,
Yard House, The Capital Grille, Seasons 52, Bahama
Breeze and Eddie V's. Our people equal our success, and
we are proud to employ 180,000 team members in more than 1,700
restaurants. Together, we create memorable experiences for
nearly 390 million guests each year in communities
across North America. 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, the inability to hire, train, reward and retain
restaurant team members or monitor and proactively respond to
employee dissatisfaction, a failure to develop and recruit
effective leaders, litigation, unfavorable publicity, an
inability or failure to manage the accelerated impact of social
media, risks relating to public policy changes and federal, state
and local regulation of our business, long-term and non-cancelable
property leases, 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, 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 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, licensees 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 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 Q3 Reported
to Adjusted Earnings Reconciliation
|
|
Q3
2019
|
|
Q3
2018
|
$ in millions, except
EPS
|
Earnings Before
Income Tax
|
Income Tax
Expense
|
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
|
$253.1
|
$28.0
|
$225.1
|
$1.80
|
|
$116.0
|
$(102.5)
|
$218.5
|
$1.74
|
% Change vs Prior
Year
|
|
|
|
3.4
|
%
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Debt retirement
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
|
102.2
|
|
33.6
|
|
68.6
|
|
0.54
|
|
Net benefit of
deferred tax revaluation
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
77.3
|
|
(77.3)
|
|
(0.61)
|
|
Cheddar's integration
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6.7
|
|
1.4
|
|
5.3
|
|
0.04
|
|
Adjusted Earnings
from Continuing Operations
|
$253.1
|
$28.0
|
$225.1
|
$1.80
|
|
$224.9
|
$9.8
|
$215.1
|
$1.71
|
% Change vs Prior
Year
|
|
|
|
5.3
|
%
|
|
|
|
|
|
DARDEN
RESTAURANTS, INC.
|
NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
|
2/24/19
|
2/25/18
|
Olive
Garden1
|
860
|
|
853
|
|
LongHorn
Steakhouse
|
512
|
|
499
|
|
Cheddar's Scratch
Kitchen
|
159
|
|
154
|
|
Yard House
|
78
|
|
71
|
|
The Capital
Grille2
|
58
|
|
57
|
|
Bahama
Breeze
|
42
|
|
39
|
|
Seasons 52
|
43
|
|
41
|
|
Eddie V's
|
20
|
|
19
|
|
Darden Continuing
Operations
|
1,772
|
|
1,733
|
|
1Includes
six locations in Canada for all periods presented.
|
2Includes
one The Capital Burger restaurant in fiscal 2019.
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2/24/2019
|
|
2/25/2018
|
|
2/24/2019
|
|
2/25/2018
|
Sales
|
$
|
2,246.5
|
|
|
$
|
2,128.4
|
|
|
$
|
6,281.3
|
|
|
$
|
5,946.0
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Food and
beverage
|
638.0
|
|
|
603.3
|
|
|
1,784.6
|
|
|
1,701.4
|
|
Restaurant
labor
|
711.4
|
|
|
683.0
|
|
|
2,053.1
|
|
|
1,929.6
|
|
Restaurant
expenses
|
379.5
|
|
|
360.8
|
|
|
1,098.4
|
|
|
1,055.2
|
|
Marketing
expenses
|
62.4
|
|
|
58.9
|
|
|
186.9
|
|
|
183.0
|
|
General and
administrative expenses
|
102.8
|
|
|
110.1
|
|
|
302.4
|
|
|
307.0
|
|
Depreciation and
amortization
|
85.3
|
|
|
79.2
|
|
|
248.8
|
|
|
234.1
|
|
Impairments and
disposal of assets, net
|
1.6
|
|
|
(0.3)
|
|
|
4.4
|
|
|
(1.1)
|
|
Total operating costs
and expenses
|
$
|
1,981.0
|
|
|
$
|
1,895.0
|
|
|
$
|
5,678.6
|
|
|
$
|
5,409.2
|
|
Operating
income
|
265.5
|
|
|
233.4
|
|
|
602.7
|
|
|
536.8
|
|
Interest,
net
|
12.4
|
|
|
117.4
|
|
|
38.3
|
|
|
147.9
|
|
Earnings before
income taxes
|
253.1
|
|
|
116.0
|
|
|
564.4
|
|
|
388.9
|
|
Income tax
expense
|
28.0
|
|
|
(102.5)
|
|
|
54.5
|
|
|
(39.5)
|
|
Earnings from
continuing operations
|
$
|
225.1
|
|
|
$
|
218.5
|
|
|
$
|
509.9
|
|
|
$
|
428.4
|
|
Losses from
discontinued operations, net of tax benefit of $0.8,
$0.5, $1.3 and $4.0,
respectively
|
(1.5)
|
|
|
(0.7)
|
|
|
(4.5)
|
|
|
(6.9)
|
|
Net
earnings
|
$
|
223.6
|
|
|
$
|
217.8
|
|
|
$
|
505.4
|
|
|
$
|
421.5
|
|
|
|
|
|
|
|
|
|
Basic net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.83
|
|
|
$
|
1.77
|
|
|
$
|
4.12
|
|
|
$
|
3.45
|
|
Losses from
discontinued operations
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.03)
|
|
|
(0.06)
|
|
Net
earnings
|
$
|
1.81
|
|
|
$
|
1.76
|
|
|
$
|
4.09
|
|
|
$
|
3.39
|
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.80
|
|
|
$
|
1.74
|
|
|
$
|
4.06
|
|
|
$
|
3.40
|
|
Losses from
discontinued operations
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.04)
|
|
|
(0.06)
|
|
Net
earnings
|
$
|
1.79
|
|
|
$
|
1.73
|
|
|
$
|
4.02
|
|
|
$
|
3.34
|
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
123.3
|
|
|
123.6
|
|
|
123.7
|
|
|
124.2
|
|
Diluted
|
125.0
|
|
|
125.7
|
|
|
125.6
|
|
|
126.1
|
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
millions)
|
|
|
2/24/2019
|
|
5/27/2018
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
302.9
|
|
|
$
|
146.9
|
|
Receivables,
net
|
73.9
|
|
|
83.7
|
|
Inventories
|
209.5
|
|
|
205.3
|
|
Prepaid income
taxes
|
5.2
|
|
|
15.9
|
|
Prepaid expenses and
other current assets
|
95.7
|
|
|
89.9
|
|
Assets held for
sale
|
—
|
|
|
11.9
|
|
Total current
assets
|
$
|
687.2
|
|
|
$
|
553.6
|
|
Land, buildings and
equipment, net
|
2,539.9
|
|
|
2,429.8
|
|
Goodwill
|
1,183.7
|
|
|
1,183.7
|
|
Trademarks
|
950.8
|
|
|
950.8
|
|
Other
assets
|
336.2
|
|
|
351.7
|
|
Total
assets
|
$
|
5,697.8
|
|
|
$
|
5,469.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
303.2
|
|
|
$
|
277.0
|
|
Accrued
payroll
|
163.3
|
|
|
177.5
|
|
Accrued income
taxes
|
7.3
|
|
|
—
|
|
Other accrued
taxes
|
50.5
|
|
|
56.6
|
|
Unearned
revenues
|
471.7
|
|
|
415.8
|
|
Other current
liabilities
|
446.9
|
|
|
457.6
|
|
Total current
liabilities
|
$
|
1,442.9
|
|
|
$
|
1,384.5
|
|
Long-term
debt
|
927.4
|
|
|
926.5
|
|
Deferred income
taxes
|
130.7
|
|
|
114.0
|
|
Deferred
rent
|
346.5
|
|
|
318.0
|
|
Other
liabilities
|
534.6
|
|
|
531.8
|
|
Total
liabilities
|
$
|
3,382.1
|
|
|
$
|
3,274.8
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
|
1,676.8
|
|
|
$
|
1,631.9
|
|
Retained
earnings
|
728.4
|
|
|
657.6
|
|
Treasury
stock
|
(7.8)
|
|
|
(7.8)
|
|
Accumulated other
comprehensive income (loss)
|
(81.0)
|
|
|
(85.2)
|
|
Unearned
compensation
|
(0.7)
|
|
|
(1.7)
|
|
Total stockholders'
equity
|
$
|
2,315.7
|
|
|
$
|
2,194.8
|
|
Total liabilities and
stockholders' equity
|
$
|
5,697.8
|
|
|
$
|
5,469.6
|
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
Nine Months
Ended
|
|
2/24/2019
|
|
2/25/2018
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
|
505.4
|
|
|
$
|
421.5
|
|
Losses from
discontinued operations, net of tax
|
4.5
|
|
|
6.9
|
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
248.8
|
|
|
234.1
|
|
Stock-based
compensation expense
|
45.3
|
|
|
32.2
|
|
Loss on
extinguishment of debt
|
—
|
|
|
102.2
|
|
Change in current
assets and liabilities and other, net
|
116.0
|
|
|
(45.9)
|
|
Net cash provided by
operating activities of continuing operations
|
$
|
920.0
|
|
|
$
|
751.0
|
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(346.9)
|
|
|
(294.9)
|
|
Proceeds from
disposal of land, buildings and equipment
|
12.7
|
|
|
3.3
|
|
Cash used in business
acquisitions, net of cash acquired
|
—
|
|
|
(40.4)
|
|
Purchases of
capitalized software and changes in other assets, net
|
(15.5)
|
|
|
(10.3)
|
|
Net cash used in
investing activities of continuing operations
|
$
|
(349.7)
|
|
|
$
|
(342.3)
|
|
Cash flows—financing
activities
|
|
|
|
Proceeds from
issuance of common stock
|
45.4
|
|
|
35.5
|
|
Dividends
paid
|
(278.4)
|
|
|
(234.9)
|
|
Repurchases of common
stock
|
(166.0)
|
|
|
(207.6)
|
|
Proceeds from
issuance of short-term debt, net
|
—
|
|
|
50.6
|
|
Repayment of
long-term debt
|
—
|
|
|
(408.2)
|
|
Proceeds from
issuance of long-term debt
|
—
|
|
|
300.0
|
|
Principal payments on
capital and financing leases
|
(4.9)
|
|
|
(3.9)
|
|
Other, net
|
0.1
|
|
|
(11.5)
|
|
Net cash used in
financing activities of continuing operations
|
$
|
(403.8)
|
|
|
$
|
(480.0)
|
|
Cash
flows—discontinued operations
|
|
|
|
Net cash used in
operating activities of discontinued operations
|
(10.5)
|
|
|
(15.2)
|
|
Net cash provided by
investing activities of discontinued operations
|
—
|
|
|
0.2
|
|
Net cash used in
discontinued operations
|
$
|
(10.5)
|
|
|
$
|
(15.0)
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
156.0
|
|
|
(86.3)
|
|
Cash and cash
equivalents - beginning of period
|
146.9
|
|
|
233.1
|
|
Cash and cash
equivalents - end of period
|
$
|
302.9
|
|
|
$
|
146.8
|
|
View original
content:http://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2019-third-quarter-results-increases-financial-outlook-for-the-full-fiscal-year-and-declares-regular-quarterly-dividend-300816020.html
SOURCE Darden Restaurants, Inc.: Financial