Darden Restaurants Reports Fiscal 2017 First Quarter Results; Increases Earnings Outlook For The Full Fiscal Year; And Announces New Share Repurchase Authorization

ORLANDO, Fla., Oct. 4, 2016 /PRNewswire/ -- Darden Restaurants, Inc., (NYSE: DRI) today reported its financial results for the first quarter ended August 28, 2016.

First Quarter 2017 Financial Highlights Versus Same Fiscal Quarter Last Year

• Total sales from continuing operations increased 1.6% to $1.71 billion
• Reported diluted net earnings per share from continuing operations increased 39.7% to $0.88 and increased 29.4% from last year's adjusted diluted net earnings per share*
• The Company repurchased approximately $196 million of its outstanding common stock during the quarter
• Same-restaurant sales increased 1.3% for the quarter

 

*   See the "Non-GAAP Information" below for more details

"I'm pleased with our performance during the quarter and the progress we made against our strategic initiatives," said CEO Gene Lee.  "We continued to gain market share and our same-restaurant sales growth outperformed the industry by a considerable margin.  We also returned significant capital to shareholders in the form of our regular dividend and $196 million in share repurchases."

Segment Performance Versus Same Fiscal Period Last Year

Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses.  Segment profit for fiscal 2017 includes the impact of additional rent and other tax expense related to the completion of our real estate strategy, primarily impacting Olive Garden and LongHorn Steakhouse.

 

*Represents the incremental impact to segment profit of the fiscal 2016 real estate transactions, primarily rent expense.

 

U.S. Same-Restaurant Sales Results - Fiscal Calendar Basis

 

Share Repurchase Program

During the quarter, the Company repurchased approximately 3.2 million shares of its common stock for a total cost of approximately $196 million.  An additional $4 million in shares were repurchased subsequent to the close of the first quarter, for a total of $200 million in shares repurchased year-to-date.  In addition, Darden's Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $500 million of its outstanding common stock.  This repurchase program does not have an expiration and replaces the previously existing share repurchase authorization.

Updated Fiscal 2017 Financial Outlook The Company reaffirms its outlook for same-restaurant sales of approximately 1.0% to 2.0% and increased the outlook for diluted net earnings per share to $3.87 to $3.97 from $3.80 to $3.90.  This reflects approximately 126 million diluted average common shares outstanding for the year.

Investor Conference Call

The Company will host a conference call and slide presentation on Tuesday, October 4 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/1007/16908 at least fifteen minutes early to register, download, and install any necessary audio software.  For those who cannot access the Internet, please dial 1-800-779-9102 and enter passcode 3833399.  For those who cannot listen to the live broadcast, a replay will be available shortly after the call.  In addition, at the conclusion of the call, we will post the slide presentation from the call on the Investor Relations section of our website at: www.darden.com that provides more context on our first quarter fiscal 2017 results.

Darden Restaurants, Inc., (NYSE: DRI) owns and operates more than 1,500 restaurants that generate $7.0 billion in annual sales. Headquartered in Orlando, Florida, and employing 150,000 people, Darden is recognized for a culture that rewards caring for and responding to people.  Our restaurant brands - Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, 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. 

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:

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, 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, our plans to expand our smaller brands Bahama Breeze, Seasons 52 and Eddie V's, a lack of availability of suitable locations for new restaurants, higher-than-anticipated costs to open, close, relocate or remodel restaurants, 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 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, an inability or failure to manage the accelerated impact of social media 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.

 

 

 

 

 

 

 

 

 

Logo - http://photos.prnewswire.com/prnh/20050203/FLTH026LOGO

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/darden-restaurants-reports-fiscal-2017-first-quarter-results-increases-earnings-outlook-for-the-full-fiscal-year-and-announces-new-share-repurchase-authorization-300338275.html

SOURCE Darden Restaurants, Inc.: Financial