Darden Restaurants, Inc. (NYSE: DRI) stock lost 3.6% on 26th, 2020 (as of 11:18 am GMT-4; Source: Google finance) post fourth quarter of FY 20. The company has delivered the net losses of $480 million compared to net income of $208 million, last year. The company had permanently closed 11 restaurants in the quarter, six of which were already impaired. During the quarter, the company impaired $390 million of assets due to lower sales, reduced profitability and lower market capitalization.
Moreover, Olive Garden same-restaurant sales declined by 39.2% for the fourth quarter, and LongHorn Steakhouse was down 45.3%. The fine dining category, which includes The Capital Grille, has fallen 63.1%. And the “other business” category, which includes Bahama Breeze and Yard House, fell 65.4%. As of June 22, 91% of Darden dining rooms are open with at least limited capacity. For the fiscal first quarter to June 21, same-restaurant sales have fallen down 33.2%. Olive Garden, LongHorn Steakhouse, the fine dining and remaining business categories continue to show sales and same-restaurant sales improvement. As of the week of June 21, Darden has generated positive operating cash flow and has more than $1.5 billion in liquidity, including $750 million cash on hand. During the quarter, the company has suspended the dividend and share repurchases, fully drew down the $750 million credit facility, took out a $270 million term loan and raised over $500 million in a follow-on equity offering.
DRI in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.24, while reported 43 percent fall in the adjusted revenue to $1.27 billion in the fourth quarter of FY 20.
For the fiscal first quarter, DRI projects earnings per share greater than or equal to breakeven, EBITDA to be of at least $75 million and sales to be of about 70% of the previous year. In addition, for the full year, the Company expects to open 35-40 net new restaurants and have total capital spending to be in the range of $250 to $300 million. The first opening of the year is anticipated to be in early July with a few others likely to be opened by the end of the first quarter.