Darden Restaurants, Inc. is the world's largest company-owned and operated full-service restaurant company (Photo: Darden Restaurants)

COMPANY OF THE WEEK: Darden Restaurants Strong Financial Performance

Darden Restaurants, Inc. (NYSE: DRI) has reported sales and diluted net earnings per share for the fiscal first quarter ended August 29, 2010. In the first quarter, diluted net earnings per share from continuing operations increased 19 percent to 80 cents, versus 67 cents in the prior year. 

The Capital Grille reported a first quarter sales increase of 2.7 percent

First quarter sales from continuing operations were USD1.81 billion, compared to USD1.73 billion in the prior year, a 4.2 percent increase. Blended same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were up 1.1 percent this quarter, which compares to an estimate of 0.0 percent for the Knapp-Track (TM) benchmark of U.S. same-restaurant sales, excluding Darden.

Clarence Otis, Chairman and Chief Executive Officer of Darden

"We are pleased with our very strong financial performance this quarter and encouraged by the continued improvement in industry sales trends," said Clarence Otis, Chairman and Chief Executive Officer of Darden. "Same-restaurant sales results for the Knapp-Track (TM) benchmark were one percent age point better in this quarter than in our last fiscal quarter. And, on a blended basis, our three core brands once again exceeded the industry average. Though it's improving, the environment remains challenging. With our competitively strong brands and the talented people who drive them, we are confident we can continue to successfully handle the challenges. In fiscal 2011, we will remain focused on delivering another year of superior sales results and earnings growth while doing what's necessary to position ourselves for sustainable, long-term success."

Highlights for the Q1

• Net earnings from continuing operations for the first quarter were USD113.3 million, or 80 cents per diluted share on sales of USD1.81 billion. Last year, first quarter net earnings from continuing operations were USD95.0 million, or 67 cents per diluted share, on sales of USD 1.73 billion.
• Total first quarter sales from continuing operations of USD1.81 billion represent a 4.2 percent increase over the prior year.
• In the first quarter, U.S. same-restaurant sales increased 2.7 percent at Olive Garden and 2.2 percent at LongHorn Steakhouse, and declined 1.7 percent at Red Lobster. These results compare to an estimate of 0.0 percent for the Knapp-Track (TM) benchmark of U.S. same-restaurant sales, excluding Darden.
• The Company's Board of Directors declared a quarterly dividend of 32 cents per share on the Company's outstanding common stock. The dividend is payable on November 1, 2010 to shareholders of record at the close of business on October 8, 2010.
• The Company purchased almost 2.4 million shares of its common stock during the quarter. Since commencing its repurchase program in December 1995, the Company has purchased 156.5 million shares for USD 3.11 billion, under authorizations totalling 162.4 million shares.

Partnering with organizations like the National Fisheries Institute (NFI) and the Global Aquaculture Alliance (GAA), Red Lobster is committed to helping protect the sustainability of the world’s seafood supply.

Operating Highlights

• Olive Garden’s first quarter sales of USD 877 million were 6.8 percent above prior year, driven by revenue from 32 net new restaurants and its U.S. same-restaurant sales increase of 2.7 percent. For the quarter, on a percent age of sales basis, lower restaurant labour expenses, restaurant expenses and depreciation expenses were partially offset by increased food and beverage expenses and selling, general and administrative expenses. The net result was an increase in returns and absolute operating profit for the quarter.
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Darden Restaurants serve more than 400 million meals a year

Red Lobster’s first quarter sales of USD 600 million were 0.8 percent below prior year, driven by a U.S. same-restaurant sales decrease of 1.7percent , partially offset by revenue from four net new restaurants. For the quarter, on a percent age of sales basis, lower food and beverage expenses, restaurant labour expenses and restaurant expenses were partially offset by increased selling, general and administrative expenses and depreciation expenses. Absolute operating profit and returns increased for the quarter.
• Longhorn Steakhouse’s first quarter sales of USD 226 million were 6.8 percent above prior year, driven by revenue from 12 net new restaurants and its same-restaurant sales increase of 2.2 percent. For the quarter, on a percent age of sales basis, lower food and beverage expenses, restaurant labour expenses and depreciation expenses were partially offset by increased restaurant expenses and selling, general and administrative expenses, resulting in an increase in returns and absolute operating profit for the quarter.
• The Specialty Restaurant Group’s first quarter sales of USD 107 million were 11.7 percent above prior year driven by same-restaurant sales increases of 2.7 percent at The Capital Grille and 5.8 percent at Seasons 52 offset by a same-restaurant sales decrease of 0.1 percent at Bahama Breeze. Additionally, sales growth was driven by revenue from three new restaurants each at The Capital Grille and Seasons 52 and one new restaurant at Bahama Breeze. The Capital Grille's first quarter sales of USD 54 million were 8.7 percent above the prior year results.
• Bahama Breeze's first quarter sales of USD 37 million were 4.4 percent above the prior year results. Seasons 52's first quarter sales of USD 16 million were 51 percent above the prior year results.

Olive Garden’s first quarter sales were 6.8 percent above prior year and 5.8 percent at Seasons 52

Darden Restaurants, Inc.

Darden Restaurants, Inc., (NYSE: DRI) headquartered in Orlando, Florida, is the world's largest company-owned and operated full-service restaurant company with over USD 7.1 billion in annual sales.

The Darden family of restaurants features some of the most recognizable and successful brands in full-service dining: Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52.

Since opening its first Red Lobster restaurant in Florida in 1968, Darden has grown to become the world’s largest full-service restaurant company. Through subsidiaries, Darden own and operate 1,800 restaurants, employ approximately 180,000 people and serve more than 400 million meals a year.

Photos and Videos: Darden Restaurants Inc.

Address:	1000 Darden Center Drive
City:	Orlando
State/ZIP:	Florida (32837-4032)
Country:	United States
Phone:	+1 407 245 4000
Fax:	+1 407 245 4989
E-Mail:	[email protected]
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