Darden Restaurants Conference Call Highlights

Darden Restaurants, Inc. DRI recently reported its second-quarter earning. Shares of the company are up 2 percent.

Below are some key highlights and takeaways from its conference call.

• Total sales from continuing operations for the second quarter were $1.56 billion, a 4.9% increase from the second quarter last year.
• On an adjusted basis, our earnings per share were $0.28, which represents a 133% increase year-over-year.
• LongHorn Steakhouse continued to deliver strong same-restaurant sales growth, with an increase of 2.6%.
• We also saw continued gains in our Specialty Restaurant Group, which delivered a 3.2% increase in same-restaurant sales on a blended basis.
• LongHorn Steakhouse's same-restaurant sales increased 2.6% for the quarter, the seventh consecutive quarter of growth and industry outperformance.
• Earnings per diluted share from continuing operations for the fiscal second quarter was $0.28, a 133% increase from the adjusted earnings per diluted share in the second quarter last year.
• On a reported basis, our net loss per diluted share was $0.24.
• The adjusted results exclude approximately $0.52 per share, of which $0.33 were non-cash items.
• The breakout of the $0.52 includes: $0.16 related to asset impairments at 11 restaurants and lease buyouts of two properties; $0.16 of severance and other costs associated with the support expense reduction efforts announced in November; $0.08 of costs associated with our strategic action plan; $0.07 for the impairment and related tax effects of lobster aquaculture investment; $0.05 of debt breakage costs related to the previously planned retirement of $100 million of the company's debt.
• We will continue to operate the impaired restaurants.
• Now, second quarter sales from continuing operations increased 4.9% to $1.560 billion from blended same-restaurant sales increase of 1.5% and the addition of 53 net new restaurants.
• Food and beverage expenses were approximately 100 basis points higher than last year.
• The unfavorable cost increase was driven entirely by higher beef and dairy costs on a year-over-year basis.
• The elevated dairy costs fully accounts for the decline in Olive Garden's quarterly profits.
• During the second quarter, we took delivery of over 8.6 million shares of stock under our previously announced accelerated share repurchase authorization.
• This contributed $0.01 to second quarter EPS, which is consistent with our previous expectations, and is expected to have a positive impact of $0.11 on our fiscal 2015 EPS.
• Same-restaurant sales growth for Olive Garden to be even to plus 1% to last year, LongHorn Steakhouse to be approximately 2% to 3% above last year, and our specialty restaurants also to be up approximately 2% to 3%.
• We anticipate adjusted diluted net earnings per share from continuing operations to be between $2.25 and $2.30 for fiscal 2015.
• On an unadjusted basis or reported basis, we anticipate net diluted earnings per share from continuing operations of $1.30 to $1.35 for the year.