ORLANDO,
Fla., June 22, 2023 /PRNewswire/ -- Darden
Restaurants, Inc. (NYSE:DRI) today reported its financial results
for the fourth quarter and fiscal year ended May 28, 2023.
Fourth Quarter 2023 Financial Highlights
- Total sales increased 6.4% to $2.8
billion driven by a blended same-restaurant sales increase
of 4.0% and sales from 47 net new restaurants
- Same-restaurant sales:
|
|
|
Consolidated
Darden
|
4.0 %
|
|
|
|
Olive Garden
|
4.4 %
|
|
|
|
LongHorn
Steakhouse
|
7.1 %
|
|
|
|
Fine Dining
|
(1.9) %
|
|
|
|
Other
Business
|
2.2 %
|
- Reported diluted net earnings per share increased 15.2% to
$2.58 as compared to last year's
reported diluted net earnings per share of $2.24
- The Company repurchased $35.2
million of its outstanding common stock
Fiscal 2023 Financial Highlights
- Total sales increased 8.9% to $10.5
billion driven by a blended same-restaurant sales increase
of 6.8% and sales from 47 net new restaurants
- Same-restaurant sales:
|
|
|
Consolidated Darden
|
6.8 %
|
|
|
|
Olive Garden
|
6.7 %
|
|
|
|
LongHorn
Steakhouse
|
7.4 %
|
|
|
|
Fine Dining
|
5.7 %
|
|
|
|
Other
Business
|
7.0 %
|
- Reported diluted net earnings per share increased 8.1% to
$8.00, as compared to last year's
reported diluted net earnings per share of $7.40.
"We had a solid quarter to conclude a strong year in which we
met or exceeded our financial outlook, despite a tough operating
environment," said Darden President
& CEO Rick Cardenas. "Throughout
fiscal 2023, our strategy continued to serve us well. In addition
to our Back-to-Basics Operating Philosophy driving strong execution
in our restaurants, Darden's Four Competitive Advantages of
Significant Scale, Extensive Data & Insights, Rigorous
Strategic Planning and our Results-Oriented Culture continued to
enable our brands to compete more effectively and provide even
greater value to their guests."
Segment Performance
Segment profit represents sales, less costs for food and
beverage, restaurant labor, restaurant expenses and marketing
expenses. Segment profit excludes non-cash real estate related
expenses.
|
|
Q4
Sales
|
|
Q4 Segment
Profit
|
($ in
millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Consolidated
Darden
|
|
$2,769.0
|
|
$2,602.9
|
|
|
|
|
Olive Garden
|
|
$1,269.2
|
|
$1,193.7
|
|
$297.8
|
|
$265.3
|
LongHorn
Steakhouse
|
|
$711.7
|
|
$647.3
|
|
$132.1
|
|
$115.8
|
Fine Dining
|
|
$209.8
|
|
$210.5
|
|
$38.3
|
|
$44.0
|
Other
Business
|
|
$578.3
|
|
$551.4
|
|
$91.5
|
|
$85.9
|
|
|
Annual
Sales
|
|
Annual Segment
Profit
|
($ in
millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Consolidated
Darden
|
|
$10,487.8
|
|
$9,630.0
|
|
|
|
|
Olive Garden
|
|
$4,877.8
|
|
$4,503.9
|
|
$1,025.8
|
|
$993.7
|
LongHorn
Steakhouse
|
|
$2,612.3
|
|
$2,374.3
|
|
$430.9
|
|
$418.4
|
Fine Dining
|
|
$830.8
|
|
$776.2
|
|
$158.5
|
|
$165.0
|
Other
Business
|
|
$2,166.9
|
|
$1,975.6
|
|
$300.6
|
|
$300.2
|
|
|
Q4 Average Weekly
Sales1
|
|
Annual Average
Weekly Sales1
|
|
|
2023
|
|
Pre-COVID2
|
|
2023
|
|
Pre-COVID3
|
Consolidated
Darden
|
|
$111,673
|
|
$96,542
|
|
$106,674
|
|
$94,148
|
Olive Garden
|
|
$108,587
|
|
$99,105
|
|
$105,159
|
|
$97,759
|
LongHorn
Steakhouse
|
|
$98,240
|
|
$73,088
|
|
$91,142
|
|
$70,929
|
Fine Dining
|
|
$178,181
|
|
$152,848
|
|
$177,530
|
|
$152,687
|
Other
Business
|
|
$123,579
|
|
$113,838
|
|
$116,798
|
|
$107,285
|
______________
1 Represents average weekly sales by location,
excluding permanently closed restaurants.
2 Pre-COVID comparison refers to fiscal 2019 Q4 due to
impact of pandemic on fiscal 2020 Q4, fiscal 2021 and fiscal
2022.
3 Pre-COVID comparison refers to the 12-month period
ending February 2020 due to impact of
pandemic on fiscal 2020 Q4, fiscal 2021 and fiscal 2022.
Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend
of $1.31 per share, an 8% increase from third quarter
fiscal 2023, on the Company's outstanding common stock. The
dividend is payable on August 1, 2023 to shareholders of
record at the close of business on July 10, 2023.
Share Repurchase Program
During the quarter, the Company repurchased approximately 0.2
million shares of its common stock for a total of approximately
$35.2 million. As of the end of
the fiscal fourth quarter, the Company had approximately
$652 million remaining under the
current $1 billion repurchase
authorization.
"Our strong business model generated significant cash flows in
fiscal 2023, despite the difficult inflationary environment," said
CFO Raj Vennam. "This year, we continued to invest in our
businesses and returned more than $1
billion to shareholders in the form of dividends and share
repurchases."
Fiscal 2024 Financial Outlook
Below is the full year financial outlook for fiscal 2024 which
includes Ruth's Chris operating results, but excludes approximately
$55 million, pre-tax, of expected
transaction and integration related costs associated with the
acquisition. We will provide additional details during our investor
conference call scheduled for this morning at 8:30 am ET.
- Total sales of $11.5 to
$11.6 billion
- Same-restaurant sales growth of 2.5% to 3.5%
- New restaurant openings of approximately 50
- Total capital spending of $550 to
$600 million
- Total inflation of 3% to 4%
- An effective tax rate of approximately 12% to 12.5%
- Adjusted diluted net earnings per share from continuing
operations of $8.55 to $8.85, excluding approximately $0.34, after-tax, of Ruth's Chris integration
related expenses*
- Approximately 121.5 million weighted average diluted shares
outstanding
* See the "Non-GAAP Information" below for more
details
Annual Meeting of Shareholders
Darden will hold its Annual Meeting of Shareholders on
September 20, 2023. The meeting will
be held in a virtual format only. The record date for shareholders
to vote in the Annual Meeting is July 26,
2023.
Investor Conference Call
The Company will host a conference call and slide presentation
on Thursday, June 22, 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=8dvkXMe6
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: the
ability to successfully integrate Ruth's Chris Steak House
operations into our business, 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.
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
Reconciliation of
Fiscal 2024 Reported to Adjusted Earnings Outlook
|
|
2024
|
Reported diluted net
earnings per share from continuing operations
|
$8.21
|
to
|
$8.51
|
Ruth's Chris
transaction and integration related expenses
|
0.45
|
|
0.45
|
Income tax
expense
|
(0.11)
|
|
(0.11)
|
Adjusted diluted net
earnings per share from continuing operations
|
$8.55
|
to
|
$8.85
|
DARDEN RESTAURANTS,
INC.
NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
|
5/28/23
|
5/29/22
|
Olive Garden
|
905
|
884
|
LongHorn
Steakhouse
|
562
|
546
|
Cheddar's Scratch
Kitchen
|
180
|
172
|
Yard House
|
86
|
85
|
The Capital
Grille
|
62
|
62
|
Seasons 52
|
44
|
45
|
Bahama
Breeze
|
42
|
42
|
Eddie V's
|
29
|
28
|
The Capital
Burger
|
4
|
3
|
Darden Continuing
Operations
|
1,914
|
1,867
|
DARDEN RESTAURANTS,
INC.
CONSOLIDATED
STATEMENTS OF EARNINGS
(In millions, except
per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
5/28/2023
|
|
5/29/2022
|
|
5/28/2023
|
|
5/29/2022
|
Sales
|
$ 2,769.0
|
|
$
2,602.9
|
|
$
10,487.8
|
|
$ 9,630.0
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Food and
beverage
|
855.3
|
|
811.4
|
|
3,355.9
|
|
2,943.6
|
Restaurant
labor
|
869.8
|
|
829.3
|
|
3,346.3
|
|
3,108.8
|
Restaurant
expenses
|
441.4
|
|
423.8
|
|
1,702.2
|
|
1,582.6
|
Marketing
expenses
|
28.7
|
|
20.2
|
|
118.3
|
|
93.2
|
General and
administrative expenses
|
100.4
|
|
83.5
|
|
386.1
|
|
373.2
|
Depreciation and
amortization
|
97.1
|
|
93.0
|
|
387.8
|
|
368.4
|
Impairments and
disposal of assets, net
|
1.8
|
|
3.5
|
|
(10.6)
|
|
(2.0)
|
Total operating costs
and expenses
|
$ 2,394.5
|
|
$
2,264.7
|
|
$ 9,286.0
|
|
$ 8,467.8
|
Operating
income
|
374.5
|
|
338.2
|
|
1,201.8
|
|
1,162.2
|
Interest,
net
|
22.1
|
|
18.9
|
|
81.3
|
|
68.7
|
Earnings before income
taxes
|
352.4
|
|
319.3
|
|
1,120.5
|
|
1,093.5
|
Income tax
expense
|
36.8
|
|
37.6
|
|
137.0
|
|
138.8
|
Earnings from
continuing operations
|
$
315.6
|
|
$
281.7
|
|
$
983.5
|
|
$
954.7
|
Losses from
discontinued operations, net of tax expense (benefit) of $(0.3),
$0.3, $(0.8) and $(0.2), respectively
|
(0.5)
|
|
—
|
|
(1.6)
|
|
(1.9)
|
Net earnings
|
$
315.1
|
|
$
281.7
|
|
$
981.9
|
|
$
952.8
|
Basic net earnings per
share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
2.61
|
|
$
2.26
|
|
$
8.07
|
|
$
7.47
|
Losses from
discontinued operations
|
—
|
|
—
|
|
(0.01)
|
|
(0.01)
|
Net
earnings
|
$
2.61
|
|
$
2.26
|
|
$
8.06
|
|
$
7.46
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
2.58
|
|
$
2.24
|
|
$
8.00
|
|
$
7.40
|
Losses from
discontinued operations
|
—
|
|
—
|
|
(0.01)
|
|
(0.01)
|
Net
earnings
|
$
2.58
|
|
$
2.24
|
|
$
7.99
|
|
$
7.39
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
121.0
|
|
124.4
|
|
121.9
|
|
127.8
|
Diluted
|
122.1
|
|
125.5
|
|
122.9
|
|
129.0
|
|
|
|
|
|
|
|
|
DARDEN RESTAURANTS,
INC.
CONSOLIDATED BALANCE
SHEETS
(In
millions)
|
|
|
5/28/2023
|
|
5/29/2022
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
367.8
|
|
$
420.6
|
Receivables,
net
|
80.2
|
|
72.0
|
Inventories
|
287.9
|
|
270.6
|
Prepaid income
taxes
|
107.3
|
|
274.8
|
Prepaid expenses and
other current assets
|
154.5
|
|
141.4
|
Total current
assets
|
$
997.7
|
|
$
1,179.4
|
Land, buildings and
equipment, net
|
3,725.1
|
|
3,356.0
|
Operating lease
right-of-use assets
|
3,373.9
|
|
3,465.1
|
Goodwill
|
1,037.4
|
|
1,037.4
|
Trademarks
|
806.3
|
|
806.3
|
Other assets
|
301.1
|
|
291.6
|
Total
assets
|
$
10,241.5
|
|
$
10,135.8
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
426.2
|
|
$
366.9
|
Accrued
payroll
|
173.0
|
|
181.5
|
Accrued income
taxes
|
7.8
|
|
32.1
|
Other accrued
taxes
|
65.9
|
|
64.5
|
Unearned
revenues
|
512.0
|
|
498.0
|
Other current
liabilities
|
752.5
|
|
704.5
|
Total current
liabilities
|
$
1,937.4
|
|
$
1,847.5
|
Long-term
debt
|
884.9
|
|
901.0
|
Deferred income
taxes
|
142.2
|
|
201.1
|
Operating lease
liabilities - non-current
|
3,667.6
|
|
3,755.8
|
Other
liabilities
|
1,407.9
|
|
1,232.2
|
Total
liabilities
|
$
8,040.0
|
|
$
7,937.6
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
2,230.8
|
|
$
2,226.0
|
Retained earnings
(deficit)
|
(32.5)
|
|
(25.9)
|
Accumulated other
comprehensive income (loss)
|
3.2
|
|
(1.9)
|
Total stockholders'
equity
|
$
2,201.5
|
|
$
2,198.2
|
Total liabilities and
stockholders' equity
|
$
10,241.5
|
|
$
10,135.8
|
DARDEN RESTAURANTS,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
5/28/2023
|
|
5/29/2022
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
981.9
|
|
$
952.8
|
Losses from
discontinued operations, net of tax
|
1.6
|
|
1.9
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
387.8
|
|
368.4
|
Impairments and
disposal of assets, net
|
(10.6)
|
|
(2.0)
|
Stock-based
compensation expense
|
67.5
|
|
60.5
|
Change in current
assets and liabilities and other, net
|
124.6
|
|
(117.0)
|
Net cash provided by
operating activities of continuing operations
|
$
1,552.8
|
|
$
1,264.6
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(564.9)
|
|
(376.9)
|
Proceeds from disposal
of land, buildings and equipment
|
25.4
|
|
10.1
|
Purchases of
capitalized software and changes in other assets, net
|
(28.9)
|
|
(22.2)
|
Net cash used in
investing activities of continuing operations
|
$
(568.4)
|
|
$
(389.0)
|
Cash flows—financing
activities
|
|
|
|
Net proceeds from
issuance of common stock
|
35.4
|
|
40.2
|
Dividends
paid
|
(589.8)
|
|
(563.0)
|
Repurchases of common
stock
|
(458.7)
|
|
(1,071.3)
|
Other, net
|
(20.0)
|
|
(15.6)
|
Net cash used in
financing activities of continuing operations
|
$
(1,033.1)
|
|
$
(1,609.7)
|
Cash flows—discontinued
operations
|
|
|
|
Net cash used in
operating activities of discontinued operations
|
(7.2)
|
|
(8.5)
|
Net cash used in
discontinued operations
|
$
(7.2)
|
|
$
(8.5)
|
|
|
|
|
Decrease in cash, cash
equivalents, and restricted cash
|
(55.9)
|
|
(742.6)
|
Cash, cash equivalents,
and restricted cash - beginning of period
|
472.1
|
|
1,214.7
|
Cash, cash equivalents,
and restricted cash - end of period
|
$
416.2
|
|
$
472.1
|
|
Reconciliation of cash,
cash equivalents, and restricted cash:
|
5/28/2023
|
|
5/29/2022
|
Cash and cash
equivalents
|
$
367.8
|
|
$
420.6
|
Restricted cash
included in prepaid expenses and other current assets
|
48.4
|
|
51.5
|
Total cash, cash
equivalents, and restricted cash shown in the statement of cash
flows
|
$
416.2
|
|
$
472.1
|
View original
content:https://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2023-fourth-quarter-and-full-year-results-increases-quarterly-dividend-and-provides-fiscal-2024-outlook-301857433.html
SOURCE Darden Restaurants, Inc.: Financial