10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 28, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

1-13666

Commission File Number

 DARDEN RESTAURANTS, INC.

(Exact name of registrant as specified in its charter)

 

Florida		59-3305930
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1000 Darden Center Drive
Orlando,	Florida	32837
(Address of principal executive offices)		(Zip Code)

407-245-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, without par value	DRI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No

Number of shares of common stock outstanding as of December 15, 2021: 127,723,677.

TABLE OF CONTENTS

			Page
Part I -	Financial Information
	Item 1.	Financial Statements (Unaudited)	4
		Consolidated Statements of Earnings	4
		Consolidated Statements of Comprehensive Income	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Changes in Stockholders’ Equity	7
		Consolidated Statements of Cash Flows	8
		Notes to Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4.	Controls and Procedures	31
Part II -	Other Information
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 6.	Exhibits	33
Signature			34

2

Cautionary Statement Regarding Forward-Looking Statements

Statements set forth in or incorporated into this report that are not historical facts, including without limitation statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Darden Restaurants, Inc. and its subsidiaries that are preceded by, followed by or that include words such as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “estimate,” “project,” “believe,” “plan”, “outlook” or similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This statement is included for purposes of complying with the safe harbor provisions of that Act. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements for any reason to reflect events or circumstances arising after such date. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. The most significant of these uncertainties are described in Darden’s Form 10-K, Form 10-Q (including this report) and Form 8-K reports.

3

PART I

FINANCIAL INFORMATION

Item  1. Financial Statements (Unaudited)

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share data)

(Unaudited)

	Three Months Ended				Six Months Ended
	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Sales	$	2,272.2	$	1,656.5	$	4,578.2	$	3,183.9
Costs and expenses:
Food and beverage	694.1		475.1		1,379.5		909.6
Restaurant labor	744.8		535.5		1,480.8		1,036.2
Restaurant expenses	385.0		330.5		763.1		621.4
Marketing expenses	21.9		18.8		45.8		47.6
General and administrative expenses	91.4		89.9		204.2		218.2
Depreciation and amortization	92.1		86.0		181.1		173.6
Total operating costs and expenses	$	2,029.3	$	1,535.8	$	4,054.5	$	3,006.6
Operating income	242.9		120.7		523.7		177.3
Interest, net	16.7		14.6		32.3		31.2
Other (income) expense, net	0.3		0.4		0.5		7.9
Earnings before income taxes	225.9		105.7		490.9		138.2
Income tax expense	32.5		8.8		65.8		4.0
Earnings from continuing operations	$	193.4	$	96.9	$	425.1	$	134.2
Losses from discontinued operations, net of tax benefit of $0.0, $0.7, $0.5 and $1.6, respectively	(0.2)		(0.9)		(1.0)		(2.1)
Net earnings	$	193.2	$	96.0	$	424.1	$	132.1
Basic net earnings per share:
Earnings from continuing operations	$	1.50	$	0.74	$	3.28	$	1.03
Losses from discontinued operations	—		—		(0.01)		(0.01)
Net earnings	$	1.50	$	0.74	$	3.27	$	1.02
Diluted net earnings per share:
Earnings from continuing operations	$	1.48	$	0.74	$	3.24	$	1.02
Losses from discontinued operations	—		(0.01)		(0.01)		(0.01)
Net earnings	$	1.48	$	0.73	$	3.23	$	1.01
Average number of common shares outstanding:
Basic	129.2		130.3		129.8		130.1
Diluted	130.5		131.5		131.1		131.2

See accompanying notes to our unaudited consolidated financial statements.

4

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended				Six Months Ended
	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Net earnings	$	193.2	$	96.0	$	424.1	$	132.1
Foreign currency adjustment	(0.1)		—		(0.5)		0.2
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $0.0, $(0.1), $0.0 and $0.3, respectively	(5.3)		5.0		(3.5)		9.5
Net unamortized gain (loss) arising during the period, including amortization of unrecognized net actuarial gain (loss), net of taxes of $0.1, $0.2, $0.2 and $0.3, respectively, related to pension and other post-employment benefits	0.2		0.4		0.4		0.8
Other comprehensive income (loss)	$	(5.2)	$	5.4	$	(3.6)	$	10.5
Total comprehensive income	$	188.0	$	101.4	$	420.5	$	142.6

See accompanying notes to our unaudited consolidated financial statements.

5

DARDEN RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions)

	November 28, 2021		May 30, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	746.3	$	1,214.7
Receivables, net	69.1		68.2
Inventories	230.2		190.8
Prepaid income taxes	337.6		337.2
Prepaid expenses and other current assets	131.0		60.2
Total current assets	$	1,514.2	$	1,871.1
Land, buildings and equipment, net of accumulated depreciation and amortization of $2,982.0 and $2,843.8, respectively	3,140.8		2,869.2
Operating lease right-of-use assets	3,599.7		3,776.4
Goodwill	1,037.4		1,037.4
Trademarks	806.3		806.3
Other assets	304.9		295.7
Total assets	$	10,403.3	$	10,656.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	355.4	$	304.5
Accrued payroll	160.7		177.4
Accrued income taxes	34.1		35.9
Other accrued taxes	63.9		60.5
Unearned revenues	457.5		474.2
Other current liabilities	709.1		795.8
Total current liabilities	$	1,780.7	$	1,848.3
Long-term debt	929.0		929.8
Deferred income taxes	229.3		221.6
Operating lease liabilities - non-current	3,904.4		4,088.5
Other liabilities	1,016.9		754.8
Total liabilities	$	7,860.3	$	7,843.0
Stockholders’ equity:
Common stock and surplus	$	2,280.6	$	2,286.6
Retained earnings	261.8		522.3
Accumulated other comprehensive income (loss)	0.6		4.2
Total stockholders’ equity	$	2,543.0	$	2,813.1
Total liabilities and stockholders’ equity	$	10,403.3	$	10,656.1

See accompanying notes to our unaudited consolidated financial statements.

6

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three And Six Months Ended November 28, 2021 and November 29, 2020

(In millions)

(Unaudited)

	Common Stock And Surplus
	Shares	Amount		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance at August 29, 2021	130.0	$	2,300.7	$	445.9	$	5.8	$	2,752.4
Net earnings	—	—		193.2		—		193.2
Other comprehensive income (loss)	—	—		—		(5.2)		(5.2)
Dividends declared ($1.10 per share)	—	—		(143.1)		—		(143.1)
Stock option exercises	0.1	3.6		—		—		3.6
Stock-based compensation	—	5.6		—		—		5.6
Repurchases of common stock	(1.8)	(31.8)		(234.2)		—		(266.0)
Issuance of stock under Employee Stock Purchase Plan and other plans	—	2.5		—		—		2.5
Other	—	—		—		—		—
Balance at November 28, 2021	128.3	$	2,280.6	$	261.8	$	0.6	$	2,543.0
Balance at May 30, 2021	130.8	$	2,286.6	$	522.3	$	4.2	$	2,813.1
Net earnings	—	—		424.1		—		424.1
Other comprehensive income (loss)	—	—		—		(3.6)		(3.6)
Dividends declared ($2.20 per share)	—	—		(287.2)		—		(287.2)
Stock option exercises	0.4	20.6		—		—		20.6
Stock-based compensation	—	21.9		—		—		21.9
Repurchases of common stock	(3.1)	(54.9)		(397.4)		—		(452.3)
Issuance of stock under Employee Stock Purchase Plan and other plans	0.2	5.1		—		—		5.1
Other	—	1.3				—		1.3
Balance at November 28, 2021	128.3	$	2,280.6	$	261.8	$	0.6	$	2,543.0

Balance at August 30, 2020	130.2	$	2,220.9	$	166.6	$	(12.5)	$	2,375.0
Net earnings	—	—		96.0		—		96.0
Other comprehensive income	—	—		—		5.4		5.4
Dividends declared ($0.30 per share)	—	—		(39.5)		—		(39.5)
Stock option exercises	0.1	3.9		—		—		3.9
Stock-based compensation	—	11.9		—		—		11.9
Repurchases of common stock	—	(0.1)		(0.1)		—		(0.2)
Issuance of stock under Employee Stock Purchase Plan and other plans	—	2.3		—		—		2.3
Other	—	0.1		0.2		—		0.3
Balance at November 29, 2020	130.3	$	2,239.0	$	223.2	$	(7.1)	$	2,455.1
Balance at May 31, 2020	129.9	$	2,205.3	$	143.5	$	(17.6)	$	2,331.2
Net earnings	—	—		132.1		—		132.1
Other comprehensive income	—	—		—		10.5		10.5
Dividends declared ($0.30 per share)	—	—		(39.5)		—		(39.5)
Stock option exercises	0.1	5.6		—		—		5.6
Stock-based compensation	—	23.0		—		—		23.0
Repurchases of common stock	(0.1)	(1.5)		(5.3)		—		(6.8)
Issuance of stock under Employee Stock Purchase Plan and other plans	0.4	4.8		—		—		4.8
Other	—	1.8		(7.6)		—		(5.8)
Balance at November 29, 2020	130.3	$	2,239.0	$	223.2	$	(7.1)	$	2,455.1

See accompanying notes to our unaudited consolidated financial statements.

7

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended
	November 28, 2021		November 29, 2020
Cash flows—operating activities
Net earnings	$	424.1	$	132.1
Losses from discontinued operations, net of tax	1.0		2.1
Adjustments to reconcile net earnings from continuing operations to cash flows:
Depreciation and amortization	181.1		173.6
Stock-based compensation expense	38.1		41.4
Change in current assets and liabilities	(156.2)		(6.9)
Contributions to pension and postretirement plans	(1.1)		(0.7)
Deferred income taxes	7.5		(8.0)
Change in other assets and liabilities	(9.4)		118.4
Other, net	(3.6)		(23.4)
Net cash provided by operating activities of continuing operations	$	481.5	$	428.6
Cash flows—investing activities
Purchases of land, buildings and equipment	(173.3)		(108.2)
Proceeds from disposal of land, buildings and equipment	6.0		5.4
Purchases of capitalized software and other assets	(11.8)		(6.6)
Other, net	1.3		(0.3)
Net cash used in investing activities of continuing operations	$	(177.8)	$	(109.7)
Cash flows—financing activities
Proceeds from issuance of common stock	25.7		10.4
Dividends paid	(286.1)		(39.1)
Repurchases of common stock	(452.3)		(6.8)
Repayments of short-term debt	—		(270.0)
Principal payments on finance leases	(5.6)		(2.9)
Payments of debt issuance costs	(2.7)		—
Net cash used in financing activities of continuing operations	$	(721.0)	$	(308.4)
Cash flows—discontinued operations
Net cash provided by operating activities of discontinued operations	0.4		3.5
Net cash provided by discontinued operations	$	0.4	$	3.5
(Decrease) increase in cash, cash equivalents, and restricted cash	(416.9)		14.0
Cash, cash equivalents, and restricted cash - beginning of period	1,214.7		763.3
Cash, cash equivalents, and restricted cash - end of period	$	797.8	$	777.3

Reconciliation of cash, cash equivalents, and restricted cash:	November 28, 2021		November 29, 2020
Cash and cash equivalents	$	746.3	$	777.3
Restricted cash included in prepaid expenses and other current assets	51.5		—
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	797.8	$	777.3

8

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In millions)

(Unaudited)

	Six Months Ended
	November 28, 2021		November 29, 2020
Cash flows from changes in current assets and liabilities
Receivables, net	(0.9)		3.6
Inventories	(39.4)		3.9
Prepaid expenses and other current assets	(16.8)		1.3
Accounts payable	36.8		(24.8)
Accrued payroll	(16.7)		(20.1)
Prepaid/accrued income taxes	(2.3)		(3.5)
Other accrued taxes	3.4		4.2
Unearned revenues	(16.7)		(28.1)
Other current liabilities	(103.6)		56.6
Change in current assets and liabilities	$	(156.2)	$	(6.9)

See accompanying notes to our unaudited consolidated financial statements.

9

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.Basis of Presentation

Darden Restaurants, Inc. (we, our, Darden or the Company) owns and operates full-service dining restaurants in the United States and Canada under the trade names Olive Garden®, LongHorn Steakhouse®, Cheddar’s Scratch Kitchen®, Yard House®, The Capital Grille®, Seasons 52®, Bahama Breeze®, Eddie V’s Prime Seafood® and The Capital Burger®. As of November 28, 2021, through subsidiaries, we own and operate all of our restaurants in the United States and Canada, except for 2 joint venture restaurants managed by us and 34 franchised restaurants. We also have 25 franchised restaurants in operation located in Latin America.

We have prepared these consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. We operate on a 52/53-week fiscal year which ends on the last Sunday in May. Our fiscal year ending May 29, 2022 will contain 52 weeks of operation. Operating results for interim periods presented are not necessarily indicative of results that may be expected for the full fiscal year.

These statements should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. We prepare our consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and costs and expenses during the reporting period. Actual results could differ from those estimates.

We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation.

COVID-19 Pandemic

For much of fiscal 2021, the COVID-19 pandemic resulted in a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as public health officials encouraged social distancing and required personal protective equipment and state and local governments mandated restrictions including suspension of dine-in operations, reduced restaurant seating capacity, table spacing requirements, bar closures and additional physical barriers. Once COVID-19 vaccines were approved and moved into wider distribution in the United States in early 2021, public health conditions improved and almost all of the COVID-19 restrictions on businesses have eased. As of the date of this report, all of our restaurants were able to open their dining rooms and few capacity restrictions remained in place in the United States. Following increases in the numbers of cases of COVID-19 throughout the United States during fiscal 2022, some of our restaurants are subject to other COVID-19-related restrictions such as mask requirements or vaccine requirements for team members, guests or both. For the health and safety of our guests and team members, we continue to evaluate and implement our own COVID-19 protocols for our restaurant teams, including mask wearing, contact tracing, and exclusion or quarantine of team members who are exposed or are ill. Exclusions and quarantines of restaurant team members or groups thereof disrupt an individual restaurant’s operations and often come with little or no notice to the local restaurant management. We continue to monitor the progression of the COVID-19 pandemic and state, local and federal government regulatory and public health responses thereto, including the federal Occupational Health and Safety Administration’s attempt to implement a nationwide vaccine requirement for large employers.

Recently Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We elected to adopt this guidance during the quarter ended August 29, 2021; adoption did not have a material impact on our consolidated financial statements.

10

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2.Revenue Recognition  

Deferred revenue liabilities from contracts with customers included on our accompanying consolidated balance sheets is comprised of the following:

(in millions)	November 28, 2021		May 30, 2021
Unearned revenues
Deferred gift card revenue	$	476.9	$	494.3
Deferred gift card discounts	(20.2)		(20.5)
Other	0.8		0.4
Total	$	457.5	$	474.2
Other liabilities
Deferred franchise fees - non-current	$	2.6	$	2.2

The following table presents a rollforward of deferred gift card revenue.

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Beginning balance	$	465.0	$	475.6	$	494.3	$	494.6
Activations	127.7		94.7		234.3		170.4
Redemptions and breakage	(115.8)		(101.0)		(251.7)		(195.7)
Ending balance	$	476.9	$	469.3	$	476.9	$	469.3

11

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3.Additional Financial Information

Supplemental Balance Sheet Information

The components of lease assets and liabilities on the consolidated balance sheet are as follows:

(in millions)	Balance Sheet Classification	November 28, 2021		May 30, 2021
Operating lease right-of-use assets	Operating lease right-of-use assets	$	3,599.7	$	3,776.4
Finance lease right-of-use assets	Land, buildings and equipment, net	655.7		405.6
Total lease assets, net		$	4,255.4	$	4,182.0
Operating lease liabilities - current	Other current liabilities	$	177.9	$	176.8
Finance lease liabilities - current	Other current liabilities	10.7		7.3
Operating lease liabilities - non-current	Operating lease liabilities - non-current	3,904.4		4,088.5
Finance lease liabilities - non-current	Other liabilities	818.3		555.3
Total lease liabilities		$	4,911.3	$	4,827.9

Supplemental Cash Flow Information

Cash paid for interest and income taxes are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Interest, net of amounts capitalized	$	30.3	$	31.4
Income taxes, net of refunds	58.0		12.6

Non-cash investing and financing activities are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Increase in land, buildings and equipment through accrued purchases	$	43.2	$	33.9
Right-of-use assets obtained in exchange for new operating lease liabilities	3.6		20.1
Right-of-use assets obtained in exchange for new finance lease liabilities	92.9		18.4
Net change in right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance	108.3		71.3

We have restricted cash, of $51.5 million and $0 as of November 28, 2021 and May 30, 2021, respectively, which represents cash held as security for a standby letter of credit. Restricted cash is included in Prepaid Expenses and Other Current Assets on the balance sheet. See Note 11, Commitments and Contingencies.

Note 4.Income Taxes

The effective income tax rate for continuing operations for the quarter ended November 28, 2021 was 14.4 percent, reflecting income tax expense of $32.5 million compared to an effective income tax rate for the quarter ended November 29, 2020 of 8.3 percent, reflecting income tax expense of $8.8 million. The effective income tax rate for continuing operations for the six months ended November 28, 2021 was 13.4 percent, reflecting income tax expense $65.8 million compared to an effective income tax rate of 2.9 percent for the six months ended November 29, 2020, reflecting income tax expense $4.0 million. The change was primarily driven by higher net earnings from continuing operations in the quarter and six months ended November 28, 2021 compared to the quarter and six months ended November 29, 2020 and the impact of certain tax credits on earnings before income taxes for the six months ended November 29, 2020.

Included in our remaining balance of unrecognized tax benefits is $34.1 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations or as a result of the expiration of the statute of limitations for specific jurisdictions.

12

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5.Net Earnings per Share

Outstanding stock options, restricted stock and equity-settled performance stock units granted by us represent the only dilutive effect reflected in diluted weighted average shares outstanding, none of which impact the numerator of the diluted net earnings per share computation. Stock options, restricted stock and equity-settled performance stock units excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: 

	Three Months Ended		Six Months Ended
(in millions)	November 28, 2021	November 29, 2020	November 28, 2021	November 29, 2020
Anti-dilutive stock-based compensation awards	0.2	0.7	0.1	1.1

Note 6.Segment Information

We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger in North America as operating segments. The brands operate principally in the U.S. within full-service dining. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. We have four reportable segments: (1) Olive Garden, (2) LongHorn Steakhouse, (3) Fine Dining and (4) Other Business.

The Olive Garden segment includes the results of our company-owned Olive Garden restaurants in the U.S. and Canada. The LongHorn Steakhouse segment includes the results of our company-owned LongHorn Steakhouse restaurants in the U.S. The Fine Dining segment aggregates our premium brands that operate within the fine-dining sub-segment of full-service dining and includes the results of our company-owned The Capital Grille and Eddie V’s restaurants in the U.S. The Other Business segment aggregates our remaining brands and includes the results of our company-owned Cheddar’s Scratch Kitchen, Yard House, Seasons 52, Bahama Breeze and The Capital Burger restaurants in the U.S and results from our franchise operations.

External sales are derived principally from food and beverage sales. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our reportable segments are predominantly in the U.S. There were no material transactions among reportable segments.

Our management uses segment profit as the measure for assessing performance of our segments. Segment profit includes revenues and expenses directly attributable to restaurant-level results of operations (sometimes referred to as restaurant-level earnings). These expenses include food and beverage costs, restaurant labor costs, restaurant expenses and marketing expenses (collectively “restaurant and marketing expenses”). Non-cash lease-related expenses included in restaurant expenses (which is a component of segment profit) and lease-related depreciation and amortization are reported at the corporate level as these are expenses for which our operating segments are not being evaluated. Additionally, our lease-related right-of-use assets are not managed or evaluated at the operating segment level, but rather at the corporate level.

In the first quarter of fiscal 2022, we changed our internal management reporting to include The Capital Burger in the Other Business segment. Previously, The Capital Burger was included in the Fine Dining segment due to its adjacency with The Capital Grille brand and overall immateriality. Fiscal 2021 figures have been restated for comparability.

13

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP.

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 28, 2021
Sales	$	1,077.2	$	547.2	$	188.7	$	459.1	$	—	$	2,272.2
Restaurant and marketing expenses	842.1		463.6		149.0		396.8		(5.7)		1,845.8
Segment profit	$	235.1	$	83.6	$	39.7	$	62.3	$	5.7	$	426.4
Depreciation and amortization	$	35.9	$	16.3	$	8.5	$	24.5	$	6.9	$	92.1
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 28, 2021
Sales	$	2,167.6	$	1,114.3	$	357.5	$	938.8	$	—	$	4,578.2
Restaurant and marketing expenses	1,679.2		923.2		284.3		791.7		(9.2)		3,669.2
Segment profit	$	488.4	$	191.1	$	73.2	$	147.1	$	9.2	$	909.0
Depreciation and amortization	$	71.3	$	32.3	$	16.7	$	48.6	$	12.2	$	181.1
Purchases of land, buildings and equipment	70.6		43.1		20.7		38.2		0.7		173.3

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 29, 2020
Sales	$	829.5	$	407.4	$	107.3	$	312.3	$	—	$	1,656.5
Restaurant and marketing expenses	654.4		341.1		86.9		273.1		4.4		1,359.9
Segment profit	$	175.1	$	66.3	$	20.4	$	39.2	$	(4.4)	$	296.6
Depreciation and amortization	$	34.5	$	16.5	$	7.7	$	24.1	$	3.2	$	86.0
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 29, 2020
Sales	$	1,617.7	$	784.1	$	190.0	$	592.1	$	—	$	3,183.9
Restaurant and marketing expenses	1,268.8		660.8		159.5		517.4		8.3		2,614.8
Segment profit	$	348.9	$	123.3	$	30.5	$	74.7	$	(8.3)	$	569.1
Depreciation and amortization	$	70.4	$	33.4	$	15.3	$	48.3	$	6.2	$	173.6
Purchases of land, buildings and equipment	34.6		17.4		23.2		32.0		1.0		108.2

14

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Reconciliation of segment profit to earnings from continuing operations before income taxes:

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Segment profit	$	426.4	$	296.6	$	909.0	$	569.1
Less general and administrative expenses	(91.4)		(89.9)		(204.2)		(218.2)
Less depreciation and amortization	(92.1)		(86.0)		(181.1)		(173.6)
Less interest, net	(16.7)		(14.6)		(32.3)		(31.2)
Less other (income) expense, net	(0.3)		(0.4)		(0.5)		(7.9)
Earnings before income taxes	$	225.9	$	105.7	$	490.9	$	138.2

Note 7.Stockholders’ Equity

Accumulated Other Comprehensive Income (Loss) (AOCI)

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 28, 2021 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 29, 2021	$	4.8	$	9.7	$	(8.7)	$	5.8
Gain (loss)	(0.1)		(5.3)		—		(5.4)
Reclassification realized in net earnings	—		—		0.2		0.2
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6
Balance at May 30, 2021	$	5.2	$	7.9	$	(8.9)	$	4.2
Gain (loss)	(0.5)		(2.7)		—		(3.2)
Reclassification realized in net earnings	—		(0.8)		0.4		(0.4)
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 29, 2020 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 30, 2020	$	4.7	$	(4.1)	$	(13.1)	$	(12.5)
Gain (loss)	—		4.6		—		4.6
Reclassification realized in net earnings	—		0.4		0.4		0.8
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)
Balance at May 31, 2020	$	4.5	$	(8.6)	$	(13.5)	$	(17.6)
Gain (loss)	0.2		9.0		—		9.2
Reclassification realized in net earnings	—		0.5		0.8		1.3
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)

15

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded.

		Amount Reclassified from AOCI into Net Earnings
		Three Months Ended				Six Months Ended
(in millions) AOCI Components	Location of Gain (Loss) Recognized in Earnings	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Derivatives
Commodity contracts	(1)	$	—	$	(0.4)	$	—	$	(0.9)
Equity contracts	(2)	0.1		(0.1)		0.9		0.3
Interest rate contracts	(3)	(0.1)		(0.1)		(0.1)		(0.1)
Total before tax		$	—	$	(0.6)	$	0.8	$	(0.7)
Tax (expense) benefit		—		0.2		—		0.2
Net of tax		$	—	$	(0.4)	$	0.8	$	(0.5)
Benefit plan funding position
Recognized net actuarial loss - pension/postretirement plans	(4)	$	(0.2)	$	(0.1)	$	(0.3)	$	(0.1)
Recognized net actuarial gain (loss) - other plans	(4)	(0.1)		(0.5)		(0.3)		(1.0)
Total before tax		$	(0.3)	$	(0.6)	$	(0.6)	$	(1.1)
Tax (expense) benefit		0.1		0.2		0.2		0.3
Net of tax		$	(0.2)	$	(0.4)	$	(0.4)	$	(0.8)

(1)Primarily included in food and beverage costs and restaurant expenses. See Note 9 for additional details.

(2)Included in general and administrative expenses. See Note 9 for additional details.

(3)Including in interest, net on our consolidated statement of earnings.

(4)Included in the computation of net periodic benefit costs, which is a component of other (income) expense, net, restaurant labor expenses and general and administrative expenses.

Note 8.Stock-Based Compensation

We grant stock options for a fixed number of shares to certain employees with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units and performance stock units with a fair value generally determined based on our closing stock price on the date of grant. In addition, we grant cash settled stock units (Darden stock units) which are classified as liabilities and are marked to market as of the end of each period.

The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model for options granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Weighted-average fair value	$	41.02		$	20.07
Dividend yield	3.2		%	3.0		%
Expected volatility of stock	39.6		%	37.3		%
Risk-free interest rate	0.9		%	0.4		%
Expected option life (in years)	6.3			6.4
Weighted-average exercise price per share	$	148.20		$	78.84

16

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The weighted-average grant date fair value of market-based performance stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation for units granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	53.4 %			50.5 %
Risk-free interest rate	0.4 %			0.1 %
Expected life (in years)	2.8			2.8
Weighted-average grant date fair value per unit	$	172.34		$	83.46

(1)Assumes a reinvestment of dividends.

The following table presents a summary of our stock-based compensation activity for the six months ended November 28, 2021.

(in millions)	Stock Options	Restricted Stock/ Restricted Stock Units	Equity-Settled Performance Stock Units	Cash-Settled Darden Stock Units
Outstanding beginning of period	2.15	0.26	0.48	0.80
Awards granted	0.15	0.05	0.09	0.31
Awards exercised/vested	(0.36)	(0.06)	(0.15)	(0.22)
Awards forfeited	—	—	—	(0.04)
Outstanding end of period	1.94	0.25	0.42	0.85

We recognized expense from stock-based compensation as follows: 

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Stock options	$	1.1	$	2.8	$	4.5	$	4.5
Restricted stock/restricted stock units	1.2		3.0		5.0		5.8
Equity-settled performance stock units	2.3		5.1		10.5		10.7
Cash-settled Darden stock units	4.9		10.4		16.2		18.4
Employee stock purchase plan	0.6		0.6		1.3		1.3
Director compensation program/other	0.4		0.3		0.6		0.7
Total stock-based compensation expense	$	10.5	$	22.2	$	38.1	$	41.4

Note 9. Derivative Instruments and Hedging Activities

We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as provided by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use financial derivatives to manage interest rate and compensation risks inherent in our business operations. To the extent our cash-flow hedging instruments are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria required by Topic 815 of the FASB ASC, changes in the derivatives’ fair value are not included in current earnings, but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. To the extent the cash flow hedge accounting criteria are not met, the derivative contracts are utilized as economic hedges and changes in the fair value of such contracts are recorded currently in earnings in the period in which they occur. Cash flows related to derivatives are included in operating activities.

17

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties. We currently do not have any provisions in our agreements with counterparties that would require either party to hold or post collateral in the event that the market value of the related derivative instrument exceeds a certain limit. As such, the maximum amount of loss due to counterparty credit risk we would incur at November 28, 2021, if counterparties to the derivative instruments failed completely to perform, would approximate the values of derivative instruments currently recognized as assets on our consolidated balance sheet. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices, or the market price of our common stock. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

We periodically enter into commodity futures, swaps and option contracts (collectively, commodity contracts) to reduce the risk of variability in cash flows associated with fluctuations in the price we pay for commodities, such as natural gas and diesel fuel. For certain commodity purchases, changes in the price we pay for these commodities are highly correlated with changes in the market price of these commodities. For these commodity purchases, we designate commodity contracts as cash flow hedging instruments. For the remaining commodity purchases, changes in the price we pay for these commodities are not highly correlated with changes in the market price, generally due to the timing of when changes in the market prices are reflected in the price we pay. For these commodity purchases, we utilize these commodity contracts as economic hedges. Our commodity contracts currently extend through December 2021.

During the fourth quarter of fiscal 2021, we entered into interest-rate swap agreements with $300.0 million of notional value to limit the risk of change in fair value through fiscal 2031, of the $300.0 million 4.550 percent senior notes due February 2048. The swap agreements effectively swap the fixed-rate obligations for floating-rate obligations over the term of the agreements, thereby mitigating changes in fair value of the related debt. The swap agreements were designated as fair value hedges of the related debt and met the requirements to be accounted for under the short-cut method, resulting in no ineffectiveness in the hedging relationship. During the quarter and six months ended November 28, 2021, $1.2 million and $2.5 million, respectively, was recorded as a reduction to interest expense related to net swap settlements.

We enter into equity forward contracts to hedge the risk of changes in future cash flows associated with the unvested, unrecognized cash-settled Darden stock units. The equity forward contracts will be settled at the end of the vesting periods of their underlying Darden stock units, which range between three and five years and currently extend through July 2026. The contracts are initially designated as cash flow hedges to the extent the Darden stock units are unvested and, therefore, unrecognized as a liability in our financial statements. The forward contracts have net cash settlement terms and net settle every three months. As the Darden stock units vest, we will de-designate that portion of the equity forward contract that no longer qualifies for hedge accounting, and changes in fair value associated with that portion of the equity forward contract will be recognized in current earnings. We periodically incur interest on the notional value of the contracts and receive dividend equivalents on the underlying shares. These amounts are recognized currently in earnings as they are incurred or received.

We entered into equity forward contracts to hedge the risk of changes in future cash flows associated with recognized, employee-directed investments in Darden stock within the non-qualified deferred compensation plan. We did not elect hedge accounting with the expectation that changes in the fair value of the equity forward contracts would offset changes in the fair value of Darden stock investments in the non-qualified deferred compensation plan within general and administrative expenses in our consolidated statements of earnings. These contracts currently extend through July 2026.

18

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The notional and fair values of our derivative contracts are as follows: 

					Fair Values
(in millions, except per share data)	Number of Shares Outstanding	Weighted-Average  Per Share Forward Rates	Notional Values		Derivative Assets (1)				Derivative Liabilities (1)
	November 28, 2021				November 28, 2021		May 30, 2021		November 28, 2021		May 30, 2021
Equity forwards:
Designated	0.3	$125.95	$	42.2	$	—	$	0.9	$	2.4	$	—
Not designated	0.4	119.46	45.5		—		2.0		2.7		—
Total equity forwards					$	—	$	2.9	$	5.1	$	—
Commodity contracts:
Designated	N/A	N/A	$	0.4	$	—	$	0.1	$	—	$	—
Not designated	N/A	N/A	—		—		—		—		—
Total commodity contracts					$	—	$	0.1	$	—	$	—
Interest rate related
Designated	N/A	N/A	$	300.0	$	1.0	$	—	$	—	$	0.2
Not designated	N/A	N/A			—		—		—		—
Total interest rate related					$	1.0	$	—	$	—	$	0.2
Total derivative contracts					$	1.0	$	3.0	$	5.1	$	0.2

 

(1)Derivative assets and liabilities are included in receivables, net and other current liabilities, as applicable, on our consolidated balance sheets.

    The effects of derivative instruments accounted for as cash flow hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(5.4)	$	5.0	$	0.1	$	(0.1)
Commodity (2)	0.1		(0.5)		—		(0.4)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(5.3)	$	4.5	$	—	$	(0.6)
	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(2.7)	$	8.7	$	0.9	$	0.3
Commodity (2)	—		0.4		—		(0.9)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(2.7)	$	9.1	$	0.8	$	(0.7)

(1)Location of the gain (loss) reclassified from AOCI to earnings is general and administrative expenses.

(2)Location of the gain (loss) reclassified from AOCI to earnings is food and beverage costs and restaurant expenses.

(3)Location of gain (loss) reclassified from AOCI to earnings is interest, net.

The effects of derivative instruments in fair value hedging relationships in the consolidated statement of earnings are as follows:

19

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	(5.5)	$	—	$	5.5	$	—
Total	$	(5.5)	$	—	$	5.5	$	—

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	1.2	$	—	$	(1.2)	$	—
Total	$	1.2	$	—	$	(1.2)	$	—

 (1) Location of the gain (loss) recognized in earnings on derivatives and related hedged item is interest, net.

(2) Hedged item in fair value hedge relationship is debt.

The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in Earnings
(in millions)	Three Months Ended				Six Months Ended
Location of Gain (Loss) Recognized in Earnings on Derivatives	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Food and beverage costs and restaurant expenses	$	—	$	—	$	0.1	$	0.1
General and administrative expenses	(3.5)		10.6		1.6		15.1
Total	$	(3.5)	$	10.6	$	1.7	$	15.2

Based on the fair value of our derivative instruments designated as cash flow hedges as of November 28, 2021, we expect to reclassify $0.5 million of net gains on derivative instruments from accumulated other comprehensive income (loss) to earnings during the next 12 months based on the maturity of our equity forward contracts. However, the amounts ultimately realized in earnings will be dependent on the fair value of the contracts on the settlement dates.

Note 10. Fair Value Measurements

The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration.

The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of November 28, 2021 and May 30, 2021. 

Items Measured at Fair Value at November 28, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Equity forwards	(2)	$	(5.1)	$	—	$	(5.1)	$	—
Interest rate swaps	(3)	1.0		—		1.0		—
Total		$	(4.1)	$	—	$	(4.1)	$	—

20

DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Items Measured at Fair Value at May 30, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Commodities futures, swaps & options	(1)	$	0.1	$	—	$	0.1	$	—
Equity forwards	(2)	2.9		—		2.9		—
Interest rate swaps	(3)	(0.2)		—		(0.2)		—
Total		$	2.8	$	—	$	2.8	$	—

(1)The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.

(2)The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.

(3)The fair value of our interest rate swap agreements is based on current and expected market interest rates, inclusive of risk of nonperformance.

The carrying value and fair value of long-term debt as of November 28, 2021, was $929.0 million and $1.07 billion, respectively. The carrying value and fair value of long-term debt as of May 30, 2021, was $929.8 million and $1.06 billion, respectively. The fair value of long-term debt, which is classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2 in the fair value hierarchy, is determined based on third-party market appraisals. As of November 28, 2021 and May 30, 2021, adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2, were not material.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 3 in the fair value hierarchy, is determined based on appraisals, sales prices of comparable assets, or estimates of discounted future cash flows. As of November 28, 2021, adjustments to the fair values of non-financial assets, classified as Level 3, were not material. As of May 30, 2021, long-lived assets held and used with a carrying amount of $5.6 million, primarily related to four underperforming restaurants, were determined to have a fair value of $0.6 million resulting in an impairment charge of $5.0 million.

Note 11. Commitments and Contingencies

As collateral for performance on contracts and as credit guarantees to banks and insurers, we are contingently liable for guarantees of subsidiary obligations under standby letters of credit. As of November 28, 2021 and May 30, 2021, we had $104.8 million and $70.5 million, respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in our consolidated financial statements. As of November 28, 2021 and May 30, 2021, we had $18.9 million and $28.9 million, respectively, of surety bonds related to other payments. Most surety bonds are renewable annually.

As of November 28, 2021 and May 30, 2021, we had $107.8 million and $121.5 million, respectively, of guarantees associated with leased properties that have been assigned to third parties. These amounts represent the maximum potential amount of future payments under the guarantees. The fair value of the maximum potential future payments discounted at our weighted-average cost of capital as of November 28, 2021 and May 30, 2021, amounted to $86.2 million and $99.7 million, respectively. In the event of default by a third party, the indemnity and default clauses in our assignment agreements govern our ability to recover from and pursue the third party for damages incurred as a result of its default. We do not hold any third-party assets as collateral related to these assignment agreements, except to the extent that the assignment allows us to repossess the building and personal property. These guarantees expire over their respective lease terms, which range from fiscal 2022 through fiscal 2034.

We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry, and can also involve

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DARDEN RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

infringement of, or challenges to, our trademarks. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the final disposition of the lawsuits, proceedings and claims in which we are currently involved, either individually or in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity. 

Note 12. Subsequent Events

On December 15, 2021, the Board of Directors declared a cash dividend of $1.10 per share to be paid February 1, 2022 to all shareholders of record as of the close of business on January 10, 2022.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis below for the Company, which contains forward-looking statements, should be read in conjunction with the unaudited financial statements, the notes to such financial statements and the “Forward-Looking Statements” included elsewhere in this Form 10-Q.

To facilitate review of our discussion and analysis, the following table sets forth our financial results for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the quarters and six months ended November 28, 2021 and November 29, 2020. 

	Three Months Ended							Six Months Ended
(in millions)	November 28, 2021			November 29, 2020			% Chg	November 28, 2021			November 29, 2020			% Chg
Sales	$	2,272.2		$	1,656.5		37.2%	$	4,578.2		$	3,183.9		43.8%
Costs and expenses:
Food and beverage	694.1			475.1			46.1	1,379.5			909.6			51.7
Restaurant labor	744.8			535.5			39.1	1,480.8			1,036.2			42.9
Restaurant expenses	385.0			330.5			16.5	763.1			621.4			22.8
Marketing expenses	21.9			18.8			16.5	45.8			47.6			(3.8)
General and administrative expenses	91.4			89.9			1.7	204.2			218.2			(6.4)
Depreciation and amortization	92.1			86.0			7.1	181.1			173.6			4.3
Total costs and expenses	$	2,029.3		$	1,535.8		32.1	$	4,054.5		$	3,006.6		34.9
Operating income	242.9			120.7			NM	523.7			177.3			NM
Interest, net	16.7			14.6			14.4	32.3			31.2			3.5
Other (income) expense, net	0.3			0.4			(25.0)	0.5			7.9			(93.7)
Earnings before income taxes	225.9			105.7			NM	$	490.9		$	138.2		NM
Income tax expense (1)	32.5			8.8			NM	65.8			4.0			NM
Earnings from continuing operations	$	193.4		$	96.9		99.6	$	425.1		$	134.2		NM
Losses from discontinued operations, net of tax	(0.2)			(0.9)			(77.8)	(1.0)			(2.1)			(52.4)
Net earnings	$	193.2		$	96.0		NM	$	424.1		$	132.1		NM
Diluted net earnings per share:
Earnings from continuing operations	$	1.48		$	0.74		NM	$	3.24		$	1.02		NM
Losses from discontinued operations	—			(0.01)			NM	(0.01)			(0.01)			NM
Net earnings	$	1.48		$	0.73		NM	$	3.23		$	1.01		NM
(1) Effective tax rate	14.4		%	8.3		%		13.4		%	2.9		%
NM- Percentage not considered meaningful.

The following table details the number of company-owned restaurants currently reported in continuing operations that were open at the end of the second quarter of fiscal 2022, compared with the number open at the end of fiscal 2021 and the end of the second quarter of fiscal 2021. 

	November 28, 2021	May 30, 2021	November 29, 2020
Olive Garden	879	875	874
LongHorn Steakhouse	539	533	527
Cheddar’s Scratch Kitchen	172	170	168
Yard House	85	81	81
The Capital Grille	61	60	58
Seasons 52	44	44	43
Bahama Breeze	42	42	41
Eddie V’s	27	26	24
The Capital Burger	3	3	2
Total	1,852	1,834	1,818

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OVERVIEW OF OPERATIONS

COVID-19 Pandemic

For much of fiscal 2021, the COVID-19 pandemic resulted in a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as public health officials encouraged social distancing and required personal protective equipment and state and local governments mandated restrictions including suspension of dine-in operations, reduced restaurant seating capacity, table spacing requirements, bar closures and additional physical barriers. Once COVID-19 vaccines were approved and moved into wider distribution in the United States in early 2021, public health conditions improved and almost all of the COVID-19 restrictions on businesses have eased. As of the date of this report, all of our restaurants were able to open their dining rooms and few capacity restrictions remained in place in the United States. Following increases in the numbers of cases of COVID-19 throughout the United States during fiscal 2022, some of our restaurants are subject to other COVID-19-related restrictions such as mask requirements or vaccine requirements for team members, guests or both. For the health and safety of our guests and team members, we continue to evaluate and implement our own COVID-19 protocols for our restaurant teams, including mask wearing, contact tracing, and exclusion or quarantine of team members who are exposed or are ill. Exclusions and quarantines of restaurant team members or groups thereof disrupt an individual restaurant’s operations and often come with little or no notice to the local restaurant management. We continue to monitor the progression of the COVID-19 pandemic and state, local and federal government regulatory and public health responses thereto, including the federal Occupational Health and Safety Administration’s attempt to implement a nationwide vaccine requirement for large employers.

Financial Highlights - Consolidated

Our sales from continuing operations were $2.27 billion and $4.58 billion for the second quarter and first six months of fiscal 2022, respectively, compared to $1.66 billion and $3.18 billion for the second quarter and first six months of fiscal 2021, respectively. The 37.2 percent and 43.8 percent increases in sales for the second quarter and first six months of fiscal 2022 were driven by combined Darden same-restaurant sales increases of 34.4 percent and 40.7 percent for the second quarter and first six months of fiscal 2022, respectively, in addition to revenue from the addition of 34 net new company-owned restaurants since the second quarter of fiscal 2021. Fiscal 2021 sales for the second quarter and first six months were negatively impacted by COVID-19.

For the second quarter of fiscal 2022, our net earnings from continuing operations were $193.4 million compared to $96.9 million for the second quarter of fiscal 2021, and our diluted net earnings per share from continuing operations were $1.48 for the second quarter of fiscal 2022 compared to $0.74 for the second quarter of fiscal 2021. For the first six months of fiscal 2022, our net earnings from continuing operations were $425.1 million compared to $134.2 million for the first six months of fiscal 2021, and our diluted net earnings per share from continuing operations were $3.24 for the first six months of fiscal 2022 compared to $1.02 for the first six months of fiscal 2021. Our diluted per share results from continuing operations for the first six months of fiscal 2021 were adversely impacted by approximately $0.28 due to charges associated with our corporate restructuring plan.

Outlook

We expect sales for fiscal 2022 to be between $9.6 and $9.7 billion, driven by same-restaurant sales growth of 29 to 31 percent and 35 to 40 net new restaurants. Additionally, we expect capital expenditures incurred to build new restaurants, remodel and maintain existing restaurants and for technology initiatives to be $425 million.

SALES

The following table presents our sales by segment for the periods indicated.

	Three Months Ended								Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		% Chg		SRS (1)		November 28, 2021		November 29, 2020		% Chg		SRS (1)
Olive Garden	$	1,077.2	$	829.5	29.9	%	29.3	%	$	2,167.6	$	1,617.7	34.0	%	33.1	%
LongHorn Steakhouse	$	547.2	$	407.4	34.3	%	31.2	%	$	1,114.3	$	784.1	42.1	%	38.8	%
Fine Dining	$	188.7	$	107.3	75.9	%	61.6	%	$	357.5	$	190.0	88.2	%	71.6	%
Other Business	$	459.1	$	312.3	47.0	%	42.9	%	$	938.8	$	592.1	58.6	%	53.8	%

(1)Same-restaurant sales is a year-over-year comparison of each period’s sales volumes for a 52-week year and is limited to restaurants open at least 16 months.

Olive Garden’s sales increase for the second quarter and first six months of fiscal 2022 was primarily driven by U.S. same-restaurant sales increases combined with revenue from new restaurants. The increase in U.S. same-restaurant sales for the second quarter of fiscal 2022 resulted from a 24.7 percent increase in same-restaurant guest counts and a 3.7 percent increase in

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average check. The increase in U.S. same-restaurant sales for the first six months of fiscal 2022 resulted from a 30.0 percent increase in same-restaurant guest counts and a 2.4 percent increase in average check.

LongHorn Steakhouse’s sales increase for the second quarter and first six months of fiscal 2022 was primarily driven by same-restaurant sales increases combined with revenue from new restaurants. The increase in same-restaurant sales for the second quarter of fiscal 2022 resulted from a 28.3 percent increase in same-restaurant guest counts and a 2.3 percent increase in average check. The increase in U.S. same-restaurant sales for the first six months of fiscal 2022 resulted from a 34.9 percent increase in same-restaurant guest counts and a 2.9 percent increase in average check.

Fine Dining’s sales increase for the second quarter and first six months of fiscal 2022 was primarily driven by same-restaurant sales increases combined with revenue from new restaurants. The increase in same-restaurant sales for the second quarter of fiscal 2022 resulted from a 54.3 percent increase in same-restaurant guest counts combined with a 4.7 percent increase in average check. The increase in same-restaurant sales for the first six months of fiscal 2022 resulted from a 65.7 percent increase in same-restaurant guest counts and a 3.6 percent increase in average check.

Other Business’ sales increase for the second quarter and first six months of fiscal 2022 was primarily driven by same-restaurant sales increases combined with revenue from new restaurants. The increase in same-restaurant sales for the second quarter of fiscal 2021 resulted from a 31.4 percent increase in same-restaurant guest counts and a 8.7 percent increase in average check. The increase in same-restaurant sales for the first six months of fiscal 2022 resulted from a 41.8 percent increase in same-restaurant guest counts and a 8.5 percent increase in average check.

COSTS AND EXPENSES

The following table sets forth selected operating data as a percent of sales for the periods indicated. All information is derived from the unaudited consolidated statements of earnings for the quarters and six months ended November 28, 2021 and November 29, 2020. 

	Three Months Ended				Six Months Ended
	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Sales	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Food and beverage	30.5		28.7		30.1		28.6
Restaurant labor	32.8		32.3		32.3		32.5
Restaurant expenses	16.9		20.0		16.7		19.5
Marketing expenses	1.0		1.1		1.0		1.5
General and administrative expenses	4.0		5.4		4.5		6.9
Depreciation and amortization	4.1		5.2		4.0		5.5
Total operating costs and expenses	89.3	%	92.7	%	88.6	%	94.4	%
Operating income	10.7		7.3		11.4		5.6
Interest, net	0.7		0.9		0.7		1.0
Other (income) expense, net	—		—		—		0.2
Earnings before income taxes	9.9		6.4		10.7		4.3
Income tax expense	1.4		0.5		1.4		0.1
Earnings from continuing operations	8.5	%	5.8	%	9.3	%	4.2	%

Quarter Ended November 28, 2021 Compared to Quarter Ended November 29, 2020

•Food and beverage costs increased as a percent of sales primarily due to a 3.6% impact from inflation and unfavorable menu mix, offset by a 1.7% impact from pricing leverage.

•Restaurant labor costs increased as a percent of sales primarily due to 2.5% impact from inflation and a 2.4% impact from decreased productivity, offset by a 4.5% impact from sales leverage.

•Restaurant expenses decreased as a percent of sales primarily due to a 4.0% impact from sales leverage, partially offset by a 0.5% impact from higher utility costs and a 0.5% impact from higher repairs and maintenance expenses.

•Marketing expenses decreased as a percent of sales primarily due to sales leverage.

•General and administrative expenses decreased as a percent of sales primarily due to a 1.5% impact from sales leverage and a 0.4% impact related to mark to market on deferred compensation plans, offset by a 0.5% impact from travel and other costs.

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•Depreciation and amortization expenses decreased as a percent of sales due to sales leverage.

Six Months Ended November 28, 2021 Compared to Six Months Ended November 29, 2020

•Food and beverage costs increased as a percent of sales primarily due to a 2.9% impact from inflation and unfavorable menu mix, offset by a 1.3% impact from pricing leverage.

•Restaurant labor costs decreased as a percent of sales primarily due to 5.6% impact from sales and pricing leverage, partially offset by a 3.5% impact from decreased productivity and a 1.9% impact from inflation.

•Restaurant expenses decreased as a percent of sales primarily due to a 4.8% impact from sales and pricing leverage, partially offset by a 0.6% impact from higher repairs and maintenance expenses, a 0.5% impact from higher utility costs, a 0.2% impact from prior year business interruption proceeds and a 0.7% impact from all other costs.

•Marketing expenses decreased as a percent of sales due to a 0.5% impact from sales leverage.

•General and administrative expenses decreased as a percent of sales primarily due to a 2.1% impact from sales leverage and a 1.0% impact from costs associated with our corporate restructuring in the first quarter of fiscal 2021, offset by a 0.7% impact from travel and labor costs.

•Depreciation and amortization expenses decreased as a percent of sales due to sales leverage.

INTEREST EXPENSE

Net interest expense decreased as a percent of sales for the second quarter of fiscal 2022 primarily due to sales leverage. Net interest expense decreased as a percent of sales for the first six months of fiscal 2022 primarily due sales leverage as well as interest incurred on our $270.0 million term loan during fiscal 2021.

OTHER (INCOME) EXPENSE, NET

Other (income) expense, net decreased as a percent of sales for the first six months of fiscal 2022 primarily due to a postretirement benefit plan valuation adjustment resulting from our corporate restructuring in the first quarter of fiscal 2021.

INCOME TAXES

The effective income tax rate for continuing operations for the quarter ended November 28, 2021 was 14.4 percent, reflecting income tax expense of $32.5 million compared to an effective income tax rate for the quarter ended November 29, 2020 of 8.3 percent, reflecting income tax expense of $8.8 million. The effective tax rate for continuing operations for the six months ended November 28, 2021 was 13.4 percent, reflecting income tax expense of $65.8 million compared to an effective income tax rate of 2.9 percent for the six months ended November 29, 2020, reflecting income tax expense of 4.0 million. The change was primarily driven by higher net earnings from continuing operations in the quarter and six months ended November 28, 2021 compared to the quarter and six months ended November 29, 2020 and the impact of certain tax credits on earnings before income taxes for the six months ended November 29, 2020.

LOSSES FROM DISCONTINUED OPERATIONS

On an after-tax basis, losses from discontinued operations for the second quarter and first six months of fiscal 2022 were $0.2 million ($0.00 per diluted share) and $1.0 million ($0.01 per diluted share) compared with losses from discontinued operations for the second quarter and first six months of fiscal 2021 of $0.9 million ($0.01 per diluted share) and $2.1 million ($0.01 per diluted share).

SEGMENT RESULTS

We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger in North America as operating segments. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. Our four reportable segments are: (1) Olive Garden, (2) LongHorn Steakhouse, (3) Fine Dining and (4) Other Business (see Note 6 to our unaudited consolidated financial statements in Part I, Item 1 of this report).

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Our management uses segment profit as the measure for assessing performance of our segments. The following table presents segment profit margin for the periods indicated.

	Three Months Ended			Six Months Ended
Segment	November 28, 2021	November 29, 2020	Change	November 28, 2021	November 29, 2020	Change
Olive Garden	21.8%	21.1%	70 BPS	22.5%	21.6%	90	BPS
LongHorn Steakhouse	15.3%	16.3%	(100) BPS	17.1%	15.7%	140	BPS
Fine Dining	21.0%	19.0%	200 BPS	20.5%	16.1%	440	BPS
Other Business	13.6%	12.6%	100 BPS	15.7%	12.6%	310	BPS

The increase in Olive Garden’s segment profit margin for the second quarter and first six months of fiscal 2022 was driven primarily by positive same-restaurant sales as well as decreased restaurant and marketing expense. The decrease in LongHorn Steakhouse’s segment profit margin for the second quarter of fiscal 2022 was driven by increased food and beverage costs, partially offset by positive same-restaurant sales. The increase in LongHorn Steakhouse’s segment profit margin first six months of fiscal 2022 was driven primarily by positive same-restaurant sales as well as decreased restaurant expenses, partially offset by increased food and beverage costs. The increase in Fine Dining’s segment profit margin for the second quarter and first six months of fiscal 2022 was driven primarily by as positive same-restaurant sales as well as decreased labor and restaurant expenses. The increase in Other Business’ segment profit margin for the second quarter and first six months of fiscal 2022 was driven primarily by positive same-restaurant sales as well as decreased restaurant expenses.

SEASONALITY

Our sales volumes fluctuate seasonally. Typically, our average sales per restaurant are highest in the winter and spring, followed by the summer, and lowest in the fall. Holidays, changes in the economy, severe weather and similar conditions may impact sales volumes seasonally in some operating regions. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. We are not able to predict the impact that the COVID-19 pandemic may have on the seasonality of our business.

LIQUIDITY AND CAPITAL RESOURCES

Typically, cash flows generated from operating activities are our principal source of liquidity, which we use to finance capital expenditures for new restaurants and to remodel and maintain existing restaurants, to pay dividends to our shareholders and to repurchase shares of our common stock. Since substantially all of our sales are for cash and cash equivalents, and accounts payable are generally paid in 5 to 90 days, we are typically able to carry current liabilities in excess of current assets.

We currently manage our business and financial ratios to target an investment-grade bond rating, which has historically allowed flexible access to financing at reasonable costs. Our publicly issued long-term debt currently carries the following ratings:

•Moody’s Investors Service “Baa2”;

•Standard & Poor’s “BBB”; and

•Fitch “BBB”.

Our commercial paper has ratings of:

•Moody’s Investors Service “P-2”;

•Standard & Poor’s “A-2”; and

•Fitch “F-2”.

These ratings are as of the date of the filing of this Form 10-Q and have been obtained with the understanding that Moody’s Investors Service, Standard & Poor’s and Fitch will continue to monitor our credit and make future adjustments to these ratings to the extent warranted. The ratings are not a recommendation to buy, sell or hold our securities, may be changed, superseded or withdrawn at any time and should be evaluated independently of any other rating.

On September 10, 2021, we entered into a $1 billion Revolving Credit Agreement (Revolving Credit Agreement) with Bank of America, N.A. (BOA), as administrative agent, and the lenders and other agents party thereto. The Revolving Credit Agreement is a senior unsecured credit commitment to the Company and contains customary representations and affirmative and negative covenants (including limitations on liens and subsidiary debt and a maximum consolidated lease adjusted total debt to total capitalization ratio of 0.75 to 1.00) and events of default usual for credit facilities of this type. The Revolving Credit Agreement replaced our prior $750.0 million revolving credit agreement, dated as of October 27, 2017 and amended as of March 25, 2020. As of November 28, 2021, we had no outstanding balances and we were in compliance with all covenants under the New Revolving Credit Agreement.

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The New Revolving Credit Agreement matures on September 10, 2026, and the proceeds may be used for working capital and capital expenditures, the refinancing of certain indebtedness, certain acquisitions and general corporate purposes. Loans under the New Revolving Credit Agreement bear interest at a rate of LIBOR plus a margin determined by reference to a ratings-based pricing grid (Applicable Margin), or the base rate (which is defined as the highest of the BOA prime rate, the Federal Funds rate plus 0.500 percent, and the Eurodollar Rate plus 1.00 percent) plus the Applicable Margin. Assuming a “BBB” equivalent credit rating level, the Applicable Margin under the New Revolving Credit Agreement will be 1.000 percent for LIBOR loans and 0.000 percent for base rate loans.

As of November 28, 2021, our outstanding long-term debt consisted principally of:

•$500.0 million of unsecured 3.850 percent senior notes due in May 2027;

•$96.3 million of unsecured 6.000 percent senior notes due in August 2035;

•$42.8 million of unsecured 6.800 percent senior notes due in October 2037; and

•$300.0 million of unsecured 4.550 percent senior notes due in February 2048.

The interest rate on our $42.8 million senior notes due in October 2037 is subject to adjustment from time to time if the debt rating assigned to such series of notes is downgraded below a certain rating level (or subsequently upgraded). The maximum adjustment is 2.000 percent above the initial interest rate and the interest rate cannot be reduced below the initial interest rate. As of November 28, 2021, no such adjustments are made to this rate.

We may from time to time repurchase our remaining outstanding debt in privately negotiated transactions. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements and other factors.

From time to time we enter into interest rate derivative instruments. See Note 9 to our unaudited consolidated financial statements in Part I, Item 1 of this report, which is incorporated by reference.

Net cash flows provided by operating activities of continuing operations increased to $481.5 million for the first six months of fiscal 2022, from $428.6 million for the first six months of fiscal 2021. Net cash flows provided by operating activities include net earnings from continuing operations of $425.1 million and $134.2 million in the first six months of fiscal 2022 and 2021, respectively. Net cash flows provided by operating activities increased in fiscal 2022 primarily due to higher net earnings from continuing operations, offset by the change in working capital compared to fiscal 2021.

Net cash flows used in investing activities of continuing operations were $177.8 million for the first six months of fiscal 2022, compared to $109.7 million for the first six months of fiscal 2021. Capital expenditures increased to $173.3 million for the first six months of fiscal 2022 from $108.2 million for the first six months of fiscal 2021 reflecting an increase in new restaurant construction and remodel activity during fiscal 2022.

Net cash flows used in financing activities of continuing operations were $721.0 million for the first six months of fiscal 2022, compared to $308.4 million for the first six months of fiscal 2021. Net cash flows used in financing activities for the first six months of fiscal 2022 included dividends paid of $286.1 million and share repurchases of $452.3 million partially offset by proceeds from the exercise of employee stock options. Net cash flows used in financing activities for the first six months of fiscal 2021 included repayment of a 364-day term loan of $270.0 million prior to maturity as well as dividends paid of $39.1 million partially offset by proceeds from the exercise of employee stock options. Dividends declared by our Board of Directors totaled $2.20 and $0.30 per share for the first six months of fiscal 2022 and 2021, respectively.

On September 22, 2021, our Board of Directors authorized a new share repurchase program under which we may repurchase up to $750.0 million of our outstanding common stock in addition to any amount remaining under the prior authorization. This repurchase program does not have an expiration. During the quarter and six months ended November 28, 2021, we repurchased 1.8 million and 3.1 million shares of our common stock, respectively, compared to 0.0 million and 0.1 million shares of our common stock, respectively, during the quarter and six months ended November 29, 2020.

We are not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, sales, costs or expenses, results of operations, liquidity, capital expenditures or capital resources.

 Impairment of our assets, including goodwill or trademarks, adversely affects our financial position and results of operations, and our leverage ratio for purposes of our Revolving Credit Agreement. A leverage ratio exceeding the maximum permitted under our Revolving Credit Agreement would be a default under our Revolving Credit Agreement.  At November 28, 2021, write-downs of goodwill, other indefinite-lived intangible assets, or any other assets in excess of approximately $1.39 billion would have been required to cause our leverage ratio to exceed the permitted maximum. As our leverage ratio is

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determined on a quarterly basis, and due to the seasonal nature of our business, a lesser amount of impairment in future quarters could cause our leverage ratio to exceed the permitted maximum.

FINANCIAL CONDITION

Our current assets totaled $1.51 billion as of November 28, 2021, compared to $1.87 billion as of May 30, 2021. The decrease was primarily due to a decrease in cash and cash equivalents.

Our current liabilities totaled $1.78 billion as of November 28, 2021, compared to $1.85 billion as of May 30, 2021. The decrease was primarily driven by a decrease in other current liabilities.

CRITICAL ACCOUNTING ESTIMATES

We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales, costs and expenses during the reporting period. Actual results could differ from those estimates. We have discussed the development, selection and disclosure of those estimates with the Audit Committee. Our critical accounting estimates have not changed materially from those previously reported in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

APPLICATION OF NEW ACCOUNTING STANDARDS

Information regarding application of new accounting standards is incorporated by reference from Note 1 to our unaudited consolidated financial statements in Part I, Item 1 of this report.

FORWARD-LOOKING STATEMENTS

Statements set forth in or incorporated into this report regarding the expected increase in the number of our restaurants and capital expenditures in fiscal 2022, projections for sales and all other statements that are not historical facts, including without limitation statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Darden Restaurants, Inc. and its subsidiaries that are preceded by, followed by or that include words such as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “estimate,” “project,” “believe,” “plan,” “outlook” or similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of complying with the safe harbor provisions of that Act. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements for any reason to reflect events or circumstances arising after such date. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. In addition to the risks and uncertainties of ordinary business obligations, and those described in information incorporated into this report, the forward-looking statements contained in this report are subject to the risks and uncertainties described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended May 30, 2021 and in our Forms 10-Q (including this report), which are summarized as follows:

•The impacts of the novel coronavirus (COVID-19) pandemic on our business, including the response of governments and of our company to the pandemic and the effectiveness, acceptance, availability, timing and distribution of approved vaccines;

•Health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases;

•Insufficient guest or employee facing technology, or a failure to maintain a continuous and secure cyber network, free from material failure, interruption or security breach;

•Food safety and food-borne illness concerns throughout the supply chain;

•The inability to hire, train, reward and retain restaurant team members;

•A failure to recruit, develop and retain effective leaders or the loss or shortage of key personnel;

•Insufficient or ineffective response to legislation or government regulation may impact our cost structure, operational efficiencies and talent availability;

•Litigation, including allegations of illegal, unfair or inconsistent employment practices;

•Unfavorable publicity, or a failure to respond effectively to adverse publicity;

•An inability or failure to recognize, respond to and effectively manage the accelerated impact of social media;

•The inability to cancel long-term, non-cancelable leases that we may want to cancel or the inability to renew the leases that we may want to extend at the end of their terms;

29

•Labor and insurance costs;

•Our inability or failure to execute a comprehensive business continuity plan following a major natural disaster such as a hurricane or manmade disaster, including terrorism;

•Intense competition, or an insufficient focus on competition and the consumer landscape;

•Changes in consumer preferences that may adversely affect demand for food at our restaurants;

•Our failure to drive both short-term and long-term profitable sales growth through brand relevance, operating excellence, opening new restaurants of existing brands and developing or acquiring new dining brands;

•A lack of suitable new restaurant locations or a decline in the quality of the locations of our current restaurants;

•Higher-than-anticipated costs to open, close, relocate or remodel restaurants;

•A failure to identify and execute innovative marketing and guest relationship tactics and ineffective or improper use of other marketing initiatives and increased advertising and marketing costs;

•A failure to address cost pressures, including rising costs for commodities, labor, health care and utilities used by our restaurants, and a failure to effectively deliver cost management activities and achieve economies of scale in purchasing;

•The impact of shortages or interruptions in the delivery of food and other products from third-party vendors and suppliers;

•Adverse weather conditions and natural disasters;

•Volatility in the market value of derivatives we may use to hedge commodity and broader market prices;

•Volatility in the United States equity markets that may affect our ability to efficiently hedge exposures to our market risk related to equity-based compensation awards;

•Economic and business factors specific to the restaurant industry and other general macroeconomic factors including energy prices and interest rates that are largely out of our control;

•Disruptions in the financial markets that may impact consumer spending patterns, affect the availability and cost of credit;

•Risks associated with doing business with franchisees and licensees;

•Risks associated with doing business with business partners and vendors in foreign markets;

•Failure to protect our service marks or other intellectual property;

•Impairment of the carrying value of our goodwill or other intangible assets;

•Changes in tax laws or treaties and unanticipated tax liabilities; and

•A failure of our internal controls over financial reporting and future changes in accounting standards.

Any of the risks described above or elsewhere in this report or our other filings with the SEC could have a material impact on our business, financial condition or results of operations. It is not possible to predict or identify all risk factors. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. Therefore, the above is not intended to be a complete discussion of all potential risks or uncertainties.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market risks, including fluctuations in interest rates, foreign currency exchange rates, compensation and commodity prices. To manage this exposure, we periodically enter into interest rate, foreign currency exchange rate, equity forward and commodity derivative instruments for other than trading purposes (see Note 9 to our unaudited consolidated financial statements in Part I, Item 1 of this report).

We use the variance/covariance method to measure value at risk, over time horizons ranging from one week to one year, at the 95 percent confidence level. As of November 28, 2021, our potential losses in future net earnings resulting from changes in equity forwards, commodity instruments and floating rate debt interest rate exposures were approximately $80.5 million over a period of one year. The value at risk from an increase in the fair value of all of our long-term fixed-rate debt, over a period of one year, was approximately $70.1 million. The fair value of our long-term fixed-rate debt outstanding as of November 28, 2021, averaged $1.08 billion, with a high of $1.09 billion and a low of $1.06 billion during the first six months of fiscal 2022. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows by targeting an appropriate mix of variable and fixed-rate debt.

30

Item 4.Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of November 28, 2021, the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of November 28, 2021.

During the fiscal quarter ended November 28, 2021, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

31

PART II

OTHER INFORMATION 

Item 1.Legal Proceedings

See the discussion of legal proceedings contained in the third paragraph of Note 11 to our unaudited consolidated financial statements in Part I, Item 1 of this report, which is incorporated herein by reference.

Item 1A.Risk Factors

There have been no material changes to the risk factors contained in Item 1A of our Annual Report on Form 10-K for the year ended May 30, 2021.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The table below provides information concerning our repurchase of shares of our common stock during the quarter ended November 28, 2021.

(Dollars in millions, except per share data)	Total Number of Shares Purchased (1) (2)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3)
August 30, 2021 through October 3, 2021	399,769	$	150.85	399,769	$	966.9
October 4, 2021 through October 31, 2021	732,787	$	148.84	732,787	$	857.8
November 1, 2021 through November 28, 2021	654,317	$	147.74	654,317	$	761.1
Quarter-to-Date	1,786,873	$	148.89	1,786,873	$	761.1

(1)All of the shares purchased during the quarter ended November 28, 2021 were purchased as part of our repurchase program. On September 22, 2021, our Board of Directors authorized a new share repurchase program under which we may repurchase up to $750.0 million of our outstanding common stock in addition to any amount remaining under the prior authorization. This repurchase program, which was announced publicly in a press release issued on September 23, 2021, does not have an expiration.

(2)The number of shares purchased includes shares withheld for taxes on vesting of restricted stock, shares delivered or deemed to be delivered to us on tender of stock in payment for the exercise price of options, and shares reacquired pursuant to tax withholding on option exercises. These shares are included as part of our repurchase program and deplete the repurchase authority granted by our Board. The number of shares repurchased excludes shares we reacquired pursuant to forfeiture of restricted stock.

(3)Repurchases are subject to prevailing market prices, may be made in open market or private transactions and may occur or be discontinued at any time. There can be no assurance that we will repurchase any shares.

32

Item 6.Exhibits 

 

Exhibit No.	Exhibit Title
31(a)	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31(b)	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32(a)	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32(b)	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DARDEN RESTAURANTS, INC.
Dated:	January 5, 2022	By:	/s/ Rajesh Vennam
			Rajesh Vennam
			Senior Vice President, Chief Financial Officer and Treasurer
			(Principal financial officer)

34

EX-31.A

EXHIBIT 31(a)

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Eugene I. Lee, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Darden Restaurants, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

January 5, 2022

/s/ Eugene I. Lee, Jr.

Eugene I. Lee, Jr.

Chairman and Chief Executive Officer

EX-31.B

EXHIBIT 31(b)

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Rajesh Vennam, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Darden Restaurants, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

January 5, 2022

/s/ Rajesh Vennam

Rajesh Vennam

Senior Vice President, Chief Financial Officer and Treasurer

EX-32.A

EXHIBIT 32(a)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Darden Restaurants, Inc. (Company) on Form 10-Q for the quarter ended November 28, 2021, as filed with the Securities and Exchange Commission (Report), I, Eugene I. Lee, Jr., Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

January 5, 2022

/s/ Eugene I. Lee, Jr.

Eugene I. Lee, Jr.

Chairman and Chief Executive Officer

EX-32.B

EXHIBIT 32(b)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Darden Restaurants, Inc. (Company) on Form 10-Q for the quarter ended November 28, 2021, as filed with the Securities and Exchange Commission (Report), I, Rajesh Vennam, Senior Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

January 5, 2022

/s/ Rajesh Vennam

Rajesh Vennam

Senior Vice President, Chief Financial Officer and Treasurer

XML

Cover Page - shares	6 Months Ended
	Nov. 28, 2021	Dec. 15, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Nov. 28, 2021
Document Transition Report	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
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	DRI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		127,723,677
Entity Registrant Name	DARDEN RESTAURANTS INC
Entity Central Index Key	0000940944
Amendment Flag	false
Current Fiscal Year End Date	--05-29
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2

XML

Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Sales	$ 2,272.2	$ 1,656.5	$ 4,578.2	$ 3,183.9
Costs and expenses:
Restaurant labor	744.8	535.5	1,480.8	1,036.2
Marketing expenses	21.9	18.8	45.8	47.6
General and administrative expenses	91.4	89.9	204.2	218.2
Depreciation and amortization	92.1	86.0	181.1	173.6
Total operating costs and expenses	2,029.3	1,535.8	4,054.5	3,006.6
Operating income	242.9	120.7	523.7	177.3
Interest, net	16.7	14.6	32.3	31.2
Other (income) expense, net	0.3	0.4	0.5	7.9
Earnings before income taxes	225.9	105.7	490.9	138.2
Income tax expense	32.5	8.8	65.8	4.0
Earnings from continuing operations	193.4	96.9	425.1	134.2
Losses from discontinued operations, net of tax benefit of $0.0, $0.7, $0.5 and $1.6, respectively	(0.2)	(0.9)	(1.0)	(2.1)
Net earnings	$ 193.2	$ 96.0	$ 424.1	$ 132.1
Basic net earnings per share:
Earnings from continuing operations (in dollars per share)	$ 1.50	$ 0.74	$ 3.28	$ 1.03
Losses from discontinued operations (in dollars per share)	0	0	(0.01)	(0.01)
Net earnings (in dollars per share)	1.50	0.74	3.27	1.02
Diluted net earnings per share:
Earnings from continuing operations (in dollars per share)	1.48	0.74	3.24	1.02
Losses from discontinued operations (in dollars per share)	0	(0.01)	(0.01)	(0.01)
Net earnings (in dollars per share)	$ 1.48	$ 0.73	$ 3.23	$ 1.01
Average number of common shares outstanding:
Basic (in shares)	129.2	130.3	129.8	130.1
Diluted (in shares)	130.5	131.5	131.1	131.2
Food and beverage
Costs and expenses:
Food and beverage costs and restaurant expenses	$ 694.1	$ 475.1	$ 1,379.5	$ 909.6
Restaurant expenses
Costs and expenses:
Food and beverage costs and restaurant expenses	$ 385.0	$ 330.5	$ 763.1	$ 621.4

XML

Consolidated Statements of Earnings (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Income Statement [Abstract]
Tax expense (benefit) of discontinued operations	$ 0.0	$ 0.7	$ 0.5	$ 1.6

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Statement of Comprehensive Income [Abstract]
Net earnings	$ 193.2	$ 96.0	$ 424.1	$ 132.1
Foreign currency adjustment	(0.1)	0.0	(0.5)	0.2
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $0.0, $(0.1), $0.0 and $0.3, respectively	(5.3)	5.0	(3.5)	9.5
Net unamortized gain (loss) arising during the period, including amortization of unrecognized net actuarial gain (loss), net of taxes of $0.1, $0.2, $0.2 and $0.3, respectively, related to pension and other post-employment benefits	0.2	0.4	0.4	0.8
Other comprehensive income (loss)	(5.2)	5.4	(3.6)	10.5
Total comprehensive income	$ 188.0	$ 101.4	$ 420.5	$ 142.6

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Statement of Comprehensive Income [Abstract]
Change in fair value of derivatives and amortization of unrecognized gain (loss) on derivatives, tax	$ 0.0	$ (0.1)	$ 0.0	$ 0.3
Amortization of unrecognized net actuarial (loss) gain, tax	$ 0.1	$ 0.2	$ 0.2	$ 0.3

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Nov. 28, 2021	May 30, 2021
Current assets:
Cash and cash equivalents	$ 746.3	$ 1,214.7
Receivables, net	69.1	68.2
Inventories	230.2	190.8
Prepaid income taxes	337.6	337.2
Prepaid expenses and other current assets	131.0	60.2
Total current assets	1,514.2	1,871.1
Land, buildings and equipment, net of accumulated depreciation and amortization of $2,982.0 and $2,843.8, respectively	3,140.8	2,869.2
Operating lease right-of-use assets	3,599.7	3,776.4
Goodwill	1,037.4	1,037.4
Trademarks	806.3	806.3
Other assets	304.9	295.7
Total assets	10,403.3	10,656.1
Current liabilities:
Accounts payable	355.4	304.5
Accrued payroll	160.7	177.4
Accrued income taxes	34.1	35.9
Other accrued taxes	63.9	60.5
Unearned revenues	457.5	474.2
Other current liabilities	709.1	795.8
Total current liabilities	1,780.7	1,848.3
Long-term debt	929.0	929.8
Deferred income taxes	229.3	221.6
Operating lease liabilities - non-current	3,904.4	4,088.5
Other liabilities	1,016.9	754.8
Total liabilities	7,860.3	7,843.0
Stockholders’ equity:
Common stock and surplus	2,280.6	2,286.6
Retained earnings	261.8	522.3
Accumulated other comprehensive income (loss)	0.6	4.2
Total stockholders’ equity	2,543.0	2,813.1
Total liabilities and stockholders’ equity	$ 10,403.3	$ 10,656.1

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Nov. 28, 2021	May 30, 2021
Statement of Financial Position [Abstract]
Land, buildings and equipment, net of accumulated depreciation and amortization	$ 2,982.0	$ 2,843.8

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock And Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at May. 31, 2020		129.9
Beginning balance at May. 31, 2020	$ 2,331.2	$ 2,205.3	$ 143.5	$ (17.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	132.1		132.1
Other comprehensive income (loss)	10.5			10.5
Dividends declared	(39.5)		(39.5)
Stock option exercises (in shares)		0.1
Stock option exercises	5.6	$ 5.6
Stock-based compensation	23.0	$ 23.0
Repurchases of common stock (in shares)		(0.1)
Repurchases of common stock	(6.8)	$ (1.5)	(5.3)
Issuance of stock under Employee Stock Purchase Plan and other plans (in shares)		0.4
Issuance of stock under Employee Stock Purchase Plan and other plans	4.8	$ 4.8
Other	(5.8)	$ 1.8	(7.6)
Ending balance (in shares) at Nov. 29, 2020		130.3
Ending balance at Nov. 29, 2020	2,455.1	$ 2,239.0	223.2	(7.1)
Beginning balance (in shares) at Aug. 30, 2020		130.2
Beginning balance at Aug. 30, 2020	2,375.0	$ 2,220.9	166.6	(12.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	96.0		96.0
Other comprehensive income (loss)	5.4			5.4
Dividends declared	(39.5)		(39.5)
Stock option exercises (in shares)		0.1
Stock option exercises	3.9	$ 3.9
Stock-based compensation	11.9	11.9
Repurchases of common stock	(0.2)	(0.1)	(0.1)
Issuance of stock under Employee Stock Purchase Plan and other plans	2.3	2.3
Other	0.3	$ 0.1	0.2
Ending balance (in shares) at Nov. 29, 2020		130.3
Ending balance at Nov. 29, 2020	2,455.1	$ 2,239.0	223.2	(7.1)
Beginning balance (in shares) at May. 30, 2021		130.8
Beginning balance at May. 30, 2021	2,813.1	$ 2,286.6	522.3	4.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	424.1		424.1
Other comprehensive income (loss)	(3.6)			(3.6)
Dividends declared	(287.2)		(287.2)
Stock option exercises (in shares)		0.4
Stock option exercises	20.6	$ 20.6
Stock-based compensation	21.9	$ 21.9
Repurchases of common stock (in shares)		(3.1)
Repurchases of common stock	(452.3)	$ (54.9)	(397.4)
Issuance of stock under Employee Stock Purchase Plan and other plans (in shares)		0.2
Issuance of stock under Employee Stock Purchase Plan and other plans	5.1	$ 5.1
Other	1.3	$ 1.3
Ending balance (in shares) at Nov. 28, 2021		128.3
Ending balance at Nov. 28, 2021	2,543.0	$ 2,280.6	261.8	0.6
Beginning balance (in shares) at Aug. 29, 2021		130.0
Beginning balance at Aug. 29, 2021	2,752.4	$ 2,300.7	445.9	5.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	193.2		193.2
Other comprehensive income (loss)	(5.2)			(5.2)
Dividends declared	(143.1)		(143.1)
Stock option exercises (in shares)		0.1
Stock option exercises	3.6	$ 3.6
Stock-based compensation	5.6	$ 5.6
Repurchases of common stock (in shares)		(1.8)
Repurchases of common stock	(266.0)	$ (31.8)	(234.2)
Issuance of stock under Employee Stock Purchase Plan and other plans	2.5	$ 2.5
Ending balance (in shares) at Nov. 28, 2021		128.3
Ending balance at Nov. 28, 2021	$ 2,543.0	$ 2,280.6	$ 261.8	$ 0.6

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Statement of Stockholders' Equity [Abstract]
Dividends declared (in dollars per share)	$ 1.10	$ 0.30	$ 2.20	$ 0.30

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020
Cash flows—operating activities
Net earnings	$ 424.1	$ 132.1
Losses from discontinued operations, net of tax	1.0	2.1
Adjustments to reconcile net earnings from continuing operations to cash flows:
Depreciation and amortization	181.1	173.6
Stock-based compensation expense	38.1	41.4
Change in current assets and liabilities	(156.2)	(6.9)
Contributions to pension and postretirement plans	(1.1)	(0.7)
Deferred income taxes	7.5	(8.0)
Change in other assets and liabilities	(9.4)	118.4
Other, net	(3.6)	(23.4)
Net cash provided by operating activities of continuing operations	481.5	428.6
Cash flows—investing activities
Purchases of land, buildings and equipment	(173.3)	(108.2)
Proceeds from disposal of land, buildings and equipment	6.0	5.4
Purchases of capitalized software and other assets	(11.8)	(6.6)
Other, net	1.3	(0.3)
Net cash used in investing activities of continuing operations	(177.8)	(109.7)
Cash flows—financing activities
Proceeds from issuance of common stock	25.7	10.4
Dividends paid	(286.1)	(39.1)
Repurchases of common stock	(452.3)	(6.8)
Repayments of short-term debt	0.0	(270.0)
Principal payments on finance leases	(5.6)	(2.9)
Payments of debt issuance costs	(2.7)	0.0
Net cash used in financing activities of continuing operations	(721.0)	(308.4)
Cash flows—discontinued operations
Net cash provided by operating activities of discontinued operations	0.4	3.5
Net cash provided by discontinued operations	0.4	3.5
(Decrease) increase in cash, cash equivalents, and restricted cash	(416.9)	14.0
Cash, cash equivalents, and restricted cash - beginning of period	1,214.7	763.3
Cash, cash equivalents, and restricted cash - end of period	797.8	777.3
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	746.3	777.3
Restricted cash included in prepaid expenses and other current assets	51.5	0.0
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	797.8	777.3
Cash flows from changes in current assets and liabilities
Receivables, net	(0.9)	3.6
Inventories	(39.4)	3.9
Prepaid expenses and other current assets	(16.8)	1.3
Accounts payable	36.8	(24.8)
Accrued payroll	(16.7)	(20.1)
Prepaid/accrued income taxes	(2.3)	(3.5)
Other accrued taxes	3.4	4.2
Unearned revenues	(16.7)	(28.1)
Other current liabilities	(103.6)	56.6
Change in current assets and liabilities	$ (156.2)	$ (6.9)

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Basis of Presentation

6 Months Ended

Nov. 28, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Darden Restaurants, Inc. (we, our, Darden or the Company) owns and operates full-service dining restaurants in the United States and Canada under the trade names Olive Garden®, LongHorn Steakhouse®, Cheddar’s Scratch Kitchen®, Yard House®, The Capital Grille®, Seasons 52®, Bahama Breeze®, Eddie V’s Prime Seafood® and The Capital Burger®. As of November 28, 2021, through subsidiaries, we own and operate all of our restaurants in the United States and Canada, except for 2 joint venture restaurants managed by us and 34 franchised restaurants. We also have 25 franchised restaurants in operation located in Latin America.

We have prepared these consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. We operate on a 52/53-week fiscal year which ends on the last Sunday in May. Our fiscal year ending May 29, 2022 will contain 52 weeks of operation. Operating results for interim periods presented are not necessarily indicative of results that may be expected for the full fiscal year.

These statements should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. We prepare our consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and costs and expenses during the reporting period. Actual results could differ from those estimates.

We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation.

COVID-19 Pandemic

For much of fiscal 2021, the COVID-19 pandemic resulted in a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as public health officials encouraged social distancing and required personal protective equipment and state and local governments mandated restrictions including suspension of dine-in operations, reduced restaurant seating capacity, table spacing requirements, bar closures and additional physical barriers. Once COVID-19 vaccines were approved and moved into wider distribution in the United States in early 2021, public health conditions improved and almost all of the COVID-19 restrictions on businesses have eased. As of the date of this report, all of our restaurants were able to open their dining rooms and few capacity restrictions remained in place in the United States. Following increases in the numbers of cases of COVID-19 throughout the United States during fiscal 2022, some of our restaurants are subject to other COVID-19-related restrictions such as mask requirements or vaccine requirements for team members, guests or both. For the health and safety of our guests and team members, we continue to evaluate and implement our own COVID-19 protocols for our restaurant teams, including mask wearing, contact tracing, and exclusion or quarantine of team members who are exposed or are ill. Exclusions and quarantines of restaurant team members or groups thereof disrupt an individual restaurant’s operations and often come with little or no notice to the local restaurant management. We continue to monitor the progression of the COVID-19 pandemic and state, local and federal government regulatory and public health responses thereto, including the federal Occupational Health and Safety Administration’s attempt to implement a nationwide vaccine requirement for large employers.

Recently Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We elected to adopt this guidance during the quarter ended August 29, 2021; adoption did not have a material impact on our consolidated financial statements.

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Revenue Recognition

6 Months Ended

Nov. 28, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition  

Deferred revenue liabilities from contracts with customers included on our accompanying consolidated balance sheets is comprised of the following:

(in millions)	November 28, 2021		May 30, 2021
Unearned revenues
Deferred gift card revenue	$	476.9	$	494.3
Deferred gift card discounts	(20.2)		(20.5)
Other	0.8		0.4
Total	$	457.5	$	474.2
Other liabilities
Deferred franchise fees - non-current	$	2.6	$	2.2

The following table presents a rollforward of deferred gift card revenue.

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Beginning balance	$	465.0	$	475.6	$	494.3	$	494.6
Activations	127.7		94.7		234.3		170.4
Redemptions and breakage	(115.8)		(101.0)		(251.7)		(195.7)
Ending balance	$	476.9	$	469.3	$	476.9	$	469.3

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Additional Financial Information

6 Months Ended

Nov. 28, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Additional Financial Information

Additional Financial Information

Supplemental Balance Sheet Information

The components of lease assets and liabilities on the consolidated balance sheet are as follows:

(in millions)	Balance Sheet Classification	November 28, 2021		May 30, 2021
Operating lease right-of-use assets	Operating lease right-of-use assets	$	3,599.7	$	3,776.4
Finance lease right-of-use assets	Land, buildings and equipment, net	655.7		405.6
Total lease assets, net		$	4,255.4	$	4,182.0
Operating lease liabilities - current	Other current liabilities	$	177.9	$	176.8
Finance lease liabilities - current	Other current liabilities	10.7		7.3
Operating lease liabilities - non-current	Operating lease liabilities - non-current	3,904.4		4,088.5
Finance lease liabilities - non-current	Other liabilities	818.3		555.3
Total lease liabilities		$	4,911.3	$	4,827.9

Supplemental Cash Flow Information

Cash paid for interest and income taxes are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Interest, net of amounts capitalized	$	30.3	$	31.4
Income taxes, net of refunds	58.0		12.6

Non-cash investing and financing activities are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Increase in land, buildings and equipment through accrued purchases	$	43.2	$	33.9
Right-of-use assets obtained in exchange for new operating lease liabilities	3.6		20.1
Right-of-use assets obtained in exchange for new finance lease liabilities	92.9		18.4
Net change in right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance	108.3		71.3

We have restricted cash, of $51.5 million and $0 as of November 28, 2021 and May 30, 2021, respectively, which represents cash held as security for a standby letter of credit. Restricted cash is included in Prepaid Expenses and Other Current Assets on the balance sheet. See Note 11, Commitments and Contingencies.

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Income Taxes	6 Months Ended
	Nov. 28, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The effective income tax rate for continuing operations for the quarter ended November 28, 2021 was 14.4 percent, reflecting income tax expense of $32.5 million compared to an effective income tax rate for the quarter ended November 29, 2020 of 8.3 percent, reflecting income tax expense of $8.8 million. The effective income tax rate for continuing operations for the six months ended November 28, 2021 was 13.4 percent, reflecting income tax expense $65.8 million compared to an effective income tax rate of 2.9 percent for the six months ended November 29, 2020, reflecting income tax expense $4.0 million. The change was primarily driven by higher net earnings from continuing operations in the quarter and six months ended November 28, 2021 compared to the quarter and six months ended November 29, 2020 and the impact of certain tax credits on earnings before income taxes for the six months ended November 29, 2020. Included in our remaining balance of unrecognized tax benefits is $34.1 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations or as a result of the expiration of the statute of limitations for specific jurisdictions.

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Net Earnings per Share

6 Months Ended

Nov. 28, 2021

Earnings Per Share [Abstract]

Net Earnings per Share

Net Earnings per Share

Outstanding stock options, restricted stock and equity-settled performance stock units granted by us represent the only dilutive effect reflected in diluted weighted average shares outstanding, none of which impact the numerator of the diluted net earnings per share computation. Stock options, restricted stock and equity-settled performance stock units excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: 

	Three Months Ended		Six Months Ended
(in millions)	November 28, 2021	November 29, 2020	November 28, 2021	November 29, 2020
Anti-dilutive stock-based compensation awards	0.2	0.7	0.1	1.1

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Segment Information

6 Months Ended

Nov. 28, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and The Capital Burger in North America as operating segments. The brands operate principally in the U.S. within full-service dining. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. We have four reportable segments: (1) Olive Garden, (2) LongHorn Steakhouse, (3) Fine Dining and (4) Other Business.

The Olive Garden segment includes the results of our company-owned Olive Garden restaurants in the U.S. and Canada. The LongHorn Steakhouse segment includes the results of our company-owned LongHorn Steakhouse restaurants in the U.S. The Fine Dining segment aggregates our premium brands that operate within the fine-dining sub-segment of full-service dining and includes the results of our company-owned The Capital Grille and Eddie V’s restaurants in the U.S. The Other Business segment aggregates our remaining brands and includes the results of our company-owned Cheddar’s Scratch Kitchen, Yard House, Seasons 52, Bahama Breeze and The Capital Burger restaurants in the U.S and results from our franchise operations.

External sales are derived principally from food and beverage sales. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our reportable segments are predominantly in the U.S. There were no material transactions among reportable segments.

Our management uses segment profit as the measure for assessing performance of our segments. Segment profit includes revenues and expenses directly attributable to restaurant-level results of operations (sometimes referred to as restaurant-level earnings). These expenses include food and beverage costs, restaurant labor costs, restaurant expenses and marketing expenses (collectively “restaurant and marketing expenses”). Non-cash lease-related expenses included in restaurant expenses (which is a component of segment profit) and lease-related depreciation and amortization are reported at the corporate level as these are expenses for which our operating segments are not being evaluated. Additionally, our lease-related right-of-use assets are not managed or evaluated at the operating segment level, but rather at the corporate level.

In the first quarter of fiscal 2022, we changed our internal management reporting to include The Capital Burger in the Other Business segment. Previously, The Capital Burger was included in the Fine Dining segment due to its adjacency with The Capital Grille brand and overall immateriality. Fiscal 2021 figures have been restated for comparability.

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP.

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 28, 2021
Sales	$	1,077.2	$	547.2	$	188.7	$	459.1	$	—	$	2,272.2
Restaurant and marketing expenses	842.1		463.6		149.0		396.8		(5.7)		1,845.8
Segment profit	$	235.1	$	83.6	$	39.7	$	62.3	$	5.7	$	426.4
Depreciation and amortization	$	35.9	$	16.3	$	8.5	$	24.5	$	6.9	$	92.1
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 28, 2021
Sales	$	2,167.6	$	1,114.3	$	357.5	$	938.8	$	—	$	4,578.2
Restaurant and marketing expenses	1,679.2		923.2		284.3		791.7		(9.2)		3,669.2
Segment profit	$	488.4	$	191.1	$	73.2	$	147.1	$	9.2	$	909.0
Depreciation and amortization	$	71.3	$	32.3	$	16.7	$	48.6	$	12.2	$	181.1
Purchases of land, buildings and equipment	70.6		43.1		20.7		38.2		0.7		173.3

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 29, 2020
Sales	$	829.5	$	407.4	$	107.3	$	312.3	$	—	$	1,656.5
Restaurant and marketing expenses	654.4		341.1		86.9		273.1		4.4		1,359.9
Segment profit	$	175.1	$	66.3	$	20.4	$	39.2	$	(4.4)	$	296.6
Depreciation and amortization	$	34.5	$	16.5	$	7.7	$	24.1	$	3.2	$	86.0
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 29, 2020
Sales	$	1,617.7	$	784.1	$	190.0	$	592.1	$	—	$	3,183.9
Restaurant and marketing expenses	1,268.8		660.8		159.5		517.4		8.3		2,614.8
Segment profit	$	348.9	$	123.3	$	30.5	$	74.7	$	(8.3)	$	569.1
Depreciation and amortization	$	70.4	$	33.4	$	15.3	$	48.3	$	6.2	$	173.6
Purchases of land, buildings and equipment	34.6		17.4		23.2		32.0		1.0		108.2

Reconciliation of segment profit to earnings from continuing operations before income taxes:

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Segment profit	$	426.4	$	296.6	$	909.0	$	569.1
Less general and administrative expenses	(91.4)		(89.9)		(204.2)		(218.2)
Less depreciation and amortization	(92.1)		(86.0)		(181.1)		(173.6)
Less interest, net	(16.7)		(14.6)		(32.3)		(31.2)
Less other (income) expense, net	(0.3)		(0.4)		(0.5)		(7.9)
Earnings before income taxes	$	225.9	$	105.7	$	490.9	$	138.2

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Stockholders' Equity

6 Months Ended

Nov. 28, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Accumulated Other Comprehensive Income (Loss) (AOCI)

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 28, 2021 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 29, 2021	$	4.8	$	9.7	$	(8.7)	$	5.8
Gain (loss)	(0.1)		(5.3)		—		(5.4)
Reclassification realized in net earnings	—		—		0.2		0.2
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6
Balance at May 30, 2021	$	5.2	$	7.9	$	(8.9)	$	4.2
Gain (loss)	(0.5)		(2.7)		—		(3.2)
Reclassification realized in net earnings	—		(0.8)		0.4		(0.4)
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 29, 2020 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 30, 2020	$	4.7	$	(4.1)	$	(13.1)	$	(12.5)
Gain (loss)	—		4.6		—		4.6
Reclassification realized in net earnings	—		0.4		0.4		0.8
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)
Balance at May 31, 2020	$	4.5	$	(8.6)	$	(13.5)	$	(17.6)
Gain (loss)	0.2		9.0		—		9.2
Reclassification realized in net earnings	—		0.5		0.8		1.3
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)

The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded.

		Amount Reclassified from AOCI into Net Earnings
		Three Months Ended				Six Months Ended
(in millions) AOCI Components	Location of Gain (Loss) Recognized in Earnings	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Derivatives
Commodity contracts	(1)	$	—	$	(0.4)	$	—	$	(0.9)
Equity contracts	(2)	0.1		(0.1)		0.9		0.3
Interest rate contracts	(3)	(0.1)		(0.1)		(0.1)		(0.1)
Total before tax		$	—	$	(0.6)	$	0.8	$	(0.7)
Tax (expense) benefit		—		0.2		—		0.2
Net of tax		$	—	$	(0.4)	$	0.8	$	(0.5)
Benefit plan funding position
Recognized net actuarial loss - pension/postretirement plans	(4)	$	(0.2)	$	(0.1)	$	(0.3)	$	(0.1)
Recognized net actuarial gain (loss) - other plans	(4)	(0.1)		(0.5)		(0.3)		(1.0)
Total before tax		$	(0.3)	$	(0.6)	$	(0.6)	$	(1.1)
Tax (expense) benefit		0.1		0.2		0.2		0.3
Net of tax		$	(0.2)	$	(0.4)	$	(0.4)	$	(0.8)

(1)Primarily included in food and beverage costs and restaurant expenses. See Note 9 for additional details.

(2)Included in general and administrative expenses. See Note 9 for additional details.

(3)Including in interest, net on our consolidated statement of earnings.

(4)Included in the computation of net periodic benefit costs, which is a component of other (income) expense, net, restaurant labor expenses and general and administrative expenses.

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Stock-Based Compensation

6 Months Ended

Nov. 28, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We grant stock options for a fixed number of shares to certain employees with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units and performance stock units with a fair value generally determined based on our closing stock price on the date of grant. In addition, we grant cash settled stock units (Darden stock units) which are classified as liabilities and are marked to market as of the end of each period.

The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model for options granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Weighted-average fair value	$	41.02		$	20.07
Dividend yield	3.2		%	3.0		%
Expected volatility of stock	39.6		%	37.3		%
Risk-free interest rate	0.9		%	0.4		%
Expected option life (in years)	6.3			6.4
Weighted-average exercise price per share	$	148.20		$	78.84

The weighted-average grant date fair value of market-based performance stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation for units granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	53.4 %			50.5 %
Risk-free interest rate	0.4 %			0.1 %
Expected life (in years)	2.8			2.8
Weighted-average grant date fair value per unit	$	172.34		$	83.46

(1)Assumes a reinvestment of dividends.

The following table presents a summary of our stock-based compensation activity for the six months ended November 28, 2021.

(in millions)	Stock Options	Restricted Stock/ Restricted Stock Units	Equity-Settled Performance Stock Units	Cash-Settled Darden Stock Units
Outstanding beginning of period	2.15	0.26	0.48	0.80
Awards granted	0.15	0.05	0.09	0.31
Awards exercised/vested	(0.36)	(0.06)	(0.15)	(0.22)
Awards forfeited	—	—	—	(0.04)
Outstanding end of period	1.94	0.25	0.42	0.85

We recognized expense from stock-based compensation as follows: 

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Stock options	$	1.1	$	2.8	$	4.5	$	4.5
Restricted stock/restricted stock units	1.2		3.0		5.0		5.8
Equity-settled performance stock units	2.3		5.1		10.5		10.7
Cash-settled Darden stock units	4.9		10.4		16.2		18.4
Employee stock purchase plan	0.6		0.6		1.3		1.3
Director compensation program/other	0.4		0.3		0.6		0.7
Total stock-based compensation expense	$	10.5	$	22.2	$	38.1	$	41.4

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Derivative Instruments and Hedging Activities

6 Months Ended

Nov. 28, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging ActivitiesWe enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as provided by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use financial derivatives to manage interest rate and compensation risks inherent in our business operations. To the extent our cash-flow hedging instruments are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria required by Topic 815 of the FASB ASC, changes in the derivatives’ fair value are not included in current earnings, but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. To the extent the cash flow hedge accounting criteria are not met, the derivative contracts are utilized as economic hedges and changes in the fair value of such contracts are recorded currently in earnings in the period in which they occur. Cash flows related to derivatives are included in operating activities.

By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties. We currently do not have any provisions in our agreements with counterparties that would require either party to hold or post collateral in the event that the market value of the related derivative instrument exceeds a certain limit. As such, the maximum amount of loss due to counterparty credit risk we would incur at November 28, 2021, if counterparties to the derivative instruments failed completely to perform, would approximate the values of derivative instruments currently recognized as assets on our consolidated balance sheet. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices, or the market price of our common stock. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

We periodically enter into commodity futures, swaps and option contracts (collectively, commodity contracts) to reduce the risk of variability in cash flows associated with fluctuations in the price we pay for commodities, such as natural gas and diesel fuel. For certain commodity purchases, changes in the price we pay for these commodities are highly correlated with changes in the market price of these commodities. For these commodity purchases, we designate commodity contracts as cash flow hedging instruments. For the remaining commodity purchases, changes in the price we pay for these commodities are not highly correlated with changes in the market price, generally due to the timing of when changes in the market prices are reflected in the price we pay. For these commodity purchases, we utilize these commodity contracts as economic hedges. Our commodity contracts currently extend through December 2021.

During the fourth quarter of fiscal 2021, we entered into interest-rate swap agreements with $300.0 million of notional value to limit the risk of change in fair value through fiscal 2031, of the $300.0 million 4.550 percent senior notes due February 2048. The swap agreements effectively swap the fixed-rate obligations for floating-rate obligations over the term of the agreements, thereby mitigating changes in fair value of the related debt. The swap agreements were designated as fair value hedges of the related debt and met the requirements to be accounted for under the short-cut method, resulting in no ineffectiveness in the hedging relationship. During the quarter and six months ended November 28, 2021, $1.2 million and $2.5 million, respectively, was recorded as a reduction to interest expense related to net swap settlements.

We enter into equity forward contracts to hedge the risk of changes in future cash flows associated with the unvested, unrecognized cash-settled Darden stock units. The equity forward contracts will be settled at the end of the vesting periods of their underlying Darden stock units, which range between three and five years and currently extend through July 2026. The contracts are initially designated as cash flow hedges to the extent the Darden stock units are unvested and, therefore, unrecognized as a liability in our financial statements. The forward contracts have net cash settlement terms and net settle every three months. As the Darden stock units vest, we will de-designate that portion of the equity forward contract that no longer qualifies for hedge accounting, and changes in fair value associated with that portion of the equity forward contract will be recognized in current earnings. We periodically incur interest on the notional value of the contracts and receive dividend equivalents on the underlying shares. These amounts are recognized currently in earnings as they are incurred or received.

We entered into equity forward contracts to hedge the risk of changes in future cash flows associated with recognized, employee-directed investments in Darden stock within the non-qualified deferred compensation plan. We did not elect hedge accounting with the expectation that changes in the fair value of the equity forward contracts would offset changes in the fair value of Darden stock investments in the non-qualified deferred compensation plan within general and administrative expenses in our consolidated statements of earnings. These contracts currently extend through July 2026.

The notional and fair values of our derivative contracts are as follows: 

					Fair Values
(in millions, except per share data)	Number of Shares Outstanding	Weighted-Average  Per Share Forward Rates	Notional Values		Derivative Assets (1)				Derivative Liabilities (1)
	November 28, 2021				November 28, 2021		May 30, 2021		November 28, 2021		May 30, 2021
Equity forwards:
Designated	0.3	$125.95	$	42.2	$	—	$	0.9	$	2.4	$	—
Not designated	0.4	119.46	45.5		—		2.0		2.7		—
Total equity forwards					$	—	$	2.9	$	5.1	$	—
Commodity contracts:
Designated	N/A	N/A	$	0.4	$	—	$	0.1	$	—	$	—
Not designated	N/A	N/A	—		—		—		—		—
Total commodity contracts					$	—	$	0.1	$	—	$	—
Interest rate related
Designated	N/A	N/A	$	300.0	$	1.0	$	—	$	—	$	0.2
Not designated	N/A	N/A			—		—		—		—
Total interest rate related					$	1.0	$	—	$	—	$	0.2
Total derivative contracts					$	1.0	$	3.0	$	5.1	$	0.2

 

(1)Derivative assets and liabilities are included in receivables, net and other current liabilities, as applicable, on our consolidated balance sheets.

    The effects of derivative instruments accounted for as cash flow hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(5.4)	$	5.0	$	0.1	$	(0.1)
Commodity (2)	0.1		(0.5)		—		(0.4)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(5.3)	$	4.5	$	—	$	(0.6)
	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(2.7)	$	8.7	$	0.9	$	0.3
Commodity (2)	—		0.4		—		(0.9)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(2.7)	$	9.1	$	0.8	$	(0.7)

(1)Location of the gain (loss) reclassified from AOCI to earnings is general and administrative expenses.

(2)Location of the gain (loss) reclassified from AOCI to earnings is food and beverage costs and restaurant expenses.

(3)Location of gain (loss) reclassified from AOCI to earnings is interest, net.

The effects of derivative instruments in fair value hedging relationships in the consolidated statement of earnings are as follows:

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	(5.5)	$	—	$	5.5	$	—
Total	$	(5.5)	$	—	$	5.5	$	—

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	1.2	$	—	$	(1.2)	$	—
Total	$	1.2	$	—	$	(1.2)	$	—

 (1) Location of the gain (loss) recognized in earnings on derivatives and related hedged item is interest, net.

(2) Hedged item in fair value hedge relationship is debt.

The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in Earnings
(in millions)	Three Months Ended				Six Months Ended
Location of Gain (Loss) Recognized in Earnings on Derivatives	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Food and beverage costs and restaurant expenses	$	—	$	—	$	0.1	$	0.1
General and administrative expenses	(3.5)		10.6		1.6		15.1
Total	$	(3.5)	$	10.6	$	1.7	$	15.2

Based on the fair value of our derivative instruments designated as cash flow hedges as of November 28, 2021, we expect to reclassify $0.5 million of net gains on derivative instruments from accumulated other comprehensive income (loss) to earnings during the next 12 months based on the maturity of our equity forward contracts. However, the amounts ultimately realized in earnings will be dependent on the fair value of the contracts on the settlement dates.

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Fair Value Measurements

6 Months Ended

Nov. 28, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration.

The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of November 28, 2021 and May 30, 2021. 

Items Measured at Fair Value at November 28, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Equity forwards	(2)	$	(5.1)	$	—	$	(5.1)	$	—
Interest rate swaps	(3)	1.0		—		1.0		—
Total		$	(4.1)	$	—	$	(4.1)	$	—

Items Measured at Fair Value at May 30, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Commodities futures, swaps & options	(1)	$	0.1	$	—	$	0.1	$	—
Equity forwards	(2)	2.9		—		2.9		—
Interest rate swaps	(3)	(0.2)		—		(0.2)		—
Total		$	2.8	$	—	$	2.8	$	—

(1)The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.

(2)The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.

(3)The fair value of our interest rate swap agreements is based on current and expected market interest rates, inclusive of risk of nonperformance.

The carrying value and fair value of long-term debt as of November 28, 2021, was $929.0 million and $1.07 billion, respectively. The carrying value and fair value of long-term debt as of May 30, 2021, was $929.8 million and $1.06 billion, respectively. The fair value of long-term debt, which is classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2 in the fair value hierarchy, is determined based on third-party market appraisals. As of November 28, 2021 and May 30, 2021, adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis, classified as Level 2, were not material.

The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 3 in the fair value hierarchy, is determined based on appraisals, sales prices of comparable assets, or estimates of discounted future cash flows. As of November 28, 2021, adjustments to the fair values of non-financial assets, classified as Level 3, were not material. As of May 30, 2021, long-lived assets held and used with a carrying amount of $5.6 million, primarily related to four underperforming restaurants, were determined to have a fair value of $0.6 million resulting in an impairment charge of $5.0 million.

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Commitments and Contingencies

6 Months Ended

Nov. 28, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As collateral for performance on contracts and as credit guarantees to banks and insurers, we are contingently liable for guarantees of subsidiary obligations under standby letters of credit. As of November 28, 2021 and May 30, 2021, we had $104.8 million and $70.5 million, respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in our consolidated financial statements. As of November 28, 2021 and May 30, 2021, we had $18.9 million and $28.9 million, respectively, of surety bonds related to other payments. Most surety bonds are renewable annually.

As of November 28, 2021 and May 30, 2021, we had $107.8 million and $121.5 million, respectively, of guarantees associated with leased properties that have been assigned to third parties. These amounts represent the maximum potential amount of future payments under the guarantees. The fair value of the maximum potential future payments discounted at our weighted-average cost of capital as of November 28, 2021 and May 30, 2021, amounted to $86.2 million and $99.7 million, respectively. In the event of default by a third party, the indemnity and default clauses in our assignment agreements govern our ability to recover from and pursue the third party for damages incurred as a result of its default. We do not hold any third-party assets as collateral related to these assignment agreements, except to the extent that the assignment allows us to repossess the building and personal property. These guarantees expire over their respective lease terms, which range from fiscal 2022 through fiscal 2034.

We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry, and can also involve

infringement of, or challenges to, our trademarks. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the final disposition of the lawsuits, proceedings and claims in which we are currently involved, either individually or in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity.

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Subsequent Events	6 Months Ended
	Nov. 28, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On December 15, 2021, the Board of Directors declared a cash dividend of $1.10 per share to be paid February 1, 2022 to all shareholders of record as of the close of business on January 10, 2022.

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Basis of Presentation (Policies)

6 Months Ended

Nov. 28, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

We have prepared these consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. We operate on a 52/53-week fiscal year which ends on the last Sunday in May. Our fiscal year ending May 29, 2022 will contain 52 weeks of operation. Operating results for interim periods presented are not necessarily indicative of results that may be expected for the full fiscal year.These statements should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. We prepare our consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and costs and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification

We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation.

COVID-19 Pandemic

COVID-19 Pandemic

For much of fiscal 2021, the COVID-19 pandemic resulted in a significant reduction in guest traffic at our restaurants due to changes in consumer behavior as public health officials encouraged social distancing and required personal protective equipment and state and local governments mandated restrictions including suspension of dine-in operations, reduced restaurant seating capacity, table spacing requirements, bar closures and additional physical barriers. Once COVID-19 vaccines were approved and moved into wider distribution in the United States in early 2021, public health conditions improved and almost all of the COVID-19 restrictions on businesses have eased. As of the date of this report, all of our restaurants were able to open their dining rooms and few capacity restrictions remained in place in the United States. Following increases in the numbers of cases of COVID-19 throughout the United States during fiscal 2022, some of our restaurants are subject to other COVID-19-related restrictions such as mask requirements or vaccine requirements for team members, guests or both. For the health and safety of our guests and team members, we continue to evaluate and implement our own COVID-19 protocols for our restaurant teams, including mask wearing, contact tracing, and exclusion or quarantine of team members who are exposed or are ill. Exclusions and quarantines of restaurant team members or groups thereof disrupt an individual restaurant’s operations and often come with little or no notice to the local restaurant management. We continue to monitor the progression of the COVID-19 pandemic and state, local and federal government regulatory and public health responses thereto, including the federal Occupational Health and Safety Administration’s attempt to implement a nationwide vaccine requirement for large employers.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective upon issuance to modifications made as early as the beginning of the interim period through December 31, 2022. We elected to adopt this guidance during the quarter ended August 29, 2021; adoption did not have a material impact on our consolidated financial statements.

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Revenue Recognition (Tables)

6 Months Ended

Nov. 28, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Contract with Customer

Deferred revenue liabilities from contracts with customers included on our accompanying consolidated balance sheets is comprised of the following:

(in millions)	November 28, 2021		May 30, 2021
Unearned revenues
Deferred gift card revenue	$	476.9	$	494.3
Deferred gift card discounts	(20.2)		(20.5)
Other	0.8		0.4
Total	$	457.5	$	474.2
Other liabilities
Deferred franchise fees - non-current	$	2.6	$	2.2

The following table presents a rollforward of deferred gift card revenue.

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Beginning balance	$	465.0	$	475.6	$	494.3	$	494.6
Activations	127.7		94.7		234.3		170.4
Redemptions and breakage	(115.8)		(101.0)		(251.7)		(195.7)
Ending balance	$	476.9	$	469.3	$	476.9	$	469.3

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Additional Financial Information (Tables)

6 Months Ended

Nov. 28, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Lease Assets and Liabilities

The components of lease assets and liabilities on the consolidated balance sheet are as follows:

(in millions)	Balance Sheet Classification	November 28, 2021		May 30, 2021
Operating lease right-of-use assets	Operating lease right-of-use assets	$	3,599.7	$	3,776.4
Finance lease right-of-use assets	Land, buildings and equipment, net	655.7		405.6
Total lease assets, net		$	4,255.4	$	4,182.0
Operating lease liabilities - current	Other current liabilities	$	177.9	$	176.8
Finance lease liabilities - current	Other current liabilities	10.7		7.3
Operating lease liabilities - non-current	Operating lease liabilities - non-current	3,904.4		4,088.5
Finance lease liabilities - non-current	Other liabilities	818.3		555.3
Total lease liabilities		$	4,911.3	$	4,827.9

Schedule of Cash Flow, Supplemental Disclosures

Cash paid for interest and income taxes are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Interest, net of amounts capitalized	$	30.3	$	31.4
Income taxes, net of refunds	58.0		12.6

Non-cash investing and financing activities are as follows:	Six Months Ended
(in millions)	November 28, 2021		November 29, 2020
Increase in land, buildings and equipment through accrued purchases	$	43.2	$	33.9
Right-of-use assets obtained in exchange for new operating lease liabilities	3.6		20.1
Right-of-use assets obtained in exchange for new finance lease liabilities	92.9		18.4
Net change in right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance	108.3		71.3

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Net Earnings per Share (Tables)

6 Months Ended

Nov. 28, 2021

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Stock options, restricted stock and equity-settled performance stock units excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: 

	Three Months Ended		Six Months Ended
(in millions)	November 28, 2021	November 29, 2020	November 28, 2021	November 29, 2020
Anti-dilutive stock-based compensation awards	0.2	0.7	0.1	1.1

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Segment Information (Tables)

6 Months Ended

Nov. 28, 2021

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP.

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 28, 2021
Sales	$	1,077.2	$	547.2	$	188.7	$	459.1	$	—	$	2,272.2
Restaurant and marketing expenses	842.1		463.6		149.0		396.8		(5.7)		1,845.8
Segment profit	$	235.1	$	83.6	$	39.7	$	62.3	$	5.7	$	426.4
Depreciation and amortization	$	35.9	$	16.3	$	8.5	$	24.5	$	6.9	$	92.1
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 28, 2021
Sales	$	2,167.6	$	1,114.3	$	357.5	$	938.8	$	—	$	4,578.2
Restaurant and marketing expenses	1,679.2		923.2		284.3		791.7		(9.2)		3,669.2
Segment profit	$	488.4	$	191.1	$	73.2	$	147.1	$	9.2	$	909.0
Depreciation and amortization	$	71.3	$	32.3	$	16.7	$	48.6	$	12.2	$	181.1
Purchases of land, buildings and equipment	70.6		43.1		20.7		38.2		0.7		173.3

(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the three months ended November 29, 2020
Sales	$	829.5	$	407.4	$	107.3	$	312.3	$	—	$	1,656.5
Restaurant and marketing expenses	654.4		341.1		86.9		273.1		4.4		1,359.9
Segment profit	$	175.1	$	66.3	$	20.4	$	39.2	$	(4.4)	$	296.6
Depreciation and amortization	$	34.5	$	16.5	$	7.7	$	24.1	$	3.2	$	86.0
(in millions)	Olive Garden		LongHorn Steakhouse		Fine Dining		Other Business		Corporate		Consolidated
For the six months ended November 29, 2020
Sales	$	1,617.7	$	784.1	$	190.0	$	592.1	$	—	$	3,183.9
Restaurant and marketing expenses	1,268.8		660.8		159.5		517.4		8.3		2,614.8
Segment profit	$	348.9	$	123.3	$	30.5	$	74.7	$	(8.3)	$	569.1
Depreciation and amortization	$	70.4	$	33.4	$	15.3	$	48.3	$	6.2	$	173.6
Purchases of land, buildings and equipment	34.6		17.4		23.2		32.0		1.0		108.2

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

Reconciliation of segment profit to earnings from continuing operations before income taxes:

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Segment profit	$	426.4	$	296.6	$	909.0	$	569.1
Less general and administrative expenses	(91.4)		(89.9)		(204.2)		(218.2)
Less depreciation and amortization	(92.1)		(86.0)		(181.1)		(173.6)
Less interest, net	(16.7)		(14.6)		(32.3)		(31.2)
Less other (income) expense, net	(0.3)		(0.4)		(0.5)		(7.9)
Earnings before income taxes	$	225.9	$	105.7	$	490.9	$	138.2

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Stockholders' Equity (Tables)

6 Months Ended

Nov. 28, 2021

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 28, 2021 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 29, 2021	$	4.8	$	9.7	$	(8.7)	$	5.8
Gain (loss)	(0.1)		(5.3)		—		(5.4)
Reclassification realized in net earnings	—		—		0.2		0.2
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6
Balance at May 30, 2021	$	5.2	$	7.9	$	(8.9)	$	4.2
Gain (loss)	(0.5)		(2.7)		—		(3.2)
Reclassification realized in net earnings	—		(0.8)		0.4		(0.4)
Balance at November 28, 2021	$	4.7	$	4.4	$	(8.5)	$	0.6

The components of accumulated other comprehensive income (loss), net of tax, for the quarter ended November 29, 2020 are as follows:

(in millions)	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Derivatives		Benefit Plan Funding Position		Accumulated Other Comprehensive Income (Loss)
Balance at August 30, 2020	$	4.7	$	(4.1)	$	(13.1)	$	(12.5)
Gain (loss)	—		4.6		—		4.6
Reclassification realized in net earnings	—		0.4		0.4		0.8
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)
Balance at May 31, 2020	$	4.5	$	(8.6)	$	(13.5)	$	(17.6)
Gain (loss)	0.2		9.0		—		9.2
Reclassification realized in net earnings	—		0.5		0.8		1.3
Balance at November 29, 2020	$	4.7	$	0.9	$	(12.7)	$	(7.1)

Reclassification out of Accumulated Other Comprehensive Income

The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded.

		Amount Reclassified from AOCI into Net Earnings
		Three Months Ended				Six Months Ended
(in millions) AOCI Components	Location of Gain (Loss) Recognized in Earnings	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Derivatives
Commodity contracts	(1)	$	—	$	(0.4)	$	—	$	(0.9)
Equity contracts	(2)	0.1		(0.1)		0.9		0.3
Interest rate contracts	(3)	(0.1)		(0.1)		(0.1)		(0.1)
Total before tax		$	—	$	(0.6)	$	0.8	$	(0.7)
Tax (expense) benefit		—		0.2		—		0.2
Net of tax		$	—	$	(0.4)	$	0.8	$	(0.5)
Benefit plan funding position
Recognized net actuarial loss - pension/postretirement plans	(4)	$	(0.2)	$	(0.1)	$	(0.3)	$	(0.1)
Recognized net actuarial gain (loss) - other plans	(4)	(0.1)		(0.5)		(0.3)		(1.0)
Total before tax		$	(0.3)	$	(0.6)	$	(0.6)	$	(1.1)
Tax (expense) benefit		0.1		0.2		0.2		0.3
Net of tax		$	(0.2)	$	(0.4)	$	(0.4)	$	(0.8)

(1)Primarily included in food and beverage costs and restaurant expenses. See Note 9 for additional details.

(2)Included in general and administrative expenses. See Note 9 for additional details.

(3)Including in interest, net on our consolidated statement of earnings.

(4)Included in the computation of net periodic benefit costs, which is a component of other (income) expense, net, restaurant labor expenses and general and administrative expenses.

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Stock-Based Compensation (Tables)

6 Months Ended

Nov. 28, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model for options granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Weighted-average fair value	$	41.02		$	20.07
Dividend yield	3.2		%	3.0		%
Expected volatility of stock	39.6		%	37.3		%
Risk-free interest rate	0.9		%	0.4		%
Expected option life (in years)	6.3			6.4
Weighted-average exercise price per share	$	148.20		$	78.84

The weighted-average grant date fair value of market-based performance stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation for units granted during the periods presented, were as follows:

	Six Months Ended
	November 28, 2021			November 29, 2020
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	53.4 %			50.5 %
Risk-free interest rate	0.4 %			0.1 %
Expected life (in years)	2.8			2.8
Weighted-average grant date fair value per unit	$	172.34		$	83.46

(1)Assumes a reinvestment of dividends.

Schedule of Nonvested Share Activity

The following table presents a summary of our stock-based compensation activity for the six months ended November 28, 2021.

(in millions)	Stock Options	Restricted Stock/ Restricted Stock Units	Equity-Settled Performance Stock Units	Cash-Settled Darden Stock Units
Outstanding beginning of period	2.15	0.26	0.48	0.80
Awards granted	0.15	0.05	0.09	0.31
Awards exercised/vested	(0.36)	(0.06)	(0.15)	(0.22)
Awards forfeited	—	—	—	(0.04)
Outstanding end of period	1.94	0.25	0.42	0.85

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

We recognized expense from stock-based compensation as follows: 

	Three Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Stock options	$	1.1	$	2.8	$	4.5	$	4.5
Restricted stock/restricted stock units	1.2		3.0		5.0		5.8
Equity-settled performance stock units	2.3		5.1		10.5		10.7
Cash-settled Darden stock units	4.9		10.4		16.2		18.4
Employee stock purchase plan	0.6		0.6		1.3		1.3
Director compensation program/other	0.4		0.3		0.6		0.7
Total stock-based compensation expense	$	10.5	$	22.2	$	38.1	$	41.4

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Nov. 28, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional and Fair Values of Derivative Contracts

The notional and fair values of our derivative contracts are as follows: 

					Fair Values
(in millions, except per share data)	Number of Shares Outstanding	Weighted-Average  Per Share Forward Rates	Notional Values		Derivative Assets (1)				Derivative Liabilities (1)
	November 28, 2021				November 28, 2021		May 30, 2021		November 28, 2021		May 30, 2021
Equity forwards:
Designated	0.3	$125.95	$	42.2	$	—	$	0.9	$	2.4	$	—
Not designated	0.4	119.46	45.5		—		2.0		2.7		—
Total equity forwards					$	—	$	2.9	$	5.1	$	—
Commodity contracts:
Designated	N/A	N/A	$	0.4	$	—	$	0.1	$	—	$	—
Not designated	N/A	N/A	—		—		—		—		—
Total commodity contracts					$	—	$	0.1	$	—	$	—
Interest rate related
Designated	N/A	N/A	$	300.0	$	1.0	$	—	$	—	$	0.2
Not designated	N/A	N/A			—		—		—		—
Total interest rate related					$	1.0	$	—	$	—	$	0.2
Total derivative contracts					$	1.0	$	3.0	$	5.1	$	0.2

 

(1)Derivative assets and liabilities are included in receivables, net and other current liabilities, as applicable, on our consolidated balance sheets.

Effects of Derivative Instruments in Hedging Relationships

The effects of derivative instruments accounted for as cash flow hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(5.4)	$	5.0	$	0.1	$	(0.1)
Commodity (2)	0.1		(0.5)		—		(0.4)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(5.3)	$	4.5	$	—	$	(0.6)
	Amount of Gain (Loss) Recognized in AOCI				Amount of Gain (Loss) Reclassified from AOCI to Earnings
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Equity (1)	$	(2.7)	$	8.7	$	0.9	$	0.3
Commodity (2)	—		0.4		—		(0.9)
Interest rate (3)	—		—		(0.1)		(0.1)
Total	$	(2.7)	$	9.1	$	0.8	$	(0.7)

(1)Location of the gain (loss) reclassified from AOCI to earnings is general and administrative expenses.

(2)Location of the gain (loss) reclassified from AOCI to earnings is food and beverage costs and restaurant expenses.

(3)Location of gain (loss) reclassified from AOCI to earnings is interest, net.

The effects of derivative instruments in fair value hedging relationships in the consolidated statement of earnings are as follows:

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Three Months Ended				Three Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	(5.5)	$	—	$	5.5	$	—
Total	$	(5.5)	$	—	$	5.5	$	—

	Amount of Gain (Loss) Recognized in Earnings on Derivatives				Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
	Six Months Ended				Six Months Ended
(in millions)	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Interest rate (1)(2)	$	1.2	$	—	$	(1.2)	$	—
Total	$	1.2	$	—	$	(1.2)	$	—

 (1) Location of the gain (loss) recognized in earnings on derivatives and related hedged item is interest, net.

(2) Hedged item in fair value hedge relationship is debt.

The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows:

	Amount of Gain (Loss) Recognized in Earnings
(in millions)	Three Months Ended				Six Months Ended
Location of Gain (Loss) Recognized in Earnings on Derivatives	November 28, 2021		November 29, 2020		November 28, 2021		November 29, 2020
Food and beverage costs and restaurant expenses	$	—	$	—	$	0.1	$	0.1
General and administrative expenses	(3.5)		10.6		1.6		15.1
Total	$	(3.5)	$	10.6	$	1.7	$	15.2

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Fair Value Measurements (Tables)

6 Months Ended

Nov. 28, 2021

Fair Value Disclosures [Abstract]

Fair Values of Financial Instruments Measured at Fair Value on Recurring Basis

The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of November 28, 2021 and May 30, 2021. 

Items Measured at Fair Value at November 28, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Equity forwards	(2)	$	(5.1)	$	—	$	(5.1)	$	—
Interest rate swaps	(3)	1.0		—		1.0		—
Total		$	(4.1)	$	—	$	(4.1)	$	—

Items Measured at Fair Value at May 30, 2021
(in millions)		Fair value of assets (liabilities)		Quoted prices in active market for identical assets (liabilities) (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives:
Commodities futures, swaps & options	(1)	$	0.1	$	—	$	0.1	$	—
Equity forwards	(2)	2.9		—		2.9		—
Interest rate swaps	(3)	(0.2)		—		(0.2)		—
Total		$	2.8	$	—	$	2.8	$	—

(1)The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.

(2)The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.

(3)The fair value of our interest rate swap agreements is based on current and expected market interest rates, inclusive of risk of nonperformance.

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Basis of Presentation (Details)	Nov. 28, 2021 restaurant
Entity Operated Units | North America
Summary Of Significant Accounting Policies [Line Items]
Number of restaurants	2
Franchised Units | North America
Summary Of Significant Accounting Policies [Line Items]
Number of restaurants	34
Franchised Units | Latin America
Summary Of Significant Accounting Policies [Line Items]
Number of restaurants	25

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Revenue Recognition - Deferred Revenue from Contract with Customer (Details) - USD ($) $ in Millions	Nov. 28, 2021	Aug. 29, 2021	May 30, 2021	Nov. 29, 2020	Aug. 30, 2020	May 31, 2020
Unearned revenues
Unearned revenues	$ 457.5		$ 474.2
Other liabilities
Deferred franchise fees - non-current	2.6		2.2
Gift Card
Unearned revenues
Unearned revenues	476.9	$ 465.0	494.3	$ 469.3	$ 475.6	$ 494.6
Unearned revenues - discounts	(20.2)		(20.5)
Other
Unearned revenues
Unearned revenues	$ 0.8		$ 0.4

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Revenue Recognition - Deferred Gift Card Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Change in Contract with Customer, Liability [Roll Forward]
Beginning balance			$ 474.2
Ending balance	$ 457.5		457.5
Gift Card
Change in Contract with Customer, Liability [Roll Forward]
Beginning balance	465.0	$ 475.6	494.3	$ 494.6
Activations	127.7	94.7	234.3	170.4
Redemptions and breakage	(115.8)	(101.0)	(251.7)	(195.7)
Ending balance	$ 476.9	$ 469.3	$ 476.9	$ 469.3

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Additional Financial Information - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Nov. 28, 2021	May 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating lease right-of-use assets	$ 3,599.7	$ 3,776.4
Finance lease right-of-use assets	655.7	405.6
Total lease assets, net	4,255.4	4,182.0
Operating lease liabilities - current	177.9	176.8
Finance lease liabilities - current	10.7	7.3
Operating lease liabilities - non-current	3,904.4	4,088.5
Finance lease liabilities - non-current	818.3	555.3
Total lease liabilities	$ 4,911.3	$ 4,827.9
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Carrying amount of long-lived assets held and used	Carrying amount of long-lived assets held and used
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current	Other Liabilities, Current
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current	Other Liabilities, Current
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other liabilities	Other liabilities

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Additional Financial Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	May 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest, net of amounts capitalized	$ 30.3	$ 31.4
Income taxes, net of refunds	58.0	12.6
Increase in land, buildings and equipment through accrued purchases	43.2	33.9
Right-of-use assets obtained in exchange for new operating lease liabilities	3.6	20.1
Right-of-use assets obtained in exchange for new finance lease liabilities	92.9	18.4
Net change in right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance	108.3	71.3
Restricted cash	$ 51.5	$ 0.0	$ 0.0

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate (percentage)	14.40%	8.30%	13.40%	2.90%
Income tax expense	$ 32.5	$ 8.8	$ 65.8	$ 4.0
Tax position, change is reasonably possible in the next twelve months	$ 34.1		$ 34.1

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Net Earnings per Share (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Earnings Per Share [Abstract]
Anti-dilutive stock-based compensation awards (in shares)	0.2	0.7	0.1	1.1

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Segment Information - Narrative (Details)	6 Months Ended
	Nov. 28, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	4

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Segment Information - Schedule of Segment Reporting (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Segment Reporting Information [Line Items]
Sales	$ 2,272.2	$ 1,656.5	$ 4,578.2	$ 3,183.9
Restaurant and marketing expenses	1,845.8	1,359.9	3,669.2	2,614.8
Segment profit	426.4	296.6	909.0	569.1
Depreciation and amortization	92.1	86.0	181.1	173.6
Purchases of land, buildings and equipment			173.3	108.2
Operating Segments | Olive Garden
Segment Reporting Information [Line Items]
Sales	1,077.2	829.5	2,167.6	1,617.7
Restaurant and marketing expenses	842.1	654.4	1,679.2	1,268.8
Segment profit	235.1	175.1	488.4	348.9
Depreciation and amortization	35.9	34.5	71.3	70.4
Purchases of land, buildings and equipment			70.6	34.6
Operating Segments | LongHorn Steakhouse
Segment Reporting Information [Line Items]
Sales	547.2	407.4	1,114.3	784.1
Restaurant and marketing expenses	463.6	341.1	923.2	660.8
Segment profit	83.6	66.3	191.1	123.3
Depreciation and amortization	16.3	16.5	32.3	33.4
Purchases of land, buildings and equipment			43.1	17.4
Operating Segments | Fine Dining
Segment Reporting Information [Line Items]
Sales	188.7	107.3	357.5	190.0
Restaurant and marketing expenses	149.0	86.9	284.3	159.5
Segment profit	39.7	20.4	73.2	30.5
Depreciation and amortization	8.5	7.7	16.7	15.3
Purchases of land, buildings and equipment			20.7	23.2
Operating Segments | Other Business
Segment Reporting Information [Line Items]
Sales	459.1	312.3	938.8	592.1
Restaurant and marketing expenses	396.8	273.1	791.7	517.4
Segment profit	62.3	39.2	147.1	74.7
Depreciation and amortization	24.5	24.1	48.6	48.3
Purchases of land, buildings and equipment			38.2	32.0
Corporate
Segment Reporting Information [Line Items]
Sales	0.0	0.0	0.0	0.0
Restaurant and marketing expenses	(5.7)	4.4	(9.2)	8.3
Segment profit	5.7	(4.4)	9.2	(8.3)
Depreciation and amortization	$ 6.9	$ 3.2	12.2	6.2
Purchases of land, buildings and equipment			$ 0.7	$ 1.0

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Segment Information - Reconciliation of Segment Profit to Earnings (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Segment Reporting [Abstract]
Segment profit	$ 426.4	$ 296.6	$ 909.0	$ 569.1
Less general and administrative expenses	(91.4)	(89.9)	(204.2)	(218.2)
Less depreciation and amortization	(92.1)	(86.0)	(181.1)	(173.6)
Less interest, net	(16.7)	(14.6)	(32.3)	(31.2)
Other (income) expense, net	(0.3)	(0.4)	(0.5)	(7.9)
Earnings before income taxes	$ 225.9	$ 105.7	$ 490.9	$ 138.2

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Stockholders' Equity - Schedule of Components of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 2,752.4	$ 2,375.0	$ 2,813.1	$ 2,331.2
Gain (loss)	(5.4)	4.6	(3.2)	9.2
Reclassification realized in net earnings	0.2	0.8	(0.4)	1.3
Ending balance	2,543.0	2,455.1	2,543.0	2,455.1
Foreign Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	4.8	4.7	5.2	4.5
Gain (loss)	(0.1)	0.0	(0.5)	0.2
Reclassification realized in net earnings	0.0	0.0	0.0	0.0
Ending balance	4.7	4.7	4.7	4.7
Unrealized Gains (Losses) on Derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	9.7	(4.1)	7.9	(8.6)
Gain (loss)	(5.3)	4.6	(2.7)	9.0
Reclassification realized in net earnings	0.0	0.4	(0.8)	0.5
Ending balance	4.4	0.9	4.4	0.9
Benefit Plan Funding Position
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(8.7)	(13.1)	(8.9)	(13.5)
Gain (loss)	0.0	0.0	0.0	0.0
Reclassification realized in net earnings	0.2	0.4	0.4	0.8
Ending balance	(8.5)	(12.7)	(8.5)	(12.7)
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	5.8	(12.5)	4.2	(17.6)
Ending balance	$ 0.6	$ (7.1)	$ 0.6	$ (7.1)

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Stockholders' Equity - Schedule of Reclassification Adjustments out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Less general and administrative expenses	$ (91.4)	$ (89.9)	$ (204.2)	$ (218.2)
Tax benefit (expense)	(32.5)	(8.8)	(65.8)	(4.0)
Net earnings	193.2	96.0	424.1	132.1
Amount Reclassified from AOCI into Net Earnings | Derivatives
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Earnings before income taxes	0.0	(0.6)	0.8	(0.7)
Tax benefit (expense)	0.0	0.2	0.0	0.2
Net earnings	0.0	(0.4)	0.8	(0.5)
Amount Reclassified from AOCI into Net Earnings | Derivatives | Commodity contracts:
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Food and beverage costs and restaurant expenses	0.0	(0.4)	0.0	(0.9)
Amount Reclassified from AOCI into Net Earnings | Derivatives | Equity contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Restaurant labor costs and general and administrative expenses	0.1	(0.1)	0.9	0.3
Amount Reclassified from AOCI into Net Earnings | Derivatives | Interest rate contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Restaurant labor costs and general and administrative expenses	(0.1)	(0.1)	(0.1)	(0.1)
Amount Reclassified from AOCI into Net Earnings | Benefit plan funding position
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Earnings before income taxes	(0.3)	(0.6)	(0.6)	(1.1)
Tax benefit (expense)	0.1	0.2	0.2	0.3
Net earnings	(0.2)	(0.4)	(0.4)	(0.8)
Amount Reclassified from AOCI into Net Earnings | Benefit plan funding position | Pension and postretirement plan
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Restaurant labor costs and general and administrative expenses	(0.2)	(0.1)	(0.3)	(0.1)
Amount Reclassified from AOCI into Net Earnings | Benefit plan funding position | Other plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Less general and administrative expenses	$ (0.1)	$ (0.5)	$ (0.3)	$ (1.0)

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Stock-Based Compensation - Option Pricing Assumptions (Details) - $ / shares	6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average fair value (in dollars per share)	$ 41.02	$ 20.07
Dividend yield	3.20%	3.00%
Expected volatility of stock	39.60%	37.30%
Risk-free interest rate	0.90%	0.40%
Expected option life (in years)	6 years 3 months 18 days	6 years 4 months 24 days
Weighted-average exercise price per share (in dollars per share)	$ 148.20	$ 78.84
Equity-Settled Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Expected volatility of stock	53.40%	50.50%
Risk-free interest rate	0.40%	0.10%
Expected option life (in years)	2 years 9 months 18 days	2 years 9 months 18 days
Weighted-average exercise price per share (in dollars per share)	$ 172.34	$ 83.46

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Stock-Based Compensation - Share Activity (Details) shares in Thousands	6 Months Ended
	Nov. 28, 2021 shares
Stock Options
Stock Options
Outstanding shares beginning of period (in shares)	2,150
Awards granted (in shares)	150
Awards exercised/vested (in shares)	(360)
Awards forfeited (in shares)	0
Outstanding shares end of period (in shares)	1,940
Restricted Stock/ Restricted Stock Units
Non-Option Awards
Outstanding shares beginning of period (in shares)	260
Awards granted (in shares)	50
Awards exercised/vested (in shares)	(60)
Awards forfeited (in shares)	0
Outstanding shares end of period (in shares)	250
Equity-Settled Performance Stock Units
Non-Option Awards
Outstanding shares beginning of period (in shares)	480
Awards granted (in shares)	90
Awards exercised/vested (in shares)	(150)
Awards forfeited (in shares)	0
Outstanding shares end of period (in shares)	420
Cash-Settled Darden Stock Units
Non-Option Awards
Outstanding shares beginning of period (in shares)	800
Awards granted (in shares)	310
Awards exercised/vested (in shares)	(220)
Awards forfeited (in shares)	(40)
Outstanding shares end of period (in shares)	850

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Stock-Based Compensation - Recognized Stock-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 10.5	$ 22.2	$ 38.1	$ 41.4
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1.1	2.8	4.5	4.5
Restricted stock/restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1.2	3.0	5.0	5.8
Equity-settled performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2.3	5.1	10.5	10.7
Cash-settled Darden stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	4.9	10.4	16.2	18.4
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	0.6	0.6	1.3	1.3
Director compensation program/other
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 0.4	$ 0.3	$ 0.6	$ 0.7

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Derivative Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Nov. 28, 2021	Nov. 28, 2021	May 30, 2021
Derivative [Line Items]
Reduction to interest expense related to net swap settlements	$ 1.2	$ 2.5
Cash flow hedge gain to be reclassified within twelve months		$ 0.5
4.550% Senior Notes Due In February 2048
Derivative [Line Items]
Long-term debt			$ 300.0
Debt instrument, interest rate			455.00%
Interest rate contracts
Derivative [Line Items]
Notional value			$ 300.0
Equity forwards:
Derivative [Line Items]
Derivative term		3 months
Darden Stock Units | Minimum | Equity forwards:
Derivative [Line Items]
Vesting period		3 years
Darden Stock Units | Maximum | Equity forwards:
Derivative [Line Items]
Vesting period		5 years

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Derivative Instruments and Hedging Activities - Notional and Fair Values of Derivative Contracts Designated and Not Designated as Hedging Instruments (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	6 Months Ended
	Nov. 28, 2021	May 30, 2021
Derivatives, Fair Value [Line Items]
Derivative assets	$ 1.0	$ 3.0
Derivative liabilities	5.1	0.2
Equity forwards:
Derivatives, Fair Value [Line Items]
Derivative assets	0.0	2.9
Derivative liabilities	$ 5.1	0.0
Equity forwards: | Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Number of shares outstanding (in shares)	0.3
Weighted-average forward rates (in dollars per share)	$ 125.95
Notional value	$ 42.2
Derivative assets	0.0	0.9
Derivative liabilities	$ 2.4	0.0
Equity forwards: | Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Number of shares outstanding (in shares)	0.4
Weighted-average forward rates (in dollars per share)	$ 119.46
Notional value	$ 45.5
Derivative assets	0.0	2.0
Derivative liabilities	2.7	0.0
Commodity contracts:
Derivatives, Fair Value [Line Items]
Derivative assets	0.0	0.1
Derivative liabilities	0.0	0.0
Commodity contracts: | Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional value	0.4
Derivative assets	0.0	0.1
Derivative liabilities	0.0	0.0
Commodity contracts: | Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional value	0.0
Derivative assets	0.0	0.0
Derivative liabilities	0.0	0.0
Interest rate contracts
Derivatives, Fair Value [Line Items]
Notional value		300.0
Derivative assets	1.0	0.0
Derivative liabilities	0.0	0.2
Interest rate contracts | Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional value	300.0
Derivative assets	1.0	0.0
Derivative liabilities	0.0	0.2
Interest rate contracts | Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative assets	0.0	0.0
Derivative liabilities	$ 0.0	$ 0.0

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Derivative Instruments and Hedging Activities - Effects of Derivative Instruments in Cash Flow Hedging Relationships (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	$ (5.3)	$ 4.5	$ (2.7)	$ 9.1
Amount of Gain (Loss) Reclassified from AOCI to Earnings	0.0	(0.6)	0.8	(0.7)
Equity forwards: | Cost of sales and selling general and administrative expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	(5.4)	5.0	(2.7)	8.7
Amount of Gain (Loss) Reclassified from AOCI to Earnings	0.1	(0.1)	0.9	0.3
Commodity contracts: | Food and beverage costs and restaurant expenses
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	0.1	(0.5)	0.0	0.4
Amount of Gain (Loss) Reclassified from AOCI to Earnings	0.0	(0.4)	0.0	(0.9)
Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	0.0	0.0	0.0	0.0
Amount of Gain (Loss) Reclassified from AOCI to Earnings	$ (0.1)	$ (0.1)	$ (0.1)	$ (0.1)

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Derivative Instruments and Hedging Activities - Effects of Derivative Instruments in Fair Value Hedging Relationships (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Earnings on Derivatives	$ (5.5)	$ 0.0	$ 1.2	$ 0.0
Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item	5.5	0.0	(1.2)	0.0
Interest rate contracts | Interest, Net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Earnings on Derivatives	(5.5)	0.0	1.2	0.0
Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item	$ 5.5	$ 0.0	$ (1.2)	$ 0.0

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Derivative Instruments and Hedging Activities - Effects of Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Earnings	$ (3.5)	$ 10.6	$ 1.7	$ 15.2
Food and beverage costs and restaurant expenses
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Earnings	0.0	0.0	0.1	0.1
General and administrative expenses
Derivative [Line Items]
Amount of Gain (Loss) Recognized in Earnings	$ (3.5)	$ 10.6	$ 1.6	$ 15.1

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Fair Value Measurements (Schedule of Financial Instruments Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Nov. 28, 2021	May 30, 2021
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Total	$ (4.1)	$ 2.8
Commodities futures, swaps & options
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives		0.1
Equity forwards
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	(5.1)	2.9
Interest rate swaps
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	1.0	(0.2)
Quoted prices in active market for identical assets (liabilities) (Level 1)
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Total	0.0	0.0
Quoted prices in active market for identical assets (liabilities) (Level 1) | Commodities futures, swaps & options
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives		0.0
Quoted prices in active market for identical assets (liabilities) (Level 1) | Equity forwards
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	0.0	0.0
Quoted prices in active market for identical assets (liabilities) (Level 1) | Interest rate swaps
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	0.0	0.0
Significant other observable inputs (Level 2)
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Total	(4.1)	2.8
Significant other observable inputs (Level 2) | Commodities futures, swaps & options
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives		0.1
Significant other observable inputs (Level 2) | Equity forwards
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	(5.1)	2.9
Significant other observable inputs (Level 2) | Interest rate swaps
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	1.0	(0.2)
Significant unobservable inputs (Level 3)
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Total	0.0	0.0
Significant unobservable inputs (Level 3) | Commodities futures, swaps & options
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives		0.0
Significant unobservable inputs (Level 3) | Equity forwards
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	0.0	0.0
Significant unobservable inputs (Level 3) | Interest rate swaps
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Derivatives	$ 0.0	$ 0.0

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Fair Value Measurements (Narrative) (Details) $ in Millions	12 Months Ended
	May 30, 2021 USD ($) restaurant	Nov. 28, 2021 USD ($)
Impaired Long-Lived Assets Held and Used [Line Items]
Carrying value of long-term debt	$ 929.8	$ 929.0
Fair value of long-term debt	1,060.0	1,070.0
Carrying amount of long-lived assets held and used	2,869.2	$ 3,140.8
Underperforming Restaurants
Impaired Long-Lived Assets Held and Used [Line Items]
Asset impairment	5.0
Significant unobservable inputs (Level 3) | Underperforming Restaurants
Impaired Long-Lived Assets Held and Used [Line Items]
Carrying amount of long-lived assets held and used	$ 5.6
Number of underperforming restaurants | restaurant	4
Assets held-for-sale, long-lived, fair value	$ 0.6

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Commitments and Contingencies (Details) - USD ($) $ in Millions	Nov. 28, 2021	May 30, 2021
Workers Compensation and General Liabilities Accrued
Loss Contingencies [Line Items]
Standby letters of credit	$ 104.8	$ 70.5
Surety Bonds and Other Payments
Loss Contingencies [Line Items]
Standby letters of credit	18.9	28.9
Property Lease Guarantee
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss	107.8	121.5
Fair value of potential payments discounted at pre-tax cost of capital related to guarantee obligations	$ 86.2	$ 99.7

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Subsequent Events (Details) - $ / shares		3 Months Ended		6 Months Ended
	Dec. 15, 2021	Nov. 28, 2021	Nov. 29, 2020	Nov. 28, 2021	Nov. 29, 2020
Subsequent Event [Line Items]
Dividends declared (in dollars per share)		$ 1.10	$ 0.30	$ 2.20	$ 0.30
Subsequent Event
Subsequent Event [Line Items]
Dividends declared (in dollars per share)	$ 1.10