ORLANDO, Fla., Dec. 20 - Darden Restaurants, Inc.
(NYSE: DRI) today reported record earnings per diluted share of 24 cents for
its second quarter, which ended November 26, 2000.
This represents a 33%
increase in earnings per diluted share from prior year and the 14th
consecutive period of quarterly earnings growth above 15%.
Sales for the
second quarter were $932.0 million, a 9.9% increase over prior year.
These
results were driven by significant same-restaurant sales growth at Red Lobster
and Olive Garden.
Last year, second quarter earnings per diluted share were
18 cents on sales of $848.2 million.
"This was another fantastic quarter," said Joe R. Lee, Chairman and Chief
Executive Officer.
"We're excited about the favorable results at Red Lobster
and Olive Garden.
We're also delighted with how well our emerging brands,
Bahama Breeze and Smokey Bones BBQ, continue to be received.
Solid core
businesses and promising new concepts give us an excellent platform for
expansion.
These strengths enable us to capitalize on the powerful long-term
growth trends in casual dining and respond well to any near-term challenges."
Highlights for the quarter ended November 26, 2000, include the following:
- Earnings after tax in the second quarter were $29.5 million, or
24 cents per diluted share, on sales of $932.0 million.
Last year, earnings
after tax were $24.5 million, or 18 cents per diluted share, on sales of
$848.2 million.
- Red Lobster led the Company with an 8.4% same-restaurant sales increase
in the quarter, its 12th consecutive quarter of same-restaurant sales gains.
- Olive Garden reported its 25th consecutive quarter of same-restaurant
sales growth with a 7.2% increase.
- Bahama Breeze opened another restaurant, its 15th, during the quarter
and expects to open nine more restaurants this fiscal year.
- Smokey Bones BBQ opened two restaurants during the quarter, bringing
the total number in operation to four in three different markets.
- The Company purchased 1.1 million shares of its common stock in the
quarter.
Operating Highlights
RED LOBSTER'S second quarter sales of $503.1 million were 8.9% above prior
year, due primarily to its 8.4% increase in same-restaurant sales -- the 12th
consecutive quarter of same-restaurant sales growth for Red Lobster.
Last
year, Red Lobster reported second quarter same-restaurant sales growth of
8.2%.
This year's sales improvement resulted from increased same-restaurant
guest counts and menu mix changes as guests responded favorably to exciting
new items and the successful "30-Shrimp for $10.99" promotional offering.
With the increased sales and lower labor and restaurant expenses as a percent
of sales, Red Lobster achieved strong double-digit operating profit growth for
the quarter.
"The second quarter results reflect continued improvement in virtually
every aspect of our business," said Dick Rivera, President of Red Lobster.
"We are introducing appealing new menu items with great flavors, preparing
everything we offer more consistently and providing our guests with greater
service excellence that reflects 'hospitality you can touch.'
I am pleased
with the progress we're making toward our ultimate goal, which is to be the
best in casual dining."
OLIVE GARDEN'S second quarter sales of $407.4 million were 8.4% above
prior year, propelled by its 7.2% same-restaurant sales increase for the
quarter.
This is the 25th consecutive quarter of same-restaurant sales growth
for Olive Garden, and comes on top of a 6.8% increase last year.
The
continued sales improvement reflects terrific acceptance of Olive Garden's new
menu, a higher check average due to menu mix and pricing, good response to
proven promotions like "Never Ending Pasta Bowl" and outstanding wine sales
increases exceeding 20% growth.
The increased sales, along with lower labor
and restaurant expenses as a percent of sales, combined to produce double-
digit operating profit growth and second quarter profits.
"We're proud of our results for the quarter," said Brad Blum, President of
Olive Garden.
"They represent our team's progress in elevating critical
elements of the dining experience we provide.
Our family of local restaurants
continues to get better and better at delighting every guest with a genuine
Italian dining experience that includes fresh, simple and delicious Italian
food, great wines and superior service.
We are committed to excellence in
everything we do, and to making everyone feel welcome, special and
appreciated."
BAHAMA BREEZE continued to produce impressive sales results during the
quarter, and opened one new restaurant in Oklahoma City, Okla.
Two additional
restaurants have opened since the end of the quarter -- one on November 27 in
Lake Buena Vista (Orlando) and the other on December 18 in Pembroke Pines
(Miami).
At least seven more openings are scheduled for this fiscal year.
These new restaurants are planned for Detroit (2), Cincinnati, Rochester,
N.Y., Dallas, Las Vegas, and Phoenix.
"We have established a very appealing experience," said Gary Heckel,
President of Bahama Breeze, "one that is based on a serious passion for
creating great food from scratch, hand-crafted drinks and incredible service.
We aim to provide a memorable two-hour island vacation that leaves our guests
with a burning desire to return.
Bahama Breeze is enjoying very strong
revenues per restaurant in a variety of markets.
Sales at restaurants in
major markets are annualizing to an average that's between $6.0 million and
$6.5 million, and restaurants in mid-size markets are annualizing to an
average that's between $4.5 million and $5.0 million."
SMOKEY BONES BBQ opened two more restaurants in the second quarter,
bringing the total number in operation to four.
The two newest are located in
Columbus, Ohio, and Albany, N.Y., the first test markets outside of Orlando.
"With the continued strength of the initial two restaurants in Orlando and
exceptional early success of the Columbus and Albany restaurants, we are
moving to the next test phase," said Joe Lee, Darden's Chairman and CEO.
"We
plan to open another five Smokey Bones BBQ restaurants this fiscal year.
Like
the first four, these new openings will be conversions of our own existing
restaurant properties."
Other Actions
Darden continued its buyback of common stock, purchasing 1.1 million
shares in the second quarter.
Cumulatively, since the initial authorization
of its repurchase program in December 1995, the Company has repurchased 48.6
million shares from a total authorization of 64.6 million shares.
Darden Restaurants, Inc., in Orlando, Fla., 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
11/28/99 11/26/00
618 Red Lobster USA 620
32 Red Lobster Canada 32
650 Total Red Lobster 652
458 Olive Garden USA 463
5 Olive Garden Canada 5
463 Total Olive Garden 468
8 Bahama Breeze 15
1 Smokey Bones BBQ 4
1,122 Total Restaurants 1,139
DARDEN RESTAURANTS, INC.
SECOND QUARTER FY 2001 FINANCIAL HIGHLIGHTS
(In Millions, Except per Share Data)
13 Weeks Ended 26 Weeks Ended
11/26/2000 11/28/1999 11/26/2000 11/28/1999
Sales $932.0 $848.2 $1,950.2 $1,777.6
Net Earnings $29.5 $24.5 $86.5 $71.8
Net Earnings per Share:
Basic $0.25 $0.19 $0.72 $0.55
Diluted $0.24 $0.18 $0.70 $0.53
Average Number of Common
Shares Outstanding:
Basic 119.8 130.8 120.7 131.5
Diluted 123.7 134.5 124.1 135.5
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
13 Weeks Ended 26 Weeks Ended
11/26/2000 11/28/1999 11/26/2000 11/28/1999
Sales $931,958 $848,231 $1,950,163 $1,777,622
Costs and Expenses:
Cost of sales:
Food and beverage 298,361 271,802 629,398 570,630
Restaurant labor 302,908 280,310 621,539 575,723
Restaurant expenses 135,857 126,910 275,359 258,737
Total Cost of Sales 737,126 679,022 1,526,296 1,405,090
Selling, general
and administrative 105,955 94,208 205,242 188,358
Depreciation and
amortization 35,789 31,771 71,425 63,141
Interest, net 7,777 5,265 14,051 9,841
Total Costs and
Expenses 886,647 810,266 1,817,014 1,666,430
Earnings before
Income Taxes 45,311 37,965 133,149 111,192
Income Taxes -15,770 -13,511 -46,687 -39,425
Net Earnings $29,541 $24,454 $86,462 $71,767
Net Earnings per Share:
Basic $0.25 $0.19 $0.72 $0.55
Diluted $0.24 $0.18 $0.70 $0.53
Average Number of Common
Shares Outstanding:
Basic 119,800 130,800 120,700 131,500
Diluted 123,700 134,500 124,100 135,500
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
Unaudited
11/26/2000 5/28/2000
ASSETS
Current Assets:
Cash and cash equivalents $7,753 $26,102
Receivables 35,214 27,962
Inventories 207,850 142,187
Net assets held for disposal 12,749 19,614
Prepaid expenses and other current assets 17,964 26,525
Deferred income taxes 49,915 48,070
Total Current Assets $331,445 $290,460
Land, Buildings and Equipment 1,662,370 1,578,541
Other Assets 104,449 102,422
Total Assets $2,098,264 $1,971,423
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $144,209 $140,487
Short-term debt 89,300 115,000
Current portion of long-term debt 2,514 2,513
Accrued payroll 66,674 77,805
Accrued income taxes 18,314 33,256
Other accrued taxes 26,289 25,524
Other current liabilities 205,946 212,302
Total Current Liabilities $553,246 $606,887
Long-term Debt 447,739 304,073
Deferred Income Taxes 79,790 79,102
Other Liabilities 20,849 20,891
Total Liabilities $1,101,624 $1,010,953
Stockholders' Equity:
Common stock and surplus $1,384,947 $1,351,707
Retained earnings 426,275 344,579
Treasury stock -747,869 -666,837
Accumulated other comprehensive income -13,136 -12,457
Unearned compensation -53,577 -56,522
Total Stockholders' Equity $996,640 $960,470
Total Liabilities and Stockholders' Equity $2,098,264 $1,971,423