Darden Restaurants (DRI) Tops Q3 EPS by 2c, Revenues Beat; Withdraws Guidance, Suspends Dividend

Darden Restaurants (NYSE: DRI) reported Q3 EPS of $1.90, $0.02 better than the analyst estimate of $1.88. Revenue for the quarter came in at $2.35 billion versus the consensus estimate of $2.32 billion.

Suspends Quarterly Dividend; Withdraws its Full Year Financial Outlook For Fiscal 2020.

The Board of Directors has suspended the quarterly cash dividend. The Board made this determination due to uncertainty driven by the significant reduction in effective restaurant seating capacity and other restrictions mandated by state and local governments in response to COVID-19. The Board of Directors intends to review the Company's quarterly cash dividend policy as developments warrant. Out of an abundance of caution, the Company is also fully drawing on its $750 million credit facility.

The Company is withdrawing its full year financial outlook for fiscal 2020. For the fourth quarter to date through Sunday, March 15, Darden same-restaurant sales declined -5.9%. Same-restaurant sales were +3.0%, -0.2%, and -20.6% for the first three weeks of the quarter, respectively. During the investor conference call, the Company will provide fiscal fourth quarter trends by fiscal week for each of its reporting segments.

"The health and safety of our team members, their families and our guests remains our top priority," said CEO Gene Lee. "We are committed to supporting our team members during this unprecedented time and are pleased to have an emergency pay program to supplement our permanent paid sick leave policy for all of our hourly team members."

"With the drawdown of our revolver, and cash on the balance sheet, we will have approximately $1 billion in cash on hand," said CFO Rick Cardenas. "We believe this positions us well to deal with potential near term volatility under the current market conditions."

For earnings history and earnings-related data on Darden Restaurants (DRI) click here.

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