Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q4 2022 Earnings Presentation
25 slides from Darden Restaurants's earnings presentation, Jun 23, 2022
Slide 1: Earnings Call: Fiscal 2022 Fourth Quarter Results
Earnings Call Fiscal 2022: Fourth Quarter Results June 23, 2022 Updated July 18, 2022 to correct information on pages 14 and 22
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: A full-service restaurant company with Back-To-Basics philosophy
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: Competitively Superior Scale Advantage
Competitively Superior Scale Advantage Total Revenues $9,630 $4,275 $3,791 $3,651 $3,094 $1,231 $1,162 $468 $409 Darden Full Service Competitors Note: $'s in Millions Darden: Twelve months ending May 29, 2022 Full Service Competitors: BJRI, BLMN, CAKE, CHUY, EAT, RRGB, RUTH & TXRH Sources: Full Serv
Slide 5: Competitively Superior Scale Advantage
Competitively Superior Scale Advantage Higher Sales Lower Support Costs Stronger Profitability 12.1% $5.1 $4.4 5.4% 3.9% 6.3% Average Annual Restaurant Sales G&A % Net Operating Income Margin Note: Average annual restaurant sales $ in millions Darden: Twelve months ending May 29, 2022 Full Service C
Slide 6: Portfolio of Differentiated and Iconic Brands
Portfolio of Differentiated and Iconic Brands Total Average Annual 1 1 2 Restaurants Sales Restaurant Sales $4.5 B $5.1 M 884 $2.4 B $4.4 M 546 $676 M $3.9 M 172 $722 M $8.6 M 85 $547 M $9.0 M 62 $271 M $6.2 M 45 $268 M $6.4 M 42 $229 M $8.5 M 28 (1) Twelve months ending May 29, 2022. Company owned/
Slide 7: Leverage Scale to Invest In...
Leverage Scale to Invest In... Our Brands' Value Propositions | Underpricing inflation over time Product | Ensuring we have the items our guests expect Technology | Enhancing the guest experience & simplifying operations Our People | Helping them grow & thrive 7
Slide 8: A full-service restaurant company with Back-To-Basics philosophy
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 9: Fiscal 2022 Fourth Quarter Financial Highlights
Fiscal 2022 Fourth Quarter Financial Highlights $2.6 Billion 14.2% TOTAL SALES TOTAL SALES GROWTH 11.7% $2.24 SAME-RESTAURANT SALES DILUTED NET EPS FROM GROWTH CONTINUING OPERATIONS 9
Slide 10: Fiscal 2022 Fourth Quarter Financial Highlights
Fiscal 2022 Fourth Quarter Financial Highlights $431 Million $137 Million $237 Million 1 EBITDA DIVIDENDS PAID SHARE REPURCHASES 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 10
Slide 11: Margin Analysis
Margin Analysis Fiscal Q4 2022 ($ millions) % of Sales vs Q4 2019* (bps) Favorable/(Unfavorable) Sales $2,602.9 Food and Beverage $811.4 31.2 % (300) Restaurant Labor $829.3 31.9 % 40 Restaurant Expenses $423.8 16.3 % 70 Marketing Expenses $20.2 0.8 % 230 Restaurant-Level EBITDA $518.2 19.9 % 40 Gen
Slide 12: Fourth Quarter Segment Performance
Fourth Quarter Segment Performance 1 Fiscal 2022 vs. Fiscal 2019 to compare to Pre-COVID results Segment Sales ($ millions) Fine Dining Other 7% 7.9% 33. $647 $1,194 1% 14.1% $551 $1,107 36. $483 $484 $211 $155 FY19 Q4 FY22 Q4 FY19 Q4 FY22 Q4 FY19 Q4 FY22 Q4 FY19 Q4 FY22 Q4 2 Segment Profit Margin F
Slide 13: Fiscal 2022 Financial Highlights
Fiscal 2022 Financial Highlights $9.6 Billion $7.40 TOTAL SALES DILUTED NET EPS FROM CONTINUING OPERATIONS $1.5 Billion $1.6 Billion 1 2 EBITDA CASH RETURN 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 2 Includes dividends paid and r
Slide 14: Strong Model Generates Durable Cash Flows
Strong Model Generates Durable Cash Flows 1 Adjusted EBITDA from Continuing Operations ($ in millions) GR $1,531 9.2% CA $1,184 $1,099 $1,039 $987 $794 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 CapEx $293 $396 $452 $460 $255 $377 Adjusted 1 3.4x 2.8x 2.6x 1.7x 4.1x 4.1x
Slide 15: Fiscal 2023 Annual Outlook
Fiscal 2023 Annual Outlook SALES DEVELOPMENT MARGIN Total Sales Restaurant Openings Total Inflation: ~6% $10.2B to $10.4B 55 to 60 Commodities: ~7% Same-Restaurant Sales Capital Spending Effective Tax Rate Growth $500 to $550 million ~13.5% 4% to 6% Earnings per Diluted Share $7.40 to $8.00 (~124 mi
Slide 16: Thank You To Our Team Members
Thank You To Our Team Members 16
Slide 17: Nourish & Delight Everyone We Serve
Nourish & Delight Everyone We Serve Our Team Members Our Guests Our Communities 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 – First Half Fiscal 2023
Commodities Outlook – First Half Fiscal 2023 First Half FY2023 First Half spend by category Coverage Outlook Beef 23% 65% High single digit inflation Produce 12% 80% High single digit inflation Seafood 11% 85% Low double digit inflation 1 Dairy / Oil 9% 50% Mid double digit inflation Chicken 7% 80%
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Fiscal 2022 EBITDA Reconciliation $ in millions Net Earnings from Continuing Operations $281.7 Interest, Net $18.9 Income Tax Expense $37.6 Depreciation and Amortization $93.0 EBITDA $431.2 Q4 Fiscal 2019 Reported to Adjusted Earnings Reconciliation Diluted Net Earnings B
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA Reconciliation $ in millions 5/28/2017 5/27/2018 5/26/2019 5/31/2020 5/30/2021 5/29/2022 Sales $7,170.2 $8,080.1 $8,510.4 $7,806.9 $7,196.1 $9,630.0 Net Earnings from Continuing Operations $482.5 $603.8 $718.6 $(49.2) $632.4 $954.7 Interest, Net 40.2 161.1 50
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1 Includes immaterial amounts incurred but not adjusted. 2 In April 2018, our Benefits Plans Committee approved the termination of our primary non-contributory defined benefit pension plan. In fiscal 2020 the benefit obligations to plan participants was settled, resulting in
Slide 24: Non-GAAP Reconciliations: Adjusted Total Debt
Non-GAAP Reconciliations Adjusted Total Debt Reconciliation $ in millions 5/28/2017 5/27/2018 5/26/2019 5/31/2020 5/30/2021 5/29/2022 Short-term debt — — — $270.0 — — Capital lease obligation $58.9 $80.5 $84.0 — — — Long-term debt, excluding unamortized discount and issuance costs $950.0 $939.1 $939
Slide 25: Non GAAP Reconciliations: Pre-COVID EBITDA Margin
Non GAAP Reconciliations Pre-COVID EBITDA Margin $ in millions Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Total Sales $2,229 $2,134 $2,056 $2,347 $8,766 Net Earnings from Continuing Operations 209 172 25 233 639 Interest, Net 12 11 13 13 49 Income Tax Expense 9 19 (32) 32 28 Depreciation and Amortization 88 86