ORLANDO, Fla., Sept. 24, 2020 /PRNewswire/ -- Darden
Restaurants, Inc., (NYSE:DRI) today reported its financial results
for the first quarter ended August 30, 2020.
First Quarter 2021 Financial Highlights, Comparisons to First
Quarter Last Year
- Total sales of $1.53 billion, a
decrease of 28.4% driven by negative blended same-restaurant sales
of 29.0% and partially offset by the addition of 14 net new
restaurants
- Same-restaurant sales by segment:
|
(28.2)% for Olive
Garden
|
|
(39.1)% for Fine
Dining
|
|
(18.1)% for LongHorn
Steakhouse
|
|
(39.0)% for Other
Business
|
- Reported diluted net earnings per share from continuing
operations of $0.28 as compared to
last year's reported diluted net earnings per share of $1.38
- Adjusted diluted net earnings per share from continuing
operations of $0.56, after excluding
$0.28 related to corporate
restructuring costs, as compared to reported diluted net earnings
per share of $1.38*
- Reported net earnings from continuing operations of
$37 million
- Adjusted EBITDA of $185
million*
* See the "Non-GAAP Information" below for more
details
"The actions we continued to take in response to COVID-19, which
include being laser-focused on execution and strengthening our
business model, resulted in significantly improved first quarter
performance that exceeded expectations," said CEO Gene Lee. "I'm incredibly proud of how our
restaurant teams have adapted to our new operating environment and
their ongoing dedication to safety and delivering exceptional guest
experiences."
Segment Performance
Segment profit represents sales, less costs for food and beverage,
restaurant labor, restaurant expenses and marketing expenses.
Segment profit excludes non-cash real estate related expenses.
|
|
Q1
Sales
|
|
|
|
Q1 Segment
Profit
|
|
|
($ in
millions)
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
Consolidated
Darden
|
|
$1,527.4
|
|
$2,133.9
|
|
(28.4)
|
%
|
|
|
|
|
|
|
Olive
Garden
|
|
$788.2
|
|
$1,090.2
|
|
(27.7)
|
%
|
|
$173.8
|
|
$228.9
|
|
(24.1)
|
%
|
LongHorn
Steakhouse
|
|
$376.8
|
|
$450.2
|
|
(16.3)
|
%
|
|
$57.0
|
|
$74.5
|
|
(23.5)
|
%
|
Fine
Dining
|
|
$83.1
|
|
$136.1
|
|
(38.9)
|
%
|
|
$9.9
|
|
$20.3
|
|
(51.2)
|
%
|
Other
Business
|
|
$279.3
|
|
$457.4
|
|
(38.9)
|
%
|
|
$35.7
|
|
$64.4
|
|
(44.6)
|
%
|
The table below summarizes various metrics for consolidated
Darden and each reportable segment for restaurants with at least
limited dining room capacity at the beginning of each fiscal
quarter.
|
Q1
|
|
Q2
|
|
Average
Weekly
Sales
|
Same-
Restaurant
Sales
|
% of
Restaurants
|
|
% of
Restaurants
|
Consolidated
Darden
|
$69,046
|
(21.9)
|
%
|
68
|
%
|
|
91
|
%
|
Olive
Garden
|
$75,585
|
(21.1)
|
%
|
63
|
%
|
|
89
|
%
|
LongHorn
Steakhouse
|
$60,247
|
(11.3)
|
%
|
72
|
%
|
|
96
|
%
|
Fine
Dining
|
$89,706
|
(27.7)
|
%
|
57
|
%
|
|
90
|
%
|
Other
Business
|
$63,890
|
(33.9)
|
%
|
76
|
%
|
|
88
|
%
|
Term Loan Repayment and Other Liquidity Matters
Given steadily improving cash flows in the quarter, and increased
confidence in cash flow projections, the Company fully repaid its
$270 million term loan on
August 10, 2020. The Company now has
access to $1.4 billion of liquidity
with $655 million of cash on hand and
$750 million available through its
credit facility.
Dividend Declared
Darden's Board of Directors announced that it has reinstated a
quarterly dividend and declared a quarterly cash dividend
of $0.30 per share on the Company's outstanding common
stock. The dividend is payable on November 2, 2020 to
shareholders of record at the close of business on October 9,
2020.
Fiscal 2021 Second Quarter Financial Outlook
The Company provided the financial outlook for the second quarter
of fiscal 2021 as follows:
- Total sales of approximately 82% of prior year
- EBITDA of $200 to $215 million*
- Diluted net earnings per share from continuing operations of
$0.65 to $0.75
- Approximately 131 million weighted average diluted shares
outstanding
* See the "Non-GAAP Information" below for more
details
The Company reiterated its full year outlook for 35-40 net new
restaurants and total capital spending of $250 to $300
million.
Investor Conference Call
The Company will host a conference call and slide presentation on
Thursday, September 24 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/1007/36843 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
9688892. 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 response of governments and of our Company to the
outbreak, health concerns including food-related pandemics or
outbreaks of flu or other viruses, 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, long-term and
non-cancelable property leases, labor and insurance costs, failure
to execute a business continuity plan following a disaster, 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,
volatility leading to the inability to hedge equity compensation
market exposure, economic factors specific to the restaurant
industry and general macroeconomic factors including interest
rates, disruptions in the financial markets, risks of doing
business with franchisees, licensees and vendors in foreign
markets, failure to protect our intellectual property, impairment
in the carrying value of our goodwill or other intangible assets,
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,
EBITDA and adjusted EBITDA. 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.
Fiscal Q1 Reported
to Adjusted Earnings Reconciliation
|
|
Q1
2021
|
|
Q1
2020
|
$ in millions, except
EPS
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
(Benefit)
|
Net
Earnings
|
Diluted
Net
Earnings
Per
Share
|
|
Earnings
Before
Income
Tax
|
Income
Tax
Expense
(Benefit)
|
Net
Earnings
|
Diluted
Net
Earnings
Per
Share
|
Reported Earnings
from Continuing Operations
|
$32.5
|
$(4.8)
|
$37.3
|
$0.28
|
|
$190.4
|
$18.6
|
$171.8
|
$1.38
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Corporate
restructuring1
|
47.8
|
12.0
|
35.8
|
0.28
|
|
—
|
—
|
—
|
—
|
Adjusted Earnings
from Continuing Operations
|
$80.3
|
$7.2
|
$73.1
|
$0.56
|
|
$190.4
|
$18.6
|
$171.8
|
$1.38
|
Interest
|
|
|
16.6
|
|
|
|
|
11.1
|
|
Adjusted Income Tax
Expense
|
|
|
7.2
|
|
|
|
|
18.6
|
|
Depreciation and
Amortization
|
|
|
87.6
|
|
|
|
|
86.2
|
|
Adjusted
EBITDA
|
|
|
$184.5
|
|
|
|
|
$287.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Includes
cash expenses of approximately $38 million, primarily related to
severance and benefits, which will be paid over the next eighteen
months, and non-cash expenses of approximately $10 million related
to acceleration of equity-settled awards and expense associated
with the postretirement benefit plan.
|
Fiscal 2021 Second
Quarter EBITDA Outlook Reconciliation
|
$ in
millions
|
Net
Earnings
|
$86
|
to
|
$98
|
Interest,
net
|
15
|
|
15
|
Income tax
expense
|
10
|
|
13
|
Depreciation and
amortization
|
89
|
|
89
|
EBITDA
|
$200
|
to
|
$215
|
DARDEN
RESTAURANTS, INC.
|
NUMBER OF
COMPANY-OWNED RESTAURANTS
|
|
|
8/30/20
|
8/25/19
|
Olive
Garden
|
871
|
867
|
LongHorn
Steakhouse
|
524
|
514
|
Cheddar's Scratch
Kitchen
|
165
|
165
|
Yard House
|
80
|
79
|
The Capital
Grille1
|
60
|
59
|
Seasons 52
|
43
|
45
|
Bahama
Breeze
|
41
|
42
|
Eddie V's
|
23
|
22
|
Darden Continuing
Operations
|
1,807
|
1,793
|
1Includes
two The Capital Burger restaurants in fiscal 2021 and one in fiscal
2020.
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
8/30/2020
|
|
8/25/2019
|
Sales
|
$
|
1,527.4
|
|
|
$
|
2,133.9
|
|
Costs and
expenses:
|
|
|
|
Food and
beverage
|
434.5
|
|
|
603.3
|
|
Restaurant
labor
|
500.7
|
|
|
703.8
|
|
Restaurant
expenses
|
290.9
|
|
|
372.4
|
|
Marketing
expenses
|
28.8
|
|
|
68.7
|
|
General and
administrative expenses
|
128.3
|
|
|
98.0
|
|
Depreciation and
amortization
|
87.6
|
|
|
86.2
|
|
Total operating costs
and expenses
|
$
|
1,470.8
|
|
|
$
|
1,932.4
|
|
Operating
income
|
56.6
|
|
|
201.5
|
|
Interest,
net
|
16.6
|
|
|
11.1
|
|
Other (income)
expense, net
|
7.5
|
|
|
—
|
|
Earnings before
income taxes
|
32.5
|
|
|
190.4
|
|
Income tax expense
(benefit)
|
(4.8)
|
|
|
18.6
|
|
Earnings from
continuing operations
|
$
|
37.3
|
|
|
$
|
171.8
|
|
Losses from
discontinued operations, net of tax benefit of $0.9 and $0.2,
respectively
|
(1.2)
|
|
|
(1.2)
|
|
Net
earnings
|
$
|
36.1
|
|
|
$
|
170.6
|
|
|
|
|
|
Basic net earnings
per share:
|
|
|
|
Earnings from
continuing operations
|
$
|
0.29
|
|
|
$
|
1.40
|
|
Losses from
discontinued operations
|
(0.01)
|
|
|
(0.01)
|
|
Net
earnings
|
$
|
0.28
|
|
|
$
|
1.39
|
|
Diluted net earnings
per share:
|
|
|
|
Earnings from
continuing operations
|
$
|
0.28
|
|
|
$
|
1.38
|
|
Losses from
discontinued operations
|
—
|
|
|
(0.01)
|
|
Net
earnings
|
$
|
0.28
|
|
|
$
|
1.37
|
|
Average number of
common shares outstanding:
|
|
|
|
Basic
|
130.0
|
|
|
122.9
|
|
Diluted
|
130.9
|
|
|
124.6
|
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
millions)
|
|
|
8/30/2020
|
|
5/31/2020
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
654.6
|
|
|
$
|
763.3
|
|
Receivables,
net
|
47.2
|
|
|
49.8
|
|
Inventories
|
190.1
|
|
|
206.9
|
|
Prepaid income
taxes
|
16.2
|
|
|
18.4
|
|
Prepaid expenses and
other current assets
|
62.9
|
|
|
63.0
|
|
Total current
assets
|
$
|
971.0
|
|
|
$
|
1,101.4
|
|
Land, buildings and
equipment, net
|
2,739.6
|
|
|
2,756.9
|
|
Operating lease
right-of-use assets
|
3,951.4
|
|
|
3,969.2
|
|
Goodwill
|
1,037.4
|
|
|
1,037.4
|
|
Trademarks
|
806.3
|
|
|
805.9
|
|
Other
assets
|
283.8
|
|
|
275.3
|
|
Total
assets
|
$
|
9,789.5
|
|
|
$
|
9,946.1
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
248.8
|
|
|
$
|
249.4
|
|
Short-term
debt
|
—
|
|
|
270.0
|
|
Accrued
payroll
|
128.9
|
|
|
150.0
|
|
Accrued income
taxes
|
6.1
|
|
|
6.2
|
|
Other accrued
taxes
|
52.1
|
|
|
43.4
|
|
Unearned
revenues
|
448.5
|
|
|
467.9
|
|
Other current
liabilities
|
659.5
|
|
|
605.9
|
|
Total current
liabilities
|
$
|
1,543.9
|
|
|
$
|
1,792.8
|
|
Long-term
debt
|
929.1
|
|
|
928.8
|
|
Deferred income
taxes
|
43.3
|
|
|
56.1
|
|
Operating lease
liability - non-current
|
4,264.3
|
|
|
4,276.3
|
|
Other
liabilities
|
633.9
|
|
|
560.9
|
|
Total
liabilities
|
$
|
7,414.5
|
|
|
$
|
7,614.9
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
surplus
|
$
|
2,220.9
|
|
|
$
|
2,205.3
|
|
Retained
earnings
|
166.6
|
|
|
143.5
|
|
Accumulated other
comprehensive income (loss)
|
(12.5)
|
|
|
(17.6)
|
|
Total stockholders'
equity
|
$
|
2,375.0
|
|
|
$
|
2,331.2
|
|
Total liabilities and
stockholders' equity
|
$
|
9,789.5
|
|
|
$
|
9,946.1
|
|
DARDEN
RESTAURANTS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
8/30/2020
|
|
8/25/2019
|
Cash flows—operating
activities
|
|
|
|
Net
earnings
|
$
|
36.1
|
|
|
$
|
170.6
|
|
Losses from
discontinued operations, net of tax
|
1.2
|
|
|
1.2
|
|
Adjustments to
reconcile net earnings from continuing operations to cash
flows:
|
|
|
|
Depreciation and
amortization
|
87.6
|
|
|
86.2
|
|
Stock-based
compensation expense
|
19.1
|
|
|
14.2
|
|
Change in current
assets and liabilities and other, net
|
62.7
|
|
|
(18.4)
|
|
Net cash provided by
operating activities of continuing operations
|
$
|
206.7
|
|
|
$
|
253.8
|
|
Cash flows—investing
activities
|
|
|
|
Purchases of land,
buildings and equipment
|
(42.2)
|
|
|
(117.1)
|
|
Proceeds from
disposal of land, buildings and equipment
|
2.3
|
|
|
2.6
|
|
Cash used in business
acquisitions, net of cash acquired
|
—
|
|
|
(37.0)
|
|
Purchases of
capitalized software and changes in other assets, net
|
(4.1)
|
|
|
(15.4)
|
|
Net cash used in
investing activities of continuing operations
|
$
|
(44.0)
|
|
|
$
|
(166.9)
|
|
Cash flows—financing
activities
|
|
|
|
Proceeds from
issuance of common stock
|
4.2
|
|
|
11.2
|
|
Dividends
paid
|
—
|
|
|
(108.1)
|
|
Repurchases of common
stock
|
(6.6)
|
|
|
(94.8)
|
|
Repayments of
short-term debt
|
(270.0)
|
|
|
—
|
|
Principal payments on
capital and financing leases
|
(1.2)
|
|
|
(1.3)
|
|
Other, net
|
—
|
|
|
0.3
|
|
Net cash used in
financing activities of continuing operations
|
$
|
(273.6)
|
|
|
$
|
(192.7)
|
|
Cash
flows—discontinued operations
|
|
|
|
Net cash provided by
(used in) operating activities of discontinued
operations
|
2.2
|
|
|
(0.7)
|
|
Net cash provided by
(used in) discontinued operations
|
$
|
2.2
|
|
|
$
|
(0.7)
|
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(108.7)
|
|
|
(106.5)
|
|
Cash and cash
equivalents - beginning of period
|
763.3
|
|
|
457.3
|
|
Cash and cash
equivalents - end of period
|
$
|
654.6
|
|
|
$
|
350.8
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content:http://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2021-first-quarter-results-announces-repayment-of-its-term-loan-reinstates-a-quarterly-dividend-and-provides-fiscal-2021-second-quarter-outlook-301137066.html
SOURCE Darden Restaurants, Inc.: Financial