01—Abstract
Summary
Summary of the 10-K filed July 23, 2021. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. (DRI) reported a challenging fiscal year 2021, significantly impacted by the COVID-19 pandemic.
Total sales decreased by 7.8% to $7.20 billiona compared to fiscal 2020, primarily due to a 7.8% decline in same-restaurant sales driven by pandemic-related restrictions and changes in consumer behavior. Despite these headwinds, Darden demonstrated resilience, returning to profitability with net earnings from continuing operations of $632.4 million, a significant improvement from a net loss of $49.2 million in fiscal 2020, which was heavily affected by impairments. The company is focused on adapting its business model, investing in team members, streamlining operations, and accelerating technology rollouts to enhance both off-premise and in-restaurant experiences.
Looking ahead, Darden projects a strong recovery in fiscal 2022, forecasting sales growth of 28%b to 32% driven by an expected 25% to 29% same-restaurant sales increase and the opening of 35-40 new restaurants. The company's strategic priorities include strengthening operational fundamentals, leveraging its scale for brand development, and enhancing customer engagement through data-driven marketing and technology. Darden's robust balance sheet and effective cost management initiatives position it to navigate the ongoing recovery and capitalize on future growth opportunities.
02—Key points
Key Highlights
- Total sales for fiscal year 2021 decreased by 7.8% to $7.20 billion, primarily due to COVID-19 impacts on same-restaurant sales.
- The company returned to profitability in fiscal 2021 with net earnings from continuing operations of $632.4 million, a significant recovery from a net loss of $49.2 million in fiscal 2020.
- Darden expects a strong rebound in fiscal 2022 with projected sales growth of 28% to 32% and same-restaurant sales growth of 25% to 29%.
- The company plans to open 35-40 new restaurants in fiscal 2022, indicating a return to expansion.
- Restaurant labor costs decreased as a percentage of sales due to productivity improvements and pricing actions, despite inflation.
- Darden continued to invest in technology and off-premise dining capabilities, which proved crucial during the pandemic.
- The company maintained a strong liquidity position, ending fiscal 2021 with $1.21 billion in cash and cash equivalents.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Darden Restaurants Inc kept $0.09.
- Revenue$7.20B100.0%
- Cost of revenue−$5.79B80.5%
- Gross profit$1.40B19.5%
- Operating costs−$753.7M10.5%
- Operating income$648.7M9.0%
- Interest, other & tax−$19.4M0.3%
- Net income$629.3M8.7%
Where FY2021 revenue went
$7.20B- Cost of revenue: $5.79B, 81% of revenue
- Net income: $629.3M, 8.7% of revenue
- Operating costs: $753.7M, 10% of revenue
Kept 8.7% as net incomeNet income $629.3M · 8.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed July 23, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $7.20B$7.81B | −7.8% |
| Gross Profit | $1.40B$1.17B | +19.8% |
| Operating Expenses | $6.55B$7.76B | −15.6% |
| Operating Income | $648.70M$47.90M | +1254.3% |
| Interest Expense | $47.50M$49.30M | −3.7% |
| Net Income | $629.30M-$52.40M | +1301.0% |
| EPS (Basic) | $4.83$-0.43 | +1223.3% |
| EPS (Diluted) | $4.77$-0.43 | +1209.3% |
| Shares Outstanding (Basic) | 130.40M122.70M | +6.3% |
| Shares Outstanding (Diluted) | 131.80M122.70M | +7.4% |
05—Questions
Frequently Asked Questions
How did the COVID-19 pandemic affect Darden's financial performance in fiscal year 2021?
The COVID-19 pandemic significantly impacted Darden's fiscal year 2021, leading to a 7.8% decrease in total sales and a 7.8% decline in same-restaurant sales. Restrictions on dining, changes in consumer behavior, and temporary closures of dining rooms were the primary drivers of this performance.
What is Darden's outlook for fiscal year 2022?
Darden anticipates a strong recovery in fiscal year 2022, projecting sales growth between 28% and 32%. This growth is expected to be driven by same-restaurant sales increases of 25% to 29% and the opening of 35-40 new restaurants across its brands.
How did Darden manage costs during the challenging fiscal year 2021?
Darden implemented several cost management strategies, including streamlining restaurant processes, simplifying menus, and optimizing labor. Notably, restaurant labor costs as a percentage of sales decreased due to productivity improvements and pricing leverage, partially offsetting inflationary pressures.
What are Darden's key brands and how did they perform individually?
Darden operates several brands including Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V’s. Olive Garden saw a 10.5% sales decrease and a 9.9% same-restaurant sales decline, while LongHorn Steakhouse was a bright spot, with a 6.4% sales increase and a 5.5% same-restaurant sales growth. Fine Dining and Other Business segments experienced sales decreases due to the pandemic's impact on higher-end and diversified casual dining.
06—Continue