Tue, Apr 1, 8:10 PM (28 days ago)
**Darden Restaurants, Inc. (DRI) Q3 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $3.16 billion (Q3) and $8.81 billion (9M), up 6.2% and 4.4% YoY, driven by 143 net new restaurants, including the acquisition of 103 Chuy’s restaurants. - **Net Earnings:** $323.4 million (Q3) and $745.8 million (9M), up 3.4% and 3.7% YoY. - **Earnings per Share (EPS):** $2.74 (Q3) and $6.29 (9M), up 5.4% and 5.7% YoY. - **Operating Income:** $418.2 million (Q3) and $979.5 million (9M), up 8.0% and 6.6% YoY. - **Profit Margins:** Operating margin at 13.2% (Q3) and 11.1% (9M), net margin at 10.3% (Q3) and 8.5% (9M). - **Cash Flow:** Operating cash flow of $1.25 billion (9M), up from $1.20 billion (9M) YoY. **Segment Performance:** - **Olive Garden:** Sales up 1.5% (Q3) and 1.1% (9M) YoY, driven by same-restaurant sales and new restaurants. - **LongHorn Steakhouse:** Sales up 5.1% (Q3) and 7.3% (9M) YoY, driven by same-restaurant sales and new restaurants. - **Fine Dining:** Sales up 3.3% (Q3) and 0.6% (9M) YoY, despite a decrease in same-restaurant guest counts. - **Other Business:** Sales up 20.2% (Q3) and 10.8% (9M) YoY, driven by the addition of Chuy’s. **Costs and Expenses:** - **Food and Beverage:** Decreased as a percent of sales due to pricing leverage and cost savings. - **Restaurant Labor:** Flat as a percent of sales, with productivity improvements offsetting inflation. - **Restaurant Expenses:** Increased due to inflation and brand mix, partially offset by pricing. - **Marketing Expenses:** Flat as a percent of sales (Q3), but increased (9M) due to higher marketing spend. - **General and Administrative Expenses:** Increased due to Chuy’s transaction and integration costs. - **Depreciation and Amortization:** Increased due to the acquisition of Chuy’s and new restaurants. **Liquidity and Capital Resources:** - **Cash and Cash Equivalents:** $224.2 million (Q3), up from $194.8 million (Q2). - **Debt:** Issued $750 million in long-term debt to finance the Chuy’s acquisition. - **Capital Expenditures:** $472.6 million (9M), reflecting new restaurant construction and remodel spend. - **Share Repurchases:** Repurchased 2.4 million shares (9M), under a $1 billion authorization. **Future Outlook:** - **Sales:** Expected to be approximately $12.1 billion for fiscal 2025. - **Same-Restaurant Sales Growth:** Expected to be approximately 1.5% for fiscal 2025. - **New Restaurant Openings:** Approximately 50 to 55 new restaurant openings. - **Capital Expenditures:** Approximately $650 million for new restaurants, remodels, and technology initiatives. **Uncertainties and Risks:** - **Economic Factors:** Unemployment, energy prices, tariffs, and interest rates. - **Operational Risks:** Labor costs, health concerns, food safety, and technology. - **Market Risks:** Volatility in derivatives, equity markets, and commodity prices. - **Regulatory Risks:** Changes in tax laws, environmental regulations, and data protection laws. **Trends and Future Operations Impact:** - **Delivery Partnership:** Exclusive multi-year delivery arrangement with Uber, rolled out to nearly all Olive Garden locations. - **Seasonality:** Sales volumes fluctuate seasonally, with the highest sales in winter and spring. - **Integration:** Successful integration of Chuy’s operations into Darden’s business.