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Darden Restaurants Reports Fourth Quarter And Fiscal Year Diluted Net Earnings Per Share And Declares Its Quarterly Dividend

June 24, 2014



ENP Newswire - 24 June 2014

Release date- 20062014 - ORLANDO, Fla - Darden Restaurants, Inc. (NYSE: DRI) today reported earnings and sales results for the fourth quarter and fiscal year ended May 25, 2014. Headlines include:

Fourth Quarter Earnings Per Share and Total Sales

Fourth quarter diluted net earnings per share were 65 cents, which compares to $1.01 in last year's fourth quarter. The Company estimates that diluted net earnings per share for the fourth quarter of this year were adversely affected by approximately 19 cents due to legal, financial advisory and other costs related to implementation of the strategic action plan Darden announced in December 2013 and charges related to various asset impairments. Fourth quarter total sales from continuing and discontinued operations were $2.32 billion, which compares to $2.30 billion in the fourth quarter last year. As a result of the pending sale of Red Lobster, operating results for Red Lobster are included in discontinued operations for all periods presented. However, the Company did not allocate any general and administrative operating support expenses to net earnings from discontinued operations.

Diluted net earnings per share in the fourth quarter of this year include 36 cents from continuing operations and 29 cents from discontinued operations. Of the approximately 19 cents that adversely affected diluted net earnings for this year's fourth quarter, approximately 13 cents affected continuing operations and approximately six cents affected discontinued operations. Diluted net earnings per share for the fourth quarter of last year include 59 cents from continuing operations and 42 cents from discontinued operations.

Net earnings in the fourth quarter of this year were $86.5 million, which includes $48.4 million from continuing operations and $38.1 million from discontinued operations. Net earnings in the fourth quarter of last year were $133.2 million, and included $78.5 million from continuing operations and $54.7 million from discontinued operations.

Fourth quarter total sales from continuing and discontinued operations were $2.32 billion, which compares to $2.30 billion in the fourth quarter last year. Total sales for the fourth quarter of this year include sales of $1.65 billion from continuing operations and sales of $666.2 million from discontinued operations. Total sales in the fourth quarter of last year include sales of $1.59 billion from continuing operations and sales of $706.5 million from discontinued operations. The increase in total sales for the fourth quarter of this year reflects the operation of 69 net new restaurants compared to the fourth quarter last year and same restaurant-sales increases for LongHorn Steakhouse and the Company's Specialty Restaurants, offset by same-restaurant sales declines for Olive Garden and Red Lobster.

In the fourth quarter, U.S. same-restaurant sales increased 2.4% at LongHorn Steakhouse and 2.0% at the Specialty Restaurant Group and declined 3.5% at Olive Garden and 5.6% at Red Lobster.

Fiscal Year 2014 Earnings Per Share and Total Sales

Fiscal year 2014 diluted net earnings per share were $2.15, which compares to $3.13 last year. For the fiscal year, diluted net earnings per share were adversely affected by approximately 32 cents due to strategic action plan costs and charges related to various asset impairments. For fiscal year 2014, total sales from continuing and discontinued operations were $8.76 billion, a 2.4% increase from $8.55 billion last year. As a result of the pending sale of Red Lobster, operating results for Red Lobster are included in discontinued operations for all periods presented. However, we did not allocate any general and administrative operating support expenses to net earnings from discontinued operations.

For fiscal year 2014, diluted net earnings per share of $2.15 include $1.38 from continuing operations and 77 cents from discontinued operations. Last year, diluted net earnings per share were $3.13, and included $1.80 from continuing operations and $1.33 from discontinued operations. Net earnings were $286.2 million in fiscal 2014 and include $183.2 million from continuing operations and $103.0 million from discontinued operations. Net earnings were $411.9 million last year, including $237.3 million from continuing operations and $174.6 million from discontinued operations.

For fiscal year 2014, total sales were $8.76 billion, a 2.4% increase from $8.55 billion last year. Total sales for fiscal 2014 include sales of $6.29 billion from continuing operations and sales of $2.47 billion from discontinued operations. Total sales for fiscal 2013 include sales of $5.92 billion from continuing operations and sales of $2.63 billion from discontinued operations. The increase reflects 5.6% of growth in sales for the year due to new restaurants (including incremental operating weeks this year compared to last year as a result of the acquisition of 40 Yard House restaurants in the second quarter of last year) same-restaurant sales growth of 2.7% for LongHorn Steakhouse and 1.6% for the Company's Specialty Restaurants, offset partially by same-restaurant sales declines of 3.4% for Olive Garden and 6.0% for Red Lobster.

Operating Headlines

OLIVE GARDEN'S fourth quarter sales of $926 million were 2.7% lower than the prior year due to its U.S. same-restaurant sales decline of 3.5% partially offset by revenue from nine net new restaurants. For the quarter, on a percentage of sales basis, food and beverage expenses, restaurant labor expenses, restaurant expenses, selling, general and administrative expenses and depreciation and amortization expenses were higher. This resulted in a decline for the quarter in both operating profit and operating profit as a percentage of sales. For the full fiscal year, total sales were $3.64 billion, a 1.1% decline from last year, average annual sales per restaurant were $4.4 million and U.S. same-restaurant sales declined 3.4%.

LONGHORN STEAKHOUSE'S fourth quarter sales of $376 million were 10.8% higher than the prior year, driven by revenue from 34 net new restaurants and its U.S. same-restaurant sales increase of 2.4%. For the quarter, on a percentage of sales basis, higher food and beverage expenses, restaurant expenses and selling, general and administrative expenses were slightly offset by lower restaurant labor expenses. This resulted in a decline in both in operating profit and operating profit as a percentage of sales. For the full fiscal year, total sales were $1.38 billion, a 12.4% increase from last year, average annual sales per restaurant were $3.1 million and U.S. same-restaurant sales increased 2.7%.

THE SPECIALTY RESTAURANTS' fourth quarter sales of $342 million were 15.9% higher than the prior year, driven by same-restaurant sales increases of 4.1% at Bahama Breeze, 4.0% at The Capital Grille, 0.8% at Yard House, 0.3% at Eddie Vs partially offset by a same-restaurant sale decline of 1.6% at Seasons 52. Sales growth for the group also reflected revenue from five new restaurants at The Capital Grille, four at Bahama Breeze, seven at Seasons 52, three at Eddie V's and eight at Yard House. For the full fiscal year, total sales for the Specialty Restaurants were $1.23 billion, a 25% increase from last year. At The Capital Grille, average annual sales per restaurant were $7.1 million and same-restaurant sales increased 3.4% for the fiscal year. At Bahama Breeze, average annual sales per restaurant were $5.6 million and same-restaurant sales increased 4.1% for the fiscal year. At Seasons 52, average annual sales per restaurant were $5.7 million and same-restaurant sales declined 2.2% for the fiscal year. At Eddie V's, average annual sales per restaurant were $6.0 million and same-restaurant sales increased 1.1% for the fiscal year. And, at Yard House, average annual sales per restaurant were $8.2 million and same-restaurant sales increased 0.3% for the fiscal year.

Discontinued Operations

We have classified the results of operations, impairment charges and separation costs related to Red Lobster and its related franchise and consumer products businesses and two closed synergy restaurants as discontinued operations.

Red Lobster's fourth quarter sales of $664 million were 5.6% lower than the prior year, which reflected its U.S. same-restaurant sales decline of 5.6%. For the quarter, on a percentage of sales basis, food and beverage expenses, restaurant expenses, and depreciation and amortization expenses were higher compared to the fourth quarter of last year, while selling, general and administrative expenses were lower. The net result is that operating profit and operating profit as a percentage of sales were below last year. For the full fiscal year, total sales were $2.46 billion, a 6.2% decrease compared to last year, average annual sales per restaurant were $3.5 million and U.S. same-restaurant sales decreased 6.0%.

Fiscal 2014 March, April, May U.S. Same-Restaurant Sales Results

Darden reported U.S. same-restaurant sales for the fiscal months of March, April and May as follows:

SOURCE Darden Restaurants, Inc.: Financial


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Source: ENP Newswire


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