Today, the company reported its financial results for the third quarter ending February 25, 2024.
Third Quarter 2024 Financial Highlights (Comparisons Versus Same Fiscal Quarter Last Year):
- Total Sales: Increased by 6.8% to $3.0 billion. This growth was driven by the addition of 79 company-owned Ruth’s Chris Steak House restaurants and 53 other net new restaurants, partially offset by a 1.0% decrease in blended same-restaurant sales*.
- Same-Restaurant Sales:
- Consolidated Darden*: -1.0%
- Olive Garden: -1.8%
- LongHorn Steakhouse: +2.3%
- Fine Dining*: -2.3%
- Other Business: -2.6%
- Net Earnings: Reported diluted net earnings per share from continuing operations were $2.60. Excluding $0.02 related to Ruth’s Chris transaction and integration costs, adjusted diluted net earnings per share were $2.62, marking a 12.0% increase**.
- Stock Repurchase: The company repurchased $33 million of its outstanding common stock.
*Note: Ruth’s Chris Steak House will not be included in same-restaurant sales 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.
Comments from Darden President & CEO Rick Cardenas: “I am proud of our teams and the way they performed this quarter. Each one of our segments grew sales and profit in an operating environment that was tougher than we anticipated. We continued to outperform industry same-restaurant sales and traffic. Looking ahead, our focus remains on controlling what we can, leveraging and strengthening our competitive advantages, and executing our back-to-basics operating philosophy 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, 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 are reported 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 $33 million. Additionally, Darden’s Board of Directors authorized a new share repurchase program, allowing the company to repurchase up to $1 billion of its outstanding common stock. This program does not have an expiration date and replaces the previous share repurchase authorization.
Updated Fiscal 2024 Financial Outlook: The company updated its full-year financial outlook for fiscal 2024, including Ruth’s Chris operating results but excluding approximately $55 million, pre-tax, of expected transaction and integration costs associated with the acquisition. More details will be provided during the investor conference call scheduled for this morning at 8:30 am ET.
- Total Sales: Approximately $11.4 billion
- Same-Restaurant Sales Growth: 1.5% to 2.0%
- New Restaurant Openings: 50 to 55
- Total Capital Spending: Approximately $600 million
- Total Inflation: Approximately 3.0%
- Effective Tax Rate: Between 12.0% and 12.5%
- Adjusted Diluted Net Earnings per Share from Continuing Operations: $8.80 to $8.90, excluding approximately $0.35, after-tax, of Ruth’s Chris transaction and integration costs*
- Weighted Average Diluted Shares Outstanding: Approximately 121.0 million
*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 webcast link. Please allow extra time prior to the call to visit the site and download any necessary software. 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. A replay will be available shortly after the call.
