Slide 1: Earnings Call Fiscal 2023: Fourth Quarter Results
Earnings Call Fiscal 2023: Fourth Quarter Results June 22, 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: Fiscal 2023 Financial Highlights
Fiscal 2023 Financial Highlights $10.5 Billion $8.00 57 TOTAL SALES DILUTED NET EPS FROM NEW RESTAURANTS CONTINUING OPERATIONS 8.9% TOTAL SALES GROWTH $1.6 Billion EBITDA1 $1.1 Billion CASH RETURN2 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this pre
Slide 4: Consistently Delivering Strong Returns, Outpacing S&P 500
Consistently Delivering Strong Returns, Outpacing S&P 500 Fiscal 2023 Total Shareholder Return was 32.6% Ten Year Rolling Total Shareholder Return (TSR) Note: Results shown as of the end of Darden's fiscal year. 4
Slide 5: Brilliant With The Basics
Brilliant With The Basics XX DARDEN | RESTAURANTS
Slide 6: LongHorn Steakhouse
LONGHORN STEAKHOUSE rave STEAK MASTER DARDEN | RESTAURANTS
Slide 7: Never Ending Pasta Bowl
Never Ending Pasta Bowl Elevates Brand Equity | Simple to Execute | Not at a Deep Discount 7
Slide 8: Best Practices Awards Winners
Best Practices Awards Winners Source: Black Box Intelligence, Business Wire. 8
Slide 9: A full-service restaurant company with Back-To-Basics
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- Orient
Slide 10: Portfolio of Differentiated and Iconic Brands
Portfolio of Differentiated and Iconic Brands Total Average Annual Restaurants3 Sales1 Restaurant Sales2 $4.9 B $5.5 M 905 $2.6 B $4.7 M 562 $813 M $9.5 M 86 $740 M $4.2 M 180 $571 M $9.3 M 62 $300 M $6.8 M 44 $260 M $9.0 M 29 $261 M $6.2 M 42 1 Twelve months ending May 28, 2023. 2 Average annual sa
Slide 11: Strategic Portfolio Fit Criteria
Strategic Portfolio Fit CRITERIA // Full-service dining Fine dining restaurant with nominal guest overlap // Healthy brand with Strong business model and unit economics strong guest appeal Technomic consumer brand ratings at high levels1 // Can grow faster than Additional runway for new restaurant g
Slide 12: Fiscal 2023 Fourth Quarter Financial Highlights
Fiscal 2023 Fourth Quarter Financial Highlights $2.8 Billion 6.4% 4.0% SAME-RESTAURANT SALES TOTAL SALES TOTAL SALES GROWTH GROWTH $472 Million $2.58 $183 Million DILUTED NET EPS FROM EBITDA1 CASH RETURN2 CONTINUING OPERATIONS 1 A reconciliation of Non-GAAP measures can be found in the Additional In
Slide 13: Margin Analysis vs. Prior Year
Margin Analysis vs. Prior Year Fiscal Q4 2023 ($ millions) % of Sales vs Prior Year Favorable/(Unfavorable) Sales $2,769.0 Food and Beverage $855.3 30.9 % 30 Restaurant Labor $869.8 31.4 % 40 Restaurant Expenses $441.4 15.9 % 30 Marketing Expenses $28.7 1.0 % (30) Restaurant-Level EBITDA $573.8 20.7
Slide 14: Fourth Quarter Segment Performance
Fourth Quarter Segment Performance Fiscal 2023 vs. Prior Year Segment Sales ($ millions) Fine Dining Other Segment Profit Margin1 Fine Dining Other 1 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales. 14
Slide 15: Fine Dining Traffic Retention vs. Pre-COVID
Fine Dining Traffic1 Retention vs. Pre-COVID 1 Traffic represents average number of entrees sold per operating week. 15
Slide 16: Fiscal 2023 Financial Highlights
Fiscal 2023 Financial Highlights 6.8% SAME-RESTAURANT SALES $1.6 Billion $1.1 Billion EBITDA1 CASH RETURN2 GROWTH 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 2 Includes dividends paid and repurchases of common stock. 16
Slide 17: Margin Analysis vs. Pre-COVID
Margin Analysis vs. Pre-COVID Fiscal 2023 vs Pre-COVID ($ millions) % of Sales Adjusted1 Favorable/(Unfavorable) Sales $10,487.8 Food and Beverage $3,355.9 32.0 % (380) Restaurant Labor $3,346.3 31.9 % 80 Restaurant Expenses $1,702.2 16.2 % 120 Marketing Expenses $118.3 1.1 % 200 Restaurant-Level EB
Slide 18: Strong Model Generates Durable Cash Flows
Strong Model Generates Durable Cash Flows Adjusted EBITDA1 from Continuing Operations ($ in millions) CapEx $396 $452 $460 $255 $377 $565 Adjusted 2.8x 2.6x 1.7x 4.1x 4.1x 2.8x EBITDA1 / CapEx Dividend $315 $374 $325 $204 $565 $590 Adjusted 2.2x 2.2x 3.1x 2.4x 1.8x 1.8x Debt / EBITDAR1 1 A reconcili
Slide 19: Achieved Long-Term Framework TSR Over Past Five Years
Achieved Long-Term Framework TSR Over Past Five Years Updating Share Repurchase Target Previous FY18 - FY23 New LT Framework Annualized Framework (Over Time) Return1 (Over Time) New Restaurant Growth 2% - 3% 2.1% 2% - 3% Same-Restaurant Sales 1% - 3% 3.3% 1% - 3% EBIT Margin Expansion 10-30 bps 35bp
Slide 20: Darden completes Ruth's Chris acquisition
Darden completes Ruth's Chris acquisition // Expected run-rate synergies of ~$20 million by end of FY2025 • Savings of 4% to 5% of sales in prior acquisitions // Expected to be accretive to Darden's diluted net earnings per share, excluding acquisition and integration-related expenses • 10 to 12 cen
Slide 21: Fiscal 2024 Annual Outlook
Fiscal 2024 Annual Outlook SALES DEVELOPMENT MARGIN Total Sales Restaurant Openings Total Inflation: 3% to 4% $11.5B to $11.6B Approximately 50 Commodities: ~2.5% Same-Restaurant Sales Capital Spending Effective Tax Rate Growth $550 to $600 million 12% to 12.5% 2.5% to 3.5% Adjusted Earnings per Dil
Slide 22: Our Team Members Our Guests Our Communities
Our Team Members Our Guests Our Communities 22
Slide 23: Thank You To Our Team Members
Thank You To Our Team Members 23
Slide 24: Question & Answer Session
J DARDEN RESTAURANTS Question & Answer Session
Slide 25: Additional Information
J DARDEN RESTAURANTS Additional Information
Slide 26: Commodities Outlook – First Half
Commodities Outlook – First Half June - November FY2024 Spend by category Coverage Outlook Beef 22% 70% Low double digit inflation Produce 12% 80% High single digit inflation Dairy / Oil1 11% 55% Low single digit deflation Seafood 10% 80% High single digit deflation Chicken 10% 80% Low double digit
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Fiscal 2023 EBITDA Reconciliation1 $ in millions Earnings from Continuing Operations $315.6 Interest, Net 22.1 Income Tax Expense 36.8 Depreciation and Amortization 97.1 EBITDA $471.6 Reconciliation of Fiscal 2024 Reported to Adjusted Earnings Outlook2 2024 Reported dilut
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Ruth's Hospitality Group Adjusted EBITDA and EBITDAR Reconciliation1 52 Weeks Ended $ in millions December 25, 2022 GAAP Net Income $38.6 Interest, Net $1.5 Income Tax Expense $7.0 Depreciation and Amortization $22.1 EBITDA $69.2 Loss on legal settlement $6.0 Loss on lease m
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA Reconciliation1 $ in millions 5/27/2018 5/26/2019 5/31/2020 5/30/2021 5/29/2022 5/28/2023 Sales $8,080.1 $8,510.4 $7,806.9 $7,196.1 $9,630.0 $10,487.8 Net Earnings from Continuing Operations $603.8 $718.6 $(49.2) $632.4 $954.7 $983.5 Interest, Net 161.1 50.2
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1 See slide 18 for non-GAAP figure presented. 2 Includes immaterial amounts incurred but not adjusted. 3 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
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Total Debt Reconciliation1 $ in millions 5/27/2018 5/26/2019 5/31/2020 5/30/2021 5/29/2022 5/28/2023 Short-term debt — — $270.0 — — — Capital lease obligation $80.5 $84.0 — — — — Long-term debt, excluding unamortized discount and issuance costs $939.1 $939.1 $939.1
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Pro-forma Adjusted Total Debt to EBITDAR Reconciliation after Ruth's acquisition $ in millions Short-term debt — Term Loan (executed May 31, 2023) $600.0 Capital lease obligation — Long-term debt, excluding unamortized discount and issuance costs (as of May 28, 2023) $939.1
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reported to Adjusted Earnings Reconciliations1 $ in millions Q4 2019 Q1 2020 Q2 2020 Q3 2020 Total Sales $2,229.1 $2,133.9 $2,056.4 $2,346.5 $8,765.9 Earnings Income Earnings Income Earnings Income Earnings Income Earnings Income Before Tax Before Tax Before Tax Before Tax B
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reported to Adjusted Earnings Reconciliations1 Fiscal 2018 Earnings Before Earnings Income Interest and Before Tax Income Tax Interest, Income Expense Net $ in millions, except EPS (EBIT) net Tax (Benefit) Earnings Diluted EPS Reported Earnings from Continuing Operations $ 7