Florida | 59-3305930 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description of Exhibit | |
99.1 | News release dated June 30, 2016, entitled “Darden Restaurants Reports Fiscal 2016 Fourth Quarter and Full Year Results; Reports Positive Same-Restaurant Sales for All Brands; Increases Quarterly Dividend; and Provides Fiscal 2017 Outlook.” |
DARDEN RESTAURANTS, INC. | |
By: | /s/ Ricardo Cardenas |
Ricardo Cardenas | |
Senior Vice President and Chief Financial Officer |
Exhibit Number | Description of Exhibit | |
99.1 | News release dated June 30, 2016, entitled “Darden Restaurants Reports Fiscal 2016 Fourth Quarter and Full Year Results; Reports Positive Same-Restaurant Sales for All Brands; Increases Quarterly Dividend; and Provides Fiscal 2017 Outlook.” |
Contacts: | ||||
(Analysts) Kevin Kalicak | (407) 245-5870 | |||
FOR RELEASE | (Media) Rich Jeffers | (407) 245-4189 |
• | Due to the impact of the extra week of operations included in the fourth quarter of fiscal 2015, total sales from continuing operations decreased 4.7% to $1.79 billion; excluding the impact of the extra week, total sales from continuing operations increased 2.1% |
• | Reported diluted net earnings per share from continuing operations increased 19.6% to $1.10 and increased 8.9% from last year’s adjusted diluted net earnings per share (13-week basis)* |
• | The company repurchased approximately $45 million of its outstanding common stock |
• | Same-restaurant sales increased 1.7% on a fiscal calendar basis |
+1.6% for Olive Garden | +1.5% for The Capital Grille | +1.4% for Yard House | |||
+1.1% for LongHorn Steakhouse | +0.9% for Eddie V’s | +3.7% for Seasons 52 | |||
+5.4% for Bahama Breeze |
• | On a comparable calendar basis, same-restaurant sales increased 2.6% for the quarter |
+2.4% for Olive Garden | +3.7% for The Capital Grille | +1.4% for Yard House | |||
+2.2% for LongHorn Steakhouse | +2.7% for Eddie V’s | +5.0% for Seasons 52 | |||
+4.7% for Bahama Breeze |
• | Total sales from continuing operations increased 2.5% to $6.93 billion, which includes the impact of the extra week of operations in fiscal 2015; excluding the impact of the extra week, total sales from continuing operations increased 4.4% |
• | Reported diluted net earnings per share from continuing operations increased 84.1% to $2.78 |
• | Adjusted diluted net earnings per share from continuing operations of $3.53 increased 37.9% (52-week basis)* |
• | The company repurchased approximately $185 million of its outstanding common stock |
• | Same-restaurant sales increased 3.3% for the year on both a fiscal and comparable calendar basis |
+3.1% for Olive Garden | +3.9% for The Capital Grille | +2.3% for Yard House | |||
+3.5% for LongHorn Steakhouse | +1.8% for Eddie V’s | +4.7% for Seasons 52 | |||
+4.8% for Bahama Breeze |
Total Sales | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
($ millions) | 05/29/16 | 05/31/15 | % Change | 05/29/16 | 05/31/15 | % Change | |||||||||||||||||
Weeks in Period | 13 | 14 | 13vs14 | 52 | 53 | 52vs53 | |||||||||||||||||
Consolidated Darden | $ | 1,790.2 | $ | 1,878.3 | -4.7 | % | $ | 6,933.5 | $ | 6,764.0 | 2.5 | % | |||||||||||
Olive Garden | $ | 981.8 | $ | 1,037.4 | -5.4 | % | $ | 3,838.6 | $ | 3,789.6 | 1.3 | % | |||||||||||
LongHorn Steakhouse | $ | 413.2 | $ | 438.1 | -5.7 | % | $ | 1,587.7 | $ | 1,544.7 | 2.8 | % | |||||||||||
Fine Dining | $ | 131.6 | $ | 137.2 | -4.1 | % | $ | 514.1 | $ | 500.1 | 2.8 | % | |||||||||||
Other Business | $ | 263.6 | $ | 265.6 | -0.8 | % | $ | 993.1 | $ | 929.6 | 6.8 | % |
Segment Profit Margin %* | Three Months Ended | Twelve Months Ended | ||||||||||
($ millions) | 05/29/16 | 05/31/15 | Basis Diff | 05/29/16 | 05/31/15 | Basis Diff | ||||||
Olive Garden | 19.3% | 20.3% | (100) | 19.8% | 18.5% | 130 | ||||||
LongHorn Steakhouse | 19.0% | 17.8% | 120 | 17.3% | 15.5% | 180 | ||||||
Fine Dining | 20.1% | 20.0% | 10 | 19.5% | 19.0% | 50 | ||||||
Other Business | 18.9% | 18.9% | — | 16.9% | 15.5% | 140 |
Olive Garden | March | April | May | Q4 |
Same-Restaurant Sales | 0.8% | 0.2% | 4.1% | 1.6% |
Same-Restaurant Traffic | 0.3% | (2.4)% | 1.7% | (0.1)% |
Pricing | 0.7% | 0.7% | 0.7% | 0.7% |
Menu-mix | (0.2)% | 1.9% | 1.7% | 1.0% |
LongHorn Steakhouse | March | April | May | Q4 |
Same-Restaurant Sales | 0.0% | 0.3% | 3.1% | 1.1% |
Same-Restaurant Traffic | (5.4)% | (3.4)% | (0.1)% | (3.2)% |
Pricing | 1.8% | 1.8% | 1.8% | 1.8% |
Menu-mix | 3.6% | 1.9% | 1.4% | 2.5% |
Olive Garden | March | April | May | Q4 |
Same-Restaurant Sales | 1.7% | 1.9% | 3.8% | 2.4% |
Same-Restaurant Traffic | 0.8% | (1.2)% | 1.5% | 0.4% |
LongHorn Steakhouse | March | April | May | Q4 |
Same-Restaurant Sales | 1.4% | 1.7% | 3.7% | 2.2% |
Same-Restaurant Traffic | (4.0)% | (2.0)% | 0.4% | (2.0)% |
• | Same-restaurant sales growth of 1.0% to 2.0% |
• | New unit openings of 24 to 28 restaurants |
• | Total capital spending of $310 to $350 million |
• | Total inflation of 1.5% to 2.0% |
• | Earnings per diluted share of $3.80 to $3.90 |
• | The EPS outlook reflects approximately 128.5 million diluted average common shares outstanding for the year |
Fiscal Q4 Reported to Adjusted Earnings Reconciliation | |||
Q4 2016 | Q4 2015 | % Change | |
Reported Diluted Net EPS from Continuing Operations | $1.10 | $0.92 | 19.6% |
Debt Retirement Costs | — | — | |
Real Estate Plan Implementation | — * | — | |
Strategic Action Plan and Other Costs | — | 0.16 | |
Adjusted Diluted Net EPS from Continuing Operations | $1.10 | $1.08 | 1.9% |
Remove 53rd Week Impact in Fiscal 2015 | — | (0.07) | |
Adjusted Diluted Net EPS from Continuing Operations (13-Week Basis) | $1.10 | $1.01 | 8.9% |
Annual Reported to Adjusted Earnings Reconciliation | |||
2016 | 2015 | % Change | |
Reported Diluted Net EPS from Continuing Operations | $2.78 | $1.51 | 84.1% |
Debt Retirement Costs | 0.51 | 0.42 | |
Real Estate Plan Implementation | 0.26 | — | |
Strategic Action Plan and Other Costs | (0.02) | 0.70 | |
Adjusted Diluted Net EPS from Continuing Operations | $3.53 | $2.63 | 34.2% |
Remove 53rd Week Impact in Fiscal 2015 (In Q4) | — | (0.07) | |
Adjusted Diluted Net EPS from Continuing Operations (52-Week Basis) | $3.53 | $2.56 | 37.9% |
5/29/16 | 5/31/15 | |||
Olive Garden1 | 843 | 846 | ||
LongHorn Steakhouse | 481 | 480 | ||
Yard House | 65 | 59 | ||
The Capital Grille | 54 | 54 | ||
Bahama Breeze | 37 | 36 | ||
Seasons 52 | 40 | 43 | ||
Eddie V's | 16 | 16 | ||
Darden Continuing Operations | 1,536 | 1,534 | ||
1Includes six locations in Canada for all periods presented. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
5/29/2016 | 5/31/2015 | 5/29/2016 | 5/31/2015 | ||||||||||||
Sales | $ | 1,790.2 | $ | 1,878.3 | $ | 6,933.5 | $ | 6,764.0 | |||||||
Costs and expenses: | |||||||||||||||
Food and beverage | 517.0 | 566.9 | 2,039.7 | 2,085.1 | |||||||||||
Restaurant labor | 556.9 | 584.9 | 2,189.2 | 2,135.6 | |||||||||||
Restaurant expenses | 308.4 | 295.1 | 1,163.5 | 1,120.8 | |||||||||||
Marketing expenses | 63.4 | 65.5 | 238.0 | 243.3 | |||||||||||
General and administrative expenses | 90.7 | 119.5 | 384.9 | 430.2 | |||||||||||
Depreciation and amortization | 66.8 | 80.9 | 290.2 | 319.3 | |||||||||||
Impairments and disposal of assets, net | 1.9 | 15.0 | 5.8 | 62.1 | |||||||||||
Total operating costs and expenses | $ | 1,605.1 | $ | 1,727.8 | $ | 6,311.3 | $ | 6,396.4 | |||||||
Operating income | 185.1 | 150.5 | 622.2 | 367.6 | |||||||||||
Interest, net | 9.7 | 24.0 | 172.5 | 192.3 | |||||||||||
Earnings before income taxes | 175.4 | 126.5 | 449.7 | 175.3 | |||||||||||
Income taxes | 35.0 | 8.4 | 90.0 | (21.1 | ) | ||||||||||
Earnings from continuing operations | $ | 140.4 | $ | 118.1 | $ | 359.7 | $ | 196.4 | |||||||
Earnings (loss) from discontinued operations, net of tax expense of $0.5, $22.4, $3.4 and $344.8, respectively | (0.8 | ) | (12.8 | ) | 15.3 | 513.1 | |||||||||
Net earnings | $ | 139.6 | $ | 105.3 | $ | 375.0 | $ | 709.5 | |||||||
Basic net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 1.11 | $ | 0.94 | $ | 2.82 | $ | 1.54 | |||||||
Earnings (loss) from discontinued operations | (0.01 | ) | (0.11 | ) | 0.12 | 4.02 | |||||||||
Net earnings | $ | 1.10 | $ | 0.83 | $ | 2.94 | $ | 5.56 | |||||||
Diluted net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 1.10 | $ | 0.92 | $ | 2.78 | $ | 1.51 | |||||||
Earnings (loss) from discontinued operations | (0.01 | ) | (0.10 | ) | 0.12 | 3.96 | |||||||||
Net earnings | $ | 1.09 | $ | 0.82 | $ | 2.90 | $ | 5.47 | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 126.4 | 126.3 | 127.4 | 127.7 | |||||||||||
Diluted | 128.2 | 128.4 | 129.3 | 129.7 | |||||||||||
5/29/2016 | 5/31/2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 274.8 | $ | 535.9 | |||
Receivables, net | 64.0 | 78.0 | |||||
Inventories | 175.4 | 163.9 | |||||
Prepaid income taxes | 46.1 | 18.9 | |||||
Prepaid expenses and other current assets | 76.4 | 69.4 | |||||
Deferred income taxes | 163.3 | 157.4 | |||||
Assets held for sale | 20.3 | 32.9 | |||||
Total current assets | $ | 820.3 | $ | 1,056.4 | |||
Land, buildings and equipment, net | 2,041.6 | 3,215.8 | |||||
Goodwill | 872.3 | 872.4 | |||||
Trademarks | 574.6 | 574.6 | |||||
Other assets | 273.8 | 275.5 | |||||
Total assets | $ | 4,582.6 | $ | 5,994.7 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 241.9 | $ | 198.8 | |||
Accrued payroll | 135.1 | 141.1 | |||||
Accrued income taxes | — | 12.6 | |||||
Other accrued taxes | 49.1 | 51.5 | |||||
Unearned revenues | 360.4 | 328.6 | |||||
Current portion of long-term debt | — | 15.0 | |||||
Other current liabilities | 400.6 | 449.1 | |||||
Total current liabilities | $ | 1,187.1 | $ | 1,196.7 | |||
Long-term debt, less current portion | 440.0 | 1,452.3 | |||||
Deferred income taxes | 255.2 | 341.8 | |||||
Deferred rent | 249.7 | 225.9 | |||||
Other liabilities | 498.6 | 444.5 | |||||
Total liabilities | $ | 2,630.6 | $ | 3,661.2 | |||
Stockholders’ equity: | |||||||
Common stock and surplus | $ | 1,502.6 | $ | 1,405.9 | |||
Retained earnings | 547.5 | 1,026.0 | |||||
Treasury stock | (7.8 | ) | (7.8 | ) | |||
Accumulated other comprehensive income (loss) | (87.0 | ) | (86.6 | ) | |||
Unearned compensation | (3.3 | ) | (4.0 | ) | |||
Total stockholders’ equity | $ | 1,952.0 | $ | 2,333.5 | |||
Total liabilities and stockholders’ equity | $ | 4,582.6 | $ | 5,994.7 |
Twelve Months Ended | |||||||
5/29/2016 | 5/31/2015 | ||||||
Cash flows—operating activities | |||||||
Net earnings | $ | 375.0 | $ | 709.5 | |||
Earnings from discontinued operations, net of tax | (15.3 | ) | (513.1 | ) | |||
Adjustments to reconcile net earnings from continuing operations to cash flows: | |||||||
Depreciation and amortization | 290.2 | 319.3 | |||||
Stock-based compensation expense | 37.3 | 53.7 | |||||
Change in current assets and liabilities and other, net | 133.2 | 304.9 | |||||
Net cash provided by operating activities of continuing operations | $ | 820.4 | $ | 874.3 | |||
Cash flows—investing activities | |||||||
Purchases of land, buildings and equipment | (228.3 | ) | (296.5 | ) | |||
Proceeds from disposal of land, buildings and equipment | 325.2 | 67.9 | |||||
Increase in other assets | (21.5 | ) | (6.5 | ) | |||
Net cash provided by (used in) investing activities of continuing operations | $ | 75.4 | $ | (235.1 | ) | ||
Cash flows—financing activities | |||||||
Proceeds from issuance of common stock | 99.3 | 159.7 | |||||
Income tax benefits credited to equity | 17.5 | 18.4 | |||||
Special cash distribution from Four Corners Property Trust | 315.0 | — | |||||
Dividends paid | (268.2 | ) | (278.9 | ) | |||
Repurchases of common stock | (184.8 | ) | (502.3 | ) | |||
ESOP note receivable repayment | 0.6 | 1.2 | |||||
Repayments of short-term debt, net | — | (207.6 | ) | ||||
Repayment of long-term debt | (1,096.8 | ) | (1,065.9 | ) | |||
Principal payments on capital leases | (3.4 | ) | (2.2 | ) | |||
Proceeds from financing lease obligation | — | 93.1 | |||||
Net cash used in financing activities of continuing operations | $ | (1,120.8 | ) | $ | (1,784.5 | ) | |
Cash flows—discontinued operations | |||||||
Net cash used in operating activities of discontinued operations | (42.4 | ) | (403.3 | ) | |||
Net cash provided by investing activities of discontinued operations | 6.3 | 1,986.2 | |||||
Net cash provided by (used in) discontinued operations | $ | (36.1 | ) | $ | 1,582.9 | ||
Increase (decrease) in cash and cash equivalents | (261.1 | ) | 437.6 | ||||
Cash and cash equivalents - beginning of period | 535.9 | 98.3 | |||||
Cash and cash equivalents - end of period | $ | 274.8 | $ | 535.9 |
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