Florida | 59-3305930 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description of Exhibit | |
99.1 | News release dated April 5, 2016, entitled “Darden Restaurants Reports Fiscal 2016 Third Quarter Results; Reports Positive Same-Restaurant Sales for all Brands; and Increases Same-Restaurant Sales and Earnings Outlook for the Full Fiscal Year.” | |
99.2 | News release dated April 5, 2016, entitled “Darden Announces Resignation of Jeffrey C. Smith from Board of Directors; Charles M. Sonsteby Elected Chairman.” |
DARDEN RESTAURANTS, INC. | |
By: | /s/ Eugene I. Lee, Jr. |
Eugene I. Lee, Jr. | |
President and Chief Executive Officer |
Exhibit Number | Description of Exhibit | |
99.1 | News release dated April 5, 2016, entitled “Darden Restaurants Reports Fiscal 2016 Third Quarter Results; Reports Positive Same-Restaurant Sales for all Brands; and Increases Same-Restaurant Sales and Earnings Outlook for the Full Fiscal Year.” | |
99.2 | News release dated April 5, 2016, entitled “Darden Announces Resignation of Jeffrey C. Smith from Board of Directors; Charles M. Sonsteby Elected Chairman.” |
Contact: | ||
(Analysts) Kevin Kalicak | (407) 245-5870 | |
FOR RELEASE | (Media) Rich Jeffers | (407) 245-4189 |
• | Total sales from continuing operations increased 6.7% to $1.85 billion |
• | Adjusted diluted net earnings per share from continuing operations increased 22.2% to $1.21* |
• | On a reported basis, diluted net earnings per share from continuing operations were $0.84 and were negatively impacted by approximately $0.37, primarily related to the early retirement of debt |
• | The company repurchased approximately $140 million of its outstanding common stock and retired $750 million in debt |
• | Same-restaurant sales increased 6.2% for the fiscal quarter |
+6.8% for Olive Garden | +5.3% for The Capital Grille | +3.9% for Yard House | |||
+5.2% for LongHorn Steakhouse | +4.1% for Eddie V’s | +5.7% for Seasons 52 | |||
+9.9% for Bahama Breeze |
• | On a comparable calendar basis, same-restaurant sales increased 4.2% for the quarter |
+4.9% for Olive Garden | +4.3% for The Capital Grille | +3.1% for Yard House | |||
+2.7% for LongHorn Steakhouse | +1.3% for Eddie V’s | +5.3% for Seasons 52 | |||
+6.3% for Bahama Breeze |
Total Sales | Three Months Ended | Nine Months Ended | ||||||||||||||||||||
($ millions) | 2/28/2016 | 2/22/2015 | % Change | 2/28/2016 | 2/22/2015 | % Change | ||||||||||||||||
Consolidated Darden | $ | 1,847.5 | $ | 1,730.9 | 6.7 | % | $ | 5,143.3 | $ | 4,885.7 | 5.3 | % | ||||||||||
Olive Garden | $ | 1,019.8 | $ | 957.1 | 6.6 | % | $ | 2,856.8 | $ | 2,752.3 | 3.8 | % | ||||||||||
LongHorn Steakhouse | $ | 425.5 | $ | 403.8 | 5.4 | % | $ | 1,174.4 | $ | 1,106.5 | 6.1 | % | ||||||||||
Fine Dining | $ | 146.0 | $ | 138.5 | 5.4 | % | $ | 382.5 | $ | 362.9 | 5.4 | % | ||||||||||
Other Business | $ | 256.2 | $ | 231.5 | 10.7 | % | $ | 729.6 | $ | 664.0 | 9.9 | % |
Segment Profit | Three Months Ended | Nine Months Ended | ||||||||||||
($ millions) | 2/28/2016 | 2/22/2015 | % Change | 2/28/2016 | 2/22/2015 | % Change | ||||||||
Olive Garden | $220.1 | $201.4 | 9.3 | % | $569.2 | $490.2 | 16.1 | % | ||||||
LongHorn Steakhouse | $85.0 | $65.9 | 29.0 | % | $196.9 | $162.0 | 21.5 | % | ||||||
Fine Dining | $33.9 | $30.9 | 9.7 | % | $74.2 | $67.4 | 10.1 | % | ||||||
Other Business | $42.3 | $39.0 | 8.5 | % | $118.3 | $93.7 | 26.3 | % |
Olive Garden | December | January | February | Q3 | YTD |
Same-Restaurant Sales | 16.0% | (3.2)% | 6.4% | 6.8% | 3.6% |
Same-Restaurant Traffic | 12.9% | (4.5)% | 5.1% | 4.8% | 1.5% |
Pricing | 1.0% | 0.9% | 0.7% | 0.9% | 1.0% |
Menu-mix | 2.1% | 0.4% | 0.6% | 1.1% | 1.1% |
LongHorn Steakhouse | December | January | February | Q3 | YTD |
Same-Restaurant Sales | 13.5% | (5.7)% | 6.9% | 5.2% | 4.3% |
Same-Restaurant Traffic | 9.8% | (7.4)% | 2.2% | 1.8% | 1.7% |
Pricing | 2.3% | 2.3% | 2.0% | 2.2% | 2.2% |
Menu-mix | 1.4% | (0.6)% | 2.7% | 1.2% | 0.4% |
Olive Garden | December | January | February | Q3 | YTD |
Same-Restaurant Sales | 5.9% | 5.0% | 3.4% | 4.9% | 3.4% |
Same-Restaurant Traffic | 2.9% | 3.8% | 2.3% | 3.0% | 1.4% |
LongHorn Steakhouse | December | January | February | Q3 | YTD |
Same-Restaurant Sales | 2.7% | 2.1% | 3.2% | 2.7% | 3.8% |
Same-Restaurant Traffic | (0.4)% | (0.7)% | (1.1)% | (0.7)% | 1.2% |
Fiscal Q3 Reported to Adjusted Earnings Reconciliation | |||
Q3 2016 | Q3 2015 | % Change | |
Reported Diluted Net EPS from Continuing Operations | $0.84 | $1.01 | (16.8)% |
Debt Retirement Costs | 0.34 | - | |
Real Estate Plan Implementation | 0.03 | - | |
Strategic Action Plan and Other Costs | - | (0.02) | |
Adjusted Diluted Net EPS from Continuing Operations | $1.21 | $0.99 | 22.2% |
Annual Reported to Adjusted Earnings Reconciliation | |||
2016 Estimate | 2015 | % Change | |
Reported Diluted Net EPS from Continuing Operations | $2.75 - $2.79 | $1.51 | 82% - 85% |
Debt Retirement Costs | 0.51 | 0.42 | |
Real Estate Plan Implementation | 0.24 | ||
Strategic Action Plan and Other Costs | (0.02) | 0.70 | |
Adjusted Diluted Net EPS from Continuing Operations | $3.48 - $3.52 | $2.63 | 32% - 34% |
Remove 53rd Week Impact in Fiscal 2015 (In Q4) | - | (0.07) | |
Adjusted Diluted Net EPS from Continuing Operations | $3.48 - $3.52 | $2.56 | 36% - 38% |
2/28/16 | 2/22/15 | |||
Olive Garden1 | 844 | 845 | ||
LongHorn Steakhouse | 479 | 478 | ||
The Capital Grille | 54 | 55 | ||
Bahama Breeze | 37 | 36 | ||
Seasons 52 | 42 | 42 | ||
Eddie V's | 16 | 15 | ||
Yard House | 63 | 57 | ||
Darden Continuing Operations | 1,535 | 1,528 | ||
1Includes six locations in Canada for all periods presented. |
Three Months Ended | Nine Months Ended | ||||||||||||||
2/28/2016 | 2/22/2015 | 2/28/2016 | 2/22/2015 | ||||||||||||
Sales | $ | 1,847.5 | $ | 1,730.9 | $ | 5,143.3 | $ | 4,885.7 | |||||||
Costs and expenses: | |||||||||||||||
Food and beverage | 537.8 | 530.7 | 1,522.7 | 1,518.2 | |||||||||||
Restaurant labor | 572.5 | 535.6 | 1,632.3 | 1,550.7 | |||||||||||
Restaurant expenses | 305.2 | 276.0 | 855.1 | 825.7 | |||||||||||
Marketing expenses | 50.7 | 51.4 | 174.6 | 177.8 | |||||||||||
General and administrative expenses | 95.2 | 86.4 | 294.2 | 310.7 | |||||||||||
Depreciation and amortization | 67.0 | 79.6 | 223.4 | 238.4 | |||||||||||
Impairments and disposal of assets, net | (2.1 | ) | 0.8 | 3.9 | 47.1 | ||||||||||
Total operating costs and expenses | $ | 1,626.3 | $ | 1,560.5 | $ | 4,706.2 | $ | 4,668.6 | |||||||
Operating income | 221.2 | 170.4 | 437.1 | 217.1 | |||||||||||
Interest, net | 83.1 | 23.3 | 162.8 | 168.3 | |||||||||||
Earnings before income taxes | 138.1 | 147.1 | 274.3 | 48.8 | |||||||||||
Income tax expense (benefit) | 29.9 | 18.7 | 55.0 | (29.5 | ) | ||||||||||
Earnings from continuing operations | $ | 108.2 | $ | 128.4 | $ | 219.3 | $ | 78.3 | |||||||
Earnings (loss) from discontinued operations, net of tax expense (benefit) of $(0.3), $3.1, $2.9, and $322.4, respectively | (2.4 | ) | 5.4 | 16.1 | 525.9 | ||||||||||
Net earnings | $ | 105.8 | $ | 133.8 | $ | 235.4 | $ | 604.2 | |||||||
Basic net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 0.85 | $ | 1.03 | $ | 1.72 | $ | 0.61 | |||||||
Earnings (loss) from discontinued operations | (0.02 | ) | 0.04 | 0.12 | 4.10 | ||||||||||
Net earnings | $ | 0.83 | $ | 1.07 | $ | 1.84 | $ | 4.71 | |||||||
Diluted net earnings per share: | |||||||||||||||
Earnings from continuing operations | $ | 0.84 | $ | 1.01 | $ | 1.69 | $ | 0.60 | |||||||
Earnings (loss) from discontinued operations | (0.02 | ) | 0.04 | 0.13 | 4.04 | ||||||||||
Net earnings | $ | 0.82 | $ | 1.05 | $ | 1.82 | $ | 4.64 | |||||||
Average number of common shares outstanding: | |||||||||||||||
Basic | 127.6 | 124.6 | 127.7 | 128.2 | |||||||||||
Diluted | 129.4 | 126.9 | 129.6 | 130.1 |
2/28/2016 | 5/31/2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 215.8 | $ | 535.9 | |||
Receivables, net | 53.8 | 78.0 | |||||
Inventories | 178.9 | 163.9 | |||||
Prepaid income taxes | 24.7 | 18.9 | |||||
Prepaid expenses and other current assets | 73.0 | 69.4 | |||||
Deferred income taxes | 164.7 | 157.4 | |||||
Assets held for sale | 19.0 | 32.9 | |||||
Total current assets | $ | 729.9 | $ | 1,056.4 | |||
Land, buildings and equipment, net | 2,058.1 | 3,215.8 | |||||
Goodwill | 872.3 | 872.4 | |||||
Trademarks | 574.6 | 574.6 | |||||
Other assets | 267.0 | 275.5 | |||||
Total assets | $ | 4,501.9 | $ | 5,994.7 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 190.6 | $ | 198.8 | |||
Accrued payroll | 139.2 | 141.1 | |||||
Accrued income taxes | 22.4 | 12.6 | |||||
Other accrued taxes | 48.7 | 51.5 | |||||
Unearned revenues | 401.3 | 328.6 | |||||
Current portion of long-term debt | 8.0 | 15.0 | |||||
Other current liabilities | 390.9 | 449.1 | |||||
Total current liabilities | $ | 1,201.1 | $ | 1,196.7 | |||
Long-term debt, less current portion | 439.7 | 1,452.3 | |||||
Deferred income taxes | 220.8 | 341.8 | |||||
Deferred rent | 243.1 | 225.9 | |||||
Other liabilities | 479.0 | 444.5 | |||||
Total liabilities | $ | 2,583.7 | $ | 3,661.2 | |||
Stockholders’ equity: | |||||||
Common stock and surplus | $ | 1,485.1 | $ | 1,405.9 | |||
Retained earnings | 507.5 | 1,026.0 | |||||
Treasury stock | (7.8 | ) | (7.8 | ) | |||
Accumulated other comprehensive income (loss) | (63.3 | ) | (86.6 | ) | |||
Unearned compensation | (3.3 | ) | (4.0 | ) | |||
Total stockholders’ equity | $ | 1,918.2 | $ | 2,333.5 | |||
Total liabilities and stockholders’ equity | $ | 4,501.9 | $ | 5,994.7 |
Nine Months Ended | |||||||
2/28/2016 | 2/22/2015 | ||||||
Cash flows—operating activities | |||||||
Net earnings | $ | 235.4 | $ | 604.2 | |||
Earnings from discontinued operations, net of tax | (16.1 | ) | (525.9 | ) | |||
Adjustments to reconcile net earnings from continuing operations to cash flows: | |||||||
Depreciation and amortization | 223.4 | 238.4 | |||||
Stock-based compensation expense | 29.2 | 41.3 | |||||
Loss on extinguishment of debt | 106.8 | 91.3 | |||||
Change in current assets and liabilities and other, net | 18.5 | 106.7 | |||||
Net cash provided by operating activities of continuing operations | $ | 597.2 | $ | 556.0 | |||
Cash flows—investing activities | |||||||
Purchases of land, buildings and equipment | (172.8 | ) | (230.1 | ) | |||
Proceeds from disposal of land, buildings and equipment | 321.4 | 24.8 | |||||
Increase in other assets | (12.0 | ) | (3.5 | ) | |||
Net cash provided by (used in) investing activities of continuing operations | $ | 136.6 | $ | (208.8 | ) | ||
Cash flows—financing activities | |||||||
Proceeds from issuance of common stock | 79.2 | 107.1 | |||||
Income tax benefits credited to equity | 14.5 | 9.1 | |||||
Special cash distribution from Four Corners Property Trust | 315.0 | — | |||||
Dividends paid | (204.8 | ) | (209.3 | ) | |||
Repurchases of common stock | (140.2 | ) | (502.3 | ) | |||
ESOP note receivable repayment | 0.6 | 0.8 | |||||
Repayments of short-term debt, net | — | (207.6 | ) | ||||
Repayment of long-term debt | (1,088.8 | ) | (1,065.9 | ) | |||
Principal payments on capital and financing leases | (2.5 | ) | (1.7 | ) | |||
Proceeds from financing lease obligation | — | 93.1 | |||||
Net cash used in financing activities of continuing operations | $ | (1,027.0 | ) | $ | (1,776.7 | ) | |
Cash flows—discontinued operations | |||||||
Net cash used in operating activities of discontinued operations | (33.2 | ) | (216.6 | ) | |||
Net cash provided by investing activities of discontinued operations | 6.3 | 1,984.0 | |||||
Net cash (used in) provided by discontinued operations | $ | (26.9 | ) | $ | 1,767.4 | ||
(Decrease) increase in cash and cash equivalents | (320.1 | ) | 337.9 | ||||
Cash and cash equivalents - beginning of period | 535.9 | 98.3 | |||||
Cash and cash equivalents - end of period | $ | 215.8 | $ | 436.2 |
Contact: | ||
(Analysts) Kevin Kalicak | (407) 245-5870 | |
FOR RELEASE | (Media) Rich Jeffers | (407) 245-4189 |
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