Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q2 2021 Earnings Presentation
22 slides from Darden Restaurants's earnings presentation, Dec 18, 2020
Slide 1: Earnings Call: Fiscal 2021 Second Quarter Results
EARNINGS CALL FISCAL 2021: SECOND QUARTER RESULTS DECEMBER 18, 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: Ongoing Priorities
Ongoing Priorities Health & Safety of Team Members and Guests Back-to-Basics Operating Philosophy Technology Deployments Business Model Transformation 3
Slide 4: Health & Safety of Team Members and Guests
Health & Safety of Team Members and Guests 4
Slide 5: Back-to-Basics Operating Philosophy
Back-to-Basics Operating Philosophy 5
Slide 6: Investing in Technology
Investing in Technology Curbside I’m Here Wait List Visibility 6
Slide 7: Transforming Our Business Model
Transforming Our Business Model Adjust Cost Structure Re-Imagine Our Offerings Investments Optimize Support Structure 7
Slide 8: Second Quarter Operating Segment Highlights
Second Quarter Operating Segment Highlights (19.0)% (19.9)% SAME-RESTAURANT SALES TOTAL SALES GROWTH GROWTH 8
Slide 9: Second Quarter Operating Segment Highlights
Second Quarter Operating Segment Highlights (8.9)% (11.1)% SAME-RESTAURANT SALES TOTAL SALES GROWTH GROWTH 9
Slide 10: Fiscal 2021 Second Quarter Highlights
Fiscal 2021 Second Quarter Highlights $1.7BILLION TOTAL SALES (19.4)% TOTAL SALES GROWTH1 (20.6)% SAME-RESTAURANT SALES GROWTH $206MILLION $0.74 DILUTED NET EPS FROM EBITDA CONTINUING OPERATIONS 10
Slide 11: Margin Analysis
Margin Analysis Fiscal Q2 2021 ($ millions) % of Sales vs. Q2 2020 (bps)* Favorable/(Unfavorable) Sales $1,656.5 Food and Beverage $475.1 28.7% (30) Restaurant Labor $535.5 32.3% 140 Restaurant Expenses $330.5 20.0% (170) Marketing Expenses $18.8 1.1% 210 Restaurant-Level EBITDA $296.6 17.9% 140 Gen
Slide 12: Mark to Market Reduced Operating Income Margin by 50 bps, Mostly Offset in Tax
Mark to Market Reduced Operating Income Margin by 50 bps, Mostly Offset in Tax Fiscal Q2 2021 Reported Mark-to-Market Impact ($ millions) % of Sales ($ millions) (bps) Favorable / (Unfavorable) Sales $1,656.5 G&A $89.9 5.4% ($8.1) (50) Operating Income $120.7 7.3% ($8.1) (50) Income Tax Expense $8.8
Slide 13: Second Quarter Segment Performance
Second Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $1,024 $447 $431 $830 $407 $155 $312 $108 FY20 Q2 FY21 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 Q2 Segment Profit Margin1 Fine Dining Other 21.1% 18.6% 19.6% 18.8% 16.1% 16.3% 12.6% 11.1% FY20 Q2 FY21 Q2 FY20 Q2 F
Slide 14: Liquidity and Capital Allocation
Liquidity and Capital Allocation Well-positioned balance sheet Over $1.5 billion in liquidity Credit metrics well within debt covenants 14
Slide 15: Same-Restaurant Sales Impacted by Dining Room Closures
Same-Restaurant Sales Impacted by Dining Room Closures Comparable Calendar* Same-Restaurant Sales % Weeks Ended 11/8/20 11/15/20 11/22/20 11/29/20 12/6/20 12/13/20 Darden (23.4)% (23.3)% (29.1)% (34.0)% (33.4)% (36.9)% Olive Garden (21.9)% (22.5)% (27.3)% (34.9)% (31.1)% (32.6)% LongHorn Steakhouse
Slide 16: Fiscal 2021 Third Quarter Outlook
Fiscal 2021 Third Quarter Outlook Q3 2021 Outlook Total sales 65% - 70% of LY EBITDA $170 - $210 million Diluted share count ~132 million EPS $ $0.50 - $0.75 16
Slide 17: Our Greatest Competitive Advantage
Our Greatest Competitive Advantage 17
Slide 18: Additional Information
J. DARDEN RESTAURANTS Additional Information
Slide 19: Commodities Outlook – Third Quarter Fiscal 2021
Commodities Outlook – Third Quarter Fiscal 2021 Dec-Feb FY2021 Annual spend by category Coverage Outlook Beef 17% 70% Low single digit inflation Produce 14% 90% Low single digit inflation Dairy / Oil1 10% 50% Low single digit deflation Seafood 9% 95% Low single digit deflation Chicken 7% 100% Flat W
Slide 20: Reported to Adjusted Earnings and EBITDA Reconciliations
Reported to Adjusted Earnings and EBITDA Reconciliations Q2 2020 Earnings Income Diluted Before Tax Net Net $ in millions, except EPS Income Expense Earnings Earnings Tax (Benefit) Per Share Reported Earnings from Continuing Operations ($6.2) ($31.6) $25.4 $0.21 % of Sales (0.3%) (1.5%) (1.2%) Adjus
Slide 21: Free Cash Flow and Adjusted Debt & Total Capital Reconciliations
Free Cash Flow and Adjusted Debt & Total Capital Reconciliations Fiscal 2021 Free Cash Flow $ in millions YTD Q1 Q2 Net cash provided by operating activities of continuing operations $428.6 $206.7 $221.9 Less: Purchases of land, buildings and equipment (108.2) (42.2) (66.0) Less: Purchases of capita
Slide 22: EBITDA Outlook to Net Earnings Reconciliation
EBITDA Outlook to Net Earnings Reconciliation Fiscal 2021 Third Quarter EBITDA Outlook Reconciliation $ in millions Net Earnings $66 to $99 Interest, net 15 15 Income tax expense 1 8 Depreciation and amortization 88 88 EBITDA $170 to $210 22