Darden Restaurants reported its financial results for the fourth quarter

OREANDA-NEWS. Darden Restaurants, Inc., (NYSE: DRI) today reported its financial results for the fourth quarter and fiscal year ended May 29, 2016.  The fourth quarter of last year included an extra week of operations resulting in a 53 week fiscal 2015. 

Fourth Quarter 2016 Financial Highlights Versus Same Fiscal Quarter Last Year

• Due to the impact of the extra week of operations included in the fourth quarter of fiscal 2015, total sales from continuing operations decreased 4.7% to $1.79 billion; excluding the impact of the extra week, total sales from continuing operations increased 2.1%
• Reported diluted net earnings per share from continuing operations increased 19.6% to $1.10 and increased 8.9% from last year's adjusted diluted net earnings per share (13-week basis)*
• The company repurchased approximately $45 million of its outstanding common stock
• Same-restaurant sales increased 1.7% on a fiscal calendar basis
  (13-weeks ended May 29, 2016 vs. 13-weeks ended May 24, 2015)

• On a comparable calendar basis, same-restaurant sales increased 2.6% for the quarter
  (13-weeks ended May 29, 2016 vs. 13-weeks ended May 31, 2015)

Note: Due to the transition from a 53-week to a 52-week fiscal year, year-over-year fiscal period comparisons are offset by one week.  Using comparable calendar periods balances the one-week shift and provides a clearer year-over-year comparison.

*   See the "Non-GAAP Information" below for more details.

"I'm pleased with the results we achieved during the fourth quarter, which wrapped up a year of significant progress improving our operations and financial performance," said CEO Gene Lee.  "These results reinforce our firm belief that our strategy is working as we continue to build guest loyalty by relentlessly focusing on our back-to-basics operating philosophy.  This focus, together with our competitive advantages, drove our strong performance for the year and increased shareholder value."

Fiscal 2016 Financial Highlights Versus Fiscal 2015

• Total sales from continuing operations increased 2.5% to $6.93 billion, which includes the impact of the extra week of operations in fiscal 2015; excluding the impact of the extra week, total sales from continuing operations increased 4.4%
• Reported diluted net earnings per share from continuing operations increased 84.1% to $2.78
• Adjusted diluted net earnings per share from continuing operations of $3.53 increased 37.9% (52-week basis)*
• The company repurchased approximately $185 million of its outstanding common stock
• Same-restaurant sales increased 3.3% for the year on both a fiscal and comparable calendar basis

Note: The difference between fiscal and comparable calendar same-restaurant sales at the brand level was immaterial

*   See the "Non-GAAP Information" below for more details

Segment Performance Versus Same Fiscal Period Last Year
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses.  Segment profit for fiscal 2016 includes the impact of additional rent expense related to the completion of our real estate strategy, primarily impacting Olive Garden and LongHorn Steakhouse.  The results for the three and twelve month periods ending May 31, 2015 include an additional week of operations.

* Incremental rent from real estate transactions in fiscal 2016 negatively impacted segment profit margin % by 230bps, 130bps, 10bps and 60bps for the three months ended 05/29/2016 and by 140bps, 90bps, 0bps and 30bps for the twelve months ended 05/29/16 for Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Business segments, respectively.

U.S. Same-Restaurant Sales Results - Fiscal Calendar Basis

U.S. Same-Restaurant Sales Results - Comparable Calendar Basis

Quarterly Dividend Increase
The Board of Directors increased the quarterly dividend to $0.56 per common share, which represents a 12% increase over the Company's previous quarterly dividend of $0.50. The quarterly dividend is payable on August 1, 2016 to shareholders of record on July 11, 2016.

Share Repurchase Program
During the quarter, the Company repurchased approximately 0.7 million shares of its common stock for a total cost of approximately $45 million.  This leaves approximately $315 million remaining under the current $500 million repurchase authorization.

Fiscal 2017 Financial Outlook

• Same-restaurant sales growth of 1.0% to 2.0%
• New unit openings of 24 to 28 restaurants
• Total capital spending of $310 to $350 million
• Total inflation of 1.5% to 2.0%
• Earnings per diluted share of $3.80 to $3.90
• The EPS outlook reflects approximately 128.5 million diluted average common shares outstanding for the year

Annual Meeting of Shareholders
The Company's Annual Meeting of Shareholders will be held on September 29, 2016 in Orlando, FL.  The record date for shareholders to vote in the Annual Meeting is August 1, 2016.

Investor Conference Call
The Company will host a conference call and slide presentation on Thursday, June 30 at 8:30 am ET to review its recent financial performance.  To listen to the call live, please go to https://www.webcaster4.com/Webcast/Page/1007/15389 at least fifteen minutes early to register, download, and install any necessary audio software.  For those who cannot access the Internet, please dial 1-888-820-8959 and enter passcode 1848969.  For those who cannot listen to the live broadcast, a replay will be available shortly after the call.  In addition, at the conclusion of the call, we will post the slide presentation from the call on the Investor Relations section of our website at: www.darden.com that provides more context on our fourth quarter fiscal 2016 results.

About Darden
Darden Restaurants, Inc., (NYSE: DRI) owns and operates more than 1,500 restaurants that generate $6.9 billion in annual sales. Headquartered in Orlando, Florida, and employing 150,000 people, Darden is recognized for a culture that rewards caring for and responding to people.  Our restaurant brands - Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V's and Yard House - reflect the rich diversity of those who dine with us. Our brands are built on deep insights into what our guests want. For more information, please visit www.darden.com.

Non-GAAP Information
The information in this press release includes financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"), such as adjusted earnings per diluted share from continuing operations.  The Company's management uses these non-GAAP measures in its analysis of the Company's performance.  The Company believes that the presentation of certain non-GAAP measures provides useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses.  These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Reconciliations of these non-GAAP measures are included in this release.