Summary
Darden Restaurants, Inc. reported a 7.5% increase in sales for the first quarter of fiscal year 2012, reaching $1.94 billion, driven by the addition of 71 new restaurants and a 2.8% increase in same-restaurant sales across its key brands. Despite the top-line growth, net earnings from continuing operations saw a 5.7% decrease to $106.8 million, with diluted EPS falling 2.5% to $0.78. This decline was attributed to higher food and beverage costs and increased depreciation and amortization expenses as a percentage of sales, which were only partially offset by improvements in other expense categories and a lower effective tax rate. The company also announced a significant development agreement to expand its brands into Mexico, with a commitment to open at least 37 new restaurants over five years, though Darden will not hold an ownership stake. The company's liquidity remains strong, supported by operating cash flows and an undrawn revolving credit facility, positioning it to fund ongoing capital expenditures, dividends, and share repurchases.
Financial Highlights
49 data points| Revenue | $1.94B |
| Cost of Revenue | $1.51B |
| Gross Profit | $435.60M |
| SG&A Expenses | $182.80M |
| Operating Expenses | $1.79B |
| Operating Income | $106.80M |
| Net Income | $106.60M |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.78 |
| Shares Outstanding (Basic) | 133.80M |
| Shares Outstanding (Diluted) | 137.20M |
Key Highlights
- 1Total sales increased by 7.5% to $1.94 billion for the first quarter of fiscal 2012.
- 2Net earnings from continuing operations decreased by 5.7% to $106.8 million, and diluted EPS fell 2.5% to $0.78.
- 3Same-restaurant sales increased by 2.8% on a blended basis for Olive Garden, Red Lobster, and LongHorn Steakhouse.
- 4Food and beverage costs as a percentage of sales increased due to higher commodity costs and unfavorable menu mix.
- 5Depreciation and amortization expenses increased as a percentage of sales, driven by new restaurant openings and remodels.
- 6Darden Restaurants entered into a franchise development agreement to open a minimum of 37 restaurants in Mexico over five years.
- 7The company maintained a strong liquidity position with $74.2 million in cash and cash equivalents and an undrawn $750 million revolving credit facility.