ORLANDO, Fla., March 19, 2020 /PRNewswire/ -- Darden
Restaurants, Inc., (NYSE: DRI) today reported its financial results
for the third quarter ended February 23, 2020.
Third Quarter 2020 Financial Highlights, Comparisons Versus
Same Fiscal Quarter Last Year
- Total sales increased 4.5% to $2.35
billion driven by the addition of 40 net new restaurants and
a blended same-restaurant sales increase of 2.3%
- Same-restaurant sales by brand:
|
+2.1% for Olive
Garden
|
|
-1.6% for Cheddar's
Scratch Kitchen
|
|
+3.9% for LongHorn
Steakhouse
|
|
+1.8% for Yard
House
|
|
+4.2% for The Capital
Grille
|
|
+3.0% for Seasons
52
|
|
+3.9% for Eddie
V's
|
|
-0.5% for Bahama
Breeze
|
- Reported diluted net earnings per share from continuing
operations increased 5.6% to $1.90 compared to last
year's reported diluted net earnings per share
- The Company repurchased approximately 0.6 million shares of its
common stock for a total cost of approximately $69 million. Fiscal year-to-date, the Company
repurchased approximately 2.6 million shares of its common stock
for a total cost of approximately $300
million and had approximately $321
million remaining under the current $500 million repurchase authorization.
Segment Performance
Segment profit represents sales, less costs for food and
beverage, restaurant labor, restaurant expenses and marketing
expenses. Beginning in fiscal 2020, our calculation of
segment profit now excludes non-cash real estate related
expenses. Fiscal 2019 segment profit has been restated to
conform to the current year presentation.
|
|
Q3
Sales
|
|
|
|
Q3 Segment
Profit
|
|
|
($ in
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
|
2020
|
|
2019
|
|
%
Change
|
Consolidated
Darden
|
|
$2,346.5
|
|
$2,246.5
|
|
4.5
|
%
|
|
|
|
|
|
|
Olive
Garden
|
|
$1,169.3
|
|
$1,130.2
|
|
3.5
|
%
|
|
$246.7
|
|
$245.6
|
|
0.4
|
%
|
LongHorn
Steakhouse
|
|
$510.7
|
|
$483.2
|
|
5.7
|
%
|
|
$104.6
|
|
$97.3
|
|
7.5
|
%
|
Fine
Dining
|
|
$188.4
|
|
$174.5
|
|
8.0
|
%
|
|
$46.7
|
|
$43.4
|
|
7.6
|
%
|
Other
Business
|
|
$478.1
|
|
$458.6
|
|
4.3
|
%
|
|
$69.5
|
|
$69.2
|
|
0.4
|
%
|
|
|
YTD
Sales
|
|
|
|
YTD Segment
Profit
|
|
|
($ in
millions)
|
|
2020
|
|
2019
|
|
%
Change
|
|
2020
|
|
2019
|
|
%
Change
|
Consolidated
Darden
|
|
$6,536.8
|
|
$6,281.3
|
|
4.1
|
%
|
|
|
|
|
|
|
Olive
Garden
|
|
$3,283.0
|
|
$3,180.3
|
|
3.2
|
%
|
|
$665.9
|
|
$646.1
|
|
3.1
|
%
|
LongHorn
Steakhouse
|
|
$1,408.2
|
|
$1,326.2
|
|
6.2
|
%
|
|
$251.0
|
|
$236.0
|
|
6.4
|
%
|
Fine
Dining
|
|
$479.4
|
|
$451.2
|
|
6.3
|
%
|
|
$97.5
|
|
$92.5
|
|
5.4
|
%
|
Other
Business
|
|
$1,366.2
|
|
$1,323.6
|
|
3.2
|
%
|
|
$181.6
|
|
$188.1
|
|
(3.5)
|
%
|
U.S. Same-Restaurant Sales Results
|
Q3
|
YTD
|
|
Olive
Garden
|
LongHorn
Steakhouse
|
Olive
Garden
|
LongHorn
Steakhouse
|
Same-Restaurant
Sales
|
2.1%
|
3.9%
|
1.9%
|
4.4%
|
Same-Restaurant
Traffic
|
0.2%
|
1.6%
|
(0.6)%
|
1.7%
|
Pricing
|
1.8%
|
1.9%
|
2.0%
|
1.8%
|
Menu-mix
|
0.1%
|
0.4%
|
0.5%
|
0.9%
|
Actions in Response to COVID-19
The Board of Directors has suspended the quarterly cash
dividend. The Board made this determination due to uncertainty
driven by the significant reduction in effective restaurant seating
capacity and other restrictions mandated by state and local
governments in response to COVID-19. The Board of Directors
intends to review the Company's quarterly cash dividend policy as
developments warrant. Out of an abundance of caution, the
Company is also fully drawing on its $750
million credit facility.
The Company is withdrawing its full year financial outlook for
fiscal 2020. For the fourth quarter to date through
Sunday, March 15, Darden
same-restaurant sales declined -5.9%. Same-restaurant sales
were +3.0%, -0.2%, and -20.6% for the first three weeks of the
quarter, respectively. During the investor conference call,
the Company will provide fiscal fourth quarter trends by fiscal
week for each of its reporting segments.
"The health and safety of our team members, their families and
our guests remains our top priority," said CEO Gene Lee. "We are committed to supporting
our team members during this unprecedented time and are pleased to
have an emergency pay program to supplement our permanent paid sick
leave policy for all of our hourly team members."
"With the drawdown of our revolver, and cash on the balance
sheet, we will have approximately $1
billion in cash on hand," said CFO Rick Cardenas. "We believe this positions
us well to deal with potential near term volatility under the
current market conditions."
Investor Conference Call
The Company will host a conference call and slide presentation
on Thursday, March 19 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/1007/33263 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 1-833-470-0145 and enter passcode 4145119. 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 185,000
team members in more than 1,800 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, a
failure to develop and recruit effective leaders, risks relating to
public policy changes and federal, state and local regulation of
our business, litigation, unfavorable publicity, an inability or
failure to manage the accelerated impact of social media, the
inability to cancel long-term, non-cancelable 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, changing
consumer preferences, 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 unemployment,
energy prices and interest rates, disruptions in the financial and
credit markets, risks of doing business with franchisees and
licensees, risks of doing business with business partners and
vendors in foreign markets, failure to protect our intellectual
property, impairment in the carrying value of our goodwill or other
intangible assets, changes in tax laws or treaties, 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.
DARDEN
RESTAURANTS, INC.
NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
|
2/23/20
|
2/24/19
|
Olive
Garden
|
870
|
|
860
|
|
LongHorn
Steakhouse
|
522
|
|
512
|
|
Cheddar's Scratch
Kitchen
|
169
|
|
159
|
|
Yard House
|
81
|
|
78
|
|
The Capital
Grille1
|
60
|
|
58
|
|
Seasons 52
|
45
|
|
43
|
|
Bahama
Breeze
|
42
|
|
42
|
|
Eddie V's
|
23
|
|
20
|
|
Darden Continuing
Operations
|
1,812
|
|
1,772
|
|
1Includes
two The Capital Burger restaurants in fiscal 2020 and one in fiscal
2019.
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(In millions,
except per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2/23/2020
|
|
2/24/2019
|
|
2/23/2020
|
|
2/24/2019
|
Sales
|
$
|
2,346.5
|
|
|
$
|
2,246.5
|
|
|
$
|
6,536.8
|
|
|
$
|
6,281.3
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Food and
beverage
|
658.0
|
|
|
638.0
|
|
|
1,844.3
|
|
|
1,784.6
|
|
Restaurant
labor
|
753.8
|
|
|
711.4
|
|
|
2,149.9
|
|
|
2,053.1
|
|
Restaurant
expenses
|
396.7
|
|
|
379.5
|
|
|
1,144.7
|
|
|
1,098.4
|
|
Marketing
expenses
|
71.6
|
|
|
62.4
|
|
|
206.6
|
|
|
186.9
|
|
General and
administrative expenses
|
100.3
|
|
|
102.8
|
|
|
289.6
|
|
|
302.4
|
|
Depreciation and
amortization
|
87.7
|
|
|
85.3
|
|
|
261.5
|
|
|
248.8
|
|
Impairments and
disposal of assets, net
|
0.1
|
|
|
1.6
|
|
|
0.2
|
|
|
4.4
|
|
Total operating costs
and expenses
|
$
|
2,068.2
|
|
|
$
|
1,981.0
|
|
|
$
|
5,896.8
|
|
|
$
|
5,678.6
|
|
Operating
income
|
278.3
|
|
|
265.5
|
|
|
640.0
|
|
|
602.7
|
|
Interest,
net
|
13.2
|
|
|
12.4
|
|
|
37.4
|
|
|
38.3
|
|
Other (income)
expense, net
|
—
|
|
|
—
|
|
|
153.3
|
|
|
—
|
|
Earnings before
income taxes
|
265.1
|
|
|
253.1
|
|
|
449.3
|
|
|
564.4
|
|
Income tax
expense
|
31.8
|
|
|
28.0
|
|
|
18.8
|
|
|
54.5
|
|
Earnings from
continuing operations
|
$
|
233.3
|
|
|
$
|
225.1
|
|
|
$
|
430.5
|
|
|
$
|
509.9
|
|
Losses from
discontinued operations, net of tax benefit of $0.7,
$0.8, $1.6 and $1.3, respectively
|
(1.0)
|
|
|
(1.5)
|
|
|
(2.9)
|
|
|
(4.5)
|
|
Net
earnings
|
$
|
232.3
|
|
|
$
|
223.6
|
|
|
$
|
427.6
|
|
|
$
|
505.4
|
|
|
|
|
|
|
|
|
|
Basic net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.92
|
|
|
$
|
1.83
|
|
|
$
|
3.53
|
|
|
$
|
4.12
|
|
Losses from
discontinued operations
|
—
|
|
|
(0.02)
|
|
|
(0.03)
|
|
|
(0.03)
|
|
Net
earnings
|
$
|
1.92
|
|
|
$
|
1.81
|
|
|
$
|
3.50
|
|
|
$
|
4.09
|
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.90
|
|
|
$
|
1.80
|
|
|
$
|
3.48
|
|
|
$
|
4.06
|
|
Losses from
discontinued operations
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.04)
|
|
Net
earnings
|
$
|
1.89
|
|
|
$
|
1.79
|
|
|
$
|
3.46
|
|
|
$
|
4.02
|
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
121.3
|
|
|
123.3
|
|
|
122.1
|
|
|
123.7
|
|
Diluted
|
122.8
|
|
|
125.0
|
|
|
123.7
|
|
|
125.6
|
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
BALANCE SHEETS
(In
millions)
|
|
|
2/23/2020
|
|
5/26/2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
321.7
|
|
|
$
|
457.3
|
|
Receivables,
net
|
51.2
|
|
|
88.3
|
|
Inventories
|
229.6
|
|
|
207.3
|
|
Prepaid income
taxes
|
19.6
|
|
|
41.6
|
|
Prepaid expenses and
other current assets
|
63.9
|
|
|
98.1
|
|
Total current
assets
|
$
|
686.0
|
|
|
$
|
892.6
|
|
Land, buildings and
equipment, net
|
2,794.9
|
|
|
2,552.6
|
|
Operating lease
right-of-use assets
|
4,030.4
|
|
|
—
|
|
Goodwill
|
1,205.5
|
|
|
1,183.7
|
|
Trademarks
|
950.8
|
|
|
950.8
|
|
Other
assets
|
305.7
|
|
|
313.1
|
|
Total
assets
|
$
|
9,973.3
|
|
|
$
|
5,892.8
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
360.1
|
|
|
$
|
332.6
|
|
Accrued
payroll
|
155.2
|
|
|
175.3
|
|
Accrued income
taxes
|
5.4
|
|
|
11.6
|
|
Other accrued
taxes
|
52.2
|
|
|
54.2
|
|
Unearned
revenues
|
475.7
|
|
|
428.5
|
|
Other current
liabilities
|
634.5
|
|
|
471.9
|
|
Total current
liabilities
|
$
|
1,683.1
|
|
|
$
|
1,474.1
|
|
Long-term
debt
|
928.5
|
|
|
927.7
|
|
Deferred income
taxes
|
188.5
|
|
|
156.9
|
|
Operating lease
liability - non-current
|
4,317.4
|
|
|
—
|
|
Deferred
rent
|
—
|
|
|
354.4
|
|
Other
liabilities
|
514.6
|
|
|
587.1
|
|
Total
liabilities
|
$
|
7,632.1
|
|
|
$
|
3,500.2
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
|
1,693.0
|
|
|
$
|
1,685.0
|
|
Retained
earnings
|
648.6
|
|
|
806.6
|
|
Accumulated other
comprehensive income (loss)
|
(0.4)
|
|
|
(98.2)
|
|
Unearned
compensation
|
—
|
|
|
(0.8)
|
|
Total stockholders'
equity
|
$
|
2,341.2
|
|
|
$
|
2,392.6
|
|
Total liabilities and
stockholders' equity
|
$
|
9,973.3
|
|
|
$
|
5,892.8
|
|
DARDEN
RESTAURANTS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
2/23/2020
|
|
2/24/2019
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
|
427.6
|
|
|
$
|
505.4
|
|
Losses from
discontinued operations, net of tax
|
2.9
|
|
|
4.5
|
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
261.5
|
|
|
248.8
|
|
Stock-based
compensation expense
|
42.6
|
|
|
45.3
|
|
Pension settlement
charge
|
147.1
|
|
|
—
|
|
Change in current
assets and liabilities and other, net
|
40.7
|
|
|
116.0
|
|
Net cash provided by
operating activities of continuing operations
|
$
|
922.4
|
|
|
$
|
920.0
|
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(374.5)
|
|
|
(346.9)
|
|
Proceeds from
disposal of land, buildings and equipment
|
4.3
|
|
|
12.7
|
|
Cash used in business
acquisitions, net of cash acquired
|
(50.1)
|
|
|
—
|
|
Purchases of
capitalized software and changes in other assets, net
|
(27.1)
|
|
|
(15.5)
|
|
Net cash used in
investing activities of continuing operations
|
$
|
(447.4)
|
|
|
$
|
(349.7)
|
|
Cash flows—financing
activities
|
|
|
|
Proceeds from
issuance of common stock
|
17.7
|
|
|
45.4
|
|
Dividends
paid
|
(322.3)
|
|
|
(278.4)
|
|
Repurchases of common
stock
|
(300.3)
|
|
|
(166.0)
|
|
Principal payments on
capital and financing leases
|
(3.8)
|
|
|
(4.9)
|
|
Other, net
|
0.6
|
|
|
0.1
|
|
Net cash used in
financing activities of continuing operations
|
$
|
(608.1)
|
|
|
$
|
(403.8)
|
|
Cash
flows—discontinued operations
|
|
|
|
Net cash used in
operating activities of discontinued operations
|
(2.5)
|
|
|
(10.5)
|
|
Net cash used in
discontinued operations
|
$
|
(2.5)
|
|
|
$
|
(10.5)
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(135.6)
|
|
|
156.0
|
|
Cash and cash
equivalents - beginning of period
|
457.3
|
|
|
146.9
|
|
Cash and cash
equivalents - end of period
|
$
|
321.7
|
|
|
$
|
302.9
|
|
View original
content:http://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2020-third-quarter-results-suspends-quarterly-dividend-withdraws-its-full-year-financial-outlook-for-fiscal-2020-and-comments-on-other-liquidity-matters-301026539.html
SOURCE Darden Restaurants, Inc.: Financial