Darden Restaurants Q2 Earnings Top Estimates; Names Ricardo Cardenas To Succeed Eugene Lee As CEO

Darden Restaurants Inc DRI reported second-quarter FY22 sales growth of 37% year-on-year, to $2.27 billion, beating the analyst consensus of $2.23 billion. Same-restaurant sales increased 34.4% versus last year.

• Darden clocked an operating margin of 10.7%, and the operating income jumped 101.2% Y/Y to $242.9 million. EBITDA was $335 million.
• EPS of $1.48 beat the consensus of $1.43.
• Darden generated an operating cash flow of $481.5 million for the six months ended November 28, 2021. It held $797.8 million in cash and equivalents as of November 28, 2021.
• Darden's Board of Directors declared a quarterly cash dividend of $1.10 per share on the common stock, payable on February 1, 2022, to shareholders of record on January 10, 2022.
• Guidance: Darden raised the FY22 sales outlook to $9.55 billion - $9.7 billion (prior view $9.4 billion - $9.6 billion) versus the consensus of $9.54 billion. 
• It expects FY22 EPS of $7.35-$7.60 (prior view $7.25 - $7.60) versus the consensus of $7.61.
• The restaurant chain expects same-restaurant sales growth of 29%-31% (prior view 27% - 30%) versus FY21 and ~35 to 40 new restaurant openings.
• CEO Transition: Darden Restaurants stated that Eugene Lee will retire as CEO effective May 29, 2022. The company has named Ricardo Cardenas, its current President and COO, as CEO and a member of the Board effective May 30, 2022.
• Lee will continue to serve as Executive Chairman until the 2022 Annual Meeting of Shareholders and will stand for re-election to the Board and continue to serve as Chairman in a non-executive capacity.
• Price action: DRI shares are trading lower by 3.62% at $141.80 in premarket on the last check Friday.