Slide 1: Earnings Call Fiscal 2020: Q2 Results
EARNINGS CALL FISCAL 2020: Q2 RESULTS December 19, 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 Second Quarter Highlights
Darden Second Quarter Highlights SALES ($B) SAME-RESTAURANT SALES GROWTH 2.8% 2.0% 1.6% $2.13 $2.25 $2.13 $2.23 $2.06 $2.13 $1.97 $2.06 0.9% FY18 FY19 FY18 FY19 FY19 FY20 FY19 FY20 Q3 Q4 Q1 Q2 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 ADJUSTED EPS1 $1.71 $1.80 $1.76 $1.39 $1.34 $1.38 $1.12 $0.92 FY18 FY19 FY1
Slide 4: Second Quarter Brand Highlights
Second Quarter Brand Highlights 2.6% 1.5% TOTAL SALES GROWTH SAME-RESTAURANT SALES GROWTH 9 ~120 BPS SAME-RESTAURANT SALES NET NEW RESTAURANTS INDUSTRY VS. LY OUTPERFORMANCE1 1 Industry excluding Darden brands, specifically Olive Garden and LongHorn Steakhouse. 4
Slide 5: Second Quarter Brand Highlights
Second Quarter Brand Highlights 8.4% 6.7% TOTAL SALES GROWTH SAME-RESTAURANT SALES GROWTH 8 ~640 BPS SAME-RESTAURANT SALES NET NEW RESTAURANTS INDUSTRY VS. LY OUTPERFORMANCE1 1 Industry excluding Darden brands, specifically Olive Garden and LongHorn Steakhouse. 5
Slide 6: Second Quarter Brand Highlights
Second Quarter Brand Highlights 4.2% -1.2% SAME-RESTAURANT SALES TOTAL SALES GROWTH GROWTH 6
Slide 7: Darden Restaurants
SE DARDEN RESTAURANTS
Slide 8: Serving with Purpose: Darden Harvest
Serving with Purpose Darden Harvest Each day we “harvest” surplus, wholesome food… Ensure the quality and safety of the food donated… Food is then served at food banks and shelters. 115 96 MILLION MILLION POUNDS MEALS Food donated since inception Donated since inception 8
Slide 9: Thank you to our 185,000 Team Members!
Thank you to our 185,000 Team Members! 9
Slide 10: Financial Discussion
SE DARDEN RESTAURANTS Financial Discussion
Slide 11: Darden Second Quarter Highlights
Darden Second Quarter Highlights 4.2% 2.0% SAME-RESTAURANT SALES $1.12 ADJUSTED DILUTED NET EPS FROM TOTAL SALES GROWTH GROWTH CONTINUING OPERATIONS1 21.7% ADJUSTED DILUTED NET EPS $108 MILLION $136MILLION GROWTH VS LAST YEAR DIVIDENDS PAID SHARE REPURCHASES 1 Values adjusted for special items. A re
Slide 12: Margin Analysis
Margin Analysis As Reported As Adjusted Q2 2020 Q2 2020 Q2 2020 vs. Q2 2019 (bps) ($ millions) ($ millions) % of Sales Favorable/(Unfavorable) Sales $2,056.4 $2,056.4 Food and beverage $583.0 $583.0 28.4% 20 Restaurant labor $692.3 $692.3 33.7% (10) Restaurant expenses $375.6 $375.6 18.3% 0 Marketin
Slide 13: Second Quarter Restaurant Labor % of Sales
Second Quarter Restaurant Labor % of Sales 1.3% 33.6% 33.7% 0.7% 0.5% Fiscal 2020 Inflation Price Leverage Mix/Productivity Fiscal 2019 Green is a favorable variance to prior year, red is unfavorable Values may not foot due to rounding 13
Slide 14: Second Quarter Segment Performance
Second Quarter Segment Performance Segment Sales ($ millions) Fine Dining Other $998 $1,024 $413 $447 $431 $416 $147 $155 FY19 Q2 FY20 Q2 FY19 Q2 FY20 Q2 FY19 Q2 FY20 Q2 FY19 Q2 FY20 Q2 Segment Profit Margin1 Fine Dining Other 18.4% 18.6% 19.7% 19.6% 16.3% 16.1% 12.3% 11.1% FY19 Q2 FY20 Q2 FY19 Q2 F
Slide 15: Reaffirming Fiscal 2020 Financial Outlook
Reaffirming Fiscal 2020 Financial Outlook SALES MARGIN Total Sales Growth1 Total Inflation: ~2.5% 5.3% to 6.3% Commodities: 1% to 2% Labor: 3.5% to 4.5% Same-Restaurant Sales Growth Effective Tax Rate 1% to 2% 10% to 11% Restaurant Openings Lease Accounting EPS ~50 Gross, ~44 Net Impact -$0.05 Capit
Slide 16: Additional Information
SE DARDEN RESTAURANTS Additional Information
Slide 17: Commodities Outlook – Back Half Fiscal 2020
Commodities Outlook – Back Half Fiscal 2020 Dec-May FY2020 Annual Spend by Category Coverage Outlook Beef 19% 80% Low Single Digit Inflation Produce 13% 80% Low Single Digit Inflation Dairy / Oil1 10% 20% Low Single Digit Inflation Seafood 10% 90% Flat Chicken 7% 70% Low Single Digit Inflation Wheat
Slide 18: Reported to Adjusted Earnings Reconciliations
Reported to Adjusted Earnings Reconciliations Fiscal 2018 Q3 2018 Q4 2018 Earnings Income Earnings Income Before Tax Diluted Net Before Tax Diluted Net Income Expense Net Earnings Income Expense Net Earnings $ in millions, except EPS Tax (Benefit) Earnings Per Share Tax (Benefit) Earnings Per Share
Slide 19: Reconciliation of Adjusted Earnings Margin
Reconciliation of Adjusted Earnings Margin Quarter Ended Change (in millions) 11/24/2019 11/25/2018 (bps) Sales - as reported $ 2,056.4 $ 1,973.4 Earnings from continuing operations - as reported $ 25.4 $ 115.9 Adjustments 153.3 (1) - Income tax impacts of adjustments (40.3) - Adjusted earnings from