Darden Restaurants, Inc. · NYSE:DRI
Darden Restaurants — Q2 2023 Earnings Presentation
22 slides from Darden Restaurants's earnings presentation, Dec 16, 2022
Slide 1: Earnings Call: Fiscal 2023 Second Quarter Results
Earnings Call Fiscal 2023: Second Quarter Results December 16, 2022
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 competitive advantages
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- Orient
Slide 4: Brilliant With The Basics
Brilliant With The Basics J. DARDEN
Slide 5: Darden Brands #1 in All Categories
Darden Brands #1 in All Categories Overall Value Brand Image Food Service Atmosphere Brand Fit & Loyalty Source: Technomic, Consumer Ignite 5
Slide 6: Never Ending Pasta Bowl
Never Ending Pasta Bowl Elevates Brand Equity | Simple to Execute | Not at a Deep Discount 6
Slide 7: To Go Sales Benefit From Digital Platform
To Go Sales Benefit From Digital Platform Digital Transactions 62% of Off-Premise Sales | 10% of Total Sales 7
Slide 8: Everyone We Serve
ye (ours & Debug EVERYONE WE SERVE Cheddars Ge J DARDEN. RESTAURANTS
Slide 9: Thank You To Our Team Members
Thank You To Our Team Members 9
Slide 10: Fiscal 2023 Second Quarter Financial Highlights
Fiscal 2023 Second Quarter Financial Highlights $2.49 Billion TOTAL SALES 9.4% TOTAL SALES GROWTH 7.3% SAME-RESTAURANT SALES $1.52 DILUTED NET EPS FROM GROWTH CONTINUING OPERATIONS 10
Slide 11: Fiscal 2023 Second Quarter Financial Highlights
Fiscal 2023 Second Quarter Financial Highlights $330 Million $149 Million $100 Million EBITDA1 DIVIDENDS PAID SHARE REPURCHASES 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 11
Slide 12: Margin Analysis vs. Prior Year
Margin Analysis vs. Prior Year Fiscal Q2 2023 ($ millions) % of Sales vs Prior Year Favorable/(Unfavorable) Sales $2,486.5 Food and Beverage $818.3 32.9 % (240) Restaurant Labor $808.5 32.5 % 30 Restaurant Expenses $417.0 16.8 % 20 Marketing Expenses $31.1 1.3 % (30) Restaurant-Level EBITDA $411.6 1
Slide 13: Mark-to-Market reduced EBIT margin and Effective Tax Rate
Mark-to-Market reduced EBIT margin by ~20 bps and Effective Tax Rate by 150 bps Fiscal Q2 2023 Mark-to-Market Reported Impact ($ millions) % of Sales ($ millions) (bps) Favorable / (Unfavorable) Sales $2,486.5 G&A $90.4 3.6% ($4.4) (18) EBIT $233.2 9.4% ($4.4) (18) Income Tax Expense $25.9 1.0% $3.8
Slide 14: Margin Analysis vs. Pre-COVID
Margin Analysis vs. Pre-COVID Fiscal Q2 2023 ($ millions) % of Sales vs Pre-COVID* Favorable/(Unfavorable) Sales $2,486.5 Food and Beverage $818.3 32.9 % (460) Restaurant Labor $808.5 32.5 % 120 Restaurant Expenses $417.0 16.8 % 150 Marketing Expenses $31.1 1.3 % 200 Restaurant-Level EBITDA $411.6 1
Slide 15: Second Quarter Segment Performance
Second Quarter Segment Performance Segment Sales ($ millions) vs. Prior Year Fine Dining Other Average Weekly Sales vs. Pre-COVID Fine Dining Other 15
Slide 16: Updated Fiscal 2023 Annual Outlook
Updated Fiscal 2023 Annual Outlook SALES DEVELOPMENT MARGIN Total Sales Restaurant Openings Total Inflation: ~7% $10.3B to $10.45B 55 to 60 Commodities: 8% to 9% Same-Restaurant Sales Capital Spending Effective Tax Rate Growth $525 to $575 million ~13% 5% to 6.5% Earnings per Diluted Share $7.60 to
Slide 17: Question & Answer Session
J DARDEN RESTAURANTS Question & Answer Session
Slide 18: Additional Information
J DARDEN RESTAURANTS Additional Information
Slide 19: Second Quarter Segment Performance
Second Quarter Segment Performance Fiscal 2023 vs. Prior Year Segment Sales ($ millions) Fine Dining Other Segment Profit Margin1 Fine Dining Other 1 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales. 19
Slide 20: Commodities Outlook – Third & Fourth Quarter
Commodities Outlook – Third & Fourth Quarter December - May FY2023 Spend by category Coverage Outlook Beef 22% 50% Low single digit inflation Produce 12% 80% Mid single digit inflation Seafood 11% 85% Low single digit deflation Dairy / Oil1 10% 50% High single digit inflation Chicken 8% 90% Mid sing
Slide 21: Q2 Fiscal 2023 EBITDA Reconciliation
Q2 Fiscal 2023 EBITDA Reconciliation $ in millions Earnings from Continuing Operations $187.5 Interest, Net 19.8 Income Tax Expense 25.9 Depreciation and Amortization 96.8 EBITDA $330.0 21
Slide 22: Q2 Fiscal 2020 Non-GAAP Reconciliation
Q2 Fiscal 2020 Non-GAAP Reconciliation Q2 Fiscal 2020 Earnings Income Tax Diluted Net Net Before Expense Earnings Earnings $ in millions, except EPS Income Tax (Benefit) Per Share Reported Earnings from Continuing Operations $(6.2) $(31.6) $25.4 $0.21 Adjustments: Pension settlement charge1 $147.1 $