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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Darden Restaurants Inc | NYSE:DRI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-3.18 | -2.10% | 147.97 | 151.69 | 147.46 | 151.69 | 2,574,645 | 00:19:33 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Florida
|
|
59-3305930
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
1000 Darden Center Drive
Orlando, Florida
|
|
32837
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o
|
|
Smaller reporting company
|
|
o
|
|
|
|
|
Emerging growth company
|
|
o
|
|
|
|
Page
|
Part I -
|
Financial Information
|
|
|
|
Item 1.
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
|
|
|
|
Part II -
|
Other Information
|
|
|
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 2.
|
||
|
Item 6.
|
||
|
|
||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Sales
|
$
|
2,246.5
|
|
|
$
|
2,128.4
|
|
|
$
|
6,281.3
|
|
|
$
|
5,946.0
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Food and beverage
|
638.0
|
|
|
603.3
|
|
|
1,784.6
|
|
|
1,701.4
|
|
||||
Restaurant labor
|
711.4
|
|
|
683.0
|
|
|
2,053.1
|
|
|
1,929.6
|
|
||||
Restaurant expenses
|
379.5
|
|
|
360.8
|
|
|
1,098.4
|
|
|
1,055.2
|
|
||||
Marketing expenses
|
62.4
|
|
|
58.9
|
|
|
186.9
|
|
|
183.0
|
|
||||
General and administrative expenses
|
102.8
|
|
|
110.1
|
|
|
302.4
|
|
|
307.0
|
|
||||
Depreciation and amortization
|
85.3
|
|
|
79.2
|
|
|
248.8
|
|
|
234.1
|
|
||||
Impairments and disposal of assets, net
|
1.6
|
|
|
(0.3
|
)
|
|
4.4
|
|
|
(1.1
|
)
|
||||
Total operating costs and expenses
|
$
|
1,981.0
|
|
|
$
|
1,895.0
|
|
|
$
|
5,678.6
|
|
|
$
|
5,409.2
|
|
Operating income
|
265.5
|
|
|
233.4
|
|
|
602.7
|
|
|
536.8
|
|
||||
Interest, net
|
12.4
|
|
|
117.4
|
|
|
38.3
|
|
|
147.9
|
|
||||
Earnings before income taxes
|
253.1
|
|
|
116.0
|
|
|
564.4
|
|
|
388.9
|
|
||||
Income tax expense (benefit)
|
28.0
|
|
|
(102.5
|
)
|
|
54.5
|
|
|
(39.5
|
)
|
||||
Earnings from continuing operations
|
$
|
225.1
|
|
|
$
|
218.5
|
|
|
$
|
509.9
|
|
|
$
|
428.4
|
|
Losses from discontinued operations, net of tax benefit of $0.8, $0.5, $1.3 and $4.0, respectively
|
(1.5
|
)
|
|
(0.7
|
)
|
|
(4.5
|
)
|
|
(6.9
|
)
|
||||
Net earnings
|
$
|
223.6
|
|
|
$
|
217.8
|
|
|
$
|
505.4
|
|
|
$
|
421.5
|
|
Basic net earnings per share:
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
1.83
|
|
|
$
|
1.77
|
|
|
$
|
4.12
|
|
|
$
|
3.45
|
|
Losses from discontinued operations
|
(0.02
|
)
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.06
|
)
|
||||
Net earnings
|
$
|
1.81
|
|
|
$
|
1.76
|
|
|
$
|
4.09
|
|
|
$
|
3.39
|
|
Diluted net earnings per share:
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
1.80
|
|
|
$
|
1.74
|
|
|
$
|
4.06
|
|
|
$
|
3.40
|
|
Losses from discontinued operations
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
|
(0.06
|
)
|
||||
Net earnings
|
$
|
1.79
|
|
|
$
|
1.73
|
|
|
$
|
4.02
|
|
|
$
|
3.34
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
123.3
|
|
|
123.6
|
|
|
123.7
|
|
|
124.2
|
|
||||
Diluted
|
125.0
|
|
|
125.7
|
|
|
125.6
|
|
|
126.1
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Net earnings
|
$
|
223.6
|
|
|
$
|
217.8
|
|
|
$
|
505.4
|
|
|
$
|
421.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency adjustment
|
(0.3
|
)
|
|
(0.4
|
)
|
|
0.3
|
|
|
(1.1
|
)
|
||||
Change in fair value of marketable securities, net of taxes of $0.0, $0.0, $0.0 and $0.0, respectively
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $(0.1), $0.0, $(0.1) and $0.0, respectively
|
(1.9
|
)
|
|
3.6
|
|
|
4.4
|
|
|
(0.8
|
)
|
||||
Amortization of unrecognized net actuarial (loss) gain, net of taxes of $0.0, $(0.1), $0.0 and $(0.1), respectively, related to pension and other post-employment benefits
|
(0.1
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
||||
Reclassification of tax effect
|
—
|
|
|
(15.4
|
)
|
|
—
|
|
|
(15.4
|
)
|
||||
Other comprehensive income (loss)
|
$
|
(2.3
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
4.2
|
|
|
$
|
(17.5
|
)
|
Total comprehensive income
|
$
|
221.3
|
|
|
$
|
205.6
|
|
|
$
|
509.6
|
|
|
$
|
404.0
|
|
|
February 24,
2019 |
|
May 27,
2018 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
302.9
|
|
|
$
|
146.9
|
|
Receivables, net
|
73.9
|
|
|
83.7
|
|
||
Inventories
|
209.5
|
|
|
205.3
|
|
||
Prepaid income taxes
|
5.2
|
|
|
15.9
|
|
||
Prepaid expenses and other current assets
|
95.7
|
|
|
89.9
|
|
||
Assets held for sale
|
—
|
|
|
11.9
|
|
||
Total current assets
|
$
|
687.2
|
|
|
$
|
553.6
|
|
Land, buildings and equipment, net of accumulated depreciation and amortization of $2,414.5 and $2,231.7, respectively
|
2,539.9
|
|
|
2,429.8
|
|
||
Goodwill
|
1,183.7
|
|
|
1,183.7
|
|
||
Trademarks
|
950.8
|
|
|
950.8
|
|
||
Other assets
|
336.2
|
|
|
351.7
|
|
||
Total assets
|
$
|
5,697.8
|
|
|
$
|
5,469.6
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
303.2
|
|
|
$
|
277.0
|
|
Accrued payroll
|
163.3
|
|
|
177.5
|
|
||
Accrued income taxes
|
7.3
|
|
|
—
|
|
||
Other accrued taxes
|
50.5
|
|
|
56.6
|
|
||
Unearned revenues
|
471.7
|
|
|
415.8
|
|
||
Other current liabilities
|
446.9
|
|
|
457.6
|
|
||
Total current liabilities
|
$
|
1,442.9
|
|
|
$
|
1,384.5
|
|
Long-term debt
|
927.4
|
|
|
926.5
|
|
||
Deferred income taxes
|
130.7
|
|
|
114.0
|
|
||
Deferred rent
|
346.5
|
|
|
318.0
|
|
||
Other liabilities
|
534.6
|
|
|
531.8
|
|
||
Total liabilities
|
$
|
3,382.1
|
|
|
$
|
3,274.8
|
|
Stockholders’ equity:
|
|
|
|
||||
Common stock and surplus
|
$
|
1,676.8
|
|
|
$
|
1,631.9
|
|
Retained earnings
|
728.4
|
|
|
657.6
|
|
||
Treasury stock
|
(7.8
|
)
|
|
(7.8
|
)
|
||
Accumulated other comprehensive income (loss)
|
(81.0
|
)
|
|
(85.2
|
)
|
||
Unearned compensation
|
(0.7
|
)
|
|
(1.7
|
)
|
||
Total stockholders’ equity
|
$
|
2,315.7
|
|
|
$
|
2,194.8
|
|
Total liabilities and stockholders’ equity
|
$
|
5,697.8
|
|
|
$
|
5,469.6
|
|
|
Common
Stock And Surplus |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Unearned
Compensation |
|
Total
Stockholders’ Equity |
||||||||||||
Balance at November 25, 2018
|
$
|
1,675.5
|
|
|
$
|
662.5
|
|
|
$
|
(7.8
|
)
|
|
$
|
(78.7
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
2,250.3
|
|
Net earnings
|
—
|
|
|
223.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223.6
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
||||||
Dividends declared ($0.75 per share)
|
—
|
|
|
(93.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93.6
|
)
|
||||||
Stock option exercises (0.0 shares)
|
1.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||||
Stock-based compensation
|
7.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
||||||
Repurchases of common stock (0.7 shares)
|
(9.6
|
)
|
|
(64.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73.7
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.0 shares)
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
2.3
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
$
|
0.1
|
|
|||||
Balance at February 24, 2019
|
$
|
1,676.8
|
|
|
$
|
728.4
|
|
|
$
|
(7.8
|
)
|
|
$
|
(81.0
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
2,315.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at May 27, 2018
|
$
|
1,631.9
|
|
|
$
|
657.6
|
|
|
$
|
(7.8
|
)
|
|
$
|
(85.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
2,194.8
|
|
Net earnings
|
—
|
|
|
505.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505.4
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
||||||
Dividends declared ($2.25 per share)
|
—
|
|
|
(280.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(280.2
|
)
|
||||||
Stock option exercises (0.9 shares)
|
40.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.2
|
|
||||||
Stock-based compensation
|
20.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
||||||
Repurchases of common stock (1.6 shares)
|
(21.2
|
)
|
|
(144.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166.0
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1 shares)
|
5.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
6.0
|
|
||||||
Other
|
0.7
|
|
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(8.7
|
)
|
||||||
Balance at February 24, 2019
|
$
|
1,676.8
|
|
|
$
|
728.4
|
|
|
$
|
(7.8
|
)
|
|
$
|
(81.0
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
2,315.7
|
|
Balance at November 26, 2017
|
$
|
1,606.8
|
|
|
$
|
447.3
|
|
|
$
|
(7.8
|
)
|
|
$
|
(68.2
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
1,976.1
|
|
Net earnings
|
—
|
|
|
217.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
217.8
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
|
—
|
|
|
(12.2
|
)
|
||||||
Dividends declared ($0.63 per share)
|
—
|
|
|
(77.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77.9
|
)
|
||||||
Stock option exercises (0.4 shares)
|
16.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
||||||
Stock-based compensation
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
||||||
Repurchases of common stock (0.2 shares)
|
(2.5
|
)
|
|
(16.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.7
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1 shares)
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
1.6
|
|
||||||
Other
|
—
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
$
|
15.6
|
|
|||||
Balance at February 25, 2018
|
$
|
1,628.4
|
|
|
$
|
586.4
|
|
|
$
|
(7.8
|
)
|
|
$
|
(80.4
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
2,124.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at May 28, 2017
|
$
|
1,614.6
|
|
|
$
|
560.1
|
|
|
$
|
(7.8
|
)
|
|
$
|
(62.9
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
2,101.7
|
|
Net earnings
|
—
|
|
|
421.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
421.5
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.5
|
)
|
|
—
|
|
|
(17.5
|
)
|
||||||
Dividends declared ($1.89 per share)
|
—
|
|
|
(234.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(234.9
|
)
|
||||||
Stock option exercises (0.8 shares)
|
31.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.1
|
|
||||||
Stock-based compensation
|
16.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.7
|
|
||||||
Repurchases of common stock (2.5 shares)
|
(31.9
|
)
|
|
(175.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(207.6
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1 shares)
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
4.4
|
|
||||||
Other
|
(6.4
|
)
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
9.5
|
|
||||||
Balance at February 25, 2018
|
$
|
1,628.4
|
|
|
$
|
586.4
|
|
|
$
|
(7.8
|
)
|
|
$
|
(80.4
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
2,124.9
|
|
|
Nine Months Ended
|
||||||
|
February 24,
2019 |
|
February 25,
2018 |
||||
Cash flows—operating activities
|
|
|
|
||||
Net earnings
|
$
|
505.4
|
|
|
$
|
421.5
|
|
Losses from discontinued operations, net of tax
|
4.5
|
|
|
6.9
|
|
||
Adjustments to reconcile net earnings from continuing operations to cash flows:
|
|
|
|
||||
Depreciation and amortization
|
248.8
|
|
|
234.1
|
|
||
Impairments and disposal of assets, net
|
4.4
|
|
|
(1.1
|
)
|
||
Stock-based compensation expense
|
45.3
|
|
|
32.2
|
|
||
Change in current assets and liabilities
|
59.3
|
|
|
13.9
|
|
||
Contributions to pension and postretirement plans
|
(1.3
|
)
|
|
(61.6
|
)
|
||
Deferred income taxes
|
15.9
|
|
|
(29.0
|
)
|
||
Change in deferred rent
|
26.5
|
|
|
27.8
|
|
||
Change in other assets and liabilities
|
5.7
|
|
|
11.0
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
102.2
|
|
||
Other, net
|
5.5
|
|
|
(6.9
|
)
|
||
Net cash provided by operating activities of continuing operations
|
$
|
920.0
|
|
|
$
|
751.0
|
|
Cash flows—investing activities
|
|
|
|
||||
Purchases of land, buildings and equipment
|
(346.9
|
)
|
|
(294.9
|
)
|
||
Proceeds from disposal of land, buildings and equipment
|
12.7
|
|
|
3.3
|
|
||
Cash used in business acquisitions, net of cash acquired
|
—
|
|
|
(40.4
|
)
|
||
Purchases of capitalized software and other assets
|
(17.4
|
)
|
|
(14.7
|
)
|
||
Other, net
|
1.9
|
|
|
4.4
|
|
||
Net cash used in investing activities of continuing operations
|
$
|
(349.7
|
)
|
|
$
|
(342.3
|
)
|
Cash flows—financing activities
|
|
|
|
||||
Proceeds from issuance of common stock
|
45.4
|
|
|
35.5
|
|
||
Dividends paid
|
(278.4
|
)
|
|
(234.9
|
)
|
||
Repurchases of common stock
|
(166.0
|
)
|
|
(207.6
|
)
|
||
Proceeds from issuance of short-term debt
|
137.5
|
|
|
812.2
|
|
||
Repayments of short-term debt
|
(137.5
|
)
|
|
(761.6
|
)
|
||
Repayments of long-term debt
|
—
|
|
|
(408.2
|
)
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
300.0
|
|
||
Principal payments on capital and financing leases
|
(4.9
|
)
|
|
(3.9
|
)
|
||
Other, net
|
0.1
|
|
|
(11.5
|
)
|
||
Net cash used in financing activities of continuing operations
|
$
|
(403.8
|
)
|
|
$
|
(480.0
|
)
|
Cash flows—discontinued operations
|
|
|
|
||||
Net cash used in operating activities of discontinued operations
|
(10.5
|
)
|
|
(15.2
|
)
|
||
Net cash provided by investing activities of discontinued operations
|
—
|
|
|
0.2
|
|
||
Net cash used in discontinued operations
|
$
|
(10.5
|
)
|
|
$
|
(15.0
|
)
|
|
|
|
|
||||
Increase (decrease) in cash and cash equivalents
|
156.0
|
|
|
(86.3
|
)
|
||
Cash and cash equivalents - beginning of period
|
146.9
|
|
|
233.1
|
|
||
Cash and cash equivalents - end of period
|
$
|
302.9
|
|
|
$
|
146.8
|
|
|
|
|
|
|
Nine Months Ended
|
||||||
|
February 24,
2019 |
|
February 25,
2018 |
||||
Cash flows from changes in current assets and liabilities
|
|
|
|
||||
Receivables, net
|
16.5
|
|
|
25.8
|
|
||
Inventories
|
(4.2
|
)
|
|
(29.1
|
)
|
||
Prepaid expenses and other current assets
|
(5.8
|
)
|
|
(12.9
|
)
|
||
Accounts payable
|
26.3
|
|
|
28.9
|
|
||
Accrued payroll
|
(14.2
|
)
|
|
5.7
|
|
||
Prepaid/accrued income taxes
|
17.9
|
|
|
(56.8
|
)
|
||
Other accrued taxes
|
(6.1
|
)
|
|
(1.9
|
)
|
||
Unearned revenues
|
54.6
|
|
|
74.0
|
|
||
Other current liabilities
|
(25.7
|
)
|
|
(19.8
|
)
|
||
Change in current assets and liabilities
|
$
|
59.3
|
|
|
$
|
13.9
|
|
(in millions)
|
|
February 24, 2019
|
||
Unearned revenues
|
|
|
||
Deferred gift card revenue
|
|
$
|
501.8
|
|
Deferred gift card discounts
|
|
(31.6
|
)
|
|
Other
|
|
1.5
|
|
|
Total
|
|
$
|
471.7
|
|
|
|
|
||
Other liabilities
|
|
|
||
Deferred franchise fees - non-current
|
|
$
|
2.9
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in millions)
|
|
February 24, 2019
|
|
February 24, 2019
|
||||
Beginning balance
|
|
$
|
411.6
|
|
|
$
|
443.1
|
|
Activations
|
|
363.5
|
|
|
615.1
|
|
||
Redemptions and breakage
|
|
(273.3
|
)
|
|
(556.4
|
)
|
||
Ending balance
|
|
$
|
501.8
|
|
|
$
|
501.8
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
February 24, 2019
|
|
February 25, 2018
|
|
February 24, 2019
|
|
February 25, 2018
|
||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Restaurant and marketing expenses
|
$
|
0.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
3.2
|
|
|
$
|
(0.4
|
)
|
Other income and expenses
|
1.4
|
|
|
1.3
|
|
|
2.6
|
|
|
11.3
|
|
||||
Losses before income taxes
|
(2.3
|
)
|
|
(1.2
|
)
|
|
(5.8
|
)
|
|
(10.9
|
)
|
||||
Income tax benefit
|
(0.8
|
)
|
|
(0.5
|
)
|
|
(1.3
|
)
|
|
(4.0
|
)
|
||||
Losses from discontinued operations, net of tax
|
$
|
(1.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(6.9
|
)
|
Cash paid for interest and income taxes are as follows:
|
|
Nine Months Ended
|
||||||
(in millions)
|
|
February 24, 2019
|
|
February 25, 2018
|
||||
Interest paid, net of amounts capitalized (1)
|
|
$
|
37.1
|
|
|
$
|
142.2
|
|
Income taxes paid, net of refunds
|
|
15.0
|
|
|
40.3
|
|
(1)
|
Interest paid for the nine months ended February 25, 2018 includes approximately
$97.3 million
of payments associated with the retirement of long-term debt.
|
Non-cash investing activities are as follows:
|
|
Nine Months Ended
|
||||||
(in millions)
|
|
February 24, 2019
|
|
February 25, 2018
|
||||
Increase in land, buildings and equipment through accrued purchases
|
|
$
|
37.5
|
|
|
$
|
35.7
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||
Anti-dilutive stock-based compensation awards
|
|
0.4
|
|
|
0.4
|
|
|
0.3
|
|
|
0.2
|
|
(in millions)
|
|
Olive Garden
|
|
LongHorn Steakhouse
|
|
Fine Dining
|
|
Other Business
|
|
Corporate
|
|
Consolidated
|
||||||||||||
For the three months ended February 25, 2018
|
|
|||||||||||||||||||||||
Sales
|
|
$
|
1,073.2
|
|
|
$
|
452.8
|
|
|
$
|
164.4
|
|
|
$
|
438.0
|
|
|
$
|
—
|
|
|
$
|
2,128.4
|
|
Restaurant and marketing expenses
|
|
846.5
|
|
|
362.9
|
|
|
124.1
|
|
|
372.5
|
|
|
—
|
|
|
1,706.0
|
|
||||||
Segment profit
|
|
$
|
226.7
|
|
|
$
|
89.9
|
|
|
$
|
40.3
|
|
|
$
|
65.5
|
|
|
$
|
—
|
|
|
$
|
422.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
33.7
|
|
|
$
|
16.5
|
|
|
$
|
7.9
|
|
|
$
|
21.1
|
|
|
$
|
—
|
|
|
$
|
79.2
|
|
Impairments and disposal of assets, net
|
|
0.1
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.3
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
|
Olive Garden
|
|
LongHorn Steakhouse
|
|
Fine Dining
|
|
Other Business
|
|
Corporate
|
|
Consolidated
|
||||||||||||
For the nine months ended February 25, 2018
|
|
|||||||||||||||||||||||
Sales
|
|
$
|
3,014.6
|
|
|
$
|
1,245.0
|
|
|
$
|
427.1
|
|
|
$
|
1,259.3
|
|
|
$
|
—
|
|
|
$
|
5,946.0
|
|
Restaurant and marketing expenses
|
|
2,421.2
|
|
|
1,031.0
|
|
|
340.5
|
|
|
1,076.5
|
|
|
—
|
|
|
4,869.2
|
|
||||||
Segment profit
|
|
$
|
593.4
|
|
|
$
|
214.0
|
|
|
$
|
86.6
|
|
|
$
|
182.8
|
|
|
$
|
—
|
|
|
$
|
1,076.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
99.2
|
|
|
$
|
49.3
|
|
|
$
|
23.5
|
|
|
$
|
62.1
|
|
|
$
|
—
|
|
|
$
|
234.1
|
|
Impairments and disposal of assets, net
|
|
0.1
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(1.1
|
)
|
||||||
Purchases of land, buildings and equipment
|
|
125.8
|
|
|
55.6
|
|
|
21.6
|
|
|
87.7
|
|
|
4.2
|
|
|
294.9
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
February 24, 2019
|
|
February 25, 2018
|
|
February 24, 2019
|
|
February 25, 2018
|
||||||||
Segment profit
|
|
$
|
455.2
|
|
|
$
|
422.4
|
|
|
$
|
1,158.3
|
|
|
$
|
1,076.8
|
|
Less general and administrative expenses
|
|
(102.8
|
)
|
|
(110.1
|
)
|
|
(302.4
|
)
|
|
(307.0
|
)
|
||||
Less depreciation and amortization
|
|
(85.3
|
)
|
|
(79.2
|
)
|
|
(248.8
|
)
|
|
(234.1
|
)
|
||||
Less impairments and disposal of assets, net
|
|
(1.6
|
)
|
|
0.3
|
|
|
(4.4
|
)
|
|
1.1
|
|
||||
Less interest, net
|
|
(12.4
|
)
|
|
(117.4
|
)
|
|
(38.3
|
)
|
|
(147.9
|
)
|
||||
Earnings before income taxes
|
|
$
|
253.1
|
|
|
$
|
116.0
|
|
|
$
|
564.4
|
|
|
$
|
388.9
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
February 24, 2019
|
|
February 25, 2018
|
|
February 24, 2019
|
|
February 25, 2018
|
||||||||
Restaurant impairments
|
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
4.8
|
|
|
$
|
—
|
|
Disposal gains
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(0.6
|
)
|
|
(1.1
|
)
|
||||
Other
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Impairments and disposal of assets, net
|
|
$
|
1.6
|
|
|
$
|
(0.3
|
)
|
|
$
|
4.4
|
|
|
$
|
(1.1
|
)
|
(in millions)
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gains (Losses) on Marketable Securities
|
|
Unrealized Gains (Losses) on Derivatives
|
|
Benefit Plan Funding Position
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balance at November 25, 2018
|
|
$
|
(1.0
|
)
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
$
|
(87.4
|
)
|
|
$
|
(78.7
|
)
|
Gain (loss)
|
|
(0.3
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
Reclassification realized in net earnings
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|||||
Balance at February 24, 2019
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
7.8
|
|
|
$
|
(87.5
|
)
|
|
$
|
(81.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances at May 27, 2018
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
$
|
(87.0
|
)
|
|
$
|
(85.2
|
)
|
Gain (loss)
|
|
0.3
|
|
|
—
|
|
|
9.9
|
|
|
—
|
|
|
10.2
|
|
|||||
Reclassification realized in net earnings
|
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
(0.5
|
)
|
|
(6.0
|
)
|
|||||
Balance at February 24, 2019
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
|
$
|
7.8
|
|
|
$
|
(87.5
|
)
|
|
$
|
(81.0
|
)
|
(in millions)
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gains (Losses) on Marketable Securities
|
|
Unrealized Gains (Losses) on Derivatives
|
|
Benefit Plan Funding Position
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balance at November 26, 2017
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
(70.6
|
)
|
|
$
|
(68.2
|
)
|
Gain (loss)
|
|
(0.4
|
)
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.3
|
|
|||||
Reclassification realized in net earnings
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||||
Reclassification of tax effect (1)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(15.2
|
)
|
|
(15.4
|
)
|
|||||
Balance at February 25, 2018
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
7.2
|
|
|
$
|
(85.8
|
)
|
|
$
|
(80.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances at May 28, 2017
|
|
$
|
(0.7
|
)
|
|
$
|
0.1
|
|
|
$
|
8.2
|
|
|
$
|
(70.5
|
)
|
|
$
|
(62.9
|
)
|
Gain (loss)
|
|
(1.1
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(2.0
|
)
|
|||||
Reclassification realized in net earnings
|
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
Reclassification of tax effect (1)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(15.2
|
)
|
|
(15.4
|
)
|
|||||
Balance at February 25, 2018
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
7.2
|
|
|
$
|
(85.8
|
)
|
|
$
|
(80.4
|
)
|
(1)
|
Stranded tax effects reclassified from accumulated other comprehensive income (loss) to retained earnings from the fiscal 2018 adoption of ASU 2018-02.
|
|
|
|
Amount Reclassified from AOCI into Net Earnings
|
||||||||||||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
AOCI Components
|
Location of Gain (Loss) Recognized in Earnings
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
(1)
|
|
$
|
0.5
|
|
|
$
|
0.2
|
|
|
$
|
0.9
|
|
|
$
|
0.2
|
|
Equity contracts
|
(2)
|
|
—
|
|
|
—
|
|
|
4.9
|
|
|
(0.2
|
)
|
||||
Interest rate contracts
|
(3)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Total before tax
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
5.7
|
|
|
$
|
(0.1
|
)
|
Tax (expense) benefit
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Net of tax
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
5.5
|
|
|
$
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Benefit plan funding position
|
|
|
|
|
|
|
|
|
|
||||||||
Recognized net actuarial loss - pension/postretirement plans
|
(4)
|
|
$
|
(0.6
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(2.1
|
)
|
Recognized net actuarial gain - other plans
|
(5)
|
|
0.7
|
|
|
0.8
|
|
|
2.4
|
|
|
2.3
|
|
||||
Total before tax
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
$
|
0.2
|
|
Tax (expense) benefit
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Net of tax
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
(1)
|
Primarily included in food and beverage costs and restaurant expenses. See Note 12 for additional details.
|
(2)
|
Primarily included in restaurant labor costs and general and administrative expenses. See Note 12 for additional details.
|
(3)
|
Included in interest, net, on our consolidated statements of earnings.
|
(4)
|
Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and general and administrative expenses. See Note 10 for additional details.
|
(5)
|
Included in the computation of net periodic benefit costs - other plans, which is a component of general and administrative expenses.
|
|
|
Defined Benefit Plans
|
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Interest cost
|
|
$
|
2.4
|
|
|
$
|
2.1
|
|
|
$
|
7.0
|
|
|
$
|
6.4
|
|
Expected return on plan assets
|
|
(2.8
|
)
|
|
(3.0
|
)
|
|
(8.4
|
)
|
|
(9.0
|
)
|
||||
Recognized net actuarial loss
|
|
0.6
|
|
|
0.7
|
|
|
1.9
|
|
|
2.1
|
|
||||
Net periodic benefit (credit) cost
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.5
|
|
|
$
|
(0.5
|
)
|
|
|
Postretirement Benefit Plan
|
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.5
|
|
||||
Amortization of unrecognized prior service credit
|
|
(1.2
|
)
|
|
(1.2
|
)
|
|
(3.6
|
)
|
|
(3.6
|
)
|
||||
Recognized net actuarial loss
|
|
0.4
|
|
|
0.4
|
|
|
1.2
|
|
|
1.3
|
|
||||
Net periodic benefit (credit) cost
|
|
$
|
(0.6
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(1.7
|
)
|
|
Stock Options Granted
|
||||||
|
Nine Months Ended
|
||||||
|
February 24, 2019
|
|
February 25, 2018
|
||||
Weighted-average fair value
|
$
|
18.78
|
|
|
$
|
14.63
|
|
Dividend yield
|
3.2
|
%
|
|
3.0
|
%
|
||
Expected volatility of stock
|
22.6
|
%
|
|
23.5
|
%
|
||
Risk-free interest rate
|
2.9
|
%
|
|
2.0
|
%
|
||
Expected option life (in years)
|
6.4
|
|
|
6.4
|
|
||
Weighted-average exercise price per share
|
$
|
107.05
|
|
|
$
|
85.83
|
|
(in millions)
|
|
Stock
Options
|
|
Restricted
Stock/
Restricted
Stock
Units
|
|
Darden
Stock
Units
|
|
Equity-Settled
Performance Stock Units |
||||
Outstanding beginning of period
|
|
3.53
|
|
|
0.24
|
|
|
1.39
|
|
|
0.55
|
|
Awards granted
|
|
0.37
|
|
|
0.09
|
|
|
0.23
|
|
|
0.21
|
|
Awards exercised/vested
|
|
(0.95
|
)
|
|
(0.04
|
)
|
|
(0.33
|
)
|
|
(0.11
|
)
|
Awards forfeited
|
|
(0.04
|
)
|
|
—
|
|
|
(0.04
|
)
|
|
(0.04
|
)
|
Outstanding end of period
|
|
2.91
|
|
|
0.29
|
|
|
1.25
|
|
|
0.61
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||
Stock options
|
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
$
|
3.7
|
|
|
$
|
3.7
|
|
Restricted stock/restricted stock units
|
|
1.7
|
|
|
1.1
|
|
|
4.7
|
|
|
2.9
|
|
||||
Darden stock units
|
|
6.5
|
|
|
8.0
|
|
|
25.3
|
|
|
15.5
|
|
||||
Equity-settled performance stock units
|
|
3.5
|
|
|
3.1
|
|
|
9.5
|
|
|
8.2
|
|
||||
Employee stock purchase plan
|
|
0.4
|
|
|
0.3
|
|
|
1.1
|
|
|
0.9
|
|
||||
Director compensation program/other
|
|
0.4
|
|
|
0.3
|
|
|
1.0
|
|
|
1.0
|
|
||||
Total stock-based compensation expense
|
|
$
|
13.7
|
|
|
$
|
14.1
|
|
|
$
|
45.3
|
|
|
$
|
32.2
|
|
(1)
|
Derivative assets and liabilities are included in receivables, net and other current liabilities, as applicable, on our consolidated balance sheets.
|
|
|
Amount of Gain (Loss) Recognized in AOCI (effective portion)
|
|
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
|
|
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
|
||||||||||||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||||||
Equity (1)
|
|
$
|
(1.4
|
)
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
Commodity (2)
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.5
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
(1.5
|
)
|
|
$
|
3.7
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Amount of Gain (Loss) Recognized in AOCI (effective portion)
|
|
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
|
|
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
|
||||||||||||||||||
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
(in millions)
|
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
|
February 24,
2019 |
|
February 25,
2018 |
||||||||||||
Equity (1)
|
|
$
|
9.6
|
|
|
$
|
(1.3
|
)
|
|
$
|
4.9
|
|
|
$
|
(0.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
0.1
|
|
Commodity (2)
|
|
0.4
|
|
|
0.5
|
|
|
0.9
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate (3)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
10.0
|
|
|
$
|
(0.8
|
)
|
|
$
|
5.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
0.1
|
|
(1)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses and general and administrative expenses.
|
(2)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs and restaurant expenses.
|
(3)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is interest, net.
|
|
|
Amount of Gain (Loss) Recognized in Earnings
|
||||||||||||||
(in millions)
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
Location of Gain (Loss) Recognized in Earnings on Derivatives
|
February 24, 2019
|
|
February 25, 2018
|
|
February 24, 2019
|
|
February 25, 2018
|
|||||||||
Restaurant labor expenses
|
|
$
|
0.8
|
|
|
$
|
3.3
|
|
|
$
|
8.1
|
|
|
$
|
2.7
|
|
General and administrative expenses
|
|
0.7
|
|
|
5.5
|
|
|
10.9
|
|
|
4.2
|
|
||||
Total
|
|
$
|
1.5
|
|
|
$
|
8.8
|
|
|
$
|
19.0
|
|
|
$
|
6.9
|
|
Items Measured at Fair Value at February 24, 2019
|
|||||||||||||||||
(in millions)
|
|
|
Fair value
of assets
(liabilities)
|
|
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity forwards
|
(1)
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Total
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Items Measured at Fair Value at May 27, 2018
|
|||||||||||||||||
(in millions)
|
|
|
Fair value
of assets
(liabilities)
|
|
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities futures, swaps & options
|
(2)
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
Equity forwards
|
(1)
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
Total
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
(1)
|
The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.
|
(2)
|
The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.
|
|
|
February 24,
2019 |
|
May 27,
2018 |
|
February 25,
2018 |
|||
Olive Garden (1)
|
|
860
|
|
|
856
|
|
|
853
|
|
LongHorn Steakhouse
|
|
512
|
|
|
504
|
|
|
499
|
|
Cheddar’s Scratch Kitchen
|
|
159
|
|
|
156
|
|
|
154
|
|
Yard House
|
|
78
|
|
|
72
|
|
|
71
|
|
The Capital Grille (2)
|
|
58
|
|
|
58
|
|
|
57
|
|
Bahama Breeze
|
|
42
|
|
|
39
|
|
|
39
|
|
Seasons 52
|
|
43
|
|
|
42
|
|
|
41
|
|
Eddie V’s
|
|
20
|
|
|
19
|
|
|
19
|
|
Total
|
|
1,772
|
|
|
1,746
|
|
|
1,733
|
|
(1)
|
Includes six locations in Canada for all periods presented.
|
(2)
|
Includes one The Capital Burger restaurant for the periods ended
February 24, 2019
and
May 27, 2018
.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||
(in millions)
|
February 24, 2019
|
|
February 25, 2018
|
|
% Chg
|
|
SRS (1)
|
|
February 24, 2019
|
|
February 25, 2018
|
|
% Chg
|
|
SRS (1)
|
||||||||||||
Olive Garden
|
$
|
1,130.2
|
|
|
$
|
1,073.2
|
|
|
5.3
|
%
|
|
4.3
|
%
|
|
$
|
3,180.3
|
|
|
$
|
3,014.6
|
|
|
5.5
|
%
|
|
4.4
|
%
|
LongHorn Steakhouse
|
$
|
483.2
|
|
|
$
|
452.8
|
|
|
6.7
|
%
|
|
3.8
|
%
|
|
$
|
1,326.2
|
|
|
$
|
1,245.0
|
|
|
6.5
|
%
|
|
3.3
|
%
|
Cheddar’s Scratch Kitchen
|
$
|
166.8
|
|
|
$
|
165.1
|
|
|
1.0
|
%
|
|
(2.7
|
)%
|
|
$
|
488.6
|
|
|
$
|
478.4
|
|
|
2.1
|
%
|
|
(3.5
|
)%
|
Yard House
|
$
|
154.8
|
|
|
$
|
145.1
|
|
|
6.7
|
%
|
|
(2.1
|
)%
|
|
$
|
447.3
|
|
|
$
|
420.0
|
|
|
6.5
|
%
|
|
(1.0
|
)%
|
The Capital Grille
|
$
|
134.3
|
|
|
$
|
128.1
|
|
|
4.8
|
%
|
|
4.3
|
%
|
|
$
|
344.9
|
|
|
$
|
328.0
|
|
|
5.2
|
%
|
|
4.0
|
%
|
Bahama Breeze
|
$
|
57.5
|
|
|
$
|
56.5
|
|
|
1.8
|
%
|
|
(3.7
|
)%
|
|
$
|
176.2
|
|
|
$
|
170.3
|
|
|
3.5
|
%
|
|
(0.8
|
)%
|
Seasons 52
|
$
|
70.6
|
|
|
$
|
69.1
|
|
|
2.2
|
%
|
|
(1.3
|
)%
|
|
$
|
186.6
|
|
|
$
|
184.1
|
|
|
1.4
|
%
|
|
(1.3
|
)%
|
Eddie V’s
|
$
|
40.2
|
|
|
$
|
36.3
|
|
|
10.7
|
%
|
|
3.7
|
%
|
|
$
|
106.3
|
|
|
$
|
99.1
|
|
|
7.3
|
%
|
|
2.7
|
%
|
(1)
|
Same-restaurant sales is a year-over-year comparison of each period’s sales volumes for a 52-week year and is limited to restaurants open at least 16 months, including recently acquired restaurants, absent consideration of when the restaurants were acquired.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
February 24, 2019
|
|
February 25, 2018
|
|
February 24, 2019
|
|
February 25, 2018
|
||||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||
Food and beverage
|
28.4
|
|
|
28.3
|
|
|
28.4
|
|
|
28.6
|
|
Restaurant labor
|
31.7
|
|
|
32.1
|
|
|
32.7
|
|
|
32.5
|
|
Restaurant expenses
|
16.9
|
|
|
17.0
|
|
|
17.5
|
|
|
17.7
|
|
Marketing expenses
|
2.8
|
|
|
2.8
|
|
|
3.0
|
|
|
3.1
|
|
General and administrative expenses
|
4.6
|
|
|
5.2
|
|
|
4.8
|
|
|
5.2
|
|
Depreciation and amortization
|
3.8
|
|
|
3.7
|
|
|
4.0
|
|
|
3.9
|
|
Impairments and disposal of assets, net
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Total operating costs and expenses
|
88.2
|
%
|
|
89.0
|
%
|
|
90.4
|
%
|
|
91.0
|
%
|
Operating income
|
11.8
|
|
|
11.0
|
|
|
9.6
|
|
|
9.0
|
|
Interest, net
|
0.6
|
|
|
5.5
|
|
|
0.6
|
|
|
2.5
|
|
Earnings before income taxes
|
11.3
|
|
|
5.5
|
|
|
9.0
|
|
|
6.5
|
|
Income tax expense (benefit)
|
1.2
|
|
|
(4.8
|
)
|
|
0.9
|
|
|
(0.7
|
)
|
Earnings from continuing operations
|
10.0
|
|
|
10.3
|
|
|
8.1
|
|
|
7.2
|
|
•
|
Food and beverage costs increased as a percent of sales due to a 0.8% impact from unfavorable menu mix and inflation, partially offset by a 0.5% impact from pricing and a 0.2% impact related to cost savings initiatives.
|
•
|
Restaurant labor costs decreased as a percent of sales primarily due to a 0.7% impact from sales leverage and improved productivity and a 0.6% impact from pricing leverage, partially offset by a 1.2% impact from inflation.
|
•
|
Restaurant expenses (which include rent, utilities, repairs and maintenance, credit card, property tax, workers’ compensation, new restaurant pre-opening and other restaurant-level operating expenses) decreased as a percent of sales primarily due to a 0.5% impact from sales leverage, partially offset by a 0.3% impact from inflation.
|
•
|
General and administrative expenses decreased as a percent of sales primarily driven by a 0.3% impact due to expenses incurred in fiscal 2018 related the integration of Cheddar’s Scratch Kitchen and a 0.3% impact related to sales leverage.
|
•
|
Food and beverage costs decreased as a percent of sales due to a 0.5% impact from pricing and a 0.3% impact related to cost savings initiatives, partially offset by a 0.6% impact from unfavorable menu mix and inflation.
|
•
|
Restaurant labor costs increased as a percent of sales primarily due to a 1.3% impact from inflation and a 0.3% impact related to workforce reinvestment costs, partially offset by a 0.6% impact from pricing leverage and a 0.6% impact from sales leverage and improved productivity.
|
•
|
Restaurant expenses (which include rent, utilities, repairs and maintenance, credit card, property tax, workers’ compensation, new restaurant pre-opening and other restaurant-level operating expenses) decreased as a percent of sales primarily due to a 0.6% impact from sales leverage, partially offset by a 0.3% impact from inflation.
|
•
|
General and administrative expenses decreased as a percent of sales primarily driven by a 0.5% impact due to expenses incurred in fiscal 2018 related an unfavorable legal outcome and the integration of Cheddar’s Scratch Kitchen and a 0.3% impact related to sales leverage.
|
•
|
Moody’s Investors Service “Baa2”;
|
•
|
Standard & Poor’s “BBB”; and
|
•
|
Fitch “BBB”.
|
•
|
Moody’s Investors Service “P-2”;
|
•
|
Standard & Poor’s “A-2”; and
|
•
|
Fitch “F-2”.
|
•
|
$500.0 million
of unsecured
3.850 percent
senior notes due in May 2027;
|
•
|
$96.3 million
of unsecured
6.000 percent
senior notes due in August 2035;
|
•
|
$42.8 million
of unsecured
6.800 percent
senior notes due in October 2037; and
|
•
|
$300.0 million
of unsecured
4.550 percent
senior notes due in February 2048.
|
•
|
Insufficient guest or employee facing technology, or a failure to maintain a continuous and secure cyber network, free from material failure, interruption or security breach;
|
•
|
Food safety and food-borne illness concerns throughout the supply chain;
|
•
|
The inability to hire, train, reward and retain restaurant team members or an inability to adequately monitor and proactively respond to employee dissatisfaction;
|
•
|
A failure to recruit, develop and retain effective leaders or the loss or shortage of key personnel, or an inability to adequately monitor and respond to employee dissatisfaction;
|
•
|
Litigation, including allegations of illegal, unfair or inconsistent employment practices;
|
•
|
Unfavorable publicity, or a failure to respond effectively to adverse publicity;
|
•
|
An inability or failure to recognize, respond to and effectively manage the accelerated impact of social media;
|
•
|
Risks relating to public policy changes and federal, state and local regulation of our business, including in the areas of health care reform, environmental matters, minimum wage, unionization, data privacy, menu labeling, immigration requirements and taxes;
|
•
|
The inability to cancel long-term, non-cancelable leases that we may want to cancel or the inability to renew the leases that we may want to extend at the end of their terms;
|
•
|
Labor and insurance costs;
|
•
|
Our inability or failure to execute a comprehensive business continuity plan following a major natural disaster such as a hurricane or manmade disaster, including terrorism;
|
•
|
Health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases;
|
•
|
Intense competition, or an insufficient focus on competition and the consumer landscape;
|
•
|
Our failure to drive both short-term and long-term profitable sales growth through brand relevance, operating excellence, opening new restaurants of existing brands and developing or acquiring new dining brands;
|
•
|
A lack of suitable new restaurant locations or a decline in the quality of the locations of our current restaurants;
|
•
|
Higher-than-anticipated costs to open, close, relocate or remodel restaurants;
|
•
|
A failure to identify and execute innovative marketing and guest relationship tactics and ineffective or improper use of other marketing initiatives and increased advertising and marketing costs;
|
•
|
A failure to address cost pressures, including rising costs for commodities, labor, health care and utilities used by our restaurants, and a failure to effectively deliver cost management activities and achieve economies of scale in purchasing;
|
•
|
The impact of shortages or interruptions in the delivery of food and other products from third-party vendors and suppliers;
|
•
|
Adverse weather conditions and natural disasters;
|
•
|
Volatility in the market value of derivatives we may use to hedge commodity and broader market prices;
|
•
|
Economic and business factors specific to the restaurant industry and other general macroeconomic factors including energy prices and interest rates that are largely out of our control;
|
•
|
Disruptions in the financial markets that may impact consumer spending patterns, affect the availability and cost of credit and increase pension plan expenses;
|
•
|
Risks associated with doing business with franchisees and licensees;
|
•
|
Risks associated with doing business with business partners and vendors in foreign markets;
|
•
|
Failure to protect our service marks or other intellectual property;
|
•
|
Impairment of the carrying value of our goodwill or other intangible assets; and
|
•
|
A failure of our internal controls over financial reporting and future changes in accounting standards.
|
(Dollars in millions, except per share data)
|
|
Total Number of
Shares Purchased (1) (2)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Maximum Dollar Value of
Shares that May Yet
be Purchased
Under the Plans or
Programs (3)
|
||||||
November 26, 2018 through December 30, 2018
|
|
480,390
|
|
|
$
|
102.30
|
|
|
480,390
|
|
|
$
|
370.3
|
|
December 31, 2018 through January 27, 2019
|
|
101,689
|
|
|
$
|
100.13
|
|
|
101,689
|
|
|
$
|
360.1
|
|
January 28, 2019 through February 24, 2019
|
|
131,981
|
|
|
$
|
109.13
|
|
|
131,981
|
|
|
$
|
345.7
|
|
Total
|
|
714,060
|
|
|
$
|
103.25
|
|
|
714,060
|
|
|
$
|
345.7
|
|
(1)
|
All of the shares purchased during the quarter ended
February 24, 2019
were purchased as part of our repurchase program. On June 20, 2018, our Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $500.0 million of its outstanding common stock. This repurchase program, which was announced publicly in a press release issued on June 21, 2018, does not have an expiration and replaces the previously existing share repurchase authorizations.
|
(2)
|
The number of shares purchased includes shares withheld for taxes on vesting of restricted stock, shares delivered or deemed to be delivered to us on tender of stock in payment for the exercise price of options, and shares reacquired pursuant to tax withholding on option exercises. These shares are included as part of our repurchase program and deplete the repurchase authority granted by our Board. The number of shares repurchased excludes shares we reacquired pursuant to forfeiture of restricted stock.
|
(3)
|
Repurchases are subject to prevailing market prices, may be made in open market or private transactions and may occur or be discontinued at any time. There can be no assurance that we will repurchase any shares.
|
|
|
|
Exhibit No.
|
|
Exhibit Title
|
31(a)
|
|
|
31(b)
|
|
|
32(a)
|
|
|
32(b)
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Schema Document
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
101.LAB
|
|
XBRL Label Linkbase Document
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
|
|
|
|
|
|
DARDEN RESTAURANTS, INC.
|
|
|
|
|
|
Dated:
|
April 2, 2019
|
By:
|
/s/ Ricardo Cardenas
|
|
|
|
Ricardo Cardenas
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal financial officer)
|
1 Year Darden Restaurants Chart |
1 Month Darden Restaurants Chart |
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