ORLANDO,
Fla., Sept. 22, 2022 /PRNewswire/ -- Darden
Restaurants, Inc. (NYSE:DRI) today reported its financial results
for the first quarter ended August 28,
2022.
First Quarter 2023 Financial Highlights
- Total sales increased 6.1% to $2.4
billion driven by a blended same-restaurant sales increase
of 4.2% and sales from 34 net new restaurants
- Same-restaurant sales:
|
Consolidated
Darden
|
4.2 %
|
|
Olive Garden
|
2.3 %
|
|
LongHorn
Steakhouse
|
4.2 %
|
|
Fine Dining
|
7.6 %
|
|
Other
Business
|
7.6 %
|
|
|
|
- Reported diluted net earnings per share was $1.56 as compared to last year's reported diluted
net earnings per share of $1.76
- The Company repurchased $199
million of its outstanding common stock
"I am pleased with the performance of all our brands in what
remains a challenging inflationary and uncertain macroeconomic
environment," said Darden President
& CEO Rick Cardenas. "We had a
solid quarter and we saw more normal seasonality return to our
business, which we did not experience last year. Darden's strategy,
together with the breadth of our brand portfolio, our team members'
passion to serve, and the strength of our balance sheet, gives me
confidence in our ability to continue to win."
Segment Performance
Segment profit represents sales, less costs for food and
beverage, restaurant labor, restaurant expenses and marketing
expenses. Segment profit excludes non-cash real estate related
expenses.
|
|
Q1
Sales
|
|
Q1 Segment
Profit
|
($ in
millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Consolidated
Darden
|
|
$2,446.1
|
|
$2,306.0
|
|
|
|
|
Olive Garden
|
|
$1,130.7
|
|
$1,090.4
|
|
$216.1
|
|
$253.3
|
LongHorn
Steakhouse
|
|
$604.6
|
|
$567.1
|
|
$92.0
|
|
$107.5
|
Fine Dining
|
|
$183.4
|
|
$168.8
|
|
$30.0
|
|
$33.5
|
Other
Business
|
|
$527.4
|
|
$479.7
|
|
$72.3
|
|
$84.8
|
Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend
of $1.21 per share on the Company's outstanding common
stock. The dividend is payable on November 1, 2022 to
shareholders of record at the close of business on October 10,
2022.
Share Repurchase Program
During the quarter, the Company repurchased approximately 1.7
million shares of its common stock for a total cost of
approximately $199 million. As
of the end of the fiscal first quarter, the Company had
approximately $912 million remaining
under the current $1 billion
repurchase authorization.
Fiscal 2023 Financial Outlook
The company reaffirmed all aspects of its financial outlook:
- Total sales of $10.2 to
$10.4 billion
- Same-restaurant sales growth of 4% to 6%
- 55 to 60 new restaurant openings
- Total capital spending of $500 to
$550 million
- Total inflation of approximately 6%
- An effective tax rate of approximately 13.5%
- Diluted net earnings per share from continuing operations of
$7.40 to $8.00
- Approximately 124 million weighted average diluted shares
outstanding
Investor Conference Call
The Company will host a conference call and slide presentation
on Thursday, September 22, 2022 at
8:30 am ET to review its recent
financial performance. To listen to the call live, please go to
https://app.webinar.net/DQdyamwLRkP 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 1-800-458-4121 and enter passcode 9557965. 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. 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: the
impacts of the novel coronavirus (COVID-19) pandemic on our
business and the global economy, 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, 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 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.
DARDEN RESTAURANTS, INC. NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
|
8/28/22
|
8/29/21
|
Olive Garden
|
887
|
877
|
LongHorn
Steakhouse
|
549
|
535
|
Cheddar's Scratch
Kitchen
|
174
|
170
|
Yard House
|
85
|
82
|
The Capital
Grille
|
61
|
61
|
Seasons 52
|
45
|
44
|
Bahama
Breeze
|
42
|
42
|
Eddie V's
|
29
|
27
|
The Capital
Burger
|
3
|
3
|
Darden Continuing
Operations
|
1,875
|
1,841
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED STATEMENTS OF EARNINGS (In
millions, except per share
data) (Unaudited)
|
|
|
Three Months
Ended
|
|
8/28/2022
|
|
8/29/2021
|
Sales
|
$ 2,446.1
|
|
$ 2,306.0
|
Costs and
expenses:
|
|
|
|
Food and
beverage
|
795.3
|
|
685.4
|
Restaurant
labor
|
793.8
|
|
736.0
|
Restaurant
expenses
|
403.5
|
|
378.1
|
Marketing
expenses
|
30.3
|
|
23.9
|
General and
administrative expenses
|
88.3
|
|
113.0
|
Depreciation and
amortization
|
95.6
|
|
89.0
|
Impairments and
disposal of assets, net
|
(4.9)
|
|
—
|
Total operating costs
and expenses
|
$ 2,201.9
|
|
$ 2,025.4
|
Operating
income
|
244.2
|
|
280.6
|
Interest,
net
|
19.8
|
|
15.6
|
Earnings before income
taxes
|
224.4
|
|
265.0
|
Income tax
expense
|
30.8
|
|
33.3
|
Earnings from
continuing operations
|
$
193.6
|
|
$
231.7
|
Losses from
discontinued operations, net of tax benefit of $0.0 and $0.5,
respectively
|
(0.6)
|
|
(0.8)
|
Net earnings
|
$
193.0
|
|
$
230.9
|
Basic net earnings per
share:
|
|
|
|
Earnings from
continuing operations
|
$
1.58
|
|
$
1.78
|
Losses from
discontinued operations
|
(0.01)
|
|
(0.01)
|
Net
earnings
|
$
1.57
|
|
$
1.77
|
Diluted net earnings
per share:
|
|
|
|
Earnings from
continuing operations
|
$
1.56
|
|
$
1.76
|
Losses from
discontinued operations
|
—
|
|
(0.01)
|
Net
earnings
|
$
1.56
|
|
$
1.75
|
Average number of
common shares outstanding:
|
|
|
|
Basic
|
122.9
|
|
130.3
|
Diluted
|
123.9
|
|
131.7
|
|
|
|
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED BALANCE SHEETS (In
millions)
|
|
|
8/28/2022
|
|
5/29/2022
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
377.5
|
|
$
420.6
|
Receivables,
net
|
50.7
|
|
72.0
|
Inventories
|
273.1
|
|
270.6
|
Prepaid income
taxes
|
68.8
|
|
274.8
|
Prepaid expenses and
other current assets
|
170.9
|
|
141.4
|
Total current
assets
|
$
941.0
|
|
$
1,179.4
|
Land, buildings and
equipment, net
|
3,485.8
|
|
3,356.0
|
Operating lease
right-of-use assets
|
3,452.8
|
|
3,465.1
|
Goodwill
|
1,037.4
|
|
1,037.4
|
Trademarks
|
806.3
|
|
806.3
|
Other assets
|
291.2
|
|
291.6
|
Total
assets
|
$
10,014.5
|
|
$
10,135.8
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
406.9
|
|
$
366.9
|
Accrued
payroll
|
137.2
|
|
181.5
|
Accrued income
taxes
|
43.0
|
|
32.1
|
Other accrued
taxes
|
70.8
|
|
64.5
|
Unearned
revenues
|
467.9
|
|
498.0
|
Other current
liabilities
|
699.5
|
|
704.5
|
Total current
liabilities
|
$
1,825.3
|
|
$
1,847.5
|
Long-term
debt
|
895.1
|
|
901.0
|
Deferred income
taxes
|
192.4
|
|
201.1
|
Operating lease
liabilities - non-current
|
3,745.5
|
|
3,755.8
|
Other
liabilities
|
1,292.1
|
|
1,232.2
|
Total
liabilities
|
$
7,950.4
|
|
$
7,937.6
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
2,215.4
|
|
$
2,226.0
|
Retained earnings
(deficit)
|
(151.7)
|
|
(25.9)
|
Accumulated other
comprehensive income (loss)
|
0.4
|
|
(1.9)
|
Total stockholders'
equity
|
$
2,064.1
|
|
$
2,198.2
|
Total liabilities and
stockholders' equity
|
$
10,014.5
|
|
$
10,135.8
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In
millions) (Unaudited)
|
|
|
Thirteen Weeks
Ended
|
|
8/28/2022
|
|
8/29/2021
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
193.0
|
|
$
230.9
|
Losses from
discontinued operations, net of tax
|
0.6
|
|
0.8
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
95.6
|
|
89.0
|
Impairments and
disposal of assets, net
|
(4.9)
|
|
—
|
Stock-based
compensation expense
|
20.3
|
|
27.6
|
Change in current
assets and liabilities and other, net
|
123.2
|
|
(168.0)
|
Net cash provided by
operating activities of continuing operations
|
$
427.8
|
|
$
180.3
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(122.8)
|
|
(82.7)
|
Proceeds from disposal
of land, buildings and equipment
|
10.4
|
|
3.4
|
Purchases of
capitalized software and changes in other assets, net
|
(5.7)
|
|
(4.4)
|
Net cash used in
investing activities of continuing operations
|
$
(118.1)
|
|
$
(83.7)
|
Cash flows—financing
activities
|
|
|
|
Net proceeds from
issuance of common stock
|
6.4
|
|
19.6
|
Dividends
paid
|
(148.5)
|
|
(143.5)
|
Repurchases of common
stock
|
(199.0)
|
|
(186.3)
|
Other, net
|
(4.3)
|
|
(2.6)
|
Net cash used in
financing activities of continuing operations
|
$
(345.4)
|
|
$
(312.8)
|
Cash flows—discontinued
operations
|
|
|
|
Net cash provided by
(used in) operating activities of discontinued
operations
|
(0.5)
|
|
0.8
|
Net cash provided by
(used in) discontinued operations
|
$
(0.5)
|
|
$
0.8
|
|
|
|
|
Decrease in cash and
cash equivalents, and restricted cash
|
(36.2)
|
|
(215.4)
|
Cash and cash
equivalents, and restricted cash - beginning of period
|
472.1
|
|
1,214.7
|
Cash and cash
equivalents, and restricted cash - end of period
|
$
435.9
|
|
$
999.3
|
Reconciliation of cash,
cash equivalents, and restricted cash:
|
8/28/2022
|
|
8/29/2021
|
Cash and cash
equivalents
|
$
377.5
|
|
$
947.8
|
Restricted cash
included in prepaid expenses and other current assets
|
58.4
|
|
51.5
|
Total cash, cash
equivalents, and restricted cash shown in the statement of cash
flows
|
$
435.9
|
|
$
999.3
|
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