Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q3 2023 Earnings Presentation
22 slides from Darden Restaurants's earnings presentation, Mar 23, 2023
Slide 1: Earnings Call: Fiscal 2023 Third Quarter Results
Earnings Call Fiscal 2023: Third Quarter Results March 23, 2023
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 a complete description of t
Slide 3: A full-service restaurant company with competitive advantages
A full-service restaurant company with … 1 Be financially successful through great people consistently delivering outstanding Mission food, drinks and service in an inviting atmosphere making every guest loyal. 4 Significant Scale Extensive Data & Insights Rigorous Strategic Planning Results- Orient
Slide 4: Brilliant With The Basics
Brilliant With The Basics J. DARDEN
Slide 5: Best Practices Awards Winners
Best Practices Awards Winners Source: Black Box Intelligence, Business Wire 5
Slide 6: Darden Brands #1 in All Categories
Darden Brands #1 in All Categories Overall Value Brand Image Food Service Atmosphere Brand Fit & Loyalty Source: Technomic, Consumer Brand Metrics, 12 months ending Dec 2022 6
Slide 7: Continued Strength in To Go Sales
Continued Strength in To Go Sales Digital Transactions 62.5% of Off-Premise Sales | 10% of Total Sales 7
Slide 8: Opened 7 New Restaurants This Quarter
Opened 7 New Restaurants This Quarter 8
Slide 9: Thank You To Our Team Members
Thank You To Our Team Members 9
Slide 10: Fiscal 2023 Third Quarter Financial Highlights
Fiscal 2023 Third Quarter Financial Highlights $2.79 Billion 13.8% TOTAL SALES TOTAL SALES GROWTH 11.7% $2.34 SAME-RESTAURANT SALES DILUTED NET EPS FROM GROWTH CONTINUING OPERATIONS 10
Slide 11: Fiscal 2023 Third Quarter Financial Highlights
Fiscal 2023 Third Quarter Financial Highlights $448 Million $148 Million $124 Million 1 EBITDA DIVIDENDS PAID SHARE REPURCHASES 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 11
Slide 12: Margin Analysis vs. Prior Year
Margin Analysis vs. Prior Year Fiscal Q3 2023 ($ millions) % of Sales vs Prior Year Favorable/(Unfavorable) Sales $2,786.2 Food and Beverage $887.0 31.8 % (110) Restaurant Labor $874.2 31.4 % 120 Restaurant Expenses $440.3 15.8 % 40 Marketing Expenses $28.2 1.0 % 10 Restaurant-Level EBITDA $556.5 20
Slide 13: Margin Analysis vs. Pre-COVID
Margin Analysis vs. Pre-COVID Fiscal Q3 2023 ($ millions) % of Sales vs Pre-COVID* Favorable/(Unfavorable) Sales $2,786.2 Food and Beverage $887.0 31.8 % (380) Restaurant Labor $874.2 31.4 % 70 Restaurant Expenses $440.3 15.8 % 110 Marketing Expenses $28.2 1.0 % 200 Restaurant-Level EBITDA $556.5 20
Slide 14: Third Quarter Segment Performance
Third Quarter Segment Performance Fiscal 2023 vs. Prior Year Segment Sales ($ millions) Fine Dining Other % 5% 13.9 13. 14.1% $554 2% $696 13. $236 $485 $1,301 $613 $1,143 $208 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 1 Segment Profit Margin Fine Dining Other 22.5% 22.9% 21.8%
Slide 15: Updated Fiscal 2023 Annual Outlook
Updated Fiscal 2023 Annual Outlook SALES DEVELOPMENT MARGIN Total Sales Restaurant Openings Total Inflation: 7% to 7.5% $10.45B to $10.5B ~55 Commodities: 9.5% to 10% Same-Restaurant Sales Capital Spending Effective Tax Rate Growth $550 to $575 million ~13% 6.5% to 7% Earnings per Diluted Share $7.8
Slide 16: Implied Fourth Quarter Outlook
Implied Fourth Quarter Outlook Total Sales SRS EPS $2.73 to $2.78 3% to 5% $2.43 to $2.58 Billion 16
Slide 17: Preliminary Fiscal 2024 Outlook
Preliminary Fiscal 2024 Outlook New Restaurant Openings 50 to 55 Capital Expenditures $500 to $550 million New Restaurants $300 to $325 million Maintenance/Refresh/Tech/Other $200 to $225 million 17
Slide 18: Question & Answer Session
J DARDEN RESTAURANTS Question & Answer Session
Slide 19: Additional Information
J DARDEN RESTAURANTS Additional Information
Slide 20: Commodities Outlook – Fourth Quarter
Commodities Outlook – Fourth Quarter March - May FY2023 Spend by category Coverage Outlook Beef 22% 75% High single digit inflation Produce 12% 90% Mid single digit inflation Seafood 11% 90% Mid single digit deflation 1 Dairy / Oil 10% 40% FLAT Chicken 8% 100% Low single digit deflation 2 Wheat 7% 1
Slide 21: Third Quarter Segment Performance
Third Quarter Segment Performance Segment Sales ($ millions) vs. Prior Year Fine Dining Other % 5% 13.9 13. 2% 14.1% $554 $696 13. $485 $1,301 $613 $236 $1,143 $208 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 1 Average Weekly Sales vs. Pre-COVID Fine Dining Other 4% % 13. 8.1 $20
Slide 22: Q3 Fiscal 2023 EBITDA Reconciliation
Q3 Fiscal 2023 EBITDA Reconciliation $ in millions Earnings from Continuing Operations $286.8 Interest, Net 19.6 Income Tax Expense 43.5 Depreciation and Amortization 98.3 EBITDA $448.2 22