Darden Restaurants Inc (DRI) SEC Filing 8-K Material Event for the period ending Thursday, September 23, 2021

Darden Restaurants Inc

CIK: 940944 Ticker: DRI
Darden Restaurants Reports Fiscal 2022 First Quarter Results;
Declares Quarterly Dividend;
    Announces Additional $750 Million Share Repurchase Authorization;
And Increases Fiscal 2022 Outlook

ORLANDO, Fla., September 23, 2021 /PRNewswire/ -- Darden Restaurants, Inc., (NYSE:DRI) today reported its financial results for the first quarter ended August 29, 2021.

First Quarter 2022 Financial Highlights
Total sales increased 51% from last year to $2.31 billion driven by a blended same-restaurant sales increase of 47.5% and the addition of 34 net new restaurants
Same-restaurant sales:
Consolidated Darden47.5%
Olive Garden37.1%
LongHorn Steakhouse47.0%
Fine Dining84.6%
Other Business65.8%
Reported diluted net earnings per share from continuing operations was $1.76 as compared to reported diluted net earnings per share from continuing operations of $0.28 last year and adjusted diluted net earnings per share from continuing operations of $0.56 last year1
Reported net earnings from continuing operations were $232 million
EBITDA of $370 million1
The Company repurchased approximately $186 million of its outstanding common stock
1 See the "Non-GAAP Information" below for more details.

"Our restaurant teams continued to operate effectively in a challenging environment, and I am proud of their focus and ability to deliver another quarter of strong sales and profitability,” said Chairman and CEO Gene Lee. “Regardless of the operating environment, our unwavering commitment to our strategy ensures we stay focused on what we do best: providing exceptional guest experiences.”

Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses.
Q1 SalesQ1 Segment Profit
($ in millions)202220212020202220212020
Consolidated Darden$2,306.0$1,527.4$2,133.9
Olive Garden$1,090.4$788.2$1,090.2$253.3$173.8$228.9
LongHorn Steakhouse$567.1$376.8$450.2$107.5$57.0$74.5
Fine Dining$168.8$82.6$136.1$33.5$10.2$20.3
Other Business$479.7$279.8$457.4$84.8$35.4$64.4

Average weekly sales by segment:
Q1 Average Weekly Sales
Consolidated Darden$96,170$65,029$91,757
Olive Garden$95,577$69,628$97,003
LongHorn Steakhouse$81,753$55,559$67,635
Fine Dining$148,372$79,223$131,757
Other Business$106,886$64,589$106,631

Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend of $1.10 per share on the Company's outstanding common stock. The dividend is payable on November 1, 2021 to shareholders of record at the close of business on October 8, 2021.

Share Repurchase Program
During the quarter, the Company repurchased approximately 1.3 million shares of its common stock for a total cost of approximately $186 million. As of the end of the first quarter, the Company had approximately $277 million remaining under the current $500 million repurchase authorization. In addition, yesterday, Darden's Board of Directors authorized the Company to repurchase an additional $750 million of its outstanding common stock. This brings the total remaining repurchase authorization to approximately $1 billion.

Updated Fiscal 2022 Financial Outlook
The Company increased its financial outlook for fiscal 2022 based on year-to-date results and its expected performance for the remainder of the year, assuming no significant business interruptions related to COVID-19.
Total sales of approximately $9.4 to $9.6 billion
Total sales growth vs. Pre-COVID1 of 7% to 9%
Same-restaurant sales vs. fiscal 2021 of 27% to 30%
Approximately 35 to 40 new restaurant openings
Total capital spending of $375 to $425 million
Total inflation of approximately 4%
EBITDA between $1.54 to $1.60 billion2
Effective tax rate of 13% to 14%
Diluted net earnings per share from continuing operations of $7.25 to $7.60
Approximately 131 million weighted average diluted shares outstanding
1 Comparison to twelve months ended Q3 fiscal 2020 due to impact of pandemic.
2 See the "Non-GAAP Information" below for more details.

Investor Conference Call
The Company will host a conference call and slide presentation on Thursday, September 23 at 8:30 am ET to review its recent financial performance. To listen to the call live, please go to 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: For those who cannot access the Internet, please dial 1-800-263-0877 and enter passcode 2874518. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.

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. For more information, please visit

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 impacts of the novel coronavirus (COVID-19) pandemic on our business and the response of governments and of our Company to the outbreak, health concerns including food-related pandemics or outbreaks of flu or other viruses, food safety and food-borne illness concerns, the inability to hire, train, reward and retain restaurant team members, a failure to develop and recruit effective leaders, labor and insurance costs, technology failures including failure to maintain a secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems, risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to manage the accelerated impact of social media, a failure to execute innovative marketing tactics, a failure to address cost pressures, economic factors specific to the restaurant industry and general macroeconomic factors including interest rates, climate change, adverse weather conditions and natural disasters, long-term and non-cancelable property leases, failure to execute a business continuity plan following a disaster, shortages or interruptions in the delivery of food and other products and services, 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, risks of doing business with franchisees, licensees and vendors in foreign markets, volatility in the market value of derivatives, volatility leading to the inability to hedge equity compensation market exposure, failure to protect our intellectual property, litigation, unfavorable publicity, disruptions in the financial markets, impairment in the carrying value of our goodwill or other intangible assets, changes in tax laws or unanticipated tax liabilities, 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 and EBITDA - earnings before interest, taxes, depreciation and amortization. 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


Reported to Adjusted Earnings Reconciliation
Q1 2021
$ in millions, except EPSEarnings Before Income TaxIncome Tax Expense (Benefit)Net EarningsDiluted Net Earnings Per Share
Reported Earnings from Continuing Operations$32.5$(4.8)$37.3$0.28
Corporate restructuring1
Adjusted Earnings from Continuing Operations$80.3$7.2$73.1$0.56
1Includes cash expenses of approximately $38 million, primarily related to severance and benefits, which will be paid over an eighteen month period, and non-cash expenses of approximately $10 million related to acceleration of equity-settled awards and expense associated with the postretirement benefit plan.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Reconciliation
$ in millionsQ1 2022
Reported Earnings from Continuing Operations$232
Interest, Net16
Income Tax Expense33
Depreciation and Amortization89

Fiscal 2022 EBITDA Outlook Reconciliation
$ in millions
Net Earnings$950to$995
Interest, Net65 65
Income Tax Expense150 165
Depreciation and Amortization375 375

Olive Garden877 871 
LongHorn Steakhouse535 524 
Cheddar's Scratch Kitchen170 165 
Yard House82 80 
The Capital Grille61 58 
Seasons 5244 43 
Bahama Breeze42 41 
Eddie V's27 23 
The Capital Burger
1,841 1,807 


(In millions, except per share data)

 Three Months Ended
Sales$2,306.0 $1,527.4 
Costs and expenses:
Food and beverage685.4 434.5 
Restaurant labor736.0 500.7 
Restaurant expenses378.1 290.9 
Marketing expenses23.9 28.8 
General and administrative expenses112.8 128.3 
Depreciation and amortization89.0 87.6 
Total operating costs and expenses$2,025.2 $1,470.8 
Operating income280.8 56.6 
Interest, net15.6 16.6 
Other (income) expense, net0.2 7.5 
Earnings before income taxes265.0 32.5 
Income tax expense (benefit)33.3 (4.8)
Earnings from continuing operations$231.7 $37.3 
Losses from discontinued operations, net of tax benefit of $0.5 and $0.9, respectively
Net earnings$230.9 $36.1 
Basic net earnings per share:
Earnings from continuing operations$1.78 $0.29 
Losses from discontinued operations(0.01)(0.01)
Net earnings$1.77 $0.28 
Diluted net earnings per share:
Earnings from continuing operations$1.76 $0.28 
Losses from discontinued operations(0.01)— 
Net earnings$1.75 $0.28 
Average number of common shares outstanding:
Basic130.3 130.0 
Diluted131.7 130.9 


(In millions)
Current assets:
Cash and cash equivalents$947.8 $1,214.7 
Receivables, net67.6 68.2 
Inventories210.9 190.8 
Prepaid income taxes303.2 337.2 
Prepaid expenses and other current assets128.5 60.2 
Total current assets$1,658.0 $1,871.1 
Land, buildings and equipment, net3,060.1 2,869.2 
Operating lease right-of-use assets3,673.3 3,776.4 
Goodwill1,037.4 1,037.4 
Trademarks806.3 806.3 
Other assets306.6 295.7 
Total assets$10,541.7 $10,656.1 
Current liabilities:
Accounts payable$325.0 $304.5 
Accrued payroll154.3 177.4 
Accrued income taxes34.9 35.9 
Other accrued taxes67.9 60.5 
Unearned revenues447.1 474.2 
Other current liabilities685.8 795.8 
Total current liabilities$1,715.0 $1,848.3 
Long-term debt936.7 929.8 
Deferred income taxes216.3 221.6 
Operating lease liability - non-current3,981.6 4,088.5 
Other liabilities939.7 754.8 
Total liabilities$7,789.3 $7,843.0 
Stockholders’ equity:
Common stock and surplus$2,300.7 $2,286.6 
Retained earnings445.9 522.3 
Accumulated other comprehensive income (loss)5.8 4.2 
Total stockholders’ equity$2,752.4 $2,813.1 
Total liabilities and stockholders’ equity$10,541.7 $10,656.1 


(In millions)
 13 Weeks Ended
Cash flows—operating activities
Net earnings$230.9 $36.1 
Losses from discontinued operations, net of tax0.8 1.2 
Adjustments to reconcile net earnings from continuing operations to cash flows:
Depreciation and amortization89.0 87.6 
Stock-based compensation expense27.6 19.1 
Change in current assets and liabilities and other, net(168.0)62.7 
Net cash provided by operating activities of continuing operations$180.3 $206.7 
Cash flows—investing activities
Purchases of land, buildings and equipment(82.7)(42.2)
Proceeds from disposal of land, buildings and equipment3.4 2.3 
Purchases of capitalized software and changes in other assets, net(4.4)(4.1)
Net cash used in investing activities of continuing operations$(83.7)$(44.0)
Cash flows—financing activities
Proceeds from issuance of common stock19.6 4.2 
Dividends paid(143.5)— 
Repurchases of common stock(186.3)(6.6)
Repayments of short-term debt— (270.0)
Principal payments on finance leases(2.6)(1.2)
Net cash used in financing activities of continuing operations$(312.8)$(273.6)
Cash flows—discontinued operations
Net cash provided by operating activities of discontinued operations0.8 2.2 
Net cash provided by discontinued operations$0.8 $2.2 
Decrease in cash, cash equivalents, and restricted cash(215.4)(108.7)
Cash, cash equivalents, and restricted cash - beginning of period1,214.7 763.3 
Cash, cash equivalents, and restricted cash - end of period$999.3 $654.6 

Reconciliation of cash, cash equivalents, and restricted cash:August 29,
August 30,
Cash and cash equivalents$947.8 $654.6 
Restricted cash included in prepaid expenses and other current assets51.5 — 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$999.3 $654.6 

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Ticker: DRI
CIK: 940944
Form Type: 8-K Corporate News
Accession Number: 0000940944-21-000053
Submitted to the SEC: Thu Sep 23 2021 7:04:05 AM EST
Accepted by the SEC: Thu Sep 23 2021
Period: Thursday, September 23, 2021
Industry: Retail Eating Places
  1. Earnings Release
  2. Financial Exhibit

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