DARDEN RESTAURANTS INC0000940944false00009409442023-09-202023-09-20


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 8-K
 CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 20, 2023
(Date of earliest event reported)
DARDEN RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 1-13666
 
Florida59-3305930
(State or other jurisdiction of incorporation)(IRS Employer Identification No.)
1000 Darden Center Drive, Orlando, Florida 32837
(Address of principal executive offices, including zip code)
(407) 245-4000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, without par valueDRINew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02Results of Operations and Financial Condition.

On September 21, 2023, Darden Restaurants, Inc. (the Company) issued a news release entitled “Darden Restaurants Reports Fiscal 2024 First Quarter Results; Declares Quarterly Dividend; Reiterates Fiscal 2024 Outlook; And Announces Election of New Board Chair,” a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. In addition, the slide presentation accompanying the Company’s conference call will be posted on the Company’s website.

As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section. The information in this Item 2.02 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the Securities Act), except as expressly set forth by specific reference in such filing.

Item 8.01Other Events.

On September 20, 2023, the Company’s Board of Directors (the Board) unanimously elected Cynthia (Cindie) T. Jamison to serve as Chair of the Board until the next annual meeting of the Board or until her replacement is elected. Ms. Jamison, age, 64, has served as an independent member of the Company’s Board since 2014, most recently serving as Chair of the Board’s Audit Committee. Ms. Jamison succeeds Eugene I. Lee, Jr., who, as previously announced, retired from service as a member of the Board on that date.

Item 9.01Financial Statements and Exhibits.
(d)Exhibits.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
DARDEN RESTAURANTS, INC.
By:/s/ Rajesh Vennam
Rajesh Vennam
Senior Vice President, Chief Financial Officer
Date: September 21, 2023


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Exhibit 99.1
drilogoa06a.jpg
Darden Restaurants Reports Fiscal 2024 First Quarter Results;
Declares Quarterly Dividend;
Reiterates Fiscal 2024 Outlook;
And Announces Election of New Board Chair

ORLANDO, Fla., September 21, 2023 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the first quarter ended August 27, 2023.
 
First Quarter 2024 Financial Highlights, Comparisons Versus Same Fiscal Quarter Last Year
•Total sales increased 11.6% to $2.7 billion, driven by a blended same-restaurant sales* increase of 5.0% and sales from the addition of 77 company-owned Ruth's Chris Steak House (Ruth's Chris) restaurants and 46 other net new restaurants
•Same-restaurant sales:
Consolidated Darden*5.0%
Olive Garden6.1%
LongHorn Steakhouse8.1%
Fine Dining*(2.8)%
Other Business1.7%
•Reported diluted net earnings per share from continuing operations were $1.60
•Excluding $0.18 of Ruth's Chris transaction and integration related costs, adjusted diluted net earnings per share from continuing operations were $1.78, an increase of 14.1%**
•The Company repurchased $143 million of its outstanding common stock
* Will not include Ruth's Chris Steak House until they have been owned and operated by Darden for a 16-month period
** See the "Non-GAAP Information" below for more details

“Looking across our entire portfolio, I am pleased with our first quarter results,” said Darden President & CEO Rick Cardenas. “Our strategy is working. We continue to grow share, strengthen margins, and make meaningful investments in our business while returning capital to shareholders.”

Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses. From the date of acquisition forward, sales and profits from Ruth's Chris company-owned restaurants are included within the Fine Dining segment. Royalties from Ruth's Chris franchise and managed locations reside in the Other Business segment.
Q1 SalesQ1 Segment Profit
($ in millions)2024202320242023
Consolidated Darden$2,730.6$2,446.1
Olive Garden$1,227.9$1,130.7$262.3$216.1
LongHorn Steakhouse$669.8$604.6$117.4$92.0
Fine Dining$273.5$183.4$39.7$30.0
Other Business$559.4$527.4$84.3$72.3

Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend of $1.31 per share on the Company's outstanding common stock. The dividend is payable on November 1, 2023 to shareholders of record at the close of business on October 10, 2023.
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Share Repurchase Program
During the quarter, the Company repurchased approximately 0.9 million shares of its common stock for a total of approximately $143 million. As of the end of the fiscal first quarter, the Company had approximately $509 million remaining under the current $1 billion repurchase authorization.


Fiscal 2024 Financial Outlook
The company reiterated all aspects of its full year financial outlook for fiscal 2024, culminating in adjusted diluted net earnings per share from continuing operations of $8.55 to $8.85, including Ruth's Chris operating results, but excluding approximately $55 million, pre-tax, of expected transaction and integration related costs.*
* See the "Non-GAAP Information" below for more details

Announces Election of New Board Chair
On September 20, 2023, Darden's Board of Directors unanimously elected Cynthia (Cindie) T. Jamison as Chair of the Board, succeeding Eugene (Gene) I. Lee, Jr. who, as previously announced, retired from service as a director of the Company on that date.

“I look forward to the opportunity to continue working with Cindie in her new role as Chair,” said Cardenas. “She has been a tremendous steward of our company since joining the Board nine years ago.

“I also want to thank Chuck Sonsteby for his leadership and tireless dedication to the Board, serving as Chair for more than four years, and for the last three years as Lead Independent Director. Finally, I want to thank Gene for his service as Chair and his invaluable leadership at Darden over the last 16 years.”

Investor Conference Call
The Company will host a conference call and slide presentation on Thursday, September 21, 2023 at 8:30 am ET to review its recent financial performance. To listen to the call live, please go to https://event.choruscall.com/mediaframe/webcast.html?webcastid=HcYNeR3Q 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 1-877-407-9219. 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, Yard House, Ruth’s Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V’s and Bahama Breeze. 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: a failure to address cost pressures and a failure to effectively deliver cost management activities, economic factors and their impacts on the restaurant industry and general macroeconomic factors including unemployment, energy prices and interest rates, the inability to hire, train, reward and retain restaurant team members, a failure to develop and recruit effective leaders, labor and insurance costs, health concerns including food-related pandemics or outbreaks of flu or other viruses, food safety and food-borne illness concerns, technology failures including failure to maintain a secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems, the inability to successfully integrate Ruth's Chris Steak House operations into our business, risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to manage the accelerated impact of social media, a failure
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to execute innovative marketing and guest relationship tactics, climate change, adverse weather conditions and natural disasters, long-term and non-cancelable property leases, failure to execute a business continuity plan following a disaster, shortages or interruptions in the delivery of food and other products and services, 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, risks of doing business with franchisees, licensees and vendors in foreign markets, volatility in the market value of derivatives, volatility leading to the inability to hedge equity compensation market exposure, failure to protect our intellectual property, litigation, unfavorable publicity, disruptions in the financial markets, impairment in the carrying value of our goodwill or other intangible assets, changes in tax laws or unanticipated tax liabilities, 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.

(Analysts) Kevin Kalicak, (407) 245-5870; (Media) Rich Jeffers, (407) 245-4189

Fiscal Q1 Reported to Adjusted Earnings Reconciliation
Q1 2024Q1 2023
$ in millions, except per share amountsEarnings Before Income TaxIncome Tax Expense (Benefit)Net EarningsDiluted Net Earnings Per ShareEarnings Before Income TaxIncome Tax Expense (Benefit)Net EarningsDiluted Net Earnings Per Share
Reported Earnings from Continuing Operations$223.2 $28.4 $194.8 $1.60 $224.4 $30.8 $193.6 $1.56 
% Change vs Prior Year2.6 %
Adjustments:
Ruth's Chris transaction and integration related costs24.8 2.6 22.2 0.18 — — — $— 
Adjusted Earnings from Continuing Operations$248.0 $31.0 $217.0 $1.78 $224.4 $30.8 $193.6 $1.56 
% Change vs Prior Year14.1 %
Reconciliation of Fiscal 2024 Reported to Adjusted Earnings Outlook
 2024
Reported diluted net earnings per share from continuing operations$8.18to$8.48
Ruth's Chris transaction and integration related expenses0.450.45
Income tax expense(0.08)(0.08)
Adjusted diluted net earnings per share from continuing operations$8.55to$8.85









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DARDEN RESTAURANTS, INC.
NUMBER OF COMPANY-OWNED RESTAURANTS
8/27/238/28/22
Olive Garden906 887 
LongHorn Steakhouse562 549 
Cheddar's Scratch Kitchen183 174 
Yard House86 85 
Ruth's Chris Steak House77 — 
The Capital Grille64 61 
Seasons 5244 45 
Bahama Breeze42 42 
Eddie V's30 29 
The Capital Burger4 3 
Darden Continuing Operations1,998 1,875 
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except per share data)
(Unaudited)

 Three Months Ended
 8/27/20238/28/2022
Sales$2,730.6 $2,446.1 
Costs and expenses:
Food and beverage851.0 795.3 
Restaurant labor875.3 793.8 
Restaurant expenses446.6 403.5 
Marketing expenses38.6 30.3 
General and administrative expenses153.3 88.3 
Depreciation and amortization109.8 95.6 
Impairments and disposal of assets, net3.1 (4.9)
Total operating costs and expenses$2,477.7 $2,201.9 
Operating income252.9 244.2 
Interest, net29.7 19.8 
Earnings before income taxes223.2 224.4 
Income tax expense28.4 30.8 
Earnings from continuing operations$194.8 $193.6 
Losses from discontinued operations, net of tax benefit of $0.1 and $0.0, respectively(0.3)(0.6)
Net earnings$194.5 $193.0 
Basic net earnings per share:
Earnings from continuing operations$1.61 $1.58 
Losses from discontinued operations— (0.01)
Net earnings$1.61 $1.57 
Diluted net earnings per share:
Earnings from continuing operations$1.60 $1.56 
Losses from discontinued operations(0.01)— 
Net earnings$1.59 $1.56 
Average number of common shares outstanding:
Basic120.9 122.9 
Diluted122.0 123.9 





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DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
 
8/27/20235/28/2023
(Unaudited) 
ASSETS
Current assets:
Cash and cash equivalents$192.1 $367.8 
Receivables, net59.2 80.2 
Inventories287.0 287.9 
Prepaid income taxes98.8 107.3 
Prepaid expenses and other current assets198.6 154.5 
Total current assets$835.7 $997.7 
Land, buildings and equipment, net3,991.7 3,725.1 
Operating lease right-of-use assets3,600.3 3,373.9 
Goodwill1,376.9 1,037.4 
Trademarks1,148.0 806.3 
Other assets316.6 301.1 
Total assets$11,269.2 $10,241.5 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$419.6 $426.2 
Short-term debt95.4 — 
Accrued payroll168.6 173.0 
Accrued income taxes8.5 7.8 
Other accrued taxes74.3 65.9 
Unearned revenues541.7 512.0 
Other current liabilities786.1 752.5 
Total current liabilities$2,094.2 $1,937.4 
Long-term debt1,477.1 884.9 
Deferred income taxes231.4 142.2 
Operating lease liabilities - non-current3,877.5 3,667.6 
Other liabilities1,441.0 1,407.9 
Total liabilities$9,121.2 $8,040.0 
Stockholders’ equity:
Common stock and surplus$2,256.8 $2,230.8 
Retained earnings (deficit)(124.8)(32.5)
Accumulated other comprehensive income (loss)16.0 3.2 
Total stockholders’ equity$2,148.0 $2,201.5 
Total liabilities and stockholders’ equity$11,269.2 $10,241.5 
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Three Months Ended
 8/27/20238/28/2022
Cash flows—operating activities
Net earnings$194.5 $193.0 
Losses from discontinued operations, net of tax 0.3 0.6 
Adjustments to reconcile net earnings from continuing operations to cash flows:
Depreciation and amortization109.8 95.6 
Impairments and disposal of assets, net3.1 (4.9)
Stock-based compensation expense30.3 20.3 
Change in current assets and liabilities and other, net(68.9)123.2 
Net cash provided by operating activities of continuing operations$269.1 $427.8 
Cash flows—investing activities
Purchases of land, buildings and equipment(150.9)(122.8)
Proceeds from disposal of land, buildings and equipment1.6 10.4 
Cash used in business acquisitions, net of cash acquired(699.9)— 
Purchases of capitalized software and changes in other assets, net(5.0)(5.7)
Net cash used in investing activities of continuing operations$(854.2)$(118.1)
Cash flows—financing activities
Net proceeds from issuance of common stock22.3 6.4 
Dividends paid(158.5)(148.5)
Repurchases of common stock(142.9)(199.0)
Proceeds from short-term debt, net95.4 — 
Proceeds from issuance of long-term debt, net600.0 — 
Payments of debt issuance costs(1.4)— 
Principal payments on finance leases(5.5)(4.3)
Net cash provided by (used in) financing activities of continuing operations$409.4 $(345.4)
Cash flows—discontinued operations
Net cash used in operating activities of discontinued operations— (0.5)
Net cash used in discontinued operations$— $(0.5)
Decrease in cash, cash equivalents, and restricted cash(175.7)(36.2)
Cash, cash equivalents, and restricted cash - beginning of period416.2 472.1 
Cash, cash equivalents, and restricted cash - end of period$240.5 $435.9 

Reconciliation of cash, cash equivalents, and restricted cash:8/27/20238/28/2022
Cash and cash equivalents$192.1 $377.5 
Restricted cash included in prepaid expenses and other current assets48.4 58.4 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$240.5 $435.9 
7
v3.23.3
Cover Page
Sep. 20, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Sep. 20, 2023
Entity File Number 1-13666
Entity Incorporation, State or Country Code FL
Entity Tax Identification Number 59-3305930
Entity Address, Address Line One 1000 Darden Center Drive
Entity Address, City or Town Orlando
Entity Address, State or Province FL
Entity Address, Postal Zip Code 32837
City Area Code 407
Local Phone Number 245-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, without par value
Trading Symbol DRI
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Registrant Name DARDEN RESTAURANTS INC
Entity Central Index Key 0000940944
Amendment Flag false
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