Slides
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Earnings Call Fiscal 2025: Fourth Quarter Results June 20, 2025
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Disclaimer/Non-GAAP Information IMPORTANT NOTICE The following slides are part of a presentation by Darden Restaurants, Inc. (the "Company") and are intended to be viewed as part of that presentation (the "Presentation"). No representation is made that the Presentation is a complete description of the Company's performance, financial condition or outlook. 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, tariffs 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 complete our integration of Chuy's Holdings 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, unfavorablepublicity, 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. The information in this communication includes financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”), such as adjusted diluted net earnings per share from continuing operations and adjusted EBITDA. 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 to the most comparable GAAP measures are included under “Additional Information” in this presentation. 2
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Brilliant with the Basics 3
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5 Uber Direct Delivery
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Brilliant with the Basics 9
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Brilliant with the Basics Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. Culinary Innovation & Execution Attentive Service Engaging Atmosphere Enabled by Our People “The greatest edge we have on our competitors is the quality of our employees reflected each day in the job they do.” ― Bill Darden Significant Scale Extensive Data & Insights Rigorous Strategic Planning Quality of Our Employees
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4.6% SAME-RESTAURANT SALES GROWTH1 $3.3 Billion TOTAL SALES 10.6% TOTAL SALES GROWTH $2.98 ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS2 Fiscal 2025 Fourth Quarter Financial Highlights $582 Million ADJUSTED EBITDA2 $215 Million CASH RETURN3 1 Will not include Chuy's until they have been owned and operated by Darden for a 16 -month period (Q4 Fiscal 2026). 2 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 3 Includes cash dividends paid and repurchases of common stock. 11
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As Reported As Adjusted1 Q4 2025 Q4 2025 Q4 2025 vs Q4 2024 (bps) ($ millions) ($ millions) % of Sales Favorable/(Unfavorable) Sales $3,271.7 $3,271.7 Food and Beverage $983.9 $983.9 30.1 % 60 Restaurant Labor $1,022.0 $1,022.0 31.2 % 10 Restaurant Expenses $517.1 $517.1 15.8 % (20) Marketing Expenses $41.0 $41.0 1.3 % — Restaurant-Level EBITDA $707.7 $707.7 21.6 % 50 Pre-opening Costs $8.7 $8.7 0.3 % (10) General and Administrative Expenses $133.1 $116.9 3.6 % (30) Depreciation and Amortization $135.0 $135.0 4.1 % (10) Impairment and Disposal of Assets, Net $48.1 $0.4 — % — Operating Income $382.8 $446.7 13.7 % — Interest Expense $46.3 $46.3 1.4 % (20) Earnings Before Income Tax $336.5 $400.4 12.2 % (20) Income Tax Expense $32.5 $48.8 1.5 % 20 Note: Effective Tax Rate 9.7% 12.2% Earnings From Continuing Operations $304.0 $351.6 10.7 % — Margin Analysis vs. Prior Year Note: Continuing operations, values may not foot due to rounding. 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 12
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Fourth Quarter Segment Performance1 Fiscal 2025 vs. Prior Year Segment Sales ($ millions) Segment Profit Margin2 Other Fine Dining Other Fine Dining 1 From the date of acquisition forward, sales and profits from Chuy's company-owned restaurants are included within the Other segment. 2 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales. During the fourth quarter of fiscal 2025, we changed our reporting of segment profit to exclude pre-opening costs. Fiscal 2024 figures have been recast for comparability. 13
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Fiscal 2025 Financial Highlights $2.0 Billion Adjusted EBITDA3 1 Will not include Chuy's until they have been owned and operated by Darden for a 16 -month period (Q4 Fiscal 2026). 2 Does not include Ruth's Chris as they were not owned and operated by Darden for a 16- month period at the beginning of Fiscal 2025. 3 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 4 Includes dividends paid and repurchases of common stock. $1.1Billion CASH RETURN4 2.0% SAME-RESTAURANT SALES GROWTH1, 2 $9.55 ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS3 $12.1 Billion TOTAL SALES 6.0% TOTAL SALES GROWTH 14
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As Reported As Adjusted1 Fiscal 2025 Fiscal 2025 Fiscal 2025 vs Fiscal 2024 (bps) ($ millions) ($ millions) % of Sales Favorable/(Unfavorable) Sales $12,076.7 $12,076.7 Food and Beverage $3,657.0 $3,657.0 30.3 % 70 Restaurant Labor $3,833.1 $3,833.1 31.7 % — Restaurant Expenses $1,944.0 $1,944.0 16.1 % (20) Marketing Expenses $169.9 $169.9 1.4 % (10) Restaurant-Level EBITDA $2,472.7 $2,472.7 20.5 % 40 Pre-opening Costs $24.8 $24.8 0.2 % — General and Administrative Expenses $520.3 $469.2 3.9 % (10) Depreciation and Amortization $516.1 $516.1 4.3 % (20) Impairment and Disposal of Assets, Net $49.2 $1.5 — % — Operating Income $1,362.3 $1,461.1 12.1 % 10 Interest Expense $175.1 $172.4 1.4 % (20) Earnings Before Income Tax $1,187.2 $1,288.7 10.7 % (10) Income Tax Expense $136.2 $158.3 1.3 % — Note: Effective Tax Rate 11.5% 12.3% Earnings From Continuing Operations $1,051.0 $1,130.4 9.4 % (10) Margin Analysis vs. Prior Year Note: Continuing operations, values may not foot due to rounding. 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 15
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MARGIN Total Inflation: 2.5% - 3.0% Commodities: approx. 2.5% Effective Tax Rate approximately 13.0% Fiscal 2026 Annual Outlook SALES Total Sales Growth1 7.0% to 8.0% Same-Restaurant Sales Growth2 2.0% to 3.5% DEVELOPMENT New Restaurant Openings 60 to 65 Capital Spending $700 to $750 million Diluted Net Earnings per Share1 $10.50 to $10.70 (Approximately 117 million Weighted Average Diluted Shares Outstanding) 1 Fiscal 2026 is a 53-week year and the outlook includes approximately 2% total sales growth for the extra week, which contributes approximately $0.20 earnin gs per diluted share. 2 Annual same-restaurant sales is a 52-week metric and excludes the impact of Chuy’s, which will not have been owned and operate d by Darden for a 16-month period prior to the beginning of Fiscal 2026, as well as any additional locations not expected to be operated by Darden for the entirety of t he fiscal year. 16
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Update to the Long-Term Framework 17 Annual Target (Over Time) Current Updated New Restaurant Growth 2% - 3% 3% - 4% Same-Restaurant Sales 1% - 3% 1.5% - 3.5% EBIT Margin Expansion 10 - 30 bps n/a EAT Margin Expansion n/a 0 - 20 bps Business Performance (EAT Growth) 7% - 10% 6% - 10% Dividend Payout Ratio 50% - 60% 50% - 60% Share Repurchase1 $300 - $500 1% - 2.5% Return of Cash 3% - 5% 4% - 5% Total Shareholder Return 10% - 15% 10% - 15%(EPS Growth + Dividend Yield) 1 Current: $MM, Updated: % contribution to Shareholder Return
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Achieved Updated Long-Term Framework TSR Over Past Six Years Updated Framework (Over Time) FY19 - FY25 Annualized Return1 New Restaurant Growth2 3% - 4% 3.1% Same-Restaurant Sales3, 4 1.5% - 3.5% 2.9% EAT Margin Expansion 0 - 20 bps 13 bps Business Performance (EAT Growth) 6% - 10% 7.6% Dividend Payout Ratio 50% - 60% 58% Share Repurchase 1% - 2.5% 1.0% Return of Cash 4% - 5% 4.1% Total Shareholder Return 10% - 15% 11.6% (EPS Growth + Dividend Yield) 1 Represents performance adjusted figure. A reconciliation of Non-GAAP measures can be found in the Additional Information secti on of this presentation. 2 Includes the acquisition of Ruth's Chris and Chuy's. 3 Does not include Ruth's Chris as they were not owned and operated by Darden for a 16- month period at the beginning of Fiscal 2025. 4 Will not include Chuy's until they have been owned and operated by Darden for a 16 -month period (Q4 Fiscal 2026). 18
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Strong Model Generates Durable Cash Flows Adjusted EBITDA1 from Continuing Operations ($ in millions) CapEx $452 $460 $255 $377 $565 $601 $645 Adjusted EBITDA1 / CapEx 2.6x 1.7x 4.1x 4.1x 2.8x 3.0x 3.1x Dividend $374 $325 $204 $565 $590 $628 $659 Adjusted Debt / EBITDAR 1 2.2x 3.1x 2.4x 1.8x 1.8x 1.9x 2.1x 1 A reconciliation of Non-GAAP measures can be found in the Additional Information section of this presentation. 19
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Rigorous Strategic Planning 20 Ensures we... // Have the right portfolio of brands // Align strategies and coordinate operations to maximize portfolio’s value // Capture available synergies across brands Allows us to... // Determine each brand’s strategic role in portfolio // Identify distinct advantages and cultivate differentiated positioning // Develop deep understanding of guest and competitive landscape // Ensure brands adhere to their strategy to compete effectively and grow share
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22 Canadian Market Repositioning Canadian Olive Garden locations transition to franchise ownership, with a new development agreement to open 30 additional restaurants over the next 10 years
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International / Franchising 23 Region Locations Continental US 63 Latin America 36 Hawaii, Puerto Rico, Guam 22 Asia 22 Canada 6 Middle East 3 Caribbean 2 New development agreements with partners in India and Spain for 40 Olive Garden locations each; new agreement in Asia for six Capital Grille locations
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President Cheddar’s Scratch Kitchen Mark Cooper President The Capital Grille & Eddie V’s Falon Farrell President Yard House Bryan Clements President International & Franchising Brad Smith SVP Development Marc Braun President Ruth’s Chris Steak House Rik Jenkins Organizational Changes President Olive Garden John Wilkerson Group President Darden Todd Burrowes President LongHorn Steakhouse Laura Williamson President Seasons 52 Laurie Casler Group President Darden John Martin President & CEO Darden Rick Cardenas President Chuy’s Tex Mex Thomas Hall
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Thank You To Our Team Members 26
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Question & Answer Session 27
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Additional Information 28
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June - November FY2026 Spend by category Coverage Outlook Beef 25% 50% Mid single digit inflation Dairy / Oil1 14% 65% Low single digit deflation Produce 12% 75% FLAT Seafood 8% 85% Mid single digit inflation Chicken 8% 100% Low single digit inflation Wheat2 7% 80% Low single digit inflation Non-Perishable / Other 26% 45% Low single digit inflation Weighted average coverage 100% 65% Commodities Outlook – First Half 29 Note: Excludes Chuy's 1 Includes cheese, cream, butter, and shortening. 2 Includes breadsticks and pasta.
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$5.2 B $5.6 M 935 $746 M $4.1 M 181 $611 M $8.8 M 71 $253 M $8.5 M 29 $229 M $6.2 M4 28 $3.0 B $5.2 M 591 $879 M $10.0 M 88 FY25 Total Sales1 Average Annual Restaurant Sales2 Restaurants3 $304 M $6.8 M 43 30 Portfolio of Differentiated and Iconic Brands 1 Twelve months ending May 25, 2025, Chuy's sales included from the date of acquisition forward. 2 Average annual sales are calculated as trailing twelve months sales divided by total restaurant operating weeks multiplied by 52 weeks. 3 Company owned and operated restaurants at the end of Fiscal 2025. 4 Excludes all locations that closed during Fiscal 2025. $441 M $5.4 M 82 $292 M $4.4 M 108
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Reported to Adjusted Earnings Reconciliations 31 Q4 2025 Q4 2024 $ in millions, except EPS Earnings Before Income Tax Income Tax Expense Net Earnings Diluted Net Earnings Per Share Earnings Before Income Tax Income Tax Expense (Benefit) Net Earnings Diluted Net Earnings Per Share Reported Earnings from Continuing Operations $ 336.5 $ 32.5 $ 304.0 $ 2.58 $ 360.0 $ 50.0 $ 310.0 $ 2.58 Acquisition Transaction and Integration Related Costs $ 7.0 $ 2.1 $ 4.9 $ 0.04 $ 7.4 $ (0.8) $ 8.2 $ 0.07 Impairment on Restaurant Disposition $ 47.7 $ 11.9 $ 35.8 $ 0.30 $ — — $ — — Restaurant Closing Costs $ 9.2 $ 2.3 $ 6.9 $ 0.06 $ — — $ — — Adjusted Earnings from Continuing Operations $ 400.4 $ 48.8 $ 351.6 $ 2.98 $ 367.4 $ 49.2 $ 318.2 $ 2.65 Interest 46.3 35.4 Adjusted Income Tax 48.8 49.2 Adjusted Operating Income $ 446.7 $ 402.8 Depreciation and Amortization 135.0 119.7 Adjusted EBITDA $ 581.7 $ 522.5
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Reported to Adjusted Earnings Reconciliations 32 Fiscal 2025 Fiscal 2024 $ in millions, except EPS Earnings Before Income Tax Income Tax Expense Net Earnings Diluted Net Earnings Per Share Earnings Before Income Tax Income Tax Expense Net Earnings Diluted Net Earnings Per Share Reported Earnings from Continuing Operations $ 1,187.2 $ 136.2 $ 1,051.0 $ 8.88 $ 1,175.5 $ 145.0 $ 1,030.5 $ 8.53 Acquisition Transaction and Integration Related Costs: $ 44.6 $ 7.9 $ 36.7 $ 0.31 $ 51.8 $ 9.7 $ 42.1 $ 0.35 General & Administrative Expenses 41.9 7.3 34.6 0.29 44.6 7.9 36.7 0.30 Impairment1 — — — — 5.9 1.5 4.4 0.04 Interest2 2.7 0.6 2.1 0.02 1.3 0.3 1.0 0.01 Impairment on Restaurant Disposition $ 47.7 11.9 $ 35.8 0.30 — — — — Restaurant Closing Costs $ 9.2 2.3 $ 6.9 0.06 — — — — Adjusted Earnings from Continuing Operations $ 1,288.7 $ 158.3 $ 1,130.4 $ 9.55 $ 1,227.3 $ 154.7 $ 1,072.6 $ 8.88 Adjusted Interest 172.4 137.4 Adjusted Income Tax 158.3 154.7 Adjusted Operating Income $ 1,461.1 $ 1,364.7 Depreciation and Amortization 516.1 459.9 Adjusted EBITDA $ 1,977.2 $ 1,824.6 1 Write-off of acquired Ruth's Chris assets not able to be utilized. 2 In Q2 Fiscal 2025, Chuy's associated costs relate to write-off of term loan issuance and interest rate hedge settlement. In Q2 Fiscal 2024, Ruth's Chris associated costs relate to write -off of term loan issuance used to fund Ruth's Chris acquisition, which was paid off with proceeds from bond offering.
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Non-GAAP Reconciliations 33 Fiscal 2026 EBITDA Outlook Reconciliation $ in billions Net Earnings $ 1.23 to $ 1.25 Income Tax Expense $ 0.18 $ 0.19 Earnings Before Income Taxes $ 1.41 to $ 1.44 Interest, Net $ 0.19 $ 0.19 Depreciation and Amortization $ 0.56 $ 0.56 EBITDA $ 2.16 to $ 2.19
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Non-GAAP Reconciliations 34 Fiscal 2019 $ in millions, except EPS Earnings Before Income Tax Income Tax Expense Net Earnings Diluted EPS Reported Earnings from Continuing Operations $ 782.3 $ 63.7 $ 718.6 $ 5.73 Adjustments: Asset Impairments2 $ 14.6 $ 3.6 $ 11.0 $ 0.09 Adjusted Earnings from Continuing Operations $ 796.9 $ 67.3 $ 729.6 $ 5.82 Reported to Adjusted Earnings Reconciliations1 1 See slide 18 for non-GAAP figure presented. 2 Fiscal 2019 non-cash asset impairment charges related to four underperforming restaurants whose projected cash flows were not s ufficient to cover their respective carrying values. These were relatively newer locations we intended to continue to operate and focus on improving their results of operations.
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Non-GAAP Reconciliations Adjusted EBITDA Reconciliation1 $ in millions 5/26/2019 5/31/2020 5/30/2021 5/29/2022 5/28/2023 5/26/2024 5/25/2025 Sales $8,510.4 $7,806.9 $7,196.1 $9,630.0 $10,487.8 $11,390.0 $12,076.7 Net Earnings (Loss) from Continuing Operations $718.6 $(49.2) $632.4 $954.7 $983.5 $1,030.5 $1,051.0 Interest, Net 50.2 57.3 63.5 68.7 81.3 138.7 175.1 Income Tax Expense (Benefit) 63.7 (111.8) (55.9) 138.8 137.0 145.0 136.2 Depreciation and Amortization 336.7 355.9 350.9 368.4 387.8 459.9 516.1 EBITDA $1,169.2 $252.2 $990.9 $1,530.6 $1,589.6 $1,774.1 $1,878.4 Adjustments: Pension settlement charge (adjustment)2 — 145.5 — — — — — Goodwill Impairment3 — 169.2 — — — — — Trademark impairment3 — 145.0 — — — — — Other asset impairment4 — 28.8 — — — — — International entity liquidation — 6.2 — — — — — Restaurant impairments5 14.6 47.0 — — — — 47.7 Corporate restructuring6 — — 47.8 — — — — Transaction and integration costs7 — — — — — 50.5 41.9 Restaurant closing costs8 — — — — — 9.2 Adjusted EBITDA $1,183.8 $793.9 $1,038.7 $1,530.6 $1,589.6 $1,824.6 $1,977.2 Adjusted EBITDA Margin 13.9% 10.2% 14.4% 15.9% 15.2% 16.0% 16.4% Minimum Rent $359.5 $392.6 $385.7 $409.8 $424.3 $464.3 $498.1 Adjusted EBITDA excluding minimum rent (EBITDAR) $1,543.3 $1,186.5 $1,424.4 $1,940.4 $2,013.9 $2,288.9 $2,475.3 Adjusted Total Debt $3,331.7 $3,716.0 $3,374.6 $3,499.1 $3,566.9 $4,382.8 $5,254.5 Adjusted Debt/EBITDAR Ratio 2.2 3.1 2.4 1.8 1.8 1.9 2.1 35 See footnotes on following page
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Non-GAAP Reconciliations 36 1 See slide 14 for non-GAAP figure presented. 2 In April 2018, our Benefits Plans Committee approved the termination of our primary non-contributory defined benefit pension plan. In fiscal 2020, the benefit obligation to plan participants was settled, resulting in a pension settlement charge. 3 Non-cash goodwill and trademark impairments were related to the economic impact of COVID -19 on Darden's overall market capitali zation and the impact on Cheddar's Scratch Kitchen cash flows, coupled with the relative recency of the addition of Cheddar's to our portfolio. 4 Non-cash other asset impairments were related to the economic impact of COVID-19, approximately $15 million of which is related to inventory obsolescence and $14 million related to receivables we deemed uncollectible. 5 Fiscal 2019 non-cash asset impairment charges related to four underperforming restaurants whose projected cash flows were not s ufficient to cover their respective carrying values. These were relatively newer locations we intended to continue to operate and focus on improving their results of operations. Fiscal 2020 non-cash impairments were related to the economic impact of COVID-19 on 11 underperforming restaurants we permanently closed during the fourth quarter and nine other restaurants whose projected cash flows were not sufficient to cover their respective carrying values. Fiscal 2025 non -cash asset impairment charges related to 22 underperforming restaurants that were permanently closed during the fourth quarter. 6 Includes cash expenses of approximately $38 million, primarily related to severance and benefits, paid over an 18 -month period, and non-cash expenses of approximately $10 million related to acceleration of equity-settled awards and expense associated with the postretirement benefi t plan. 7 In Fiscal 2025, Chuy's associated costs. In Fiscal 2024, Ruth's Chris associated costs. 8 Includes cash expenses of approximately $8 million for severance and benefits related to 22 underperforming restaurants that were permanently closed during the fourth quarter.
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Non-GAAP Reconciliations Adjusted Total Debt Reconciliation1 $ in millions 5/26/2019 5/31/2020 5/30/2021 5/29/2022 5/28/2023 5/26/2024 5/25/2025 Short-term debt — $270.0 — — — 86.8 — Capital lease obligation $84.0 — — — — — — Long-term debt, excluding unamortized discount and issuance costs $939.1 $939.1 $939.1 $939.1 $939.1 $1,439.1 $2,189.1 Total Debt $1,023.1 $1,209.1 $939.1 $939.1 $939.1 $1,525.9 $2,189.1 Lease-debt equivalent (6x minimum rent) $2,157.0 $2,355.4 $2,314.2 $2,459.0 $2,545.8 $2,786.4 $2,988.9 Guarantees2 $151.6 $151.5 $121.5 $101.0 $82.0 $70.5 $76.5 Adjusted Total Debt $3,331.7 $3,716.0 $3,374.8 $3,499.1 $3,566.9 $4,382.8 $5,254.5 37 1 See slide 19 for non-GAAP figure presented. 2 Consists solely of guarantees associated with leased properties that have been assigned to third parties and are primarily re lated to the disposition of Red Lobster.