Darden Restaurants, Inc. (DRI): history, ownership, mission, how it works & makes money

A Brief History of Darden Restaurants, Inc.

Darden Restaurants, Inc. (NYSE: DRI) is a prominent player in the restaurant industry, known for its diverse portfolio of dining establishments. The company has undergone significant growth and transformation, particularly in the past few years.

Recent Financial Performance

For the first quarter of fiscal 2025, which ended on August 25, 2024, Darden reported total sales of $2.76 billion, a 1% increase compared to $2.73 billion for the same period in fiscal 2024. This rise was attributed to the opening of 42 net new restaurants, despite a blended same-restaurant sales decline of 1.1%.

Earnings and Expenses

Net earnings from continuing operations were $207.6 million for the first quarter of fiscal 2025, compared to $194.8 million in the prior year. The diluted net earnings per share from continuing operations rose to $1.74, up from $1.60.

Operational Overview

Darden's total number of restaurants increased to 2,040 by the end of the first quarter of fiscal 2025, up from 2,031 at the end of fiscal 2024. The following table summarizes the number of restaurants by brand:

Cost Structure and Profitability

Darden's operating income for Q1 FY 2025 was $269.2 million, an increase from $252.9 million in Q1 FY 2024. The effective income tax rate for the period was 10.6%, down from 12.7% the previous year.

Debt and Capital Structure

As of August 25, 2024, Darden's long-term debt was approximately $1.39 billion, with a fair value of $1.43 billion. The company has various unsecured senior notes with maturities ranging from 2027 to 2048, with interest rates ranging from 3.850% to 6.800%.

Future Outlook and Strategic Initiatives

Darden has authorized a new share repurchase program allowing up to $1 billion in stock repurchases, reflecting confidence in its financial stability and growth prospects.

The company continues to focus on enhancing its operational efficiency and expanding its restaurant portfolio, positioning itself for sustained growth in the competitive dining industry.

A Who Owns Darden Restaurants, Inc. (DRI)

Current Ownership Structure

As of 2024, Darden Restaurants, Inc. (DRI) has a diverse ownership structure consisting of institutional investors, retail investors, and company insiders. The total number of shares outstanding is approximately 117.5 million .

Institutional Ownership

Institutional investors hold a significant portion of Darden's shares, reflecting confidence in the company's financial performance and growth prospects. The following table summarizes the largest institutional shareholders as of 2024:

Insider Ownership

Insider ownership is also notable, with key executives and board members holding a portion of Darden's shares. The following table lists the top insiders and their respective holdings:

Recent Stock Performance

Darden's stock performance has seen fluctuations, with the share price closing at approximately $146.38 as of August 25, 2024, reflecting a year-to-date increase of around 9.4% .

Dividend Information

Darden has a consistent dividend policy, declaring dividends of $1.40 per share, payable on November 1, 2024. The company has a history of increasing dividends, reinforcing its commitment to returning value to shareholders.

Market Capitalization

As of August 25, 2024, Darden's market capitalization is approximately $17.2 billion . This valuation places Darden among the significant players in the restaurant industry, highlighting its operational scale and market presence.

Share Buyback Program

In March 2024, Darden's Board of Directors authorized a new share repurchase program, allowing for the repurchase of up to $1 billion of outstanding common stock . This initiative is aimed at enhancing shareholder value and reflects the company's strong cash flow position.

Darden Restaurants, Inc. (DRI) Mission Statement

Company Overview

Darden Restaurants, Inc. operates a portfolio of well-known restaurant brands in the United States and Canada. As of 2024, the company manages 2,040 restaurants across several segments including Olive Garden, LongHorn Steakhouse, and Ruth's Chris Steak House. Darden aims to provide exceptional dining experiences and high-quality food across its establishments.

Mission Statement

Darden's mission is to nourish and delight everyone they serve. The company emphasizes a commitment to quality food, guest satisfaction, and community involvement, striving to create a positive impact in every community where they operate.

Financial Overview

In the first quarter of fiscal 2025, Darden reported total sales of $2.76 billion, a 1.0% increase from the previous year. The net earnings from continuing operations reached $207.6 million, compared to $194.8 million in the same period last year. The diluted net earnings per share from continuing operations were $1.74, up from $1.60 a year prior.

Key Financial Metrics

Operational Highlights

Darden's operational strategy focuses on enhancing guest experiences through quality service and menu offerings. The company plans to open approximately 45 to 50 new restaurants in fiscal 2025, contributing to projected sales growth of $11.8 to $11.9 billion.

Restaurant Brand Performance

Strategic Initiatives

Darden has entered into a significant agreement with Uber Technologies, Inc. to enhance delivery services across its brands. This collaboration is expected to improve customer convenience and expand market reach.

Future Outlook

Looking ahead, Darden anticipates same-restaurant sales growth of 1.0% to 2.0% for fiscal 2025, while maintaining a focus on operational efficiency and guest satisfaction. The company is committed to leveraging its strong brand portfolio to drive sustainable growth.

Stock Performance

As of August 25, 2024, Darden's stock was trading at approximately $146.38, reflecting a strategic repurchase plan authorized in March 2024 to buy back up to $1 billion of outstanding common stock.

Conclusion

Darden Restaurants, Inc. continues to exemplify its mission of providing high-quality dining experiences while demonstrating strong financial performance and a commitment to growth.

For further reference, please consult the latest financial statements and reports from Darden Restaurants, Inc.

How Darden Restaurants, Inc. (DRI) Works

Overview of Operations

Darden Restaurants, Inc. operates a diverse portfolio of restaurant brands across the United States and Canada. As of August 25, 2024, the company manages the following brands:

Financial Performance

For the first quarter of fiscal 2025, Darden reported total sales of $2.76 billion, an increase of 1.0% compared to $2.73 billion in the first quarter of fiscal 2024. The growth was primarily driven by the addition of 42 net new restaurants, despite a same-restaurant sales decline of 1.1%.

Segment Reporting

Darden aggregates its restaurant brands into four reportable segments: Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Business. The following table shows sales and segment profit for the first quarter of fiscal 2025:

Cash Flow and Capital Expenditures

For the first three months of fiscal 2025, Darden reported net cash provided by operating activities of $273.2 million, compared to $269.1 million in the same period of fiscal 2024. The company also reported capital expenditures of $145.2 million for the quarter.

Debt and Financing

As of August 25, 2024, Darden's outstanding long-term debt consisted of the following:

Market Trends and Strategic Initiatives

Darden continues to adapt to changing market conditions, including a multi-year delivery arrangement with Uber Technologies, Inc. to enhance customer delivery capabilities. Additionally, the company has announced plans to acquire Chuy’s Holdings for approximately $605 million, which is expected to close in the second quarter of fiscal 2025.

How Darden Restaurants, Inc. (DRI) Makes Money

Revenue Streams

Darden Restaurants generates revenue primarily through its extensive portfolio of restaurant brands, which includes Olive Garden, LongHorn Steakhouse, and Ruth’s Chris Steak House. For the first quarter of fiscal 2025, total sales reached $2.76 billion, reflecting a 1.0% increase from $2.73 billion in the same quarter of the previous year.

Cost Structure

The operating costs for Darden are significant, with total operating expenses for the first quarter of fiscal 2025 amounting to $2.49 billion. The breakdown of costs is as follows:

Profitability Metrics

Darden's operating income for the first quarter of fiscal 2025 was $269.2 million, resulting in an operating income margin of 9.8%. The earnings before income taxes were $232.1 million, with a net income of $207.2 million, translating to a diluted earnings per share of $1.74.

Dividends and Share Repurchases

Darden declared a dividend of $1.40 per share for the first quarter of fiscal 2025, a slight increase from $1.31 per share in the same quarter of the previous year. The company also repurchased 1.2 million shares during this period, reflecting its commitment to returning value to shareholders.

Expansion and Acquisitions

Darden is actively pursuing growth through acquisitions, having entered into an agreement to acquire Chuy’s Holdings for $605 million. This strategic move aims to enhance their brand portfolio and market presence.

Financial Position

As of August 25, 2024, Darden's total assets were valued at $11.36 billion, with total liabilities of $9.21 billion, resulting in total stockholders' equity of $2.14 billion.

Outlook

Darden expects sales for fiscal 2025 to be between $11.8 billion and $11.9 billion, with anticipated same-restaurant sales growth of 1.0% to 2.0% and approximately 45 to 50 new restaurant openings.