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    Darden Restaurants Inc (DRI)

    Board Change

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    Business Description

    DRI is a company that operates full-service dining establishments across North America, primarily in the U.S., managing several well-known restaurant brands . The company offers a diverse range of dining experiences through its various brands, selling food and beverages without reliance on any major customers . DRI organizes its operations into four main segments, each contributing to its overall business strategy and revenue generation .

    1. Olive Garden - Offers Italian cuisine with a focus on fresh ingredients and quality, significantly contributing to the company's revenue .
    2. LongHorn Steakhouse - Known for its steak and American West-inspired atmosphere, playing a major role in revenue generation .
    3. Fine Dining - Includes premium brands such as Ruth’s Chris, The Capital Grille, and Eddie V’s, providing upscale dining experiences .
    4. Other Business - Encompasses a variety of dining experiences with brands like Cheddar’s Scratch Kitchen, Yard House, Seasons 52, Bahama Breeze, and The Capital Burger .

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Ricardo CardenasPresident and Chief Executive OfficerMay 2022Ricardo Cardenas has been the President and CEO since May 2022. He previously served as President and COO from January 2021 to May 2022, and as SVP, CFO from March 2016 to January 2021. He joined Darden in 1984 and has held various roles, including VP of Finance for Olive Garden .
    Rajesh VennamSenior Vice President, Chief Financial OfficerDecember 2022Rajesh Vennam has been the SVP, CFO since December 2022. He was previously SVP, CFO and Treasurer from January 2021 to December 2022, and held other finance roles since joining Darden in 2003 .
    Matthew R. BroadSenior Vice President, General Counsel, Chief Compliance Officer, and Corporate Secretary2015Matthew R. Broad has served in his current role since 2015. Before joining Darden, he was EVP, General Counsel, and Chief Compliance Officer for OfficeMax from 2004 to 2013 .
    Todd A. BurrowesPresident of Business DevelopmentMay 2024Todd A. Burrowes became President of Business Development in May 2024 after serving as President of LongHorn Steakhouse from 2015 to 2024. He rejoined Darden in 2002 and has held various leadership roles .
    Susan M. ConnellySenior Vice President, Chief Communications and Public Affairs Officer2019Susan M. Connelly has been in her current role since 2019. She joined Darden in 2007 and has held various positions, including VP, Government Relations .
    Laura WilliamsonPresident of LongHorn SteakhouseMay 2024Laura Williamson has been President of LongHorn Steakhouse since May 2024. She previously served as SVP of Finance for Olive Garden and LongHorn Steakhouse .
    Daniel J. KiernanPresident, Olive Garden2018Daniel J. Kiernan has been President of Olive Garden since 2018. He joined Olive Garden in 1992 and has held various roles, including EVP of Operations .
    Sarah H. KingSenior Vice President, Chief People and Diversity OfficerMay 2021Sarah H. King has been in her current role since May 2021. She joined Darden in 2017 as SVP, Chief Human Resources Officer after 19 years with Wyndham Worldwide Corporation .
    John W. MadonnaSenior Vice President, Corporate Controller2016John W. Madonna has been SVP, Corporate Controller since 2016. He joined Darden in 2005 and has held various roles, including Director in Corporate Reporting .
    M. John MartinPresident, Specialty Restaurant GroupAugust 2020M. John Martin has been President of the Specialty Restaurant Group since August 2020. He joined The Capital Grille in 1990 and has held several leadership roles .
    Douglas J. MilanesSenior Vice President, Chief Supply Chain Officer2015Douglas J. Milanes has served as SVP, Chief Supply Chain Officer since 2015. He previously held positions at Pfizer Inc. .
    Daryl KenninghamBoard MemberDecember 9, 2024Daryl Kenningham was appointed as a Board Member on December 9, 2024. He serves on the Audit and Compensation Committees and is also the President and CEO of Group 1 Automotive .

    Questions to Ask Management

    1. Given that you fell short of your expectations for the first quarter, can you elaborate on the specific factors that led to this underperformance and what corrective actions you're implementing to address them?
    2. With your focus on improving speed of service to meet the faster-paced needs of today's consumers, what specific operational changes are you making to accelerate service without compromising the guest experience, and how will you measure success in this area?
    3. Considering that many brands source a significant portion of their delivery sales from third-party marketplaces, why have you decided against offering Olive Garden on Uber's marketplace platform, and how do you plan to drive sufficient incremental sales through your first-party delivery to offset potential missed opportunities?
    4. In light of the challenges faced in the Fine Dining segment and decreased visits from aspirational consumers, what strategies are you employing to reinvigorate growth without diluting your brand, and how do you plan to attract new customers while retaining your discerning frequent diners?
    5. Despite spending below historical levels on marketing for Olive Garden, particularly in price-point advertising, why are you hesitant to increase marketing spend to apply more pressure on competitors, and how do you balance cost savings with the potential for driving incremental traffic through increased advertising investment?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateMarch 20, 2024
    End Date/DurationNo expiration date
    Total additional amount$1 billion
    Remaining authorization amount$743.0 million
    DetailsThe program allows repurchases up to $1 billion of outstanding common stock, with no expiration date. Repurchases are subject to market conditions and can be made in open market or private transactions. The program can be discontinued at any time at the discretion of the Board of Directors.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2027$500.0 3.850% Senior Notes3.850 18.9% = (500.0 / 2,645.2) * 100
    2027$400.0 4.350% Senior Notes4.350 15.1% = (400.0 / 2,645.2) * 100
    2029$350.0 4.550% Senior Notes4.550 13.2% = (350.0 / 2,645.2) * 100
    2033$500.0 6.300% Senior Notes6.300 18.9% = (500.0 / 2,645.2) * 100
    2035$96.3 6.000% Senior Notes6.000 3.6% = (96.3 / 2,645.2) * 100
    2037$42.8 6.800% Senior Notes6.800 1.6% = (42.8 / 2,645.2) * 100
    2048$300.0 4.550% Senior Notes4.550 11.3% = (300.0 / 2,645.2) * 100
    N/A$275.2 Short-Term DebtN/A10.4% = (275.2 / 2,645.2) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    KPMG LLP1996 PresentCurrent auditor

    Latest news

    Recent developments and announcements about DRI.

    Corporate Leadership

      Leadership Change

      ·
      8 days ago

      Who is leaving? Nana Mensah, a member of the Board of Directors of Darden Restaurants, Inc. (DRI), is retiring effective January 28, 2025.

      Why? His departure is due to retirement and is not related to any disagreements with the company, its Board, or management.

      Who is stepping up? No replacement has been announced in the provided documents.

      Board Change

      ·
      8 days ago

      Nana Mensah has retired from the Board of Directors of Darden Restaurants, Inc. effective January 28, 2025. His departure is not due to any disagreement with the company or its management.

      Board Change

      ·
      Dec 9, 2024, 9:41 PM

      Daryl A. Kenningham has been elected as a new member of the Board of Directors of Darden Restaurants, Inc., effective immediately as of December 9, 2024. The board size has increased from nine to ten members with his appointment. Mr. Kenningham will also serve on the Audit Committee and the Compensation Committee of the Board .

    Financial Reporting

      Earnings Call

      ·
      Dec 19, 2024, 3:37 PM

      The company DRI recently held an earnings call where they discussed their second quarter results and provided guidance for the future. Here are the key points from the call:

      • Revenue and Profit Performance: DRI reported total sales of $2.9 billion for the second quarter, which is a 6% increase from the previous year. This growth was driven by same-restaurant sales of 2.4%, the acquisition of 103 Chuy's restaurants, and the addition of 39 net new restaurants. Adjusted diluted net earnings per share from continuing operations were $2.03, a 10% increase from the previous year .

      • Management’s Forward Guidance: For fiscal 2025, DRI expects total sales of approximately $12.1 billion, including $300 million from Chuy's. They anticipate same-restaurant sales growth of approximately 1.5% and plan to open 50 to 55 new restaurants. The company also expects capital spending of approximately $650 million and an annual effective tax rate of approximately 12.5% .

      • Market Conditions and Strategic Initiatives: The company noted that the Thanksgiving holiday shift and hurricanes had a significant impact on their Fine Dining segment, which saw a decrease in same-restaurant sales. However, they are optimistic about the integration of Chuy's and expect to realize synergies from this acquisition .

      • Analyst Questions and Management Responses: Analysts inquired about various topics, including the impact of the Uber Eats partnership on sales, which was noted to be minimal at this stage . There were also questions about the company's advertising strategy and menu innovation, with management indicating potential increases in marketing efforts and new menu items being introduced .

      Overall, DRI is focusing on expanding its restaurant portfolio and optimizing its operations to drive growth in the coming fiscal year.

      Earnings Report

      ·
      Dec 19, 2024, 12:28 PM

      Darden Restaurants, Inc. has released its fiscal 2025 second quarter earnings results. Total sales for the quarter increased by 6.0% to $2.9 billion, driven by a blended same-restaurant sales increase of 2.4% and the addition of 103 Chuy's restaurants and 39 net new restaurants . The reported diluted net earnings per share from continuing operations were $1.82. Excluding $0.21 of Chuy's transaction and integration related costs, the adjusted diluted net earnings per share from continuing operations were $2.03, marking a 10.3% increase .

      Segment Performance:

      • Olive Garden: Sales of $1,292.5 million with a segment profit of $277.1 million.
      • LongHorn Steakhouse: Sales of $710.1 million with a segment profit of $134.2 million.
      • Fine Dining: Sales of $306.0 million with a segment profit of $52.7 million.
      • Other Business: Sales of $581.4 million with a segment profit of $79.2 million .

      Darden's Board of Directors declared a quarterly cash dividend of $1.40 per share, payable on February 3, 2025, to shareholders of record at the close of business on January 10, 2025 .

      The company also updated its fiscal 2025 financial outlook, projecting total sales of approximately $12.1 billion and diluted net earnings per share from continuing operations of $9.40 to $9.60, excluding approximately $47 million of Chuy's transaction and integration related costs .