01—Abstract
Summary
Summary of the 10-K filed July 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Darden Restaurants, Inc. (DRI) demonstrated a strong recovery and growth in fiscal year 2022, which ended May 29, 2022.
The company reported a significant increase in total sales, reaching $9.63 billiona, up 33.8% from the previous year. This growth was driven by a substantial same-restaurant sales increase of 30.9% and the addition of 33 net new company-owned restaurants. Diluted earnings per share (EPS) from continuing operations also saw a healthy rise to $7.40, a 54.2% increase compared to fiscal year 2021.
This performance indicates a robust recovery from pandemic-related impacts and a successful execution of the company's growth and operational strategies across its diverse brand portfolio. The company is strategically expanding its footprint, with plans to open 55-60 new restaurants in fiscal year 2023. Darden maintains a positive outlook, projecting sales growth of 6%b to 8% for fiscal year 2023, supported by anticipated same-restaurant sales growth of 4% to 6%.
Despite facing inflationary pressures on wages and cost of goods sold, Darden's management has effectively navigated these challenges through pricing strategies, operational efficiencies, and leveraging its scale. The company's financial position remains strong, supported by consistent cash flow generation and a well-managed balance sheet, positioning it for continued growth and shareholder value creation.
02—Key points
Key Highlights
- Total sales increased by 33.8% to $9.63 billion in fiscal year 2022.
- Same-restaurant sales grew by 30.9%, indicating strong customer demand and recovery.
- Diluted EPS from continuing operations rose to $7.40, a 54.2% increase year-over-year.
- The company added 33 net new company-owned restaurants in fiscal year 2022.
- Darden projects sales growth of 6-8% and 4-6% same-restaurant sales growth for fiscal year 2023.
- Despite inflationary pressures, effective cost management and pricing strategies were implemented.
- The company maintains a strong balance sheet and positive outlook for future growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Darden Restaurants Inc kept $0.10.
- Revenue$9.63B100.0%
- Cost of revenue−$7.73B80.3%
- Gross profit$1.90B19.7%
- Operating costs−$739.6M7.7%
- Operating income$1.16B12.1%
- Interest, other & tax−$209.4M2.2%
- Net income$952.8M9.9%
Where FY2022 revenue went
$9.63B- Cost of revenue: $7.73B, 80% of revenue
- Net income: $952.8M, 9.9% of revenue
- Operating costs: $739.6M, 7.7% of revenue
- Interest, other & tax: $209.4M, 2.2% of revenue
Kept 9.9% as net incomeNet income $952.8M · 9.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed July 22, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $9.63B$7.20B | +33.8% |
| Gross Profit | $1.90B$1.40B | +35.6% |
| Operating Expenses | $8.47B$6.55B | +29.3% |
| Operating Income | $1.16B$648.70M | +79.2% |
| Interest Expense | $40.90M$47.50M | −13.9% |
| Net Income | $952.80M$629.30M | +51.4% |
| EPS (Basic) | $7.46$4.83 | +54.5% |
| EPS (Diluted) | $7.39$4.77 | +54.9% |
| Shares Outstanding (Basic) | 127.80M130.40M | −2.0% |
| Shares Outstanding (Diluted) | 129.00M131.80M | −2.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of Darden's sales growth in fiscal year 2022?
Darden's sales growth in fiscal year 2022 was primarily driven by a significant increase in same-restaurant sales of 30.9%, reflecting strong guest traffic and average check growth across its brands. Additionally, the addition of 33 net new company-owned restaurants contributed to the overall sales increase.
How is Darden addressing inflationary pressures, particularly concerning wages and cost of goods sold?
Darden is actively managing inflationary pressures through a combination of strategies. This includes menu price increases to offset rising costs, operational efficiencies to improve productivity, and leveraging its significant scale to achieve better purchasing terms. The company also focuses on disciplined cost management across all aspects of its operations.
What are Darden's growth plans for fiscal year 2023?
For fiscal year 2023, Darden plans to continue its expansion by opening approximately 55-60 new restaurants. The company forecasts total sales growth between 6% and 8%, supported by an anticipated same-restaurant sales growth of 4% to 6%.
How did the COVID-19 pandemic continue to impact Darden's operations in fiscal year 2022?
While many COVID-19 related restrictions eased, the pandemic's impact persisted in fiscal year 2022. Increases in COVID-19 cases, such as the Omicron variant, led to temporary restrictions like mask and vaccine requirements in some locations. Furthermore, the pandemic contributed to broader macroeconomic challenges, including higher inflation in wages and supply chain disruptions, which impacted staffing and product availability.
06—Continue