EXHIBIT 99.1


dardenlogoa20.jpg
Darden Restaurants Reports Fiscal 2018 Third Quarter Results
And Increases Financial Outlook For The Full Fiscal Year
 
ORLANDO, Fla., March 22, 2018 /PRNewswire/ -- Darden Restaurants, Inc., (NYSE:DRI) today reported its financial results for the third quarter ended February 25, 2018.
 
Third Quarter 2018 Financial Highlights, Comparisons Versus Same Fiscal Quarter Last Year
Total sales increased 13.3% to $2.13 billion, including 11.3% growth from the addition of 154 Cheddar's Scratch Kitchen restaurants and 34 other net new restaurants
Blended same-restaurant sales from Darden's legacy brands increased 2.0%
 
+2.2% for Olive Garden
 
+2.8% for The Capital Grille
 
+1.9% for Yard House
 
+2.0% for LongHorn Steakhouse
 
+2.7% for Eddie V’s
 
-0.2% for Seasons 52
 
 
 
 
 
+0.2% for Bahama Breeze
Same-restaurant sales for Cheddar's Scratch Kitchen were -2.2%
Reported diluted net earnings per share from continuing operations increased 31.8% to $1.74
Adjusted diluted net earnings per share from continuing operations increased 29.5% to $1.71*
Issued $300 million of 30-year debt at 4.55%, which replaced $311 million of higher-interest (6.8% and 6.0%) long-dated bonds tendered in the quarter
The Company repurchased approximately $19 million of its outstanding common stock
* See "Non-GAAP Information" below for more details

“Our solid performance this quarter is a result of our focus on executing our back-to-basics operating philosophy to deliver memorable guest experiences," said CEO Gene Lee. “Our strategy continues to work, creating an environment that allowed us to invest in our people and our business, strengthen our balance sheet and return nearly $100 million to shareholders during the quarter.”

Adjustments to Earnings Per Share*
Reported diluted net earnings per share from continuing operations for the third quarter were $0.03 higher than adjusted diluted net earnings per share from continuing operations due to the following performance adjustments:
($0.54) for debt retirement costs;
+$0.61 related to the net benefit of deferred tax revaluation; and
($0.04) for Cheddar's integration costs
* See "Non-GAAP Information" below for more details

Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses.
 
 
Q3 Sales
 
 
 
Q3 Segment Profit
 
 
($ in millions)
 
2018
 
2017
 
% Change

 
2018
 
2017
 
% Change

Consolidated Darden
 
$2,128.4
 
$1,878.7
 
13.3
%
 
 
 
 
 
 
Olive Garden
 
$1,073.2
 
$1,035.1
 
3.7
%
 
$226.7
 
$217.7
 
4.1
%
LongHorn Steakhouse
 
$452.8
 
$434.3
 
4.3
%
 
$89.9
 
$85.0
 
5.8
%
Fine Dining
 
$164.4
 
$153.7
 
7.0
%
 
$40.3
 
$36.4
 
10.7
%
Other Business
 
$438.0
 
$255.6
 
71.4
%
 
$65.5
 
$44.8
 
46.2
%

1


 
 
YTD Sales
 
 
 
YTD Segment Profit
 
 
($ in millions)
 
2018
 
2017
 
% Change

 
2018
 
2017
 
% Change

Consolidated Darden
 
$5,946.0
 
$5,235.6
 
13.6
%
 
 
 
 
 
 
Olive Garden
 
$3,014.6
 
$2,911.3
 
3.5
%
 
$593.4
 
$557.5
 
6.4
%
LongHorn Steakhouse
 
$1,245.0
 
$1,185.6
 
5.0
%
 
$214.0
 
$197.5
 
8.4
%
Fine Dining
 
$427.1
 
$396.6
 
7.7
%
 
$86.6
 
$76.7
 
12.9
%
Other Business
 
$1,259.3
 
$742.1
 
69.7
%
 
$182.8
 
$124.1
 
47.3
%

U.S. Same-Restaurant Sales Results
 
Q3
YTD
 
Olive
Garden
LongHorn Steakhouse
Olive
Garden
LongHorn Steakhouse
Same-Restaurant Sales
2.2%
2.0%
2.4%
2.8%
Same-Restaurant Traffic
0.1%
(0.1)%
0.3%
0.3%
Pricing
1.7%
0.7%
1.6%
1.0%
Menu-mix
0.4%
1.4%
0.5%
1.5%
Note: The Company estimates that more severe winter weather negatively impacted same-restaurant sales by -70 basis points in the third quarter of fiscal 2018 compared to the same fiscal quarter last year.

Dividend Declared
Darden's Board of Directors declared a regular quarterly cash dividend of $0.63 per share on the Company's outstanding common stock. The dividend is payable on May 1, 2018 to shareholders of record at the close of business on April 10, 2018.

Share Repurchase Program
During the quarter, the Company repurchased approximately 0.2 million shares of its common stock for a total cost of approximately $19 million. As of the end of the fiscal third quarter, the Company had approximately $262 million remaining under the current $500 million repurchase authorization.

Updated Fiscal 2018 Financial Outlook
The Company increased its financial outlook for Fiscal 2018 based on year-to-date results and its expected performance in the fourth quarter.
 
Current (03/22/18)
Prior (01/08/18)
Same-restaurant sales growth
Approx. 2%
Approx. 2%
New restaurant openings
Approx. 40
Approx. 40
Total sales growth
Approx. 13%
Approx. 13%
Effective tax rate
16.0% to 16.5%
 Approx. 18%
Adjusted diluted net earnings per share from continuing operations*
$4.75 to $4.80
$4.70 to $4.78
Diluted average common shares outstanding for the year
Approx. 126M
Approx. 126M
* See "Non-GAAP Information" below for more details


Investor Conference Call
The Company will host a conference call and slide presentation on Thursday, March 22 at 8:30 am ET to review its recent financial performance. To listen to the call live, please go to https://www.webcaster4.com/Webcast/Page/1007/24792 at least fifteen minutes early to register, download, and install any necessary audio software. Prior to the call, a slide presentation will be posted on the Investor Relations section of our website at: www.darden.com. For those who cannot access the Internet, please dial 1-800-857-9760 and enter passcode 1227145. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.


2


About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's. Our people equal our success, and we are proud to employ more than 175,000 team members in over 1,700 restaurants. Together, we create memorable experiences for 380 million guests each year in communities across North America. For more information, please visit www.darden.com.

Information about Forward-Looking Statements
Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of the date on which such statements are first made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden's Form 10-K, Form 10-Q and Form 8-K reports. These risks and uncertainties include the ability to successfully integrate Cheddar's Scratch Kitchen operations into our business, technology failures including failure to maintain a secure cyber network, food safety and food-borne illness concerns, litigation, unfavorable publicity, risks relating to public policy changes and federal, state and local regulation of our business, long-term and non-cancelable property leases, labor and insurance costs, failure to execute a business continuity plan following a disaster, health concerns including food-related pandemics or virus outbreaks, intense competition, failure to drive profitable sales growth, a lack of availability of suitable locations for new restaurants, higher-than-anticipated costs to open, close, relocate or remodel restaurants, an inability or failure to manage the accelerated impact of social media, a failure to execute innovative marketing tactics, a failure to develop and recruit effective leaders, a failure to address cost pressures, shortages or interruptions in the delivery of food and other products and services, adverse weather conditions and natural disasters, volatility in the market value of derivatives, economic factors specific to the restaurant industry and general macroeconomic factors including interest rates, disruptions in the financial markets, risks of doing business with franchisees, licensees and vendors in foreign markets, failure to protect our intellectual property, impairment in the carrying value of our goodwill or other intangible assets, failure of our internal controls over financial reporting and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.

Non-GAAP Information
The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”), such as adjusted diluted net earnings per share from continuing operations. The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. The Company believes that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of the Company’s businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP measures are included in this release.


(Analysts) Kevin Kalicak, (407) 245-5870; (Media) Rich Jeffers, (407) 245-4189


3


Fiscal Q3 Reported to Adjusted Earnings Reconciliation
 
Q3 2018
 
Q3 2017
$ in millions, except EPS
Earnings Before Income Tax
Income Tax Expense (Benefit)
Net Earnings
Diluted Net Earnings Per Share
 
Earnings Before Income Tax
Income Tax Expense
Net Earnings
Diluted Net Earnings Per Share
Reported Earnings from Continuing Operations
$116.0
$(102.5)
$218.5
$1.74
 
$220.2
$53.9
$166.3
$1.32
% Change vs Prior Year
 
 
 
31.8
%
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
Debt retirement costs
102.2

33.6

68.6

0.54

 




Net benefit of deferred tax revaluation

77.3

(77.3
)
(0.61
)
 




Cheddar's integration expenses
6.7

1.4

5.3

0.04

 




Adjusted Earnings from Continuing Operations
$224.9
$9.8
$215.1
$1.71
 
$220.2
$53.9
$166.3
$1.32
% Change vs Prior Year
 
 
 
29.5
%
 
 
 
 
 

Reconciliation of Fiscal 2018 Reported to Adjusted Earnings Outlook
 
Current (03/22/18)
Prior (01/08/18)
Reported diluted net earnings per share from continuing operations
$4.73
to
$4.78
$5.17
to
$5.27
Cheddar's integration expense
0.14

 
0.14

0.13

 
0.10

Debt retirement costs
0.81

 
0.81

 
 
 
Income tax expense from Cheddar's integration and Interest expense
(0.32
)
 
(0.32
)
(0.04
)
 
(0.03
)
Net benefit of deferred tax revaluation
(0.61
)
 
(0.61
)
(0.56
)
 
(0.56
)
Adjusted diluted net earnings per share from continuing operations
$4.75
to
$4.80
$4.70
to
$4.78
 
 
 
 
 
 
 


4








DARDEN RESTAURANTS, INC.
NUMBER OF COMPANY-OWNED RESTAURANTS
 
2/25/18

2/26/17

Olive Garden1
853

843

LongHorn Steakhouse
499

488

Cheddar's Scratch Kitchen
154


Yard House
71

65

The Capital Grille
57

56

Bahama Breeze
39

36

Seasons 52
41

40

Eddie V's
19

17

Darden Continuing Operations
1,733

1,545

1Includes six locations in Canada for all periods presented.
                
            


5



DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except per share data)
(Unaudited)

 
Three Months Ended
 
Nine Months Ended
 
2/25/2018
 
2/26/2017
 
2/25/2018
 
2/26/2017
Sales
$
2,128.4

 
$
1,878.7

 
$
5,946.0

 
$
5,235.6

Costs and expenses:
 
 
 
 
 
 
 
Food and beverage
603.3

 
541.5

 
1,701.4

 
1,512.8

Restaurant labor
683.0

 
578.3

 
1,929.6

 
1,662.2

Restaurant expenses
360.8

 
320.4

 
1,055.2

 
929.4

Marketing expenses
58.9

 
54.6

 
183.0

 
175.4

General and administrative expenses
110.1

 
87.2

 
307.0

 
254.4

Depreciation and amortization
79.2

 
67.9

 
234.1

 
202.5

Impairments and disposal of assets, net
(0.3
)
 
(0.7
)
 
(1.1
)
 
(8.4
)
Total operating costs and expenses
$
1,895.0

 
$
1,649.2

 
$
5,409.2

 
$
4,728.3

Operating income
233.4

 
229.5

 
536.8

 
507.3

Interest, net
117.4

 
9.3

 
147.9

 
28.7

Earnings before income taxes
116.0

 
220.2

 
388.9

 
478.6

Income tax (benefit) expense
(102.5
)
 
53.9

 
(39.5
)
 
121.5

Earnings from continuing operations
$
218.5

 
$
166.3

 
$
428.4

 
$
357.1

Losses from discontinued operations, net of tax benefit of $(0.5), $(0.9), $(4.0) and $(2.2), respectively
(0.7
)
 
(0.7
)
 
(6.9
)
 
(1.8
)
Net earnings
$
217.8

 
$
165.6

 
$
421.5

 
$
355.3

 
 
 
 
 
 
 
 
Basic net earnings per share:
 
 
 
 
 
 
 
Earnings from continuing operations
$
1.77

 
$
1.34

 
$
3.45

 
$
2.88

Losses from discontinued operations
(0.01
)
 
(0.01
)
 
(0.06
)
 
(0.02
)
Net earnings
$
1.76

 
$
1.33

 
$
3.39

 
$
2.86

Diluted net earnings per share:
 
 
 
 
 
 
 
Earnings from continuing operations
$
1.74

 
$
1.32

 
$
3.40

 
$
2.84

Losses from discontinued operations
(0.01
)
 

 
(0.06
)
 
(0.02
)
Net earnings
$
1.73

 
$
1.32

 
$
3.34

 
$
2.82

Average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
123.6

 
124.1

 
124.2

 
124.1

Diluted
125.7

 
125.9

 
126.1

 
125.8







6




DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
 
 
2/25/2018
 
5/28/2017
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
146.8

 
$
233.1

Receivables, net
50.6

 
75.9

Inventories
208.0

 
178.9

Prepaid income taxes
62.7

 
6.2

Prepaid expenses and other current assets
90.4

 
80.6

Assets held for sale
11.1

 
13.2

Total current assets
$
569.6

 
$
587.9

Land, buildings and equipment, net
2,404.8

 
2,272.3

Goodwill
1,182.0

 
1,201.7

Trademarks
950.2

 
950.2

Other assets
348.1

 
280.2

Total assets
$
5,454.7

 
$
5,292.3

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
291.5

 
$
249.5

Short-term debt
50.6

 

Accrued payroll
157.3

 
149.1

Accrued income taxes

 
1.9

Other accrued taxes
53.1

 
54.2

Unearned revenues
456.6

 
388.6

Other current liabilities
458.4

 
445.9

Total current liabilities
$
1,467.5

 
$
1,289.2

Long-term debt
926.4

 
936.6

Deferred income taxes
106.4

 
145.6

Deferred rent
310.6

 
282.8

Other liabilities
518.9

 
536.4

Total liabilities
$
3,329.8

 
$
3,190.6

Stockholders’ equity:
 
 
 
Common stock and surplus
$
1,628.4

 
$
1,614.6

Retained earnings
586.4

 
560.1

Treasury stock
(7.8
)
 
(7.8
)
Accumulated other comprehensive income (loss)
(80.4
)
 
(62.9
)
Unearned compensation
(1.7
)
 
(2.3
)
Total stockholders’ equity
$
2,124.9

 
$
2,101.7

Total liabilities and stockholders’ equity
$
5,454.7

 
$
5,292.3



7



DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Nine Months Ended
 
2/25/2018
 
2/26/2017
Cash flows—operating activities
 
 
 
Net earnings
$
421.5

 
$
355.3

Losses from discontinued operations, net of tax
6.9

 
1.8

Adjustments to reconcile net earnings from continuing operations to cash flows:
 
 
 
Depreciation and amortization
234.1

 
202.5

Stock-based compensation expense
32.2

 
27.3

Loss on extinguishment of debt
102.2

 

Change in current assets and liabilities and other, net
(45.9
)
 
114.4

Net cash provided by operating activities of continuing operations
$
751.0

 
$
701.3

Cash flows—investing activities
 
 
 
Purchases of land, buildings and equipment
(294.9
)
 
(214.0
)
Proceeds from disposal of land, buildings and equipment
3.3

 
8.2

Cash used in business acquisitions, net of cash acquired
(40.4
)
 

Purchases of capitalized software and changes in other assets, net
(10.3
)
 
(14.5
)
Net cash used in investing activities of continuing operations
$
(342.3
)
 
$
(220.3
)
Cash flows—financing activities
 
 
 
Proceeds from issuance of common stock
35.5

 
62.5

Income tax benefits credited to equity

 
12.1

Dividends paid
(234.9
)
 
(208.9
)
Repurchases of common stock
(207.6
)
 
(214.9
)
Proceeds from issuance of short-term debt, net
50.6

 

Repayment of long-term debt
(408.2
)
 

Proceeds from issuance of long-term debt
300.0

 

Principal payments on capital and financing leases
(3.9
)
 
(3.0
)
Other, net
(11.5
)
 
0.8

Net cash used in financing activities of continuing operations
$
(480.0
)
 
$
(351.4
)
Cash flows—discontinued operations
 
 
 
Net cash used in operating activities of discontinued operations
(15.2
)
 
(13.8
)
Net cash provided by investing activities of discontinued operations
0.2

 
0.8

Net cash used in discontinued operations
$
(15.0
)
 
$
(13.0
)
 
 
 
 
Increase (decrease) in cash and cash equivalents
(86.3
)
 
116.6

Cash and cash equivalents - beginning of period
233.1

 
274.8

Cash and cash equivalents - end of period
$
146.8

 
$
391.4



8

View differences made from one to another to evaluate Darden Restaurants Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Darden Restaurants Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

FREE Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue for FREE

Log in with your credentials

or    

Forgot your details?

Create Account