Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q1 FY2019 Earnings Presentation
17 slides from Darden Restaurants's earnings presentation, Sep 20, 2018
Slide 1: Earnings Call Fiscal 2019: Q1 Results
EARNINGS CALL FISCAL 2019: Q1RESULTS September 20, 2018
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: Darden Fiscal First Quarter Highlights
Darden Fiscal First Quarter Highlights SALES ($B) SAME-RESTAURANT SALES GROWTH1 3.3% 3.1% 2.2% 2.0% $2.13 $1.93 $2.13 $1.94 $2.06 $1.88 $1.88 $1.64 FY17 FY18 FY17 FY18 FY17 FY18 FY18 FY19 Q2 Q3 Q4 Q1 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 ADJUSTED EPS2 $1.71 $1.32 $1.39 $1.34 $1.18 $0.99 $0.64 $0.73 FY17 F
Slide 4: First Quarter Sales Growth and Industry Outperformance
First Quarter First Quarter First Quarter 6.3% 5.3% 6.4% 3.1% 6.5% SAME-RESTAURANT SALES SAME-RESTAURANT SALES TOTAL SALES GROWTH TOTAL SALES GROWTH TOTAL SALES GROWTH GROWTH GROWTH 11 ~450 BPS 15 ~230 BPS -4.0% SAME-RESTAURANT SALES SAME-RESTAURANT SALES NET NEW RESTAURANTS INDUSTRY NET NEW RESTAUR
Slide 5: Thank you to our 180,000 Team Members!
Thank you to our 180,000 Team Members! 5
Slide 6: Financial Discussion
SE DARDEN RESTAURANTS Financial Discussion
Slide 7: Fiscal First Quarter Highlights
Fiscal First Quarter Highlights 6.5% 3.3% SAME-RESTAURANT SALES $1.34 DILUTED EPS FROM CONTINUING TOTAL SALES GROWTH GROWTH OPERATIONS 35.4% ADJUSTED DILUTED EPS GROWTH $93 MILLION $31 MILLION VS LAST YEAR1 DIVIDENDS PAID SHARE REPURCHASES 1 Prior year EPS value adjusted for special items. A reconci
Slide 8: Margin Analysis
Margin Analysis Fiscal Q1 2019 vs. PY* (bps) ($ millions) % of Sales Favorable/(Unfavorable) Sales $2,061.4 Food and Beverage $583.3 28.3% 40 Restaurant Labor $679.3 33.0% (70) Restaurant Expenses $357.9 17.4% 30 Marketing Expenses $66.5 3.2% 20 Restaurant-Level EBITDA $374.4 18.2% 20 General and Ad
Slide 9: Q1 Restaurant Labor % of Sales
Q1 Restaurant Labor % of Sales 0.4% 33.0% 1.4% 32.2% 0.6% 0.4% Fiscal 2018 Pricing Leverage Productivity/Other Inflation Workforce Fiscal 2019 Investments & Mark to Market Green is a favorable variance to prior year, red is unfavorable 9
Slide 10: Mark to Market Reduced EBIT Margin by 50 bps Mostly Offset in Tax
Mark to Market Reduced EBIT Margin by 50 bps Mostly Offset in Tax Mark-to-Market Reported Impact Q1 2019 Q1 2019 Q1 2019 Q1 2019 ($ millions) % of Sales ($ millions) (bps) Favorable / Sales $2,061.4 (Unfavorable) Restaurant Labor $679.3 33.0% ($2.9) (10) Restaurant-Level EBITDA $374.4 18.2% ($2.9) (
Slide 11: First quarter normalized effective tax rate of ~12%
First quarter normalized effective tax rate of ~12% EBT Taxes Tax Rate Reported $176.0 $7.1 4.0% Mark to Market Tax Benefits 1 $7.6 Higher Than Normal Stock Option Exercises 2 $5.9 Normalized $176.0 $20.6 11.7% $ in millions 1 Reflects Q1 FY19 Mark to Market tax benefits 2 Reflects stock compensatio
Slide 12: Fiscal First Quarter Segment Performance
Fiscal First Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $990 $1,052 $420 $449 $405 $430 $122 $130 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Q1 Segment Profit Margin1 Fine Dining Other 20.1% 20.7% 15.7% 16.3% 15.7% 15.9% 15.7% 14.5% FY18 Q1 FY19 Q1 FY1
Slide 13: Increased Fiscal 2019 Financial Outlook
Increased Fiscal 2019 Financial Outlook Current Prior (09/20/18) (06/21/18) Total sales growth 5.0% to 5.5% 4.0% to 5.0% Same-restaurant sales growth 2.0% to 2.5% 1.0% to 2.0% New restaurant openings 45 to 50 45 to 50 Effective tax rate 10.0% to 11.0% 11.0% to 12.0% Earnings per diluted share $5.52
Slide 14: Additional Information
SE DARDEN RESTAURANTS Additional Information
Slide 15: Commodities Outlook – Q2 Fiscal 2019
Commodities Outlook – Q2 Fiscal 2019 September - November FY2019 Annual Spend by Category Coverage Outlook Beef 18% 80% Low Single Digit Inflation Produce 14% 75% Low Single Digit Inflation Dairy / Oil1 11% 60% Low Single Digit Deflation Seafood 10% 80% Low Single Digit Deflation Wheat2 6% 95% Low S
Slide 16: Reported to Adjusted Earnings Reconciliations
Reported to Adjusted Earnings Reconciliations Fiscal 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Earnings Income Diluted Earnings Income Diluted Earnings Income Diluted Earnings Income Diluted Before Tax Net Before Tax Net Before Tax Net Before Tax Net Income Expense Net Earnings Income Expense Net Earning
Slide 17: Reported to Adjusted EBIT Margin and Earnings Reconciliations
Reported to Adjusted EBIT Margin and Earnings Reconciliations Quarter Ended Change (in millions) 8/26/2018 8/27/2017 (bps) Sales - as reported $ 2,061.4 $ 1,936.1 Earnings from continuing operations - as reported $ 168.9 $ 121.3 I nterest, net - as reported 13.1 15.0 I ncome tax expense - as reporte