Summary
Darden Restaurants, Inc. reported sales of $2.03 billion for the first quarter of fiscal year 2013, a 4.8% increase compared to the prior year. This growth was driven by the addition of new restaurants across its brands, particularly Olive Garden, LongHorn Steakhouse, and the consolidated Eddie V's, as well as same-restaurant sales increases in The Capital Grille, Bahama Breeze, and Seasons 52. While overall sales increased, Red Lobster experienced a slight decrease in same-restaurant sales. Net earnings from continuing operations grew by 3.9% to $111.0 million, leading to a 9.0% increase in diluted EPS from continuing operations to $0.85, partly due to a reduction in outstanding shares through ongoing share repurchases. The company demonstrated effective cost management, with food and beverage costs, restaurant labor, and restaurant expenses decreasing as a percentage of sales, contributing to improved operating profit margins for Olive Garden and Red Lobster. However, selling, general, and administrative expenses rose notably due to higher media costs and market-driven changes in deferred compensation plans. Darden also continues to strategically invest in its restaurant portfolio through capital expenditures for new builds and remodels, supported by strong operating cash flows and available credit facilities, positioning it for continued growth.
Financial Highlights
49 data points| Revenue | $1.37B |
| Cost of Revenue | $1.55B |
| Gross Profit | -$176.50M |
| SG&A Expenses | $218.20M |
| Operating Expenses | $1.89B |
| Operating Income | $62.90M |
| Net Income | $110.80M |
| EPS (Basic) | $0.86 |
| EPS (Diluted) | $0.85 |
| Shares Outstanding (Basic) | 128.10M |
| Shares Outstanding (Diluted) | 131.00M |
Key Highlights
- 1Total sales increased by 4.8% to $2.03 billion for the first quarter of fiscal 2013, driven by new restaurant openings and same-restaurant sales growth in select brands.
- 2Net earnings from continuing operations rose by 3.9% to $111.0 million, and diluted EPS from continuing operations increased by 9.0% to $0.85.
- 3Positive same-restaurant sales growth was achieved at The Capital Grille (4.0%), Bahama Breeze (1.2%), and Seasons 52 (1.3%), while Olive Garden and LongHorn Steakhouse showed modest increases, and Red Lobster experienced a decline.
- 4Cost of sales, restaurant labor, and restaurant expenses as a percentage of sales decreased, indicating effective operational efficiency and pricing leverage.
- 5Selling, general, and administrative expenses increased by 19.4% as a percentage of sales, primarily due to higher media costs and changes in deferred compensation plan valuations.
- 6The company continued its share repurchase program, buying back 1.0 million shares for $52.2 million during the quarter, which contributed to the increase in diluted EPS.
- 7Darden maintained strong liquidity with $51.5 million in cash and cash equivalents and $495.8 million in available credit under its revolving credit facility.