Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q3 FY2019 Earnings Presentation
18 slides from Darden Restaurants's earnings presentation, Mar 21, 2019
Slide 1: Earnings Call Fiscal 2019: Q3 Results
EARNINGS CALL FISCAL 2019: Q3 RESULTS March 21, 2019
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 Third Quarter Highlights
Darden Fiscal Third Quarter Highlights SALES ($B) SAME-RESTAURANT SALES GROWTH1 3.3% 2.8% 2.2% 2.1% $1.93 $2.13 $1.94 $2.06 $2.13 $2.25 $1.88 $1.97 FY17 FY18 FY18 FY19 FY18 FY19 FY18 FY19 Q4 Q1 Q2 Q3 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 ADJUSTED EPS2 $1.71 $1.80 $1.39 $1.34 $1.18 $0.99 $0.73 $0.92 FY17 F
Slide 4: Third Quarter Results
Third Quarter Results 5.3% 4.3% 6.7% 3.8% 1.0% SAME-RESTAURANT SALES TOTAL SALES GROWTH SAME-RESTAURANT SALES TOTAL SALES GROWTH TOTAL SALES GROWTH GROWTH GROWTH 7 ~350 BPS 13 ~300 BPS -2.7% SAME-RESTAURANT SALES SAME-RESTAURANT SALES NET NEW RESTAURANTS NET NEW RESTAURANTS INDUSTRY INDUSTRY SAME-RE
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 Third Quarter Highlights
Fiscal Third Quarter Highlights 5.5% 2.8% SAME-RESTAURANT SALES $1.80 DILUTED NET EPS FROM TOTAL SALES GROWTH GROWTH CONTINUING OPERATIONS 5.3% ADJUSTED DILUTED NET EPS $92 MILLION $74 MILLION GROWTH VS LAST YEAR1 DIVIDENDS PAID SHARE REPURCHASES 1 Prior year EPS value adjusted for special items. A
Slide 8: Margin Analysis
Margin Analysis Fiscal Q3 2019 vs. PY* (bps) ($ millions) % of Sales Favorable/(Unfavorable) Sales $2,246.5 Food and Beverage $638.0 28.4% (10) Restaurant Labor $711.4 31.7% 40 Restaurant Expenses $379.5 16.9% 10 Marketing Expenses $62.4 2.8% 0 Restaurant-Level EBITDA $455.2 20.3% 40 General and Adm
Slide 9: Third Quarter Restaurant Labor % of Sales
Third Quarter Restaurant Labor % of Sales 1.2% 32.1% 0.6% 31.7% 0.7% 0.2% 0.1% Fiscal 2018 Inflation Pricing Leverage Check Mix / New Restaurants Mark to Market Fiscal 2019 Productivity / Brand Mix Green is a favorable variance to prior year, red is unfavorable Values may not foot due to rounding 9
Slide 10: Margin Analysis
Margin Analysis Fiscal Q3 2019 vs. PY* (bps) ($ millions) % of Sales Favorable/(Unfavorable) Sales $2,246.5 Food and Beverage $638.0 28.4% (10) Restaurant Labor $711.4 31.7% 40 Restaurant Expenses $379.5 16.9% 10 Marketing Expenses $62.4 2.8% 0 Restaurant-Level EBITDA $455.2 20.3% 40 General and Adm
Slide 11: Fiscal Third Quarter Segment Performance
Fiscal Third Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $1,073 $1,130 $453 $483 $438 $459 $164 $175 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3 Segment Profit Margin1 Fine Dining Other 24.5% 25.4% 21.1% 21.9% 19.9% 20.0% 15.0% 14.7% FY18 Q3 FY19 Q3 F
Slide 12: Increased Fiscal 2019 Financial Outlook
Increased Fiscal 2019 Financial Outlook Current Prior (03/21/19) (12/18/18) Total sales growth Approx. 5.5% 5.0% to 5.5% Same-restaurant sales growth 2.5% to 2.7% Approx. 2.5% New restaurant openings 45 to 50 45 to 50 Effective tax rate Approx. 10% 10% to 11% Diluted net earnings per share $5.76 to
Slide 13: Preliminary Fiscal 2020 Outlook
Preliminary Fiscal 2020 Outlook New Restaurants ~ 50 Capital Expenditures $450M to $500M New Restaurants $240M to $265M Remodels/Maintenance/Tech/Other $210M to $235M EPS* impact: 53rd week ~ $0.15 Lease Accounting ~ ($0.05) * Diluted net earnings per share from continuing operations 13
Slide 14: Additional Information
SE DARDEN RESTAURANTS Additional Information
Slide 15: Fourth Quarter Commodities Outlook
Fourth Quarter Commodities Outlook March - May FY2019 Annual Spend by Category Coverage Outlook Beef 18% 85% Low Single Digit Inflation Produce 14% 75% Low Single Digit Inflation Dairy / Oil1 11% 65% Low Single Digit Inflation Seafood 10% 95% Flat Chicken 7% 95% Flat Wheat2 6% 95% Low Single Digit I
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 Earnings Reconciliation
Reported to Adjusted Earnings Reconciliation 2018 Earnings Income Diluted Before Tax Net Income Expense Net Earnings $ in millions, except EPS Tax (Benefit) Earnings Per Share Reported Earnings from Continuing Operations $605.7 $1.9 $603.8 $4.79 Adjustments: Debt retirement costs $102.2 $33.6 $68.6
Slide 18: Reported to Adjusted EBIT Margin and Earnings Reconciliations
Reported to Adjusted EBIT Margin and Earnings Reconciliations Quarter Ended Change (in millions) 2/24/2019 2/25/2018 (bps) Sales - as reported $ 2,246.5 $ 2,128.4 Earnings from continuing operations - as reported $ 225.1 $ 218.5 I nterest, net - as reported 12.4 117.4 I ncome tax expense - as report