Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q3 2021 Earnings Presentation
23 slides from Darden Restaurants's earnings presentation, Mar 25, 2021
Slide 1: Earnings Call Fiscal 2021: Third Quarter Results
EARNINGS CALL FISCAL 2021: THIRD QUARTER RESULTS MARCH 25, 2021
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: A Full-Service Restaurant Company With Back-to-Basics Philosophy
A FULL-SERVICE RESTAURANT COMPANY WITH … 1 Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. MISSION 4 Significant Scale Extensive Data & Insights Rigorous Strategic Planning Results-
Slide 4: Total Investment of $200 Million+ Since March 2020
Investing in Our People Hourly Earnings Commitment Previous Investment Highlights • $10/hour: March 29 • Paid Sick Leave • $11/hour: January 2022 • COVID-19 Emergency Pay • $12/hour: January 2023 • Benefits Premiums • Paid Time Off for COVID-19 Vaccine TOTAL INVESTMENT OF $200 MILLION+ SINCE MARCH 2
Slide 5: Ongoing Priorities
Ongoing Priorities Health & Safety Simplified Operations Technology Deployments Business Model Transformation 5
Slide 6: Health & Safety
Health & Safety Our Commitment to Each Other WELCOME BACK! JX DARDEN. The heath and safely of our guests ord team members has always been our ist priory. While our dining rooms were closed, we took great care fo continue serving you with our ToGo offerings. As we weleome you back into our dining roo
Slide 7: Simplified Operations
Simplified Operations J. DARDEN RESTAURANTS
Slide 8: Technology Deployment
Technology Deployment Curbside I’m Here Web Site Enhancements 8
Slide 9: Business Model Transformations
Business Model Transformations Adjust Cost Structure Re-Imagine Our Offerings Investments in New Restaurants Optimize Support Structure 9
Slide 10: Thank You to Our Team Members
Thank You to Our Team Members 10
Slide 11: Fiscal 2021 Third Quarter Financial Highlights
Fiscal 2021 Third Quarter Financial Highlights $1.7BILLION TOTAL SALES (26.1)% TOTAL SALES GROWTH (26.7)% SAME-RESTAURANT SALES GROWTH $236MILLION $0.98 DILUTED NET EPS FROM EBITDA1 CONTINUING OPERATIONS 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of th
Slide 12: Margin Analysis
Margin Analysis Fiscal Q3 2021 ($ millions) % of Sales vs. Q3 2020 (bps) Favorable/(Unfavorable) Sales $1,733.0 Food and Beverage $499.4 28.8% (80) Excl. Team Member Bonus Restaurant Labor $559.4 32.3% (20) $542.9 31.3% 80 Restaurant Expenses $336.8 19.4% (250) Marketing Expenses $19.2 1.1% 200 Rest
Slide 13: Mark to Market Reduced Operating Income Margin by 50 bps, Mostly Offset in Tax
Mark to Market Reduced Operating Income Margin by 50 bps, Mostly Offset in Tax Fiscal Q3 2021 Reported Mark to Market Impact ($ millions) % of Sales ($ millions) (bps) Favorable / (Unfavorable) Sales $1,733.0 G&A $78.9 4.6% ($8.8) (50) Operating Income $148.0 8.5% ($8.8) (50) Income Tax Expense $3.1
Slide 14: Third Quarter Normalized Effective Tax Rate of 12.1%
Third Quarter Normalized Effective Tax Rate of 12.1% EBT Taxes Tax Rate Reported $132.3 $3.1 2.3% Mark to Market $8.8 $7.2 Stock Option Exercises $6.8 Normalized $141.1 $17.1 12.1% 14
Slide 15: Third Quarter Segment Performance
Third Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $1,169 $511 $454 $478 $872 $188 $302 $104 FY20 Q3 FY21 Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 Q3 Segment Profit Margin1 Fine Dining Other 23.2% 24.8% 21.1% 20.5% 18.1% 15.7% 14.5% 10.5% FY20 Q3 FY21 Q3 FY20 Q3 FY
Slide 16: Strong Cash Flow
Strong Cash Flow Fiscal 2021 Free Cash Flow $ in millions YTD Q1 Q2 Q3 Net cash provided by operating activities of continuing operations $746.0 $206.7 $221.9 $317.4 Less: Purchases of land, buildings and equipment (177.3) (42.2) (66.0) (69.1) Less: Purchases of capitalized software and other assets
Slide 17: Business Update
Business Update Same-Restaurant Sales Compared to Fiscal 2019* Weeks Ended 2/28/2021 3/7/2021 3/14/2021 3/21/2021 Darden (15.9)% (13.9)% (11.1)% 5.4% Olive Garden (17.4)% (15.3)% (11.6)% 5.7% LongHorn Steakhouse (3.4)% 0.3% 3.8% 23.2% * Comparison to fiscal 2019 due to impact of pandemic on fiscal 2
Slide 18: Fiscal 2021 Fourth Quarter Outlook
Fiscal 2021 Fourth Quarter Outlook Total Sales Approximately $2.1 billion EBITDA $345 - $360 million Diluted share count ~132 million Diluted Net Earnings Per Share $1.60 to $1.70 Fiscal 2021 Annual CapEx $285 - $295 million Fiscal 2021Annual Net New Restaurants 33 18
Slide 19: Preliminary Fiscal 2022 Outlook
Preliminary Fiscal 2022 Outlook New Restaurants ~35 Capital Expenditures $350 to $400 million New Restaurants $150 - $175 million Maintenance/Refresh/Tech/Other $200 - $225 million Effective Tax Rate 12% to 13% 19
Slide 20: Additional Information
J. DARDEN RESTAURANTS Additional Information
Slide 21: Commodities Outlook – Fourth Quarter Fiscal 2021
Commodities Outlook – Fourth Quarter Fiscal 2021 Mar-May FY2021 Annual spend by category Coverage Outlook Beef 18% 85% Low single digit inflation Produce 14% 100% Low single digit inflation Dairy / Oil1 10% 75% High single digit inflation Seafood 9% 95% Low single digit inflation Chicken 7% 100% Low
Slide 22: EBITDA, Restaurant Labor, and G&A Reconciliations
EBITDA, Restaurant Labor, and G&A Reconciliations Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Reconciliation $ in millions Q3 2021 Reported Earnings from Continuing Operations $129.2 Interest, Net 15.2 Income Tax Expense 3.1 Depreciation and Amortization 88.2 EBITDA $235.
Slide 23: EBITDA Outlook to Net Earnings Reconciliation
EBITDA Outlook to Net Earnings Reconciliation Fiscal 2021 Fourth Quarter EBITDA Outlook Reconciliation $ in millions Net Earnings $211 to $223 Interest, Net 16 16 Income Tax Expense 28 31 Depreciation and Amortization 90 90 EBITDA $345 to $360 23