Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q1 2021 Earnings Presentation
23 slides from Darden Restaurants's earnings presentation, Sep 24, 2020
Slide 1: Earnings Call: Fiscal 2021 First Quarter Results
EARNINGS CALL FISCAL 2021: FIRST QUARTER RESULTS September 24, 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: First Quarter Priorities
First Quarter Priorities Health & Safety of Team Members and Guests Back-to-Basics Operating Philosophy Technology Investments Business Model Transformation 3
Slide 4: Health & Safety of Team Members and Guests
Health & Safety of Team Members and Guests Installing Booth Partitions 4
Slide 5: Back-to-Basics Operating Philosophy
Back-to-Basics Operating Philosophy 5
Slide 6: Investing in Technology
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Slide 7: Transforming Our Business Model
Transforming Our Business Model Adjust Cost Structure Strong Cash Flows | Invest in the Business Re-imagine Our Offerings Simplified Menus | Food & Labor Efficiencies Reduce Marketing Spend Fewer Promotions and Incentives Optimize Support Structure G&A Efficiencies 7
Slide 8: First Quarter Operating Segment Highlights
First Quarter Operating Segment Highlights (27.7)% (28.2)% SAME-RESTAURANT SALES TOTAL SALES GROWTH GROWTH 4 (220) BPS NET NEW RESTAURANTS SAME-RESTAURANT SALES VS. LY VS. I NDUSTRY BENCHMARK1 1 Industry excluding Olive Garden and LongHorn Steakhouse. 8
Slide 9: First Quarter Operating Segment Highlights
First Quarter Operating Segment Highlights (16.3)% (18.1)% SAME-RESTAURANT SALES TOTAL SALES GROWTH GROWTH 10 790 BPS NET NEW RESTAURANTS SAME-RESTAURANT SALES VS. LY INDUSTRY OUTPERFORMANCE1 1 Industry excluding Olive Garden and LongHorn Steakhouse. 9
Slide 10: First Quarter Operating Segment Highlights
First Quarter Operating Segment Highlights Fine Dining Other Business (38.9)% (39.1)% (38.9)% (39.0)% SAME-RESTAURANT SALES SAME-RESTAURANT SALES TOTAL SALES GROWTH TOTAL SALES GROWTH GROWTH GROWTH 10
Slide 11: Our Greatest Competitive Advantage
Our Greatest Competitive Advantage 11
Slide 12: Fiscal 2021 First Quarter Highlights
Fiscal 2021 First Quarter Highlights $1.5BILLION TOTAL SALES (28.4)% TOTAL SALES GROWTH1 (29.0)% SAME-RESTAURANT SALES GROWTH $185MILLION +$0.56 ADJUSTED DILUTED NET EPS FROM ADJUSTED EBITDA1 CONTINUING OPERATIONS1 1 Values adjusted for special items. A reconciliation of reported to adjusted numbers
Slide 13: Margin Analysis
Margin Analysis As Reported As Adjusted Q1 2021 Q1 2021 Q1 2021 vs. Q1 2020 (bps) ($ millions) ($ millions) % of Sales Favorable/(Unfavorable) Sales $1,527.4 $1,527.4 Food and Beverage $434.5 $434.5 28.4% (20) Restaurant Labor $500.7 $500.7 32.8% 20 Restaurant Expenses $290.9 $290.9 19.0% (160) Mark
Slide 14: Early Retirement Incentive Program and Corporate Restructuring
Early Retirement Incentive Program and Corporate Restructuring • 11% net workforce reduction in restaurant support center and other operational leadership • Recognized $48 million of expense in Q1 $10 million non-cash Remainder will be cash outflows through fiscal 2022 Q2 • Annualized savings of
Slide 15: First Quarter Segment Performance
First Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $1,090 $450 $457 $788 $377 $136 $279 $83 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 Segment Profit Margin1 Fine Dining Other 21.0% 22.1% 16.5% 15.1% 14.9% 14.1% 11.9% 12.8% FY20 Q1 FY21 Q1 FY20 Q1 FY2
Slide 16: Same-Restaurant Sales Details
Same-Restaurant Sales Details Restaurants with at least limited Dining Room Total Capacity Q1 Q1 Q2 Average SRS Weekly Sales SRS % of Rest % of Rest Darden (29.0)% $69,046 (21.9)% 68% 91% Olive Garden (28.2)% $75,585 (21.1)% 63% 89% LongHorn (18.1)% $60,247 (11.3)% 72% 96% Fine Dining (39.1)% $89,70
Slide 17: Liquidity and Capital Allocation
Liquidity and Capital Allocation • Repaid $270 million term loan in August • Ended the quarter with $655 million in cash and $1.4 billion in liquidity, including untapped credit facility • Credit metrics well within debt covenants • Reinstated a quarterly cash dividend; $0.30 payable on November 2 1
Slide 18: Fiscal 2021 Second Quarter Outlook
Fiscal 2021 Second Quarter Outlook Q2 2021 Outlook Total sales Approx. 82% of LY EBITDA* ($MM’s) $200 - $215 Diluted Share Count (MM) ~131 EPS $ $0.65 - $0.75 *A reconciliation of EBITDA Outlook to Net Earnings can be found in the Additional Information section of the presentation. 18
Slide 19: Additional Information
SE DARDEN RESTAURANTS Additional Information
Slide 20: Commodities Outlook – Second Quarter Fiscal 2021
Commodities Outlook – Second Quarter Fiscal 2021 Sep-Nov FY2021 Annual spend by category Coverage Outlook Beef 17% 85% 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
Slide 21: Reported to Adjusted Earnings and EBITDA Reconciliations
Reported to Adjusted Earnings and EBITDA Reconciliations Q1 2021 Q1 2020 Earnings Income Diluted Earnings Income Diluted Before Tax Net Net Before Tax Net Net $ in millions, except EPS Income Expense Earnings Earnings Income Expense Earnings Earnings Tax (Benefit) Per Share Tax (Benefit) Per Share R
Slide 22: Reported to Adjusted Earnings Reconciliations
Reported to Adjusted Earnings Reconciliations $ in millions Q1 2021 Margin % Sales - as reported $1,527.4 Earnings from continuing operations - as reported $37.3 Interest, net - as reported 16.6 Other Expense - as reported 7.5 Income tax expense (benefit) - as reported (4.8) Operating income from co
Slide 23: EBITDA Outlook to Net Earnings Reconciliation
EBITDA Outlook to Net Earnings Reconciliation Fiscal 2021 Second Quarter EBITDA Outlook Reconciliation $ in millions Net Earnings $86 to $98 Interest, net 15 15 Income tax expense 10 13 Depreciation and amortization 89 89 EBITDA $200 to $215 23