Slide 1: Earnings Call Fiscal 2017 Q1
Earnings Call Fiscal 2017 Q1 October 4, 2016
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
Slide 3: Fiscal First Quarter Highlights
Fiscal First Quarter Highlights Darden Sales ($bn) Same-Restaurant Sales Growth - Comparable Calendar Basis 4.2% $1.85 $1.73 $1.75 $1.79 $1.69 $1.71 $1.56 $1.61 2.9% 2.6% 1.3% FY15 FY16 FY15 FY16 FY15 FY16 FY16 FY17 Q21 Q31 Q42 Q1 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Darden Adjusted EPS3 $1.21 $1.10 $1.0
Slide 4: Continued Top Line Momentum
Continued Top Line Momentum Same-Restaurant Sales1 4.9% 2.8% 2.5% 2.4% 2.0% FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY17 Q1 Q1 Highlights 2.0% +410bps +20% Same-Restaurant Same-Restaurant Sales Industry OG To Go Growth Sales Outperformance 1 FY16 Same-Restaurant Sales on a comparable calendar basis. Industr
Slide 5: Strengthening Business Model
Strengthening Business Model Segment Profit Margin Percent1 21.3%2 20.3%2 1.3% 1.3% 17.1%2 20.0% 15.4%2 19.0% 17.8% 1.5% 16.3% 15.0% 14.9% 15.6% 12.4% FY15 FY16 FY15 FY16 FY15 FY16 FY16 FY17 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Incremental rent and other tax expense impact on Segment Profit Margin from fiscal 20
Slide 6: First Quarter Same-Restaurant Sales Growth
First Quarter Same-Restaurant Sales Growth 3.9% 0.7% 0.0% -1.2% -1.7% 5
Slide 7: Financial Update
Financial Update J DARDEN RESTAURANTS Breeze ISLAND GRILLE ees ae ee STEAKHOUSE = =
Slide 8: Fiscal First Quarter Highlights
Fiscal First Quarter Highlights $0.88 Diluted EPS from Continuing 1.3% Same-Restaurant Sales Operations 29.4% Adjusted Diluted EPS Growth $70 million Dividends Paid vs Last Year1 ~3.2 million $500 million New Share Repurchase Shares Repurchased Authorization 1 Prior year EPS values adjusted for spec
Slide 9: EAT Margin increased 130 basis points
EAT Margin increased 130 basis points Fiscal Q1 2017 vs. PY* (bps) ($ millions) % of Sales Favorable/(Unfavorable) Sales $1,714.4 Food & Beverage $493.2 28.8% 100 Restaurant Labor $545.8 31.8% Flat Restaurant Expenses $303.7 17.7% (170) Marketing $63.7 3.7% 20 Restaurant-Level EBITDA $308.0 18.0% (5
Slide 10: Segment Performance
Segment Performance All segments had positive sales growth ($ millions) Fine Dining Other $945 $961 $384 $386 $245 $253 $113 $114 FY16 Q1 FY17 Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 Q1 …with strong Segment Profit Margin, excluding incremental rent from real estate transactions1 Fine Dining
Slide 11: Fiscal 2017 Annual Outlook
Fiscal 2017 Annual Outlook Sales Margin Total Sales Growth Cost Savings 1.7% to 2.7% $30 Same Restaurant Sales Total Inflation 1.0% to 2.0% 1.5% to 2.0% New Restaurants Effective Tax Rate 24 to 28 26% to 27% Capital Spending $310 to $350 Updated Earnings per Diluted Share $3.87 to $3.97 (~126 millio
Slide 12: Thank you to our 150,000 Team Members!
Thank you to our 150,000 Team Members! 11
Slide 13: Additional Information
J. DARDEN Additional Information” RESTAURANTS Breeze ISLAND GRILLE ees ae ee STEAKHOUSE = =
Slide 14: Commodities Outlook – Q2 of Fiscal 2017
Commodities Outlook – Q2 of Fiscal 2017 Product Breakdown and Contract Coverage For Q2 of Fiscal 2017 Q2 FY2017 Spend by Category Coverage Outlook Beef 20% 80% Mid Single Digit Deflation Produce 12% 80% Low Single Digit Inflation Dairy / Oil1 12% 50% Low Single Digit Inflation Seafood 10% 85% Low
Slide 15: Reported to Adjusted Earnings Reconciliations
Reported to Adjusted Earnings Reconciliations Fiscal 2016 Q1 Q2 Q3 Q4 Annual Reported Diluted Net EPS from Continuing Operations $0.63 $0.23 $0.84 $1.10 $2.78 Real Estate Plan Implementation 0.05 0.16 0.03 - 0.26 Debt Retirement Costs - 0.17 0.34 - 0.51 Strategic Action Plan and Other Costs - (0.02)
Slide 16: Reported to Adjusted EBIT Margin and Earnings Reconciliations
Reported to Adjusted EBIT Margin and Earnings Reconciliations Quarter Ended Change (in millions) 8/28/2016 8/30/2015 (bps) Sales - as reported $ 1,714.4 $ 1,687.0 Earnings from continuing operations - as reported $ 111.1 $ 81.0 Interest, net - as reported 9.9 22.4 Income taxes - as reported 40.3 30.
Slide 17: Fiscal and Comparable Calendar Dates
Fiscal and Comparable Calendar Dates Same-Restaurant Sales Calculation Dates Fiscal Calendar Basis Comparable Calendar Basis Q1 June 1, 2015 – August 30, 2015 June 1, 2015 – August 30, 2015 vs. vs. May 26, 2014 – August 24, 2014 June 2, 2014 – August 31, 2014 Q2 August 31, 2015 - November 29, 2015 A