Darden Restaurants, Inc. (NYSE:DRI) Q4 2019 Earnings Conference Call - Final Transcript

Jun 20, 2019 • 08:30 am ET


Darden Restaurants, Inc. (NYSE:DRI) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning. Welcome to the Darden Fiscal Year 2019 Fourth Quarter Earnings Call. Your lines have been placed on listen-only until the question-and-answer session. (Operator Instructions) This conference is being recorded, if you have any objections you may disconnect at this time.

I will now turn the call over to Mr. Kevin Kalicak. Thank you. You may begin.

Kevin Kalicak

Thank you, Jill. Good morning, everyone, and thank you for participating on today's call. Joining me on the call today are Gene Lee, Darden CEO; and Rick Cardenas , CFO.

As a reminder timings made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Those risks are described in the company's press release, which was distributed this morning and in its filings with the Securities and Exchange Commission.

We are simultaneously broadcasting a presentation during this call, which is posted in the Investor Relations section of our website at darden.com. Today's discussion and presentation includes certain non-GAAP measurements and reconciliations of these measurements are included in the presentation. We plan to release fiscal 2020 first quarter earnings on September 19th before the market opens, followed by a conference call.

This morning, Gene will discuss our fiscal year performance and quarterly business highlights. And Rick will provide more detail on our financial results from both the fourth quarter and the full year before providing our initial outlook for fiscal 2020. As a reminder, all references to the industry benchmark during today's call refer to estimated Knapp-Track excluding Darden.

During our fiscal fourth quarter, industry total sales growth was 0.7%; industry same-restaurant sales declined 0.3%; and industry same-restaurant guest counts decreased 2.4%. For the full fiscal year, industry total sales growth was 1.6% ; industry same-restaurant sales grew 0.7%; and industry same-restaurant guest counts decreased 1.2%.

Now I will turn the call over to Gene.

Gene Lee

Thank you, Kevin, and good morning, everyone. As you've seen from our press release this morning, the fourth quarter wrapped up a very strong fiscal 2019 for Darden. Total sales from continuing operations for the year were $8.5 billion, an increase of 5.3%. Same-restaurant sales for the year increased 2.5% and adjusted net earnings per share were $5.82, an increase of 21% from last year. I want to start this morning by briefly talking about the industry dynamics we saw during the fourth quarter and also share some thoughts on the consumer.

As you know, the industry experienced sales volatility during the quarter. After a good March, April was a challenging month. But the industry bounced back in May. A significant part of the volatility was due to holiday shift, which helped March but hurt April. Our business followed the same pattern and I was pleased to see that our traffic after the industry expanded each month throughout the quarter. As we think about the consumer and look at the