Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Darden Restaurants Reports Second Quarter Diluted Net Earnings Per Share Of 26 Cents; Declares A Quarterly Dividend Of 50 Cents



Darden Restaurants Reports Second Quarter Diluted Net Earnings Per Share Of 26
          Cents; Declares A Quarterly Dividend Of 50 Cents Per Share

PR Newswire

ORLANDO, Fla., Dec. 20, 2012

ORLANDO, Fla., Dec. 20, 2012 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:
DRI) today reported diluted net earnings per share and sales for the second
quarter ended November 25, 2012.

(Logo: http://photos.prnewswire.com/prnh/20050203/FLTH026LOGO ) 

Highlights for the quarter include the following:

  o Second quarter diluted net earnings per share from continuing operations
    were 26 cents, a 37% decrease from the 41 cents per diluted share in the
    second quarter of last year. Earnings from continuing operations in this
    year's second quarter were $33.7 million and sales were $1.96 billion,
    which compare to earnings from continuing operations of $54.1 million and
    sales of $1.83 billion in the second quarter last year.

  o Second quarter total sales from continuing operations of $1.96 billion
    represent an increase of 7.0% compared to the second quarter of last
    year.  The increase reflects a same-restaurant sales increase of 0.7% for
    the Company's Specialty Restaurant Group, incremental sales from the 11
    Eddie V's restaurants acquired on November 14, 2011, the acquisition of 40
    Yard House restaurants on August 29, 2012 and the addition and operation
    of another 99 net new restaurants compared to the second quarter last
    year, offset by a combined same-restaurant sales decline of 2.7% for Olive
    Garden, Red Lobster and LongHorn Steakhouse.  In the second quarter, U.S.
    same-restaurant sales decreased -0.8%, -2.7% and  -3.2% for LongHorn
    Steakhouse, Red Lobster and Olive Garden, respectively.

  o The Company estimated that costs associated with the acquisition of Yard
    House USA, Inc., which was completed on August 29, 2012, the beginning of
    this year's second quarter, adversely affected diluted net earnings per
    share for this year's second quarter by approximately five cents.

  o Darden's Board of Directors declared a quarterly dividend of 50 cents per
    share.

Operating Highlights 

OLIVE GARDEN'S second quarter sales of $849 million were 1.5% higher than the
prior year, driven by revenue from 46 net new restaurants offset by a 3.2%
decrease in U.S. same-restaurant sales.  For the quarter, on a percentage of
sales basis, lower food and beverage expenses offset an increase in restaurant
expenses and depreciation expense, which resulted in an increase for the
quarter in operating profit, but a decrease in operating profit as a
percentage of sales.   

RED LOBSTER'S second quarter sales of $590 million were 2.1% lower than the
prior year as a result of a U.S. same-restaurant sales decrease of 2.7% that
was offset somewhat by revenue from five net new restaurants.  For the
quarter, on a percentage of sales basis, lower food and beverage expenses and
restaurant labor expenses were more than offset by an increase in restaurant
expenses, selling, general and administrative expenses and depreciation
expense, which resulted in a decrease for the quarter in both operating profit
and operating profit as a percentage of sales.   

LONGHORN STEAKHOUSE'S second quarter sales of $275 million were 7.8% higher
than the prior year, driven by revenue from 32 net new restaurants offset by a
U.S. same-restaurant sales decrease of 0.8%. For the quarter, on a percentage
of sales basis, higher food and beverage expenses, restaurant labor expenses,
restaurant expenses and depreciation expense resulted in a decline for the
quarter in both operating profit and operating profit as a percentage of
sales.  

THE SPECIALTY RESTAURANT GROUP'S second quarter sales of $241 million were
76.4% higher than the prior year, driven by the addition of the 40 Yard House
restaurants purchased on August 29, 2012 plus one new Yard House restaurant
that opened in October 2012; same-restaurant sales increases of 0.8% at The
Capital Grille and 1.9% at Bahama Breeze offset by a same-restaurant sales
decline of -1.0% at Seasons 52; three net new restaurants at The Capital
Grille, five net new restaurants at Bahama Breeze and four net new restaurants
at Seasons 52; and the addition of the 11 Eddie V's restaurants purchased on
November 14, 2011.

Fiscal 2013 September, October and November U.S. Same-Restaurant Sales Results

Darden reported U.S. same-restaurant sales for the fiscal months of September,
October and November as follows:

Olive Garden                            September October November*
Same-Restaurant Sales                   -3.8%     -3.9%   -2.0%
Same-Restaurant Traffic                 -7.5%     -8.2%   -4.8%
Pricing                                 2.0%      2.3%    2.4%
Menu-mix                                1.8%      2.0%    0.4%
Red Lobster                             September October November*
Same-Restaurant Sales                   0.4%      -7.0%   -2.8%
Same-Restaurant Traffic                 1.3%      -6.1%   -3.3%
Pricing                                 1.3%      1.3%    1.2%
Menu-mix                                -2.2%     -2.2%   -0.7%
LongHorn Steakhouse                     September October November*
Same-Restaurant Sales                   -1.1%     -0.1%   -1.3%
Same-Restaurant Traffic                 -1.0%     -0.2%   -0.2%
Pricing                                 2.0%      2.0%    1.9%
Menu-mix                                -2.1%     -1.9%   -3.0%

* Note: Same-restaurant sales results were adversely affected by approximately
60 and 20 basis points in November and the full second quarter, respectively,
due to Hurricane Sandy which caused approximately 475 days of restaurant
closures. 

Other Actions

Darden's Board of Directors declared a quarterly cash dividend of 50 cents per
share on the Company's outstanding common stock. The dividend is payable on
February 1, 2013 to shareholders of record at the close of business on January
10, 2013.

Fiscal 2013 Financial Outlook

Darden affirmed its financial outlook for fiscal 2013.  The Company
anticipates total sales growth of between +7.5% and +8.5% for the year based
upon combined U.S. same-restaurant sales of approximately -1.0% to flat for
Red Lobster, Olive Garden and LongHorn Steakhouse, incremental sales starting
in fiscal September from the acquisition of Yard House and the opening of
approximately 100 net new restaurants in fiscal 2013, not including the
initial 40 Yard House restaurants operating at the close of the acquisition. 
And, the Company expects diluted net earnings per share from continuing
operations of $3.29 to $3.49 for fiscal 2013, which includes approximately 8
to 10 cents of transaction and closing costs associated with the purchase of
Yard House USA, Inc. 

Darden Restaurants, Inc., (NYSE: DRI), the world's largest full-service
restaurant company, owns and operates more than 2,000 restaurants that
generate $8.0 billion in annual sales. Headquartered in Orlando, Florida and
employing more than 185,000 people, Darden is recognized for a culture that
rewards caring for and responding to people. In 2012, Darden was named to the
FORTUNE "100 Best Companies to Work For" list for the second year in a row.
Our restaurant brands - Red Lobster, Olive Garden, LongHorn Steakhouse, The
Capital Grille, Bahama Breeze, Seasons 52, Eddie V's and Yard House - 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 regarding our expected
earnings per share and U.S. same-restaurant sales for the fiscal year, new
restaurant growth and all other statements that are not historical facts,
including without limitation statements concerning our future economic
performance, plans or objectives, 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 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 (including all amendments to those
reports). These risks and uncertainties include 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
including health care reform, labor and insurance costs, technology failures,
failure to execute a business continuity plan following a disaster, health
concerns including virus outbreaks, intense competition, failure to drive
sales growth, failure to successfully integrate the Yard House business and
the additional indebtedness incurred to finance the Yard House acquisition,
our plans to expand our newer brands like Bahama Breeze, Seasons 52 and Eddie
V's, a lack of suitable new restaurant locations, higher-than-anticipated
costs to open, close or remodel restaurants, a failure to execute innovative
marketing tactics and increased advertising and marketing costs, 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, 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 unemployment and interest rates, disruptions
in the financial markets, risks of doing business with franchisees and vendors
in foreign markets, failure to protect our service marks or other intellectual
property,  a possible impairment in the carrying value of our goodwill or
other intangible assets, a failure of our internal controls over financial
reporting, or changes in accounting standards, and other factors and
uncertainties discussed from time to time in reports filed by Darden with the
Securities and Exchange Commission.

 

DARDEN RESTAURANTS, INC.

NUMBER OF COMPANY-OWNED RESTAURANTS

 
11/25/12                       11/27/11
679       Red Lobster USA      674
27        Red Lobster Canada   27
706       Total Red Lobster    701
803       Olive Garden USA     757
6         Olive Garden Canada  6
809       Total Olive Garden   763
399       LongHorn Steakhouse  367
48        The Capital Grille   45
32        Bahama Breeze        27
25        Seasons 52           21
11        Eddie V's            11
41        Yard House           -
4         Other                1
2,075     Total Restaurants    1,936

 

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share data)

(Unaudited)

 
                                Three Months Ended      Six Months Ended
                                11/25/2012  11/27/2011  11/25/2012  11/27/2011
Sales                           $ 1,960.0   $ 1,831.5   $ 3,994.8   $ 3,773.4
Costs and expenses:
Cost of sales:
Food and beverage               607.5       573.3       1,226.3     1,166.7
Restaurant labor                635.7       594.2       1,262.5     1,207.3
Restaurant expenses             325.5       293.1       629.7       593.0
Total cost of sales (1)         $ 1,568.7   $ 1,460.6   $ 3,118.5   $ 2,967.0
Selling, general and            216.1       187.4       434.2       370.2
administrative
Depreciation and amortization   99.2        85.8        191.8       169.8
Interest, net                   32.9        25.2        60.8        46.9
Total costs and expenses        $ 1,916.9   $ 1,759.0   $ 3,805.3   $ 3,553.9
Earnings before income taxes    43.1        72.5        189.5       219.5
Income taxes                    (9.4)       (18.4)      (44.7)      (58.7)
Earnings from continuing        $ 33.7      $ 54.1      $ 144.8     $ 160.8
operations
Losses from discontinued
operations, net of tax benefit
of $0.1,                        (0.1)       (0.4)       (0.4)       (0.5)

      $0.2, $0.3 and $0.4,
respectively
Net earnings                    $ 33.6      $ 53.7      $ 144.4     $ 160.3
Basic net earnings per share:
Earnings from continuing        $ 0.26      $ 0.42      $ 1.13      $ 1.22
operations
Losses from discontinued        —           (0.01)      (0.01)      (0.01)
operations
Net earnings                    $ 0.26      $ 0.41      $ 1.12      $ 1.21
Diluted net earnings per share:
Earnings from continuing        $ 0.26      $ 0.41      $ 1.10      $ 1.19
operations
Losses from discontinued        —           (0.01)      —           —
operations
Net earnings                    $ 0.26      $ 0.40      $ 1.10      $ 1.19
Average number of common shares
outstanding:
Basic                           128.8       130.3       128.5       132.0
Diluted                         131.7       133.2       131.4       135.2
(1) Excludes restaurant
depreciation and amortization   $ 94.1      $ 80.6      $ 181.5     $ 159.0
as follows:

 

DARDEN RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions)

 
                                                       11/25/2012   5/27/2012
                                                       (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                              $  61.4      $ 70.5
Receivables, net                                       66.7         71.4
Inventories                                            425.3        404.1
Prepaid income taxes                                   11.3         12.2
Prepaid expenses and other current assets              83.6         74.9
Deferred income taxes                                  152.3        124.5
Total current assets                                   $  800.6     $ 757.6
Land, buildings and equipment, net                     4,285.7      3,951.3
Goodwill                                               904.9        538.6
Trademarks                                             574.2        464.9
Other assets                                           267.3        231.8
Total assets                                           $  6,832.7   $ 5,944.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                       $  315.6     $ 260.7
Short-term debt                                        376.0        262.7
Accrued payroll                                        134.8        154.3
Accrued income taxes                                   7.8          —
Other accrued taxes                                    52.7         60.4
Unearned revenues                                      220.7        231.7
Current portion of long-term debt                      —            349.9
Other current liabilities                              436.0        454.4
Total current liabilities                              $  1,543.6   $ 1,774.1
Long-term debt, less current portion                   2,503.5      1,453.7
Deferred income taxes                                  343.3        312.9
Deferred rent                                          216.5        204.4
Obligations under capital leases, net of current       53.5         54.4
installments
Other liabilities                                      308.9        302.7
Total liabilities                                      $  4,969.3   $ 4,102.2
Stockholders' equity:
Common stock and surplus                               $  1,164.3   $ 2,518.8
Retained earnings                                      861.8        3,172.8
Treasury stock                                         (8.7)        (3,695.8)
Accumulated other comprehensive income (loss)          (147.7)      (146.6)
Unearned compensation                                  (6.3)        (7.2)
Total stockholders' equity                             $  1,863.4   $ 1,842.0
Total liabilities and stockholders' equity             $  6,832.7   $ 5,944.2

 

DARDEN RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 
                                                        Six Months Ended
                                                        11/25/2012  11/27/2011
Cash flows—operating activities
Net earnings                                            $ 144.4     $ 160.3
Losses from discontinued operations, net of tax benefit 0.4         0.5
Adjustments to reconcile net earnings from continuing
operations to cash flows:
Depreciation and amortization                           191.8       169.8
Stock-based compensation expense                        28.7        24.7
Change in current assets and liabilities and other, net (97.7)      (275.0)
Net cash provided by operating activities of continuing $ 267.6     $ 80.3
operations
Cash flows—investing activities
Purchases of land, buildings and equipment              (355.2)     (338.4)
Proceeds from disposal of land, buildings and equipment —           2.1
Cash used in business acquisitions, net of cash         (578.4)     (59.2)
acquired
Increase in other assets                                (15.8)      (12.6)
Net cash used in investing activities of continuing     $ (949.4)   $ (408.1)
operations
Cash flows—financing activities
Proceeds from issuance of common stock                  37.4        28.3
Income tax benefits credited to equity                  8.3         8.3
Dividends paid                                          (128.5)     (113.6)
Purchases of treasury stock                             (52.3)      (279.1)
ESOP note receivable repayment                          0.9         1.2
Proceeds from issuance of short-term debt, net          113.4       269.5
Repayment of long-term debt                             (350.9)     (1.2)
Principal payments on capital leases                    (0.8)       (0.8)
Proceeds from issuance of long-term debt                1,050.0     400.0
Payment of debt issuance costs                          (7.3)       (4.8)
Net cash provided by financing activities of continuing $ 670.2     $ 307.8
operations
Cash flows—discontinued operations
Net cash used in operating activities of discontinued   (0.2)       (0.3)
operations
Net cash provided by investing activities of            2.7         —
discontinued operations
Net cash provided by (used in) discontinued operations  $ 2.5       $ (0.3)
Decrease in cash and cash equivalents                   (9.1)       (20.3)
Cash and cash equivalents - beginning of period         70.5        70.5
Cash and cash equivalents - end of period               $ 61.4      $ 50.2

 

 

SOURCE Darden Restaurants, Inc.: Financial

Website: http://www.darden.com
Contact: (Analysts) Matthew Stroud, +1-407-245-6458 or (Media) Rich Jeffers,
+1-407-245-4189
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement