(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)) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
DARDEN RESTAURANTS, INC. | |
By: | /s/ Ricardo Cardenas |
Ricardo Cardenas | |
Senior Vice President and Chief Financial Officer |
• | Total sales increased 4.2% to $2.06 billion driven by the addition of 37 net new restaurants and a blended same-restaurant sales increase of 2.0% |
• | Same-restaurant sales by brand: |
+1.5% for Olive Garden | -1.2% for Cheddar's Scratch Kitchen | ||
+6.7% for LongHorn Steakhouse | +0.7% for Yard House | ||
+1.8% for The Capital Grille | -3.5% for Seasons 52 | ||
+0.5% for Eddie V’s | -3.4% for Bahama Breeze |
• | Reported diluted net earnings per share from continuing operations decreased 77.2% to $0.21 compared to last year's reported diluted net earnings per share |
• | Adjusted diluted net earnings per share from continuing operations increased 21.7% to $1.12 compared to last year's reported diluted net earnings per share, after excluding $0.91 of adjustments primarily related to the termination of our defined benefit pension plan* |
• | The Company repurchased approximately $136 million of its outstanding common stock |
Q2 Sales | Q2 Segment Profit | |||||||||||||
($ in millions) | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||
Consolidated Darden | $2,056.4 | $1,973.4 | 4.2 | % | ||||||||||
Olive Garden | $1,023.6 | $998.1 | 2.6 | % | $190.3 | $183.5 | 3.7 | % | ||||||
LongHorn Steakhouse | $447.3 | $412.6 | 8.4 | % | $71.9 | $67.1 | 7.2 | % | ||||||
Fine Dining | $154.8 | $146.7 | 5.5 | % | $30.4 | $28.9 | 5.2 | % | ||||||
Other Business | $430.7 | $416.0 | 3.5 | % | $47.7 | $51.0 | (6.5 | )% | ||||||
YTD Sales | YTD Segment Profit | |||||||||||||
($ in millions) | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||
Consolidated Darden | $4,190.3 | $4,034.8 | 3.9 | % | ||||||||||
Olive Garden | $2,113.8 | $2,050.1 | 3.1 | % | $419.2 | $400.5 | 4.7 | % | ||||||
LongHorn Steakhouse | $897.5 | $842.9 | 6.5 | % | $146.4 | $138.6 | 5.6 | % | ||||||
Fine Dining | $291.1 | $276.7 | 5.2 | % | $50.7 | $49.1 | 3.3 | % | ||||||
Other Business | $887.9 | $865.1 | 2.6 | % | $112.1 | $119.0 | (5.8 | )% |
Q2 | ||
Olive Garden | LongHorn Steakhouse | |
Same-Restaurant Sales | 1.5% | 6.7% |
Same-Restaurant Traffic | (1.2)% | 3.2% |
Pricing | 2.0% | 1.9% |
Menu-mix | 0.7% | 1.6% |
• | Total sales growth of 5.3% to 6.3%, including approximately 2% growth related to the 53rd week |
• | Same-restaurant sales growth of 1% to 2% |
• | Approximately 50 gross and 44 net new restaurant openings |
• | Total capital spending of $450 to $500 million |
• | Total inflation of approximately 2.5% |
• | Effective tax rate of 10% to 11% |
• | Adjusted diluted net earnings per share from continuing operations of $6.30 to $6.45 including*: |
• | Approximately $0.15 related to the addition of the 53rd week |
• | Approximately -$0.05 related to the implementation of ASC-842 Lease Accounting |
• | Approximately 124 million weighted average diluted shares outstanding |
Fiscal Q2 Reported to Adjusted Earnings Reconciliation | |||||||||||||||||
Q2 2020 | Q2 2019 | ||||||||||||||||
$ 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 | $(6.2) | $(31.6) | $25.4 | $0.21 | $135.3 | $19.4 | $115.9 | $0.92 | |||||||||
% Change vs Prior Year | (77.2 | )% | |||||||||||||||
Adjustments: | |||||||||||||||||
Pension settlement charge1 | 147.1 | 36.2 | 110.9 | 0.90 | — | — | — | — | |||||||||
International structure simplification | 6.2 | 4.1 | 2.1 | 0.01 | — | — | — | — | |||||||||
Adjusted Earnings from Continuing Operations | $147.1 | $8.7 | $138.4 | $1.12 | $135.3 | $19.4 | $115.9 | $0.92 | |||||||||
% Change vs Prior Year | 21.7 | % |
Reconciliation of Fiscal 2020 Reported to Adjusted Earnings Outlook | |||||
Reported diluted net earnings per share from continuing operations | $5.39 | to | $5.54 | ||
Pension settlement charge | 0.90 | 0.90 | |||
International structure simplification | 0.01 | 0.01 | |||
Adjusted diluted net earnings per share from continuing operations | $6.30 | to | $6.45 | ||
11/24/19 | 11/25/18 | |||
Olive Garden1 | 867 | 858 | ||
LongHorn Steakhouse | 518 | 510 | ||
Cheddar's Scratch Kitchen | 166 | 158 | ||
Yard House | 79 | 75 | ||
The Capital Grille2 | 59 | 58 | ||
Seasons 52 | 45 | 42 | ||
Bahama Breeze | 42 | 41 | ||
Eddie V's | 23 | 20 | ||
Darden Continuing Operations | 1,799 | 1,762 | ||
1Includes six locations in Canada. | ||||
2Includes one The Capital Burger restaurant. |
Three Months Ended | Six Months Ended | ||||||||||||||
11/24/2019 | 11/25/2018 | 11/24/2019 | 11/25/2018 | ||||||||||||
Sales | $ | 2,056.4 | $ | 1,973.4 | $ | 4,190.3 | $ | 4,034.8 | |||||||
Costs and expenses: | |||||||||||||||
Food and beverage | 583.0 | 563.3 | 1,186.3 | 1,146.6 | |||||||||||
Restaurant labor | 692.3 | 662.4 | 1,396.1 | 1,341.7 | |||||||||||
Restaurant expenses | 375.6 | 361.0 | 748.0 | 718.9 | |||||||||||
Marketing expenses | 66.3 | 58.0 | 135.0 | 124.5 | |||||||||||
General and administrative expenses | 91.3 | 95.1 | 189.3 | 199.6 | |||||||||||
Depreciation and amortization | 87.6 | 82.8 | 173.8 | 163.5 | |||||||||||
Impairments and disposal of assets, net | 0.1 | 2.7 | 0.1 | 2.8 | |||||||||||
Total operating costs and expenses | $ | 1,896.2 | $ | 1,825.3 | $ | 3,828.6 | $ | 3,697.6 | |||||||
Operating income | 160.2 | 148.1 | 361.7 | 337.2 | |||||||||||
Interest, net | 13.1 | 12.8 | 24.2 | 25.9 | |||||||||||
Other (income) expense, net | 153.3 | — | 153.3 | — | |||||||||||
Earnings before income taxes | (6.2 | ) | 135.3 | 184.2 | 311.3 | ||||||||||
Income tax expense (benefit) | (31.6 | ) | 19.4 | (13.0 | ) | 26.5 | |||||||||
Earnings from continuing operations | $ | 25.4 | $ | 115.9 | $ | 197.2 | $ | 284.8 | |||||||
Losses from discontinued operations, net of tax expense (benefit) of $(0.7), $0.7, $(0.9) and $(0.4), respectively | (0.7 | ) | (0.3 | ) | (1.9 | ) | (3.0 | ) | |||||||
Net earnings | $ | 24.7 | $ | 115.6 | $ | 195.3 | $ | 281.8 | |||||||
Basic net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 0.21 | $ | 0.94 | $ | 1.61 | $ | 2.30 | |||||||
Losses from discontinued operations | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.03 | ) | |||||||
Net earnings | $ | 0.20 | $ | 0.93 | $ | 1.59 | $ | 2.27 | |||||||
Diluted net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 0.21 | $ | 0.92 | $ | 1.59 | $ | 2.26 | |||||||
Losses from discontinued operations | (0.01 | ) | — | (0.02 | ) | (0.02 | ) | ||||||||
Net earnings | $ | 0.20 | $ | 0.92 | $ | 1.57 | $ | 2.24 | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 122.2 | 123.9 | 122.5 | 123.9 | |||||||||||
Diluted | 123.7 | 125.8 | 124.1 | 125.8 |
11/24/2019 | 5/26/2019 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 157.3 | $ | 457.3 | |||
Receivables, net | 56.8 | 88.3 | |||||
Inventories | 212.2 | 207.3 | |||||
Prepaid income taxes | 42.9 | 41.6 | |||||
Prepaid expenses and other current assets | 66.3 | 98.1 | |||||
Total current assets | $ | 535.5 | $ | 892.6 | |||
Land, buildings and equipment, net | 2,730.6 | 2,552.6 | |||||
Operating lease right-of-use assets | 4,029.0 | — | |||||
Goodwill | 1,199.4 | 1,183.7 | |||||
Trademarks | 950.8 | 950.8 | |||||
Other assets | 297.4 | 313.1 | |||||
Total assets | $ | 9,742.7 | $ | 5,892.8 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 340.2 | $ | 332.6 | |||
Accrued payroll | 137.1 | 175.3 | |||||
Accrued income taxes | 11.0 | 11.6 | |||||
Other accrued taxes | 60.8 | 54.2 | |||||
Unearned revenues | 390.3 | 428.5 | |||||
Other current liabilities | 618.1 | 471.9 | |||||
Total current liabilities | $ | 1,557.5 | $ | 1,474.1 | |||
Long-term debt | 928.2 | 927.7 | |||||
Deferred income taxes | 182.1 | 156.9 | |||||
Operating lease liability - non-current | 4,306.2 | — | |||||
Deferred rent | — | 354.4 | |||||
Other liabilities | 495.0 | 587.1 | |||||
Total liabilities | $ | 7,469.0 | $ | 3,500.2 | |||
Stockholders’ equity: | |||||||
Common stock and surplus | $ | 1,690.0 | $ | 1,685.0 | |||
Retained earnings | 584.5 | 806.6 | |||||
Accumulated other comprehensive income (loss) | (0.5 | ) | (98.2 | ) | |||
Unearned compensation | (0.3 | ) | (0.8 | ) | |||
Total stockholders’ equity | $ | 2,273.7 | $ | 2,392.6 | |||
Total liabilities and stockholders’ equity | $ | 9,742.7 | $ | 5,892.8 |
Six Months Ended | |||||||
11/24/2019 | 11/25/2018 | ||||||
Cash flows—operating activities | |||||||
Net earnings | $ | 195.3 | $ | 281.8 | |||
Losses from discontinued operations, net of tax | 1.9 | 3.0 | |||||
Adjustments to reconcile net earnings from continuing operations to cash flows: | |||||||
Depreciation and amortization | 173.8 | 163.5 | |||||
Stock-based compensation expense | 28.0 | 31.6 | |||||
Pension settlement charge | 147.1 | — | |||||
Change in current assets and liabilities and other, net | (103.0 | ) | (46.0 | ) | |||
Net cash provided by operating activities of continuing operations | $ | 443.1 | $ | 433.9 | |||
Cash flows—investing activities | |||||||
Purchases of land, buildings and equipment | (256.5 | ) | (233.0 | ) | |||
Proceeds from disposal of land, buildings and equipment | 4.3 | 0.8 | |||||
Cash used in business acquisitions, net of cash acquired | (37.0 | ) | — | ||||
Purchases of capitalized software and changes in other assets, net | (20.5 | ) | (9.6 | ) | |||
Net cash used in investing activities of continuing operations | $ | (309.7 | ) | $ | (241.8 | ) | |
Cash flows—financing activities | |||||||
Proceeds from issuance of common stock | 14.8 | 41.7 | |||||
Dividends paid | (215.7 | ) | (186.0 | ) | |||
Repurchases of common stock | (230.9 | ) | (92.3 | ) | |||
Proceeds from issuance of short-term debt, net | — | 45.0 | |||||
Principal payments on capital and financing leases | (2.5 | ) | (3.2 | ) | |||
Other, net | 0.5 | 0.1 | |||||
Net cash used in financing activities of continuing operations | $ | (433.8 | ) | $ | (194.7 | ) | |
Cash flows—discontinued operations | |||||||
Net cash provided by (used in) operating activities of discontinued operations | 0.4 | (4.6 | ) | ||||
Net cash provided by (used in) discontinued operations | $ | 0.4 | $ | (4.6 | ) | ||
Decrease in cash and cash equivalents | (300.0 | ) | (7.2 | ) | |||
Cash and cash equivalents - beginning of period | 457.3 | 146.9 | |||||
Cash and cash equivalents - end of period | $ | 157.3 | $ | 139.7 |
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Document and Entity Information Document |
Dec. 19, 2019 |
---|---|
Cover page. | |
Document Type | 8-K |
Document Period End Date | Dec. 19, 2019 |
Entity Registrant Name | DARDEN RESTAURANTS INC |
Entity Central Index Key | 0000940944 |
Amendment Flag | false |
Entity File Number | 1-13666 |
Entity Incorporation, State or Country Code | FL |
Entity Tax Identification Number | 59-3305930 |
Entity Address, Address Line One | 1000 Darden Center Drive |
Entity Address, City or Town | Orlando |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 32837 |
City Area Code | 407 |
Local Phone Number | 245-4000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, without par value |
Trading Symbol | DRI |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |