Darden Restaurants(DRI) - 2025 Q4 - Annual Results

Fiscal 2025 Performance and 2026 Outlook Fourth Quarter 2025 Financial Highlights In the fourth quarter of fiscal 2025, Darden reported a 10.6% increase in total sales to $3.3 billion, driven by a 4.6% rise in same-restaurant sales and contributions from the Chuy's acquisition, with adjusted diluted net earnings per share growing by 12.5% to $2.98 Q4 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Total Sales | $3.3 billion | +10.6% | | Adjusted Diluted EPS | $2.98 | +12.5% | | Reported Diluted EPS | $2.58 | 0.0% | | Blended Same-Restaurant Sales | +4.6% | N/A | Q4 2025 Same-Restaurant Sales by Brand | Brand | Same-Restaurant Sales Growth | | :--- | :--- | | Olive Garden | 6.9% | | LongHorn Steakhouse | 6.7% | | Fine Dining | (3.3)% | | Other Business | 1.2% | - Sales growth was primarily driven by a blended same-restaurant sales increase of 4.6%, sales from the acquisition of 103 Chuy's restaurants, and 25 net new restaurants[4] - The company repurchased $51 million of its outstanding common stock during the quarter[4] Full Year Fiscal 2025 Financial Highlights For the full fiscal year 2025, total sales increased by 6.0% to $12.1 billion, supported by a 2.0% increase in same-restaurant sales, while adjusted diluted net earnings per share from continuing operations rose by 7.5% to $9.55 Fiscal Year 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Total Sales | $12.1 billion | +6.0% | | Adjusted Diluted EPS | $9.55 | +7.5% | | Reported Diluted EPS | $8.88 | +4.1% | | Blended Same-Restaurant Sales | +2.0% | N/A | Fiscal Year 2025 Same-Restaurant Sales by Brand | Brand | Same-Restaurant Sales Growth | | :--- | :--- | | Olive Garden | 1.7% | | LongHorn Steakhouse | 5.1% | | Fine Dining | (3.0)% | | Other Business | 0.2% | - CEO Rick Cardenas stated the company had a successful year due to adherence to its strategy, anchored in four competitive advantages and being 'brilliant with the basics'[3] Segment Performance For fiscal year 2025, Olive Garden and LongHorn Steakhouse were the primary drivers of profitability, with segment profits of $1.16 billion and $582.7 million, respectively, while the 'Other Business' segment, now including Chuy's, also saw significant growth Q4 Segment Performance ($ in millions) | Segment | Q4 2025 Sales | Q4 2024 Sales | Q4 2025 Profit | Q4 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Olive Garden | $1,381.0 | $1,277.5 | $328.4 | $291.4 | | LongHorn Steakhouse | $833.8 | $762.7 | $167.8 | $147.2 | | Fine Dining | $334.6 | $327.1 | $62.9 | $64.6 | | Other Business | $722.3 | $590.0 | $126.3 | $102.5 | Annual Segment Performance ($ in millions) | Segment | FY 2025 Sales | FY 2024 Sales | FY 2025 Profit | FY 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Olive Garden | $5,212.9 | $5,067.0 | $1,163.9 | $1,117.4 | | LongHorn Steakhouse | $3,025.5 | $2,806.2 | $582.7 | $516.8 | | Fine Dining | $1,304.8 | $1,291.5 | $242.5 | $245.0 | | Other Business | $2,533.5 | $2,225.3 | $397.4 | $340.3 | - The company changed its segment profit reporting to exclude pre-opening costs starting in Q4 2025, with prior year figures recast for comparability, and sales and profits from Chuy's are included in the Other Business segment[6] Shareholder Returns and Capital Allocation Darden increased its quarterly dividend by 7.1% to $1.50 per share and authorized a new $1 billion share repurchase program, underscoring its commitment to delivering 10-15% total shareholder return - The Board of Directors declared a quarterly cash dividend of $1.50 per share, a 7.1% increase from the previous quarter[8] - A new share repurchase program was authorized, allowing the company to buy back up to $1 billion of its common stock with no expiration date[9] - During Q4, the company repurchased approximately 0.2 million shares for a total of $51 million[9] Fiscal 2026 Financial Outlook For fiscal 2026, which includes a 53rd week, Darden projects total sales growth of 7% to 8% and same-restaurant sales growth of 2% to 3.5%, anticipating diluted net EPS between $10.50 and $10.70 Fiscal 2026 Projections | Metric | Projected Value | | :--- | :--- | | Total Sales Growth | 7% to 8% | | Same-Restaurant Sales Growth | 2% to 3.5% | | New Restaurant Openings | 60 to 65 | | Diluted Net EPS | $10.50 to $10.70 | | Total Capital Spending | $700 to $750 million | | Total Inflation | 2.5% to 3.0% | | Effective Tax Rate | ~13% | - The fiscal 2026 outlook includes an extra (53rd) week, which is expected to contribute approximately 2% to total sales growth and $0.20 to diluted net EPS[10][15] Financial Statements Consolidated Statements of Earnings For the twelve months ended May 25, 2025, Darden's sales increased to $12.08 billion from $11.39 billion in the prior year, with operating income rising to $1.36 billion and earnings from continuing operations reaching $1.05 billion, or $8.88 per diluted share Annual Earnings Summary (in millions, except per share data) | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Sales | $12,076.7 | $11,390.0 | | Operating Income | $1,362.3 | $1,314.2 | | Earnings from Continuing Operations | $1,051.0 | $1,030.5 | | Diluted EPS from Continuing Operations | $8.88 | $8.53 | Q4 Earnings Summary (in millions, except per share data) | Metric | Q4 2025 | Q4 2024 | | :--- | :--- | :--- | | Sales | $3,271.7 | $2,957.3 | | Operating Income | $382.8 | $395.4 | | Earnings from Continuing Operations | $304.0 | $310.0 | | Diluted EPS from Continuing Operations | $2.58 | $2.58 | Consolidated Balance Sheets As of May 25, 2025, Darden's total assets grew to $12.59 billion from $11.32 billion the previous year, primarily due to increases in Goodwill, Trademarks, and property, while total liabilities also increased to $10.28 billion from $9.08 billion Balance Sheet Summary (in millions) | Account | May 25, 2025 | May 26, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $240.0 | $194.8 | | Total current assets | $937.7 | $822.8 | | Total assets | $12,587.0 | $11,323.0 | | Liabilities & Equity | | | | Total current liabilities | $2,247.5 | $2,192.5 | | Long-term debt | $2,128.9 | $1,370.4 | | Total liabilities | $10,275.7 | $9,080.5 | | Total stockholders' equity | $2,311.3 | $2,242.5 | Consolidated Statements of Cash Flows For fiscal year 2025, net cash from operating activities increased to $1.71 billion, with $1.28 billion used in investing activities, including $613.7 million for business acquisitions, and $385.8 million used in financing activities Annual Cash Flow Summary (in millions) | Activity | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,707.0 | $1,621.7 | | Net cash used in investing activities | $(1,278.3) | $(1,324.6) | | Net cash used in financing activities | $(385.8) | $(483.4) | | Increase (decrease) in cash | $34.4 | $(196.1) | - Key uses of cash in financing activities for FY 2025 included $658.5 million for dividends and $418.2 million for common stock repurchases[32] - Investing activities were dominated by $644.6 million in property and equipment purchases and $613.7 million used for business acquisitions[32] Reconciliation of GAAP to Non-GAAP Earnings The company provides non-GAAP earnings to offer a clearer understanding of its core operating results, with Q4 2025 reported diluted EPS of $2.58 adjusted to $2.98 and full fiscal year 2025 reported EPS of $8.88 adjusted to $9.55 Q4 2025 EPS Reconciliation (per share) | Item | Value | | :--- | :--- | | Reported Diluted EPS | $2.58 | | Transaction/integration costs | +$0.04 | | Impairment on restaurant disposition | +$0.30 | | Restaurant closing costs | +$0.06 | | Adjusted Diluted EPS | $2.98 | Full Year 2025 EPS Reconciliation (per share) | Item | Value | | :--- | :--- | | Reported Diluted EPS | $8.88 | | Transaction/integration costs | +$0.31 | | Impairment on restaurant disposition | +$0.30 | | Restaurant closing costs | +$0.06 | | Adjusted Diluted EPS | $9.55 | - Adjustments in fiscal 2025 primarily relate to Chuy's transaction costs and impairment charges for 22 underperforming restaurants that were permanently closed[22] Other Information Company-Owned Restaurant Count As of May 25, 2025, Darden operated a total of 2,159 restaurants, an increase from 2,031 in the prior year, primarily driven by the acquisition of 108 Chuy's locations and net new openings for LongHorn Steakhouse and The Capital Grille Restaurant Count by Brand | Brand | 5/25/2025 | 5/26/2024 | | :--- | :--- | :--- | | Olive Garden | 935 | 920 | | LongHorn Steakhouse | 591 | 575 | | Chuy's | 108 | — | | The Capital Grille | 71 | 66 | | Total Darden | 2,159 | 2,031 | Corporate Information Darden will host an investor conference call on June 20, 2025, to discuss its financial results, and the Annual Meeting of Shareholders will be held virtually on September 17, 2025 - The company will host an investor conference call and slide presentation on June 20, 2025, at 8:30 am ET[12] - The Annual Meeting of Shareholders is scheduled for September 17, 2025, in a virtual-only format[11]