Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the fourth quarter and fiscal year ended May 29, 2022.
Fourth Quarter 2022 Financial Highlights
- Total sales increased 14.2% to $2.60 billion driven by a blended same-restaurant sales increase of 11.7% and sales from 33 net new restaurants
- Same-restaurant sales:
Consolidated Darden | 11.7 % | |||
Olive Garden | 6.5 % | |||
LongHorn Steakhouse | 10.6 % | |||
Fine Dining | 34.5 % | |||
Other Business | 18.5 % |
- Reported diluted net earnings per share was $2.24 as compared to last year's reported diluted net earnings per share of $2.79 and last year's adjusted diluted net earnings per share of $2.03*
- Net earnings from continuing operations were $282 million
- EBITDA of $431 million*
- The Company repurchased $237 million of its outstanding common stock
* See the "Non-GAAP Information" below for more details.
Fiscal 2022 Financial Highlights
- Total sales increased 33.8% to $9.63 billion driven by a blended same-restaurant sales increase of 30.9% and sales from 33 net new restaurants
- Same-restaurant sales:
Consolidated Darden | 30.9 % | |||
Olive Garden | 24.1 % | |||
LongHorn Steakhouse | 28.1 % | |||
Fine Dining | 62.7 % | |||
Other Business | 42.4 % |
- Reported diluted net earnings per share was $7.40, as compared to last year's reported diluted net earnings per share of $4.80 and last year's adjusted diluted net earnings per share of $4.31*
- Net earnings from continuing operations were $955 million
- EBITDA of $1,531 billion*
* See the "Non-GAAP Information" below for more details.
"We had a strong quarter despite experiencing high inflation, and fiscal 2022 was a solid year," said Darden President & CEO Rick Cardenas. "Darden's competitive advantages enabled our brands to strengthen their business models while our restaurant teams continued to deliver exceptional guest experiences in a challenging operating environment. As we begin our new fiscal year, our focus remains on driving profitable sales, investing in the guest experience and simplifying operations. Darden's strategy, and our strong balance sheet, positions us well regardless of the operating environment."
Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses.
Q4 Sales | Q4 Segment Profit | |||||||||||
($ in millions) | 2022 | 2021 | Pre-COVID1 | 2022 | 2021 | Pre-COVID1 | ||||||
Consolidated Darden | $2,602.9 | $2,279.2 | $2,229.1 | |||||||||
Olive Garden | $1,193.7 | $1,103.7 | $1,107.0 | $265.3 | $281.6 | $232.9 | ||||||
LongHorn Steakhouse | $647.3 | $572.0 | $484.4 | $115.8 | $118.0 | $92.9 | ||||||
Fine Dining | $210.5 | $149.6 | $154.6 | $44.0 | $33.1 | $32.1 | ||||||
Other Business | $551.4 | $453.9 | $483.1 | $85.9 | $86.8 | $77.7 | ||||||
Annual Sales | Annual Segment Profit | |||||||||||
($ in millions) | 2022 | 2021 | Pre-COVID2 | 2022 | 2021 | Pre-COVID2 | ||||||
Consolidated Darden | $9,630.0 | $7,196.1 | $8,765.9 | |||||||||
Olive Garden | $4,503.9 | $3,593.4 | $4,390.0 | $993.7 | $832.9 | $898.8 | ||||||
LongHorn Steakhouse | $2,374.3 | $1,810.4 | $1,892.6 | $418.4 | $323.5 | $343.9 | ||||||
Fine Dining | $776.2 | $443.2 | $634.0 | $165.0 | $80.2 | $129.6 | ||||||
Other Business | $1,975.6 | $1,349.1 | $1,849.3 | $300.2 | $193.0 | $259.3 | ||||||
Average weekly sales by segment:
Q4 Average Weekly Sales | Annual Average Weekly Sales | ||||||
2022 | 2021 | Pre-COVID1 | 2022 | 2021 | Pre-COVID2 | ||
Consolidated Darden | $107,199 | $95,859 | $96,542 | $99,815 | $76,134 | $94,148 | |
Olive Garden | $103,885 | $97,425 | $99,105 | $98,443 | $79,296 | $97,759 | |
LongHorn Steakhouse | $91,731 | $83,004 | $73,088 | $84,896 | $66,261 | $70,929 | |
Fine Dining | $182,454 | $136,426 | $152,848 | $169,480 | $103,813 | $152,687 | |
Other Business | $120,481 | $101,910 | $113,838 | $108,790 | $76,734 | $107,285 | |
1 Pre-COVID represents FY2019 Q4. | |||||||
2 Pre-COVID represents trailing four quarters ended FY2020 Q3 | |||||||
Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend of $1.21 per share, a 10% increase from third quarter fiscal 2022, on the Company's outstanding common stock. The dividend is payable on August 1, 2022 to shareholders of record at the close of business on July 8, 2022.
Share Repurchase Program
During the quarter, the Company repurchased approximately 1.8 million shares of its common stock for a total cost of approximately $237 million. In addition, yesterday, Darden's Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $1 billion of its outstanding common stock. This repurchase program does not have an expiration and replaces the previously existing share repurchase authorization.
"By adhering to our strategy, and pricing below inflation, we ended the year with significantly better margins than pre-COVID," said CFO Raj Vennam. "As a result, we generated $1.3 billion of cash from operations in fiscal 2022. The strength of our operating model and its ability to generate durable cash flow allows us to be disciplined as we enter fiscal 2023."
Fiscal 2023 Financial Outlook
Below is the full year financial outlook for fiscal 2023. We will provide additional detail on the quarterly flow during our investor conference call scheduled for this morning at 8:30 am ET.
- Total sales of $10.2 to $10.4 billion
- Same-restaurant sales growth of 4% to 6%
- 55 to 60 new restaurant openings
- Total capital spending of $500 to $550 million
- Total inflation of approximately 6%
- An effective tax rate of approximately 13.5%
- Diluted net earnings per share from continuing operations of $7.40 to $8.00
- Approximately 124 million weighted average diluted shares outstanding
Annual Meeting of Shareholders
Darden will hold its Annual Meeting of Shareholders on September 21, 2022. The meeting will be held in a virtual format only. The record date for shareholders to vote in the Annual Meeting is July 27, 2022.
Investor Conference Call
The Company will host a conference call and slide presentation on Thursday, June 23, 2022 at 8:30 am ET to review its recent financial performance. To listen to the call live, please go to https://app.webinar.net/odE52WZBJex 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 1-800-263-0877 and enter passcode 3401699. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.