ORLANDO, Fla., Sept. 19 -- Darden Restaurants, Inc.
(NYSE: DRI) today reported that continued robust same-restaurant sales growth
led to record quarterly sales of $1.02 billion for the period ended August 27,
2000. Earnings per diluted share also reached a new quarterly high of
46 cents, a 31.4 % increase from prior year.
"This quarter's results are a fantastic start to an exciting new phase of
growth for Darden," said Joe R. Lee, Chairman and Chief Executive Officer.
"The impressive same-restaurant sales trends at Red Lobster and Olive Garden
reflect our restaurant teams' terrific success focusing on operating
excellence and delivering outstanding dining experiences. Offering our guests
consistently great experiences is the key to our ongoing same-restaurant sales
growth. And, we intend to capture an even greater share of the growing casual
dining business by combining solid sales growth at existing restaurants with a
meaningful increase in the number of restaurants we operate. We believe
continuing opportunities for Red Lobster and Olive Garden, plus the excitement
taking place at Bahama Breeze and potential opportunity we see emerging at
Smokey Bones BBQ, mean the best is yet to come for Darden Restaurants."
Highlights for the quarter ended August 27, 2000, included the following:
- Earnings after tax in the first quarter were $56.9 million, or 46 cents
per diluted share, on sales of $1.02 billion. Last year, earnings after tax
were $47.3 million, or 35 cents per diluted share, on sales of $929.4 million.
- Darden total sales of $1.02 billion for the quarter represent a strong
9.6% increase over prior year.
- Olive Garden led the Company with an impressive 8.7% increase in same-
restaurant sales for the quarter, making it the 24th consecutive quarter of
same-restaurant sales increases.
- Red Lobster reported its 11th consecutive quarter of same-restaurant
sales growth, continuing to outpace the casual dining industry with a 6.2%
increase.
- Bahama Breeze and Smokey Bones BBQ each posted sales and restaurant
level earnings that exceeded the Company's expectations.
- The Company purchased 3.4 million shares of its common stock in the
quarter.
Operating Highlights
OLIVE GARDEN'S first quarter sales of $436.1 million were 10.1% above
prior year, and same-restaurant sales grew 8.7% -- an impressive increase
coming on top of the 8.1% increase in last year's first quarter. These strong
sales were driven by same-restaurant guest count growth, excellent response to
a new menu with delicious dishes from the Culinary Institute and Olive Garden
restaurant in Tuscany, higher wine sales and, importantly, sales from new
restaurants that feature Olive Garden's distinctive Tuscan Farmhouse design.
The increased sales, combined with lower labor, restaurant and selling,
general and administrative expenses as a percent of sales, generated a strong
double-digit operating profit increase and record quarterly profit.
"We're proud of achieving the highest financial returns in our history and
really excited about the future growth potential of our family of local
restaurants," said Brad Blum, President of Olive Garden. "Our restaurant
General Managers and their teams are focused on delighting every guest with
fresh, simple and delicious Italian food, offering a variety of great wines
and providing extraordinary service. Olive Garden's passionate commitment to
excellence and to a genuine Italian dining experience gives us great
confidence that the best is yet to come."
RED LOBSTER'S first quarter sales of $556.8 million were 6.6% above prior
year with most of the growth produced by a 6.2% increase in same-restaurant
sales. This was well above estimated same-restaurant sales growth in the
casual dining category for the period and extended Red Lobster's string of
comparable sales gains to 11 consecutive quarters. The sales improvement was
driven by both increased same-restaurant traffic and menu mix changes as
guests responded favorably to new menu items with great new flavors and to
successful promotional offerings. Red Lobster saw a double-digit increase in
operating profit for the quarter due to the increased sales and lower labor
and restaurant expenses as a percent of sales.
"Our first quarter results are a wonderful sign that we are doing a better
and better job of delivering for our guests," said Dick Rivera, President of
Red Lobster. "Our crew is serious about providing our guests hospitality they
can taste and touch. Our vision remains the same -- we want to be a world-
class company of seafood restaurants. We will stay focused on improving the
knowledge and skills of our crew, building our leadership capabilities and
achieving even greater consistency in our restaurants as we seek to become the
best in casual dining."
BAHAMA BREEZE operated 14 restaurants in 11 markets with exceptional sales
and traffic at each location. Seven new restaurants are under construction,
and a total of twelve are expected to open during fiscal 2001. The seven
restaurants under construction are in Oklahoma City, Miami, Lake Buena Vista
(FL), Detroit, Cincinnati, Dallas, and Las Vegas.
SMOKEY BONES BBQ delivered strong sales and guest satisfaction at the
initial two restaurants in Orlando. A third location opened on September 18,
2000, in Columbus, OH, and is the first test restaurant outside of Orlando. A
fourth restaurant is under construction in upstate New York. To date, all the
restaurants are conversions of previously closed Red Lobster and Olive Garden
locations, continuing Darden's strategy of using development of Smokey BBQ as
an opportunity to optimize the Company's existing real estate portfolio.
Other Actions
Darden continued its buyback of common stock, purchasing 3.4 million
shares in the first quarter. Cumulatively, since the initial authorization of
its repurchase program in December 1995, the Company has repurchased 47.4
million shares from a total authorization of 64.6 million shares.
Darden Restaurants Inc., in Orlando, FL, owns and operates Red Lobster,
Olive Garden, Bahama Breeze and Smokey Bones BBQ restaurants.
Forward-looking statements in this news release, if any, are made under
the Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995. Certain important factors could cause results to differ materially from
those anticipated by the forward-looking statements, including the impact of
changing economic or business conditions, the impact of competition, the
availability of favorable credit and trade terms, the impact of changes in the
cost or availability of food and real estate, government regulation,
construction costs, weather conditions and other factors discussed from time
to time in reports filed by the Company with the Securities and Exchange
Commission.
DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
8/29/1999 8/27/2000
617 Red Lobster USA 621
34 Red Lobster Canada 32
651 Total Red Lobster 653
459 Olive Garden USA 464
5 Olive Garden Canada 5
464 Total Olive Garden 469
6 Bahama Breeze 14
0 Smokey Bones BBQ 2
1,121 Total Restaurants 1,138
DARDEN RESTAURANTS, INC.
FIRST QUARTER FY 2001 FINANCIAL HIGHLIGHTS
(In Millions, Except per Share Data)
13 Weeks Ended
8/27/2000 8/29/1999
Sales $1,018.2 $929.4
Net Earnings $56.9 $47.3
Net Earnings per Share:
Basic $0.47 $0.36
Diluted $0.46 $0.35
Average Number of Common Shares Outstanding:
Basic 121.6 132.2
Diluted 124.4 136.4
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
13 Weeks Ended
8/27/2000 8/29/1999
Sales $1,018,205 $929,391
Costs and Expenses:
Cost of sales:
Food and beverage 331,037 298,828
Restaurant labor 318,355 295,119
Restaurant expenses 139,778 132,121
Total Cost of Sales 789,170 726,068
Selling, general and administrative 99,287 94,150
Depreciation and amortization 35,636 31,370
Interest, net 6,274 4,576
Total Costs and Expenses 930,367 856,164
Earnings before Income Taxes 87,838 73,227
Income Taxes -30,917 -25,914
Net Earnings $56,921 $47,313
Net Earnings per Share:
Basic $0.47 $0.36
Diluted $0.46 $0.35
Average Number of Common Shares Outstanding:
Basic 121,600 132,200
Diluted 124,400 136,400
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
8/27/2000 5/28/2000
ASSETS
Current Assets:
Cash and cash equivalents $32,381 $26,102
Receivables 27,409 27,962
Inventories 176,066 142,187
Net assets held for disposal 13,662 19,614
Prepaid expenses and other current assets 18,120 26,525
Deferred income taxes 49,096 48,070
Total Current Assets $316,734 $290,460
Land, Buildings and Equipment 1,625,616 1,578,541
Other Assets 103,980 102,422
Total Assets $2,046,330 $1,971,423
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $164,901 $140,487
Short-term debt 152,300 115,000
Current portion of long-term debt 2,514 2,513
Accrued payroll 65,407 77,805
Accrued income taxes 63,182 33,256
Other accrued taxes 28,279 25,524
Other current liabilities 196,712 212,302
Total Current Liabilities $673,295 $606,887
Long-term Debt 301,146 304,073
Deferred Income Taxes 78,871 79,102
Other Liabilities 20,810 20,891
Total Liabilities $1,074,122 $1,010,953
Stockholders' Equity:
Common stock and surplus $1,362,694 $1,351,707
Retained earnings 401,500 344,579
Treasury stock -722,708 -666,837
Accumulated other comprehensive income -12,219 -12,457
Unearned compensation -57,059 -56,522
Total Stockholders' Equity $972,208 $960,470
Total Liabilities and Stockholders' Equity $2,046,330 $1,971,423