ORLANDO, Fla., June 23, 2022 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the fourth quarter and fiscal year ended May 29, 2022.

 

•Total sales increased 14.2% to $2.60 billion driven by a blended same-restaurant sales increase of 11.7% and sales from 33 net new restaurants

•Same-restaurant sales:

•Reported diluted net earnings per share was $2.24 as compared to last year's reported diluted net earnings per share of $2.79 and last year's adjusted diluted net earnings per share of $2.03*

•Net earnings from continuing operations were $282 million

•EBITDA of $431 million*

•The Company repurchased $237 million of its outstanding common stock

•Total sales increased 33.8% to $9.63 billion driven by a blended same-restaurant sales increase of 30.9% and sales from 33 net new restaurants

•Same-restaurant sales:

•Reported diluted net earnings per share was $7.40, as compared to last year's reported diluted net earnings per share of $4.80 and last year's adjusted diluted net earnings per share of $4.31*

•Net earnings from continuing operations were $955 million

•EBITDA of $1,531 billion*

“We had a strong quarter despite experiencing high inflation, and fiscal 2022 was a solid year,” said Darden President & CEO Rick Cardenas. "Darden’s competitive advantages enabled our brands to strengthen their business models while our restaurant teams continued to deliver exceptional guest experiences in a challenging operating environment. As we begin our new fiscal year, our focus remains on driving profitable sales, investing in the guest experience and simplifying operations. Darden’s strategy, and our strong balance sheet, positions us well regardless of the operating environment.”

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.

Average weekly sales by segment:

1 Pre-COVID represents FY2019 Q4.

2 Pre-COVID represents trailing four quarters ended FY2020 Q3

Darden's Board of Directors declared a quarterly cash dividend of $1.21 per share, a 10% increase from third quarter fiscal 2022, on the Company's outstanding common stock. The dividend is payable on August 1, 2022 to shareholders of record at the close of business on July 8, 2022.

During the quarter, the Company repurchased approximately 1.8 million shares of its common stock for a total cost of approximately $237 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.

“By adhering to our strategy, and pricing below inflation, we ended the year with significantly better margins than pre-COVID,” said CFO Raj Vennam. "As a result, we generated $1.3 billion of cash from operations in fiscal 2022. The strength of our operating model and its ability to generate durable cash flow allows us to be disciplined as we enter fiscal 2023.”

Below is the full year financial outlook for fiscal 2023. We will provide additional detail on the quarterly flow during our investor conference call scheduled for this morning at 8:30 am ET.

•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

Darden will hold its Annual Meeting of Shareholders on September 21, 2022. The meeting will be held in a virtual format only. The record date for shareholders to vote in the Annual Meeting is July 27, 2022.

The Company will host a conference call and slide presentation on Thursday, June 23, 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/odE52WZBJex 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 1-800-263-0877 and enter passcode 3401699. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.

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.

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, 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, labor and insurance costs, 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 tactics, a failure to address cost pressures, economic factors specific to the restaurant industry and general macroeconomic factors including interest rates, 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.

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 and EBITDA - earnings before interest, taxes, depreciation and amortization. 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

    

1 Includes cash expenses of approximately $38 million, primarily related to severance and benefits, paid over an eighteen month period, and non-cash expenses of approximately $10 million related to acceleration of equity-settled awards and expense associated with the postretirement benefit plan.

2 Primarily relates to our estimated federal net operating loss (NOL) for fiscal year 2021, which was carried back to the preceding five years. A non-recurring income tax benefit is generated due to the difference in the federal tax rates between fiscal year 2021 and the years to which the NOL was carried back.

 

			5/29/2022						5/30/2021
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents			$	420.6					$	1,214.7
Receivables, net			72.0						68.2
Inventories			270.6						190.8
Prepaid income taxes			274.8						337.2
Prepaid expenses and other current assets			141.4						60.2
Total current assets			$	1,179.4					$	1,871.1
Land, buildings and equipment, net			3,356.0						2,869.2
Operating lease right-of-use assets			3,465.1						3,776.4
Goodwill			1,037.4						1,037.4
Trademarks			806.3						806.3
Other assets			291.6						295.7
Total assets			$	10,135.8					$	10,656.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	366.9					$	304.5
Accrued payroll			181.5						177.4
Accrued income taxes			32.1						35.9
Other accrued taxes			64.5						60.5
Unearned revenues			498.0						474.2
Other current liabilities			704.5						795.8
Total current liabilities			$	1,847.5					$	1,848.3
Long-term debt			901.0						929.8
Deferred income taxes			201.1						221.6
Operating lease liabilities - non-current			3,755.8						4,088.5
Other liabilities			1,232.2						754.8
Total liabilities			$	7,937.6					$	7,843.0
Stockholders’ equity:
Common stock and surplus			$	2,226.0					$	2,286.6
Retained earnings (deficit)			(25.9)						522.3
Accumulated other comprehensive income (loss)			(1.9)						4.2
Total stockholders’ equity			$	2,198.2					$	2,813.1
Total liabilities and stockholders’ equity			$	10,135.8					$	10,656.1