Darden Restaurants, Inc. (DRI) has reported an 11.32 percent fall in profit for the quarter ended May 28, 2017. The company has earned $123.80 million, or $0.98 a share in the quarter, compared with $139.60 million, or $1.09 a share for the same period last year. On the other hand, adjusted net income from continuing operations for the quarter stood at $148.80 million, or $1.18 a share compared with $140.60 million or $1.10 a share, a year ago.
Revenue during the quarter grew 8.07 percent to $1,934.60 million from $1,790.20 million in the previous year period. Gross margin for the quarter contracted 13 basis points over the previous year period to 22.65 percent. Total expenses were 91.20 percent of quarterly revenues, up from 89.66 percent for the same period last year. That has resulted in a contraction of 154 basis points in operating margin to 8.80 percent.
Operating income for the quarter was $170.20 million, compared with $185.10 million in the previous year period.
"Our strong fourth quarter results wrapped up a solid year of performance," said chief executive officer Gene Lee. "We continue to improve execution in our restaurants by relentlessly focusing on food, service and atmosphere. Our strategy is helping to build guest loyalty, drive improved financial results and grow shareholder value."
For financial year 2018, Darden Restaurants, Inc. expects revenue to grow in the range of 11.50 percent to 13 percent. The company projects diluted earnings per share from continuing operations to be in the range of $4.30 to $4.44 and projects diluted earnings per share from continuing operations to be in the range of $4.38 to $4.50 on adjusted basis.
Operating cash flow improves
Darden Restaurants, Inc. has generated cash of $918.20 million from operating activities during the year, up 11.92 percent or $97.80 million, when compared with the last year.
The company has spent $1,071.60 million cash to meet investing activities during the year as against cash inflow of $75.40 million in the last year.
Cash flow from financing activities was $129.20 million for the year as against cash outgo of $1,120.80 million in the last year period.
Cash and cash equivalents stood at $233.10 million as on May 28, 2017, down 15.17 percent or $41.70 million from $274.80 million on May 29, 2016.
Debt increases substantially
Darden Restaurants, Inc. has witnessed an increase in total debt over the last one year. It stood at $936.60 million as on May 28, 2017, up 112.86 percent or $496.60 million from $440 million on May 29, 2016. Darden Restaurants, Inc. has witnessed an increase in long-term debt over the last one year. It stood at $936.60 million as on May 28, 2017, up 112.86 percent or $496.60 million from $440 million on May 29, 2016.
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