Darden Restaurants Reports Fiscal 2024 Third Quarter Results; Declares Quarterly Dividend; Authorizes New $1 Billion Share Repurchase Program; And Updates Fiscal 2024 Financial Outlook

ORLANDO, Fla., March 21, 2024 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE:DRI) today reported its financial results for the third quarter ended February 25, 2024.

Third Quarter 2024 Financial Highlights, Comparisons Versus Same Fiscal Quarter Last Year

• Total sales increased 6.8% to $3.0 billion, driven by sales from the addition of 79 company-owned Ruth's Chris Steak House (Ruth's Chris) restaurants and 53 other net new restaurants, partially offset by a blended same-restaurant sales* decrease of (1.0)%
• Same-restaurant sales:

• Reported diluted net earnings per share from continuing operations were $2.60
• Excluding $0.02 of Ruth's Chris transaction and integration related costs, adjusted diluted net earnings per share from continuing operations were $2.62, an increase of 12.0%**
• The Company repurchased $33 million of its outstanding common stock

* Will not include Ruth's Chris Steak House until they have been owned and operated by Darden for a 16-month period (Q2 Fiscal 2025)
** See the "Non-GAAP Information" below for more details

"I am proud of our teams and the way they performed this quarter," said Darden President & CEO Rick Cardenas. "Each one of our segments grew sales and profit in an operating environment that was tougher than we anticipated, and we continued to outperform industry same-restaurant sales and traffic.

"Looking ahead, our focus remains on controlling what we can control, leveraging and strengthening our competitive advantages, and executing our back-to-basics operating philosophy in order to effectively manage the business for the long-term."

Segment Performance
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses. Segment profit excludes non-cash real estate related expenses. From the date of acquisition forward, sales and profits from Ruth's Chris company-owned restaurants are included within the Fine Dining segment. Royalties from Ruth's Chris franchise and managed locations reside in the Other Business segment.

Dividend Declared
Darden's Board of Directors declared a quarterly cash dividend of $1.31 per share on the Company's outstanding common stock. The dividend is payable on May 1, 2024 to shareholders of record at the close of business on April 10, 2024.

Share Repurchase Program
During the quarter, the Company repurchased approximately 0.2 million shares of its common stock for a total of approximately $33 million. In addition, yesterday, Darden's Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $1 billion of its outstanding common stock. This repurchase program does not have an expiration and replaces the previously existing share repurchase authorization.

Updated Fiscal 2024 Financial Outlook
The Company updated its full year financial outlook for fiscal 2024 which includes Ruth's Chris operating results, but excludes approximately $55 million, pre-tax, of expected transaction and integration related costs associated with the acquisition. We will provide additional details during our investor conference call scheduled for this morning at 8:30 am ET.

• Total sales of approximately $11.4 billion
• Same-restaurant sales growth of 1.5% to 2.0%
• New restaurant openings of 50 to 55
• Total capital spending of approximately $600 million
• Total inflation of approximately 3.0%
• An effective tax rate between 12.0% and 12.5%
• Adjusted diluted net earnings per share from continuing operations of $8.80 to $8.90, excluding approximately $0.35, after-tax, of Ruth's Chris transaction and integration related costs*
• Approximately 121.0 million weighted average diluted shares outstanding

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

Investor Conference Call
The Company will host a conference call and slide presentation today, Thursday, March 21, 2024 at 8:30 am ET to review its recent financial performance. The call will be webcast live at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=vq68gZsK. Please allow extra time prior to the call to visit the site and download any software required to listen to the webcast. Prior to the call, a slide presentation will be posted on the Investor Relations section of our website at: www.darden.com. For those who cannot access the Internet, please dial 1-877-407-9219. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.

About Darden
Darden is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahama Breeze. For more information, please visit www.darden.com.

Information About Forward-Looking Statements
Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of the date on which such statements are first made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden's Form 10-K, Form 10-Q and Form 8-K reports. These risks and uncertainties include: a failure to address cost pressures and a failure to effectively deliver cost management activities, economic factors and their impacts on the restaurant industry and general macroeconomic factors including unemployment, energy prices and interest rates, the inability to hire, train, reward and retain restaurant team members, a failure to develop and recruit effective leaders, labor and insurance costs, health concerns including food-related pandemics or outbreaks of flu or other viruses, food safety and food-borne illness concerns, technology failures including failure to maintain a secure cyber network, compliance with privacy and data protection laws and risks of failures or breaches of our data protection systems, the inability to successfully integrate Ruth's Chris Steak House operations into our business, risks relating to public policy changes and federal, state and local regulation of our business, intense competition, changing consumer preferences, an inability or failure to manage the accelerated impact of social media, a failure to execute innovative marketing and guest relationship tactics, climate change, adverse weather conditions and natural disasters, long-term and non-cancelable property leases, failure to execute a business continuity plan following a disaster, shortages or interruptions in the delivery of food and other products and services, failure to drive profitable sales growth, a lack of availability of suitable locations for new restaurants, higher-than-anticipated costs to open, close, relocate or remodel restaurants, risks of doing business with franchisees, licensees and vendors in foreign markets, volatility in the market value of derivatives, volatility leading to the inability to hedge equity compensation market exposure, failure to protect our intellectual property, litigation, unfavorable publicity, disruptions in the financial markets, impairment in the carrying value of our goodwill or other intangible assets, changes in tax laws or unanticipated tax liabilities, failure of our internal controls over financial reporting and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.

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 diluted net earnings per 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.

(Analysts) Kevin Kalicak, (407) 245-5870; (Media) Rich Jeffers, (407) 245-4189

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SOURCE Darden Restaurants, Inc.: Financial