ORLANDO,
Fla., March 21, 2024 /PRNewswire/ -- Darden
Restaurants, Inc. (NYSE:DRI) today reported its financial results
for the third quarter ended February 25,
2024.
Third Quarter 2024 Financial Highlights, Comparisons Versus
Same Fiscal Quarter Last Year
- Total sales increased 6.8% to $3.0
billion, driven by sales from the addition of 79
company-owned Ruth's Chris Steak House (Ruth's Chris) restaurants
and 53 other net new restaurants, partially offset by a blended
same-restaurant sales* decrease of (1.0)%
- Same-restaurant sales:
|
|
|
|
|
|
Consolidated
Darden*
|
(1.0) %
|
|
|
|
|
|
|
Olive Garden
|
(1.8) %
|
|
|
|
|
|
|
LongHorn
Steakhouse
|
2.3 %
|
|
|
|
|
|
|
Fine Dining*
|
(2.3) %
|
|
|
|
|
|
|
Other
Business
|
(2.6) %
|
- Reported diluted net earnings per share from continuing
operations were $2.60
- Excluding $0.02 of Ruth's Chris
transaction and integration related costs, adjusted diluted net
earnings per share from continuing operations were $2.62, an increase of 12.0%**
- The Company repurchased $33
million of its outstanding common stock
* Will not include Ruth's Chris Steak House until
they have been owned and operated by Darden for a 16-month period
(Q2 Fiscal 2025)
** See the "Non-GAAP
Information" below for more details
"I am proud of our teams and the way they performed this
quarter," said Darden President
& CEO Rick Cardenas. "Each one
of our segments grew sales and profit in an operating environment
that was tougher than we anticipated, and we continued to
outperform industry same-restaurant sales and traffic.
"Looking ahead, our focus remains on controlling what we can
control, leveraging and strengthening our competitive advantages,
and executing our back-to-basics operating philosophy in order to
effectively manage the business for the long-term."
Segment Performance
Segment profit represents sales,
less costs for food and beverage, restaurant labor, restaurant
expenses and marketing expenses. Segment profit excludes non-cash
real estate related expenses. From the date of acquisition forward,
sales and profits from Ruth's Chris company-owned restaurants are
included within the Fine Dining segment. Royalties from Ruth's
Chris franchise and managed locations reside in the Other Business
segment.
|
|
Q3
Sales
|
|
Q3 Segment
Profit
|
($ in
millions)
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Consolidated
Darden
|
|
$2,974.8
|
|
$2,786.2
|
|
|
|
|
Olive Garden
|
|
$1,310.2
|
|
$1,301.2
|
|
$294.7
|
|
$293.0
|
LongHorn
Steakhouse
|
|
$730.7
|
|
$695.5
|
|
$136.6
|
|
$121.2
|
Fine Dining
|
|
$372.9
|
|
$235.6
|
|
$81.4
|
|
$51.3
|
Other
Business
|
|
$561.0
|
|
$553.9
|
|
$83.7
|
|
$77.8
|
|
|
|
|
|
|
|
|
|
|
|
YTD
Sales
|
|
YTD Segment
Profit
|
($ in
millions)
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Consolidated
Darden
|
|
$8,432.7
|
|
$7,718.8
|
|
|
|
|
Olive Garden
|
|
$3,789.5
|
|
$3,608.6
|
|
$819.5
|
|
$728.0
|
LongHorn
Steakhouse
|
|
$2,043.5
|
|
$1,900.6
|
|
$365.8
|
|
$298.8
|
Fine Dining
|
|
$964.4
|
|
$621.0
|
|
$177.7
|
|
$120.2
|
Other
Business
|
|
$1,635.3
|
|
$1,588.6
|
|
$234.5
|
|
$209.1
|
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 May 1, 2024 to
shareholders of record at the close of business on April 10, 2024.
Share Repurchase Program
During the quarter, the
Company repurchased approximately 0.2 million shares of its common
stock for a total of approximately $33
million. In addition, yesterday, Darden's Board of Directors
authorized a new share repurchase program under which the Company
may repurchase up to $1 billion of
its outstanding common stock. This repurchase program does not have
an expiration and replaces the previously existing share repurchase
authorization.
Updated Fiscal 2024 Financial Outlook
The Company
updated its 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 approximately $11.4
billion
- Same-restaurant sales growth of 1.5% to 2.0%
- New restaurant openings of 50 to 55
- Total capital spending of approximately $600 million
- Total inflation of approximately 3.0%
- An effective tax rate between 12.0% and 12.5%
- Adjusted diluted net earnings per share from continuing
operations of $8.80 to $8.90, excluding approximately $0.35, after-tax, of Ruth's Chris transaction and
integration related costs*
- Approximately 121.0 million weighted average diluted shares
outstanding
* See the "Non-GAAP Information" below for more
details
Investor Conference Call
The Company will host a
conference call and slide presentation today, Thursday, March 21, 2024 at 8:30 am ET to review its recent financial
performance. The call will be webcast live at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=vq68gZsK.
Please allow extra time prior to the call to visit the site and
download any software required to listen to the webcast. 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 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 Q3 Reported
to Adjusted Earnings Reconciliation
|
|
Q3
2024
|
|
Q3
2023
|
$ in millions, except
per share amounts
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
|
Net
Earnings
|
Diluted
Net
Earnings
Per
Share
|
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
|
Net
Earnings
|
Diluted
Net
Earnings
Per
Share
|
Reported Earnings
from Continuing Operations
|
$
350.9
|
$
37.5
|
$
313.4
|
$
2.60
|
|
$
330.3
|
$
43.5
|
$
286.8
|
$
2.34
|
% Change vs Prior
Year
|
|
|
|
11.1 %
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Ruth's Chris
transaction and integration related costs
|
6.8
|
4.8
|
2.0
|
0.02
|
|
—
|
—
|
—
|
$
—
|
Adjusted Earnings
from Continuing Operations
|
$
357.7
|
$
42.3
|
$
315.4
|
$
2.62
|
|
$
330.3
|
$
43.5
|
$
286.8
|
$
2.34
|
% Change vs Prior
Year
|
|
|
|
12.0 %
|
|
|
|
|
|
Reconciliation of
Fiscal 2024 Reported to Adjusted Earnings Outlook
|
|
2024
|
Reported diluted net
earnings per share from continuing operations
|
$8.45
|
to
|
$8.55
|
Ruth's Chris
transaction and integration related costs
|
0.45
|
|
0.45
|
Income tax
expense
|
(0.10)
|
|
(0.10)
|
Adjusted diluted net
earnings per share from continuing operations
|
$8.80
|
to
|
$8.90
|
DARDEN RESTAURANTS,
INC. NUMBER OF COMPANY-OWNED
RESTAURANTS
|
|
|
2/25/24
|
2/26/23
|
Olive Garden
|
917
|
893
|
LongHorn
Steakhouse
|
572
|
554
|
Cheddar's Scratch
Kitchen
|
181
|
179
|
Yard House
|
88
|
86
|
Ruth's Chris Steak
House
|
79
|
—
|
The Capital
Grille
|
64
|
61
|
Seasons 52
|
44
|
43
|
Bahama
Breeze
|
43
|
42
|
Eddie V's
|
30
|
29
|
The Capital
Burger
|
4
|
3
|
Darden Continuing
Operations
|
2,022
|
1,890
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED STATEMENTS OF EARNINGS (In
millions, except per share
data) (Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2/25/2024
|
|
2/26/2023
|
|
2/25/2024
|
|
2/26/2023
|
Sales
|
$
2,974.8
|
|
$
2,786.2
|
|
$
8,432.7
|
|
$
7,718.8
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Food and
beverage
|
920.2
|
|
887.0
|
|
2,617.0
|
|
2,500.6
|
Restaurant
labor
|
937.1
|
|
874.2
|
|
2,693.3
|
|
2,476.5
|
Restaurant
expenses
|
471.9
|
|
440.3
|
|
1,368.9
|
|
1,260.8
|
Marketing
expenses
|
31.7
|
|
28.2
|
|
107.2
|
|
89.6
|
General and
administrative expenses
|
108.2
|
|
107.0
|
|
376.3
|
|
285.7
|
Depreciation and
amortization
|
117.9
|
|
98.3
|
|
340.2
|
|
290.7
|
Impairments and
disposal of assets, net
|
0.4
|
|
1.3
|
|
11.0
|
|
(12.4)
|
Total operating costs
and expenses
|
$
2,587.4
|
|
$
2,436.3
|
|
$
7,513.9
|
|
$
6,891.5
|
Operating
income
|
387.4
|
|
349.9
|
|
918.8
|
|
827.3
|
Interest,
net
|
36.5
|
|
19.6
|
|
103.3
|
|
59.2
|
Earnings before income
taxes
|
350.9
|
|
330.3
|
|
815.5
|
|
768.1
|
Income tax
expense
|
37.5
|
|
43.5
|
|
95.0
|
|
100.2
|
Earnings from
continuing operations
|
$
313.4
|
|
$
286.8
|
|
$
720.5
|
|
$
667.9
|
Losses from
discontinued operations, net of tax benefit of $0.6,
$0.2, 1.0, and $0.5 respectively
|
(0.5)
|
|
(0.2)
|
|
(1.0)
|
|
(1.1)
|
Net earnings
|
$
312.9
|
|
$
286.6
|
|
$
719.5
|
|
$
666.8
|
Basic net earnings per
share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
2.62
|
|
$
2.36
|
|
$
6.00
|
|
$
5.47
|
Losses from
discontinued operations
|
—
|
|
—
|
|
(0.01)
|
|
(0.01)
|
Net
earnings
|
$
2.62
|
|
$
2.36
|
|
$
5.99
|
|
$
5.46
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
2.60
|
|
$
2.34
|
|
$
5.95
|
|
$
5.42
|
Losses from
discontinued operations
|
—
|
|
—
|
|
—
|
|
(0.01)
|
Net
earnings
|
$
2.60
|
|
$
2.34
|
|
$
5.95
|
|
$
5.41
|
Average number of
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
119.4
|
|
121.4
|
|
120.1
|
|
122.2
|
Diluted
|
120.4
|
|
122.5
|
|
121.0
|
|
123.2
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED BALANCE SHEETS (In
millions)
|
|
|
2/25/2024
|
|
5/28/2023
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
243.9
|
|
$
367.8
|
Receivables,
net
|
72.2
|
|
80.2
|
Inventories
|
298.2
|
|
287.9
|
Prepaid income
taxes
|
122.6
|
|
107.3
|
Prepaid expenses and
other current assets
|
139.5
|
|
154.5
|
Total current
assets
|
$
876.4
|
|
$
997.7
|
Land, buildings and
equipment, net
|
4,101.9
|
|
3,725.1
|
Operating lease
right-of-use assets
|
3,494.3
|
|
3,373.9
|
Goodwill
|
1,397.8
|
|
1,037.4
|
Trademarks
|
1,148.0
|
|
806.3
|
Other assets
|
339.8
|
|
301.1
|
Total
assets
|
$
11,358.2
|
|
$
10,241.5
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
406.0
|
|
$
426.2
|
Short-term
debt
|
158.7
|
|
—
|
Accrued
payroll
|
195.6
|
|
173.0
|
Accrued income
taxes
|
8.5
|
|
7.8
|
Other accrued
taxes
|
69.0
|
|
65.9
|
Unearned
revenues
|
626.0
|
|
512.0
|
Other current
liabilities
|
808.6
|
|
752.5
|
Total current
liabilities
|
$
2,272.4
|
|
$
1,937.4
|
Long-term
debt
|
1,372.8
|
|
884.9
|
Deferred income
taxes
|
240.9
|
|
142.2
|
Operating lease
liabilities - non-current
|
3,774.4
|
|
3,667.6
|
Other
liabilities
|
1,516.8
|
|
1,407.9
|
Total
liabilities
|
$
9,177.3
|
|
$
8,040.0
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
2,252.8
|
|
$
2,230.8
|
Retained earnings
(deficit)
|
(101.6)
|
|
(32.5)
|
Accumulated other
comprehensive income
|
29.7
|
|
3.2
|
Total stockholders'
equity
|
$
2,180.9
|
|
$
2,201.5
|
Total liabilities and
stockholders' equity
|
$
11,358.2
|
|
$
10,241.5
|
DARDEN RESTAURANTS,
INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In
millions) (Unaudited)
|
|
|
Nine Months
Ended
|
|
2/25/2024
|
|
2/26/2023
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
719.5
|
|
$
666.8
|
Losses from
discontinued operations, net of tax
|
1.0
|
|
1.1
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
340.2
|
|
290.7
|
Impairments and
disposal of assets, net
|
11.0
|
|
(12.4)
|
Stock-based
compensation expense
|
57.8
|
|
52.6
|
Change in current
assets and liabilities and other, net
|
66.2
|
|
141.7
|
Net cash provided by
operating activities of continuing operations
|
$
1,195.7
|
|
$
1,140.5
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(460.8)
|
|
(410.5)
|
Proceeds from disposal
of land, buildings and equipment
|
2.0
|
|
21.4
|
Cash used in business
acquisitions, net of cash acquired
|
(699.9)
|
|
—
|
Purchases of
capitalized software and changes in other assets, net
|
(17.3)
|
|
(20.4)
|
Net cash used in
investing activities of continuing operations
|
$
(1,176.0)
|
|
$
(409.5)
|
Cash flows—financing
activities
|
|
|
|
Net proceeds from
issuance of common stock
|
37.0
|
|
18.3
|
Dividends
paid
|
(472.1)
|
|
(443.3)
|
Repurchases of common
stock
|
(356.6)
|
|
(423.5)
|
Proceeds from
short-term debt, net
|
158.7
|
|
—
|
Proceeds from issuance
of long-term debt, net
|
500.0
|
|
—
|
Principal payments on
finance leases, net
|
(14.0)
|
|
(14.2)
|
Payments of debt
issuance costs
|
(11.5)
|
|
—
|
Net cash used in
financing activities of continuing operations
|
$
(158.5)
|
|
$
(862.7)
|
Cash flows—discontinued
operations
|
|
|
|
Net cash used in
operating activities of discontinued operations
|
(9.3)
|
|
(5.5)
|
Net cash used in
discontinued operations
|
$
(9.3)
|
|
$
(5.5)
|
|
|
|
|
Decrease in cash, cash
equivalents, and restricted cash
|
(148.1)
|
|
(137.2)
|
Cash, cash equivalents,
and restricted cash - beginning of period
|
416.2
|
|
472.1
|
Cash, cash equivalents,
and restricted cash - end of period
|
$
268.1
|
|
$
334.9
|
|
Reconciliation of cash,
cash equivalents, and restricted cash:
|
2/25/2024
|
|
2/26/2023
|
Cash and cash
equivalents
|
$
243.9
|
|
$
275.3
|
Restricted cash
included in prepaid expenses and other current assets
|
24.2
|
|
59.6
|
Total cash, cash
equivalents, and restricted cash shown in the statement of cash
flows
|
$
268.1
|
|
$
334.9
|
View original
content:https://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2024-third-quarter-results-declares-quarterly-dividend-authorizes-new-1-billion-share-repurchase-program-and-updates-fiscal-2024-financial-outlook-302095168.html
SOURCE Darden Restaurants, Inc.: Financial