Slide 1: Earnings Call Fiscal 2017 Q2
EARNINGS CALL Fiscal 2017 Q2 December 20, 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 Quarter Highlights
FISCAL QUARTER HIGHLIGHTS Darden Sales ($bn) Same-Restaurant Sales Growth - Comparable Calendar Basis 4.2% 2.6% $1.73 $1.85 $1.75 $1.79 $1.69 $1.71 $1.61 $1.64 1.7% 1.3% FY15 FY16 FY15 FY16 FY16 FY17 FY16 FY17 Q31 Q42 Q1 Q2 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Darden Adjusted EPS3 $1.01 $1.21 $1.10 $0.99
Slide 4: Continued Top Line Momentum
CONTINUED TOP LINE MOMENTUM Same-Restaurant Sales 4.9% 2.8% 2.6% 2.4% 2.0% FY16 Q21 FY16 Q31 FY16 Q41 FY17 Q1 FY17 Q2 Q2 Highlights 2.6% +540bps +21% Same-Restaurant Same-Restaurant Sales Industry OG To Go Growth Sales Outperformance2 1 FY16 Same-Restaurant Sales on a comparable calendar basis. 2 In
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 2 1.5% 15.4%2 16.0% 0.4% 1.6% 20.0% 16.3% 17.8% 19.0% 14.9% 15.6% 15.0% 14.4% FY15 FY16 FY15 FY16 FY16 FY17 FY16 FY17 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 Rent and other tax expense impact on Segment Profit Margin from fis
Slide 6: Thank You to Our 150,000 Team Members!
THANK YOU TO OUR 150,000 TEAM MEMBERS! 5
Slide 7: Financial Update
J. DARDEN FINANCIAL UPDATE
Slide 8: Fiscal Second Quarter Highlights
FISCAL SECOND QUARTER HIGHLIGHTS $0.64 1.7% Diluted EPS from Continuing Same-Restaurant Sales Operations 18.5% ~$70 million Adjusted Diluted EPS Growth Dividends Paid vs Last Year1 ~0.3 million $19 million Share Repurchases Shares Repurchased 1 Prior year EPS values adjusted for special items. A rec
Slide 9: EAT Margin Increased 50 Basis Points
EAT MARGIN INCREASED 50 BASIS POINTS Fiscal Q2 2017 vs. PY* (bps) ($ millions) % of Sales Favorable/(Unfavorable) Sales $1,642.5 Food & Beverage $478.1 29.1% 90 Restaurant Labor $538.1 32.8% (20) Restaurant Expenses $305.3 18.6% (130) Marketing $57.1 3.5% 10 Restaurant-Level EBITDA $263.9 16.1% (50)
Slide 10: Segment Performance
SEGMENT PERFORMANCE Segment sales growth ($ millions) Fine Dining Other $915 -% $892 $365 $365 $228 $234 $123 $129 FY16 Q2 FY17 Q2 FY16 Q2 FY17 Q2 FY16 Q2 FY17 Q2 FY16 Q2 FY17 Q2 …with strong Segment Profit Margin, excluding incremental rent from real estate transactions 1 Fine Dining Other 19.3%2 1
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 Earnings per Diluted Share $3.87 to $3.97 (~126 million Weight
Slide 12: Additional Information
J. DARDEN ADDITIONAL INFORMATION
Slide 13: Second Quarter Same-Restaurant Sales Growth
SECOND QUARTER SAME-RESTAURANT SALES GROWTH 2.6% -0.3% 0.7% 1.2% 2.7% 12
Slide 14: Commodities Outlook – 2nd Half of Fiscal 2017
COMMODITIES OUTLOOK – 2nd HALF OF FISCAL 2017 Product Breakdown and Contract Coverage For 2nd Half of Fiscal 2017 Dec-May FY2017 Spend by Category Coverage Outlook Beef 20% 55% Low Single Digit Deflation Produce 12% 80% Low Single Digit Inflation Dairy / Oil1 12% 60% Low Single Digit Inflation Sea
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) 11/27/2016 11/29/2015 (bps) Sales - as reported $ 1,642.5 $ 1,608.8 Earnings from continuing operations - as reported $ 79.7 $ 30.1 Interest, net - as reported 9.5 57.3 Income taxes - as reported 27.3 (5
Slide 17: Fiscal and Comparable Calendar Dates
FISCAL AND COMPARABLE CALENDAR DATES Fiscal 2016 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 - Novembe