01—Abstract
Summary
Summary of the 10-K filed July 19, 2019. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. (DRI) reported strong performance in its fiscal year ending May 26, 2019, with total sales reaching $8.51 billiona, a 5.3% increase year-over-year.
This growth was driven by the addition of 39 net new company-owned restaurants and a 2.5% increase in same-restaurant sales across its portfolio. Net earnings from continuing operations saw a significant 19.0% increase to $718.6 million, translating to $5.73b per diluted share, up from $4.79 in the prior year. This improvement was bolstered by the positive impact of the Tax Cuts and Jobs Act.
The company continues to invest in its core brands, particularly Olive Garden and LongHorn Steakhouse, which are driving same-restaurant sales growth. Darden also demonstrated its commitment to shareholder returns through dividends and share repurchases, with plans to continue expanding its restaurant base in fiscal year 2020.
The company's strategy remains focused on operational excellence, culinary innovation, and delivering an outstanding guest experience across its diverse brand portfolio, which includes Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V's. Darden's robust financial position, indicated by its investment-grade credit ratings, and its consistent cash flow generation provide a solid foundation for future growth and shareholder returns.
02—Key points
Key Highlights
- Total sales increased by 5.3% to $8.51 billion in fiscal year 2019.
- Net earnings from continuing operations grew by 19.0% to $718.6 million, with diluted EPS rising to $5.73.
- Darden added 39 net new company-owned restaurants, expanding its total restaurant count to 1,785.
- Same-restaurant sales increased by 2.5% overall, with Olive Garden and LongHorn Steakhouse showing particularly strong performance.
- The company returned capital to shareholders through dividends ($370.8 million) and share repurchases ($207.5 million).
- Operating income increased by 8.6% to $832.5 million.
- Segment profit margins improved for Olive Garden, LongHorn Steakhouse, and Fine Dining segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Darden Restaurants Inc kept $0.08.
- Revenue$8.51B100.0%
- Cost of revenue−$6.92B81.3%
- Gross profit$1.59B18.7%
- Operating costs−$761.2M8.9%
- Operating income$832.5M9.8%
- Interest, other & tax−$119.1M1.4%
- Net income$713.4M8.4%
Where FY2019 revenue went
$8.51B- Cost of revenue: $6.92B, 81% of revenue
- Net income: $713.4M, 8.4% of revenue
- Operating costs: $761.2M, 8.9% of revenue
- Interest, other & tax: $119.1M, 1.4% of revenue
Kept 8.4% as net incomeNet income $713.4M · 8.4%Interest, other & tax $119.1M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed July 19, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $8.51B$8.08B | +5.3% |
| Gross Profit | $1.59B$1.49B | +6.7% |
| Operating Expenses | $7.68B$7.31B | +5.0% |
| Operating Income | $832.50M$766.80M | +8.6% |
| Interest Expense | $44.30M$152.40M | −70.9% |
| Net Income | $713.40M$596.00M | +19.7% |
| EPS (Basic) | $5.78$4.81 | +20.2% |
| EPS (Diluted) | $5.69$4.73 | +20.3% |
| Shares Outstanding (Basic) | 123.50M124.00M | −0.4% |
| Shares Outstanding (Diluted) | 125.40M126.00M | −0.5% |
05—Questions
Frequently Asked Questions
What were Darden's key financial performance indicators for fiscal year 2019?
In fiscal year 2019, Darden Restaurants Inc. reported total sales of $8.51 billion, a 5.3% increase from the previous year. Net earnings from continuing operations rose by 19.0% to $718.6 million, resulting in diluted earnings per share of $5.73. The company also saw a 2.5% increase in same-restaurant sales and added 39 net new restaurants to its portfolio.
How did Darden's major brands perform in fiscal year 2019?
Olive Garden and LongHorn Steakhouse were strong performers, both achieving same-restaurant sales growth and contributing significantly to overall sales. Olive Garden's sales grew by 5.0% with a 3.9% same-restaurant sales increase, while LongHorn Steakhouse saw a 6.3% sales increase with a 3.3% same-restaurant sales increase. Other brands like The Capital Grille and Eddie V's also reported positive same-restaurant sales growth, though Cheddar's Scratch Kitchen, Yard House, Seasons 52, and Bahama Breeze experienced slight declines.
What is Darden's outlook for fiscal year 2020?
Darden projects fiscal year 2020 sales to increase between 5.3% and 6.3%, driven by the benefit of a 53rd week, same-restaurant sales growth of 1.0% to 2.0%, and the opening of approximately 50 new restaurants. The company also anticipates capital expenditures between $450 million and $500 million and expects its annual effective tax rate to be between 10.0% and 11.0%.
How does Darden manage its debt and capital structure?
Darden aims to maintain an investment-grade credit rating to ensure flexible access to financing. As of May 26, 2019, its long-term debt was approximately $939.1 million, and its adjusted debt to adjusted total capital ratio was 58%. The company has a $750 million revolving credit agreement and manages its capital structure to support its growth and shareholder returns, utilizing cash flow from operations, debt, and equity.
06—Continue