Darden Restaurants Reports Fourth Quarter and Annual Diluted Net Earnings Per Share; Increases Quarterly Dividend by 25 Percent
FINANCIAL DATA
Fiscal March, April and May 2009 U.S. Same-Restaurant Sales Results
Darden reported that U.S. same-restaurant sales for the fiscal months of March, April and May were as follows:
Olive Garden March April May *
----- ----- -----
Same-Restaurant Sales 1% to 2% 1% -5%
Same-Restaurant Traffic -2% to -3% -3% -8%
Pricing 4% 4% to 5% 3%
Menu-mix Flat 0% to -1% Flat
Red Lobster March April May *
----- ----- -----
Same-Restaurant Sales 0% to 1% 2% -5%
Same-Restaurant Traffic -2% to -3% -3% -9% to -10%
Pricing 2% to 3% 2% to 3% 2% to 3%
Menu-mix 0% to 1% 2% to 3% 2%
LongHorn Steakhouse March April May *
----- ----- -----
Same-Restaurant Sales -6% to -7% -7% -6%
Same-Restaurant Traffic -8% -8% to -9% -9%
Pricing 3% 3% 3%
Menu-mix -1% to -2% -1% to -2% Flat
* May results reflect a four-week fiscal month as part of a traditional 13-week fiscal quarter.
Fiscal 2010 Financial Plans "We certainly hope to see an improvement in macroeconomic conditions and full-service restaurant industry sales trends in our new fiscal year," said Clarence Otis, the Company's Chairman and CEO. "And there are reasons to believe there might be some favorable changes. However, given the current level of uncertainty, we think it's prudent to be cautious in developing our plans for the year. As a result, we're assuming that the economic and industry weakness we've experienced over the past six months will continue through all of our fiscal 2010."
"We are assuming that blended same-restaurant sales for our three large casual dining brands, Olive Garden, Red Lobster and LongHorn Steakhouse, will be between -2% and flat in fiscal year 2010," said Brad Richmond, Darden's Chief Financial Officer. "Based on these same-restaurant results and approximately 50 to 55 net new restaurant openings, total sales change is expected to be between -1% and +1% and diluted net earnings per share are expected to range from -2% to +8%. Please note that our fiscal 2009 included a 53rd week of operations. Excluding that extra week, our fiscal 2010 same-restaurant sales assumptions and plans for net new restaurant openings are expected to drive total sales growth of +1% to +3% and diluted net earnings per share growth that ranges from flat to +10%. It is also important to note that going forward, we will no longer report results and prior period comparisons that exclude integration costs and purchase accounting adjustments."
Fiscal 2009 and Fiscal 2010 Estimated Diluted Net Earnings Per Share From Continuing Operations
Diluted Net Earnings Per Share Fiscal 2009 Fiscal 2010 Estimated
------------------------------ ----------- ---------------------
52-Week Basis $2.59 $2.59 to $2.85
Impact of 53(rd) Week $0.06 N.A.
53-Week Basis (GAAP) $2.65 N.A.
Estimated Integration Costs And
Purchase Accounting Adjustments $0.10 N.A.
53-Week Non-GAAP $2.75 N.A.
Darden Restaurants, Inc., (NYSE: DRI) headquartered in Orlando, Fla., is the world's largest company-owned and operated full-service restaurant company with over $7.2 billion in annual sales and approximately 180,000 employees. Darden is recognized for a culture that rewards caring for and responding to people. Our restaurant brands -- Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52 -- reflect the rich diversity of those who dine with us. Our brands are built on deep insights into what our guests want. For more information, please visit www.darden.com. Forward-looking statements in this news release are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements could address future economic performance, restaurant openings, various financial parameters, or similar matters. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. The most significant of these uncertainties are described in Darden's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). These risks and uncertainties include the impact of intense competition, changing economic or business conditions, the price and availability of food, ingredients and utilities, supply interruptions, labor and insurance costs, the loss of or difficulties in recruiting key personnel, information technology failures, increased advertising and marketing costs, higher-than-anticipated costs to open or close restaurants, litigation, unfavorable publicity, a lack of suitable locations, government regulations, a failure to achieve growth objectives through the opening of new restaurants or the development or acquisition of new dining concepts, weather conditions, risks associated with Darden's plans to expand Darden's newer concepts Bahama Breeze and Seasons 52, our ability to combine and integrate the business of RARE Hospitality International, Inc., achieve synergies and develop new LongHorn Steakhouse and The Capital Grille restaurants, risks associated with incurring substantial additional debt, a failure of our internal controls over financial reporting, disruptions in the financial markets, possible impairment of goodwill or other assets, volatility in the market value of our derivatives and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.
In addition to U.S. generally accepted accounting principles (GAAP) reporting, as previously disclosed herein, Darden has presented its adjusted fourth quarter diluted net earnings per share results from continuing operations and consolidated results from operations for fiscal 2009, which exclude the impact of integration costs and purchase accounting adjustments and an additional 53rd week of operations. Darden believes this adjusted information is useful for comparison to our consolidated results from continuing operations for the fourth quarter of fiscal 2008 and fiscal year ended May 25, 2008, and has therefore chosen to provide this information to investors. This non-GAAP earnings information should be viewed in addition to, and not in lieu of, our diluted net earnings per share results as calculated in accordance with GAAP.
DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
5/31/09 5/25/08
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661 Red Lobster USA 651
29 Red Lobster Canada 29
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690 Total Red Lobster 680
685 Olive Garden USA 647
6 Olive Garden Canada 6
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691 Total Olive Garden 653
321 LongHorn Steakhouse 305
37 The Capital Grille 32
24 Bahama Breeze 23
8 Seasons 52 7
2 Other 2
- -
1,773 Total Restaurants 1,702
DARDEN RESTAURANTS, INC.
FOURTH QUARTER FY 2009 FINANCIAL HIGHLIGHTS
(In millions, except per share data)
(Unaudited)
14 Weeks 13 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
5/31/2009 5/25/2008 5/31/2009 5/25/2008
--------- --------- --------- ---------
Sales $1,975.5 $1,825.5 $7,217.5 $6,626.5
Earnings from
continuing
operations $122.8 $103.3 $371.8 $369.5
Earnings
(losses)
from
discontinued
operations $0.2 ($1.5) $0.4 $7.7
Net earnings $123.0 $101.8 $372.2 $377.2
Basic net
earnings per
share:
Earnings from
continuing
operations $0.89 $0.74 $2.71 $2.63
Earnings
(losses)
from
discontinued
operations -- ($0.01) -- $0.06
Net earnings $0.89 $0.73 $2.71 $2.69
Diluted net
earnings per
share:
Earnings from
continuing
operations $0.87 $0.72 $2.65 $2.55
Earnings
(losses)
from
discontinued
operations -- ($0.01) -- $0.05
Net earnings $0.87 $0.71 $2.65 $2.60
Average number
of common
shares
outstanding:
Basic 137.7 139.1 137.4 140.4
Diluted 140.8 143.2 140.4 145.1
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except per share data)
(Unaudited)
14 Weeks 13 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
5/31/09 5/25/08 5/31/09 5/25/08
------- ------- ------- -------
Sales $1,975.5 $1,825.5 $7,217.5 $6,626.5
Costs and expenses:
Cost of sales:
Food and beverage 588.7 559.7 2,200.3 1,996.2
Restaurant labor 632.9 583.2 2,308.2 2,124.7
Restaurant expenses 286.9 275.8 1,128.4 1,017.8
------- ------- ------- -------
Total cost of
sales (1) $1,508.5 $1,418.7 $5,636.9 $5,138.7
Selling, general and
administrative 193.3 165.5 665.6 641.7
Depreciation and
amortization 72.6 68.1 283.1 245.7
Interest, net 26.7 26.6 107.4 85.7
Asset impairment, net 7.3 - 12.0 -
------- ------- ------- -------
Total costs and
expenses $1,808.4 $1,678.9 $6,705.0 $6,111.8
Earnings before
income taxes 167.1 146.6 512.5 514.7
Income taxes (44.3) (43.3) (140.7) (145.2)
------- ------- ------- -------
Earnings from
continuing
operations $122.8 $103.3 $371.8 $369.5
Earnings (losses)
from discontinued
operations, net of
tax expense (benefit)
of $0.1, ($1.8), $0.2,
and $3.0, Respectively 0.2 (1.5) 0.4 7.7
------ ------ ------ ------
Net earnings $123.0 $101.8 $372.2 $377.2
====== ====== ====== ======
Basic net earnings per
share:
Earnings from
continuing
operations $0.89 $0.74 $2.71 $2.63
Earnings (losses)
from discontinued
operations -- ($0.01) -- $0.06
Net earnings $0.89 $0.73 $2.71 $2.69
Diluted net earnings per
share:
Earnings from continuing
operations $0.87 $0.72 $2.65 $2.55
Earnings (losses) from
discontinued operations -- ($0.01) -- $0.05
Net earnings $0.87 $0.71 $2.65 $2.60
Average number of common
shares outstanding:
Basic 137.7 139.1 137.4 140.4
Diluted 140.8 143.2 140.4 145.1
(1) Excludes restaurant
depreciation and
amortization as follows: 68.6 63.8 267.1 230.0
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
5/31/09 5/25/08
------- -------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $62.9 $43.2
Receivables, net 37.1 69.5
Inventories 247.0 216.7
Prepaid income taxes 53.2 4.9
Prepaid expenses and other current assets 44.2 41.8
Deferred income taxes 110.4 91.8
-------- --------
Total current assets $554.8 $467.9
Land, buildings and equipment, net 3,306.7 3,066.0
Goodwill 518.7 519.9
Trademarks 454.4 455.0
Other assets 190.6 221.8
-------- --------
Total assets $5,025.2 $4,730.6
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $237.0 $245.1
Short-term debt 150.0 178.4
Accrued payroll 138.3 129.3
Accrued income taxes -- 2.4
Other accrued taxes 60.2 55.4
Unearned revenues 138.3 160.5
Other current liabilities 372.3 365.1
-------- --------
Total current liabilities $1,096.1 $1,136.2
Long-term debt, less current portion 1,632.3 1,634.3
Deferred income taxes 297.0 197.6
Deferred rent 154.6 139.0
Obligations under capital leases, net
of current installments 58.9 59.9
Other liabilities 180.3 154.5
-------- --------
Total liabilities $3,419.2 $3,321.5
======== ========
Stockholders' equity:
Common stock and surplus $2,183.1 $2,074.9
Retained earnings 2,357.4 2,096.0
Treasury stock (2,864.2) (2,724.0)
Accumulated other comprehensive income (loss) (57.2) (20.7)
Unearned compensation (13.0) (17.0)
Officer notes receivable (0.1) (0.1)
-------- --------
Total stockholders' equity $1,606.0 $1,409.1
-------- --------
Total liabilities and stockholders' equity $5,025.2 $4,730.6
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SOURCE Darden Restaurants Inc.: Financial
