Darden Restaurants (DRI) Tops Q3 EPS by 29c, Revenues Beat, Blended SSS Down 26.7%; Offers 4Q EPS/Revenue Guidance Above Consensus

March 25, 2021 7:04 AM EDT

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Darden Restaurants (NYSE: DRI) reported Q3 EPS of $0.98, $0.29 better than the analyst estimate of $0.69. Revenue for the quarter came in at $1.73 billion versus the consensus estimate of $1.63 billion.

  • Total sales of $1.73 billion, a decrease of 26.1% driven by negative blended same-restaurant sales of 26.7%, partially offset by the addition of 10 net new restaurants
  • Reported diluted net earnings per share from continuing operations were $0.98 as compared to last year's reported diluted net earnings per share of $1.90
  • Reported net earnings from continuing operations were $129 million
  • EBITDA of $236 million*

Statement from Gene Lee, Chairman and CEO.

It is hard to believe that it has been a year since the pandemic began to significantly impact our business. The strategy we developed six years ago — focused on executing our Back-to-Basics operating philosophy and strengthening our competitive advantages — has provided a strong foundation to help us navigate this period of unprecedented change and uncertainty.

Our people are our greatest competitive advantage, which is why we have invested approximately $200 million since March 2020 in programs benefiting our team members including Paid Sick Leave, Emergency Pay, and paid time off to receive the COVID-19 vaccine. And today, I am proud to announce two additional investments. First, we are investing approximately $17 million to provide a one-time bonus for our hourly restaurant team members in recognition of their hard work and dedication.

Second, while we are proud that, on average, our hourly restaurant team members earn more than $17 per hour today, starting Monday, every hourly restaurant team member will earn at least $10 per hour, which includes tip income — increasing to $11 an hour in January 2022 and $12 an hour in January 2023. Continuing to attract and retain the best talent in the industry will be critical to our success, and this commitment further solidifies our position as the employer of choice in full-service dining.

After all we have been through, our winning strategy, combined with our team members' resilience and passion, has allowed Darden and our brands to emerge stronger as evidenced by our solid performance this quarter. Once again we were able to deliver strong profitability in a constantly changing environment while keeping our guests and team members safe.

GUIDANCE:

Darden Restaurants sees Q4 2021 EPS of $1.60-$1.70, versus the consensus of $1.24. Darden Restaurants sees Q4 2021 revenue of $2.1 billion, versus the consensus of $1.95 billion.

The Company provided the financial outlook for the fourth quarter of fiscal 2021 as follows:

  • Total sales of approximately $2.1 billion
  • EBITDA between $345 to $360 million*
  • Diluted net earnings per share from continuing operations of $1.60 to $1.70
  • Approximately 132 million weighted average diluted shares outstanding

The Company anticipates opening 33 net new restaurants and total capital spending between $285 and $295 million for the full fiscal year.

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



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