On September 19, 2024, Darden Restaurants reported their fiscal 2025 first-quarter financial results. Sales rose 1% to $2.8 billion, driven by net new restaurant additions but offset by a 1.1% decrease in same-restaurant sales. Olive Garden sales fell 2.9%, while LongHorn Steakhouse saw a 3.7% increase. Adjusted diluted net earnings per share were $1.75, down 1.7% from last year. The company repurchased $172 million of stock and reiterated its full-year financial outlook, forecasting earnings per share between $9.40 and $9.60. Additionally, a quarterly dividend of $1.40 per share was declared, payable on November 1, 2024.
The company also hosted a conference call to review the financial performance and mentioned continued initiatives to support growth despite the competitive landscape. Darden emphasized their confidence in brand strategies despite a softer July. The firm remains committed to long-term sustainability, acknowledging short-term volatility. Segment-wise, Olive Garden’s sales and profits fell, but LongHorn Steakhouse showed strong growth. Fine Dining and Other Business segments also posted mixed results. Darden’s diverse brand portfolio, including Olive Garden and LongHorn, remains a key strength as they continue expanding operations, particularly following the Ruth’s Chris Steak House acquisition.
Despite challenges, such as higher costs in labor and food, Darden reported steady profitability. They maintained optimism for the rest of the year, citing improving sales trends post-July and robust cost management strategies. The company’s focus remains on delivering shareholder value through dividends, stock repurchases, and careful cost management. Their continued ability to navigate macroeconomic pressures, like rising food and labor costs, showcases resilience in maintaining profitability amidst a competitive restaurant industry landscape.
Consolidated Financial Statements
Consolidated Statement of Earnings (in millions)
| Item | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Sales | $2,757.0 | $2,730.6 |
| Food and Beverage Expenses | $846.7 | $851.0 |
| Restaurant Labor | $889.3 | $875.3 |
| Restaurant Expenses | $458.2 | $446.6 |
| Marketing Expenses | $44.7 | $38.6 |
| General & Admin Expenses | $126.4 | $153.3 |
| Depreciation & Amortization | $121.5 | $109.8 |
| Operating Income | $269.2 | $252.9 |
| Earnings Before Income Tax | $232.1 | $223.2 |
| Net Earnings | $207.6 | $194.8 |
| Diluted EPS (continuing ops) | $1.74 | $1.60 |
Consolidated Balance Sheet (in millions)
| Item | 8/25/2024 | 5/26/2024 |
|---|---|---|
| Total Current Assets | $819.6 | $822.8 |
| Land, Buildings, and Equipment | $4,272.8 | $4,184.3 |
| Goodwill | $1,391.0 | $1,391.0 |
| Total Assets | $11,355.5 | $11,323.0 |
| Total Current Liabilities | $2,324.7 | $2,192.5 |
| Long-Term Debt | $1,385.6 | $1,370.4 |
| Stockholders’ Equity | $2,143.7 | $2,242.5 |
Consolidated Cash Flows (in millions)
| Item | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Net Cash from Operating Activities | $273.2 | $269.1 |
| Net Cash Used in Investing | $(149.7) | $(854.2) |
| Net Cash (Used in) Provided by Financing | $(126.7) | $409.4 |
Despite some challenges, the company continues to focus on shareholder returns, improving sales trends, and maintaining profitability through cost management.
Photo by ajay_suresh
