Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q4 2020 Earnings Presentation
23 slides from Darden Restaurants's earnings presentation, Jun 25, 2020
Slide 1: Earnings Call Fiscal 2020: Q4 Results
EARNINGS CALL FISCAL 2020: Q4 RESULTS June 25, 2020
Slide 2: Disclaimer/Non-GAAP information
Disclaimer/Non-GAAP information IMPORTANT NOTICE The following slides are part of a presentation by Darden Restaurants, Inc. (the "Company") and are intended to be viewed as part of that presentation (the "Presentation"). No representation is made that the Presentation is complete. Forward-looking s
Slide 3: Consumers can't wait to go back to their favorite restaurant
Consumers can’t wait to go back to their favorite restaurant When the economy opens back up again, how much are you looking forward to doing each of the following activities?1 Go to a restaurant 74% Hang out with my friends and family 74% Celebrating special occasions with 71% friends/family Go shop
Slide 4: Managing through the crisis by:
Managing through the crisis by: • Prioritizing guest and team member safety • Investing in our team members • Providing frequent and transparent communication • Leveraging our digital platform • Being brilliant with the basics 4
Slide 5: Prioritizing guest and team member safety
Prioritizing guest and team member safety 5
Slide 6: Investing in our team members
Investing in our team members • Permanent paid sick leave • Emergency pay • Payments to help cover additional transportation and child care costs • Furlough pay • Benefits paid on behalf of furloughed employees • Restaurant manager bonus at target 6
Slide 7: Frequent and transparent communication
Frequent and transparent communication
Slide 8: Leveraging our digital platform
Leveraging our digital platform • Olive Garden online ordering: Accelerated deployment of online ordering for: Grew more than 300% vs last year, 58% of To Go Sales • The Capital Grille • LongHorn Steakhouse online ordering: • Eddie V’s Grew more than 400% vs last year, 49% of To Go Sales • Seaso
Slide 9: Being brilliant with the basics
Being brilliant with the basics 9
Slide 10: A full-service restaurant company with iconic brands
A FULL-SERVICE RESTAURANT COMPANY WITH … 1 Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. MISSION 4 Significant Scale Extensive Data & Insights Rigorous Strategic Planning Results-
Slide 11: Our greatest competitive advantage
Our greatest competitive advantage 11
Slide 12: Fiscal 2020 fourth quarter highlights
Fiscal 2020 fourth quarter highlights $1.3BILLION TOTAL SALES1 (43.0)% TOTAL SALES GROWTH1 (47.7)% ($1.24) ADJUSTED DILUTED NET EPS2 SAME-RESTAURANT SALES GROWTH FROM CONTINUING OPERATIONS 1Includes impact of 53rd week. 2 Values adjusted for special items. A reconciliation of reported to adjusted nu
Slide 13: Margin analysis
Margin analysis As Reported As Adjusted Q4 2020 Q4 2020 Q4 2020 Q4 2019 ($ millions) ($ millions) % of Sales % of Sales Sales $1,270.1 $1,270.1 Food and beverage $396.5 $396.5 31.2% 28.2% Restaurant labor $532.7 $532.7 41.9% 32.2% Restaurant expenses $330.4 $330.4 26.0% 17.0% Marketing expenses $31.
Slide 14: Strong balance sheet
Strong balance sheet Generating positive operating cash flow at June sales levels Cash and cash equivalents over $750 million Credit facility availability $750 million Total access to liquidity over $1.5 billion Adjusted debt to capital 61% (Debt covenant <75%) 14 Note: Financial information as of 5
Slide 15: Weekly same-restaurant sales
Weekly same-restaurant sales WE 6/7 WE 6/14 WE 6/21* QTD 6/21 Darden (38.7)% (31.8)% (29.6)% (33.2)% Olive Garden (35.6)% (30.9)% (27.6)% (31.3)% LongHorn Steakhouse (29.9)% (22.0)% (21.7)% (24.3)% Fine Dining (56.2)% (48.2)% (42.3)% (48.1)% Other Business (50.2)% (38.6)% (38.6)% (42.3)% *WE 6/21 in
Slide 16: Weekly sales for restaurants with limited capacity dining rooms open
Weekly sales for restaurants with at least limited capacity dining rooms open Olive Garden WE 6/7 WE 6/14 WE 6/21* Total Sales per restaurant $72,739 $75,512 $80,779 To Go Sales as % of total 41% 38% 40% Same-Restaurant Sales % (26.2)% (24.0)% (21.4)% # of Restaurants** 598 680 729 LongHorn Steakhou
Slide 17: Fiscal 2021 outlook
Fiscal 2021 outlook Q1 2021 Outlook Total sales Approx. 70% of LY EBITDA* ($MM’s) At least $75 Diluted Share Count (MM) ~131 EPS $ >= $0.00 Annual 2021 Outlook CapEx ($MM’s) $250 - $300 Net New Restaurant Openings 35 to 40 *A reconciliation of EBITDA Outlook to Net Earnings can be found in the Addit
Slide 18: Additional information
SE DARDEN RESTAURANTS Additional information
Slide 19: Commodities outlook – Q1 fiscal 2021
Commodities outlook – Q1 fiscal 2021 Jun-Aug FY2021 Annual spend by category Coverage Outlook Beef 18% 85% Mid single digit inflation Produce 13% 90% Low single digit inflation Dairy / Oil1 10% 40% Low single digit deflation Seafood 10% 95% Low single digit deflation Chicken 7% 100% Low single digit
Slide 20: Reported to adjusted earnings reconciliations
Reported to adjusted earnings reconciliations Fiscal 2020 Fiscal 2020 Q4 2020 Annual Diluted Net Diluted Net Earnings Income Tax Earnings Income Tax Net Earnings Earnings Net Earnings Earnings (Loss) Before Expense (Loss) Before Expense (Loss) (Loss) Per (Loss) (Loss) Per Income Tax (Benefit) Income
Slide 21: Reported to adjusted earnings reconciliations
Reported to adjusted earnings reconciliations Fiscal 2019 Q4 2019 Earnings Income Before Tax Diluted Net Income Expense Net Earnings $ in millions, except EPS Tax (Benefit) Earnings Per Share Reported Earnings from Continuing Operations $217.9 $9.2 $208.7 $1.67 Adjustments: 1 Asset impairments $14.6
Slide 22: Reconciliation of adjusted earnings from continuing operations
Reconciliation of adjusted earnings from continuing operations Quarter Ended (in millions) 5/31/2020 5/26/2019 Sales - as reported $ 1,270.1 $ 2,229.1 Earnings from continuing operations - as reported $ (479.7) $ 208.7 Adjustments 388.4 (1) 14.6 (2) Income tax impacts of adjustments (63.3) (3.6) Adj
Slide 23: EBITDA Outlook to net earnings reconciliation
EBITDA Outlook to net earnings reconciliation Fiscal 2021 First Quarter EBITDA Outlook Reconciliation $ in millions Net Earnings $0 I ncome tax expense (benefit) (25) I nterest, net 15 Depreciation and amortization 85 EBITDA $75 23