ORLANDO, Fla., Jun 22, 2004 /PRNewswire-FirstCall via COMTEX/ -- Darden Restaurants, Inc. (NYSE: DRI) today reported diluted net earnings per share for the fiscal year and fiscal fourth quarter ended May 30, 2004, which included an additional operating week compared to last year. Diluted net earnings per share were $1.36 for the year on net earnings of $231.5 million and 32 cents for the fourth quarter on net earnings of $53.7 million. As described in the table below, annual diluted net earnings per share, before the previously announced fourth quarter asset impairment and restructuring charge, was $1.50.
14 weeks 53 weeks
ended 5/30/2004 ended 5/30/2004
(In thousands except Diluted Net Diluted Net
per share data) Net Earnings Net Earnings
Earnings Per Share Earnings Per Share
As reported $53,716 $0.32 $231,462 $1.36
Asset impairment
and restructuring
charge 23,053 0.14 23,053 0.14
Adjusted $76,769 $0.46 $254,515 $1.50
Darden Restaurants, the world's largest casual dining company, said full year sales increased 7.5% to $5.0 billion. In the fourth quarter, sales increased 10.7% to $1.4 billion, driven primarily by new restaurant growth at Olive Garden and Smokey Bones and the additional operating week in the quarter.
"This was a good quarter for Darden Restaurants," said Joe Lee, Darden's Chairman and Chief Executive Officer. "We achieved solid fourth quarter diluted net earnings per share as a result of exceptional performance once again at Olive Garden and continued improvement at Red Lobster, Bahama Breeze and Smokey Bones. Strong leadership is the key to propelling future growth for Darden, and we will benefit from recent steps to fill important leadership positions. We are committed to building the leadership teams we need to create a great company that will last for generations."
Highlights for the quarter and year ended May 30, 2004 include the following:
-- Net earnings were $231.5 million, or $1.36 per diluted share, for the
fiscal year and $53.7 million, or 32 cents per diluted share, for the
fourth quarter. These results include fourth quarter asset impairment
and restructuring charges totaling approximately $23.1 million after
tax for the closure of six Bahama Breeze restaurants and a write-down
of the value of four other Bahama Breeze restaurants, one Olive Garden
restaurant and one Red Lobster restaurant.
-- Net earnings for the fiscal year (excluding the asset impairment and
restructuring charges) were $254.5 million, or $1.50 per diluted
share, on sales of $5.0 billion (53 weeks). Last year net earnings
were $232.3 million, or $1.31 per diluted share, on sales of
$4.7 billion (52 weeks).
-- Net earnings for the fourth quarter (excluding the asset impairment
and restructuring charges) were $76.8 million, or 46 cents per diluted
share, on sales of $1.4 billion (14 weeks). Last year net earnings
were $61.1 million, or 35 cents per diluted share, on sales of $1.2
billion (13 weeks).
-- Olive Garden's same-restaurant sales increased 5.0% in the fourth
quarter on a 13 weeks versus 13 weeks basis. This is the 39th
consecutive quarter of same-restaurant sales growth, bringing Olive
Garden's same-restaurant sales increase for the fiscal year to 4.6%.
Olive Garden also opened 11 new restaurants in the fourth quarter and
23 new restaurants during fiscal 2004.
-- On May 20, the Company announced that Kim Lopdrup, a 19-year industry
veteran, would become President of Red Lobster. In addition to
Lopdrup, the Company announced that Kelly Baltes, who has spent 19
years in the casual dining industry, would become Executive Vice
President of Operations for Red Lobster and Jane Diange, a 10-year
casual dining veteran, would become Senior Vice President of Human
Resources for Red Lobster.
-- Smokey Bones opened 10 restaurants during the fourth quarter and, with
a total of 30 openings during the full fiscal year, increased in size
to 69 restaurants in operation. Total sales for Smokey Bones in
fiscal 2004 were $174.3 million and average annual sales per
restaurant were $3.2 million.
-- Darden purchased 4.4 million shares of its common stock in the fourth
quarter, bringing the total number of shares repurchased during the
year to 10.7 million.
Operating Highlights
OLIVE GARDEN'S fourth quarter sales of $593.5 million were 15.7% above prior year, driven primarily by a same-restaurant sales increase of 5.0% (on a 13 weeks versus 13 weeks basis), revenue from 19 net new restaurants opened during fiscal 2004 and sales from the additional operating week. This is the 39th consecutive quarter of comparable-restaurant sales growth for Olive Garden. Olive Garden had record total sales for the fiscal year of $2.2 billion, up 11.1% from last year, and its average annual sales per restaurant were $4.1 million (52 week base). For the quarter, the company's sales gains, combined with lower food and beverage costs, restaurant expenses and selling, general, and administrative expenses as a percent of sales, more than offset increased restaurant labor expenses. This resulted in a strong double-digit increase in operating profit for the quarter and the year along with record annual operating profit and return on sales.
"This was a great quarter to complete an outstanding year for Olive Garden," said Drew Madsen, President of Olive Garden. "I am delighted that we could deliver such strong growth and record financial performance in sales, operating profit and return on sales. We have an exceptional team that is focused on delighting our guests with a genuine Italian dining experience. I want to thank that team for making our guests feel like family, whenever they choose to dine at Olive Garden. We are excited about our future and the opportunity to achieve even higher levels of success."
RED LOBSTER'S fourth quarter sales of $652.8 million were 1.3% above prior year, driven by seven net new restaurants opened during fiscal 2004 and sales from the additional operating week partially offset by a 6.4% decrease in same-restaurant sales (on a 13 weeks versus 13 weeks basis). Red Lobster's total sales for the fiscal year were $2.4 billion, up 0.1% from last year, and its average annual sales per restaurant were $3.6 million (52 week base). Same-restaurant sales for the fiscal year were down 3.5%. Lower food and beverage costs, restaurant expenses and selling, general and administrative expenses as a percent of sales more than offset higher restaurant labor expenses, which led to a strong double-digit increase in operating profit for the quarter versus last year.
"We are encouraged that our team was able to grow profits in the fourth quarter, despite considerable challenges," said Kim Lopdrup, President of Red Lobster. "Importantly, we also increased our guest satisfaction scores significantly, and our sales trend since April has improved after we introduced our new transitional advertising campaign. Our 63,000 dedicated employees are committed to enhancing the dining experience of all our guests and building a simply great future for Red Lobster and all its stakeholders."
BAHAMA BREEZE opened its new, reduced-investment prototype building in Pittsburgh, PA during the fourth quarter. Bahama Breeze also closed six restaurants during the quarter, reducing the total number in operation to 32 restaurants. Total sales for Bahama Breeze were $176.3 million in fiscal 2004 and average annual sales per restaurant (excluding the six closed restaurants) were $5.2 million (on a 52 week basis).
SMOKEY BONES opened 10 restaurants during the fourth quarter and had 69 restaurants in operation at the end of the fiscal year. Since the end of the quarter, Smokey Bones has opened one restaurant located in Bowie, MD. Total sales for Smokey Bones were $174.3 million in fiscal 2004 and average annual sales per restaurant were $3.2 million (on a 52 week basis). The company plans to open 30 to 40 restaurants during fiscal 2005.
Other Actions
Darden continued the buyback of its common stock, purchasing 4.4 million shares in the fourth quarter. Since commencing its repurchase program in December 1995, the Company has repurchased a total of 109.2 million shares under authorizations totaling 115.4 million shares.
The Company's Annual Meeting of Shareholders will be held on September 29, 2004 at the Gaylord Palms Orlando Resort Hotel in Kissimmee, FL. The record date for shareholders entitled to vote at the Annual Meeting is July 26, 2004.
May 2004 Same-Restaurant Sales Results
Darden reported same-restaurant sales for the five-week May fiscal month ended May 30, 2004, which had an additional operating week versus last year. This period is the last month of Darden's fiscal 2004 fourth quarter.
Same-restaurant sales at Olive Garden were up 1% to 2% for fiscal May on a four weeks versus four weeks basis, which reflected a 2% to 3% increase in check average and a 1% to 2% decrease in guest counts. The check average increase was a result of a 2% to 3% increase in pricing and a 0% to 1% increase from menu mix changes. Last year, same-restaurant sales at Olive Garden were flat during fiscal May.
Same-restaurant sales at Red Lobster were down 4% to 5% for fiscal May on a four weeks versus four weeks basis, which reflected a 0% to 1% decrease in check average and a 4% to 5% decrease in guest counts. The check average increase was a result of a 0% to 1% increase in pricing and a 1% decrease from menu mix changes. Last year, same-restaurant sales at Red Lobster were down 2% to 3% during fiscal May.
Fiscal 2005 Outlook
Darden expects combined same-restaurant sales growth in fiscal 2005 of between 1% and 3% for Red Lobster and Olive Garden. Darden also expects to open at least 50 to 60 new restaurants in fiscal 2005.
"We have strong, consumer driven businesses and we will continue to do what is necessary to drive their growth. Given our near term focus to strengthen the performance at Red Lobster and Bahama Breeze, the continued roll-out of Smokey Bones as well as some uncertainty in economic conditions and the extra operating week in fiscal 2004, we believe diluted net earnings per share growth in the range of 8% to 12% is appropriate for fiscal 2005," said Lee. "Over the long term, we believe we can achieve annual diluted earnings per share growth in the double-digit range."
Darden Restaurants, Inc., headquartered in Orlando, FL, owns and operates over 1,300 Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones and Seasons 52 restaurants with annual sales of $5.0 billion.
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
05/30/04 05/25/03
649 Red Lobster USA 642
31 Red Lobster Canada 31
680 Total Red Lobster 673
537 Olive Garden USA 518
6 Olive Garden Canada 6
543 Total Olive Garden 524
32 Bahama Breeze 34
69 Smokey Bones 39
1 Seasons 52 1
1,325 Total Restaurants 1,271
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
14 weeks 13 weeks 53 weeks 52 weeks
ended ended ended ended
5/30/2004 5/25/2003 5/30/2004 5/25/2003
Sales $1,359,171 $1,227,492 $5,003,355 $4,654,971
Costs and expenses:
Cost of sales:
Food and beverage 411,418 388,644 1,526,875 1,449,162
Restaurant labor 442,290 386,590 1,601,258 1,485,046
Restaurant expenses 197,043 181,859 767,584 703,554
Total cost of
sales (1) $1,050,751 $957,093 $3,895,717 $3,637,762
Selling, general, and
administrative 128,641 114,316 472,109 431,722
Depreciation and
amortization 54,224 52,015 210,004 191,218
Interest, net 11,349 10,946 43,659 42,597
Asset impairment and
restructuring charge, net 37,823 3,924 41,868 3,924
Total costs and
expenses $1,282,788 $1,138,294 $4,663,357 $4,307,223
Earnings before
income taxes 76,383 89,198 339,998 347,748
Income taxes (22,667) (28,088) (108,536) (115,488)
Net earnings $ 53,716 $ 61,110 $ 231,462 $ 232,260
Net earnings per share:
Basic $ 0.34 $ 0.36 $ 1.42 $ 1.36
Diluted $ 0.32 $ 0.35 $ 1.36 $ 1.31
Average number of common
shares outstanding:
Basic 160,300 168,000 163,500 170,300
Diluted 166,900 173,400 169,700 177,400
(1) Excludes restaurant
depreciation and
amortization as
follows: $ 50,271 $ 48,244 $ 195,486 $ 177,127
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
5/30/2004 5/25/2003
ASSETS
Current assets:
Cash and cash equivalents $ 36,694 $ 48,630
Receivables 30,258 29,023
Inventories 198,781 173,644
Prepaid expenses and other current assets 25,316 25,126
Deferred income taxes 55,258 49,206
Total current assets $ 346,307 $ 325,629
Land, buildings, and equipment 2,250,616 2,157,132
Other assets 183,425 181,872
Total assets $2,780,348 $2,664,633
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 174,624 $ 175,991
Short term debt 14,500 --
Accrued payroll 103,327 85,975
Accrued income taxes 48,753 67,975
Other accrued taxes 38,440 35,069
Unearned revenues 75,513 72,698
Other current liabilities 228,324 202,201
Total current liabilities $ 683,481 $ 639,909
Long-term debt 653,349 658,086
Deferred income taxes 176,216 150,537
Other liabilities 21,532 19,910
Total liabilities $1,534,578 $1,468,442
Stockholders' equity:
Common stock and surplus $1,584,115 $1,525,957
Retained earnings 1,197,921 979,443
Treasury stock (1,483,768) (1,254,293)
Accumulated other comprehensive income (9,959) (10,489)
Unearned compensation (41,401) (42,848)
Officer notes receivable (1,138) (1,579)
Total stockholders' equity $1,245,770 $1,196,191
Total liabilities and
stockholders' equity $2,780,348 $2,664,633
DARDEN RESTAURANTS, INC.
FOURTH QUARTER FY 2004
FINANCIAL HIGHLIGHTS
(In millions, except per share data)
(Unaudited)
14 weeks 13 weeks 53 weeks 52 weeks
ended ended ended ended
5/30/2004 5/25/2003 5/30/2004 5/25/2003
Sales $1,359.2 $1,227.5 $5,003.4 $4,655.0
Net earnings $ 53.7 $ 61.1 $ 231.5 $ 232.3
Net earnings per share:
Basic $ 0.34 $ 0.36 $ 1.42 $ 1.36
Diluted $ 0.32 $ 0.35 $ 1.36 $ 1.31
Average number of common
shares outstanding:
Basic 160.3 168.0 163.5 170.3
Diluted 166.9 173.4 169.7 177.4
SOURCE Darden Restaurants, Inc.
Analysts, Matthew Stroud, +1-407-245-6458, Media, Jim DeSimone,
+1-407-245-4567, both of Darden Restaurants, Inc.
/Company News On-Call: http://www.prnewswire.com/comp/105228.html
http://www.darden.com
Copyright (C) 2004 PR Newswire. All rights reserved.
News Provided by COMTEX