EXHIBIT 99.1
DARDEN
RESTAURANTS
Red Lobster(R)Olive Garden(R)
Bahama Breeze(R)Smokey Bones(R)
www.darden.com
NEWS/INFORMATION
Corporate Relations
P.O. Box 593330
Orlando, FL 32859
Contacts:
(Analysts) Matthew Stroud (407) 245-5550
(Media) Rick Walsh (407) 245-5366
FOR RELEASE
September 19, 2001
4:30 PM EDT
DARDEN RESTAURANTS REPORTS THAT STRONG PERFORMANCE AT RED LOBSTER AND
OLIVE GARDEN LED TO DOUBLE-DIGIT EPS GROWTH
ORLANDO, FL, Sept. 19 - Darden Restaurants, Inc. today reported that continued
robust same-restaurant sales growth led to record first quarter sales of $1.08
billion. Earnings per diluted share also reached a new quarterly high of 51
cents, an 11% increase from prior year. The Company's fiscal first quarter ended
August 26, 2001.
"We had another very strong quarter," said Joe R. Lee, Chairman and Chief
Executive Officer. "The teams at Red Lobster and Olive Garden successfully
responded to a challenging economic environment. They placed even greater focus
on operating extraordinarily well within our restaurants and coupled this with
solidly conceived and well-executed marketing strategies. The teams at our
emerging companies, Bahama Breeze and Smokey Bones, also delivered impressive
results as they continued to expand.
"We at Darden are deeply saddened by the events of last week and express our
heartfelt sympathies to the families of the victims," said Lee. "We are doing
everything we can to help our communities recover, and I am confident our
country, our economy and our company will emerge stronger than ever from the
profound sadness and short-term uncertainty we're now experiencing." Highlights
for the quarter ended August 26, 2001, included the following:
o Earnings after tax in the first quarter were $62.2 million, or 51 cents per
diluted share, on sales of $1.08 billion. Last year, earnings after tax
were $56.9 million for the first quarter, or 46 cents per diluted share, on
sales of $1.02 billion.
o Total sales of $1.08 billion for the quarter represent a 6.2% increase over
prior year.
o Olive Garden led the Company with an impressive 4.2% increase in same-
restaurant sales for the quarter, making it the 28th consecutive quarter it
has achieved same-restaurant sales growth.
o Red Lobster reported its 15th consecutive quarter of same-restaurant sales
growth with a 3.2% increase.
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o Bahama Breeze and Smokey Bones BBQ Sports Bar each continued to deliver
solid sales and restaurant level earnings.
o The Company repurchased 1.8 million shares of its common stock in the
quarter.
Operating Highlights
--------------------
OLIVE GARDEN'S first quarter sales of $462.2 million were 6.0% above prior year,
and same-restaurant sales grew 4.2% - impressive growth coming on top of last
year's first quarter same-restaurant sales growth of 8.7% and the 8.1% increase
in the prior year. Olive Garden's increased sales, combined with lower labor
costs and selling, general and administrative expenses as a percent of sales,
enabled it to generate another double-digit operating profit increase and the
highest quarterly profit in its history.
"We had outstanding results again this quarter," said Brad Blum, President of
Olive Garden. "Our best ever guest satisfaction results, continued attention to
operating excellence and strong branding led to guest count and sales growth
that once more surpassed the casual dining industry average. At Olive Garden,
our passion is to provide every guest with a genuine Italian dining experience.
This means fresh, simple and delicious Italian food, complemented by a great
glass of wine, served in a comfortable home-like Italian setting where people
welcome you like family."
RED LOBSTER'S first quarter sales of $578.3 million were 3.9% above prior year,
driven by a 3.2% increase in same-restaurant sales. This extends Red Lobster's
string of comparable sales gains to 15 consecutive quarters. Red Lobster saw a
double-digit increase in operating profit for the quarter as a result of the
increased sales and lower seafood costs as a percent of sales.
"It was another quarter of strong performance for Red Lobster," said Dick
Rivera, President. "Our crews continue to deliver on our strategy of providing
our guests with a fresh approach to casual dining that features great seafood,
good times and hospitality. With the challenging economic environment we're now
in, their commitment to guest delight is more important than ever. I'm convinced
that operational excellence in our restaurants, combined with our powerful
advertising, will continue to be rewarded with outstanding business results."
BAHAMA BREEZE continued to enjoy strong sales during the quarter, and opened two
new restaurants - one in Rochester, NY and the other in Frisco, TX (Dallas). One
additional restaurant has opened since the end of the first quarter. That
opening occurred on September 4 in Broomfield, CO (Denver). At least five more
openings are scheduled for this fiscal year.
SMOKEY BONES BBQ SPORTS BAR opened its tenth location during the quarter in
Schaumburg, IL. Five restaurants are currently under construction, in Chicago
Ridge, IL; Springfield, IL; Orlando, FL; Warwick, RI; and Tyngsborough, MA. To
date, all opened restaurants have been conversions of previously closed Red
Lobster and Olive Garden locations, continuing Darden's strategy of using Smokey
Bones to optimize the Company's real estate portfolio.
Other Actions
-------------
Darden continued its buyback of common stock, repurchasing 1.8 million shares in
the first quarter. Cumulatively, since the inception of its repurchase program
in December 1995, the Company has repurchased 54.3 million shares from a total
authorization of 64.6 million shares.
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August 2001 Same-Restaurant Sales Results
-----------------------------------------
Darden also reported same-restaurant sales for the four-week August fiscal month
that ended August 26, 2001. This period is the last month of the Company's
fiscal 2002 first quarter.
Same-restaurant sales at Olive Garden were up 7% to 8% for the month compared
with the prior year. This reflected a 5% increase in guest counts and a 2% to 3%
increase in pricing. There was no change in check average from menu mix changes.
Olive Garden continued the national advertising behind "Chicken Con Broccoli"
and "Soup, Salad and Breadsticks" that began July 23. In fiscal August of last
year, Olive Garden also had a 7% to 8% same-restaurant sales increase.
Same-restaurant sales at Red Lobster were up 2% to 3% for the month over prior
year, driven by a 2% to 3% increase in pricing and a 2% increase in check
average due to menu mix changes. There was a 2% decline in guest traffic. Red
Lobster's "Festival of Crab" promotion continued through the month of August,
ending on September 2. In fiscal August of last year, Red Lobster recorded a 9%
to 10% same-restaurant sales increase and was running its price discounted,
traffic focused "Lobster and Shrimp" promotion.
At the end of its fiscal first quarter, Darden Restaurants, Inc., in Orlando,
FL, owned and operated 1,173 restaurants under the Red Lobster, Olive Garden,
Bahama Breeze and Smokey Bones BBQ Sports Bar brands.
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
8/27/2000 8/26/2001
--------- ---------
621 Red Lobster USA 628
32 Red Lobster Canada 32
------ -----
653 Total Red Lobster 660
464 Olive Garden USA 475
5 Olive Garden Canada 5
------ -----
469 Total Olive Garden 480
14 Bahama Breeze 23
2 Smokey Bones BBQ Sports Bar 10
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1,138 Total Restaurants 1,173
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DARDEN RESTAURANTS, INC.
FIRST QUARTER FY 2002 FINANCIAL HIGHLIGHTS
(In Millions, Except per Share Data)
13 Weeks Ended
8/26/2001 8/27/2000
--------- ---------
Sales .............................................. $ 1,081.5 $ 1,018.2
Net Earnings ....................................... $ 62.2 $ 56.9
Net Earnings per Share:
Basic ............................................. $ 0.53 $ 0.47
Diluted ........................................... $ 0.51 $ 0.46
Average Number of Common Shares Outstanding:
Basic ............................................. 117.4 121.6
Diluted ........................................... 122.5 124.4
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
13 Weeks Ended
8/26/2001 8/27/2000
--------- ---------
Sales ............................................ $1,081,489 $1,018,205
Costs and Expenses:
Cost of sales:
Food and beverage ........................... 343,592 331,037
Restaurant labor ............................ 333,446 318,631
Restaurant expenses ......................... 154,150 139,444
Total Cost of Sales ....................... 831,188 789,112
Selling, general and administrative ............ 106,940 99,345
Depreciation and amortization .................. 39,510 35,636
Interest, net .................................. 8,274 6,274
Total Costs and Expenses .................. 985,912 930,367
Earnings before Income Taxes ..................... 95,577 87,838
Income Taxes ..................................... -33,421 -30,917
Net Earnings ..................................... $ 62,156 $ 56,921
Net Earnings per Share:
Basic ........................................... $ 0.53 $ 047
Diluted ......................................... $ 0.51 $ 0.46
Average Number of Common Shares Outstanding:
Basic ........................................... 117,400 121,600
Diluted ......................................... 122,500 124,400
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DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
8/26/2001 5/27/2001
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $35,780 $61,814
Receivables 24,075 32,870
Inventories 171,672 148,429
Net assets held for disposal 12,978 10,087
Prepaid expenses and other current assets 18,131 26,942
Deferred income taxes 48,483 48,000
Total Current Assets $311,119 $328,142
Land, Buildings and Equipment 1,796,138 1,779,515
Other Assets 147,681 110,801
Total Assets $2,254,938 $2,218,458
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $171,026 $156,859
Short-term debt 0 12,000
Current portion of long-term debt 2,640 2,647
Accrued payroll 64,518 82,588
Accrued income taxes 71,119 47,698
Other accrued taxes 30,052 27,429
Other current liabilities 218,437 225,037
Total Current Liabilities $557,792 $554,258
Long-term Debt 515,957 517,927
Deferred Income Taxes 92,378 90,782
Other Liabilities 19,978 20,249
Total Liabilities $1,186,105 $1,183,216
Stockholders' Equity:
Common stock and surplus $1,428,946 $1,405,799
Retained earnings 594,277 532,121
Treasury stock -890,396 -840,254
Accumulated other comprehensive income -13,022 -13,102
Unearned compensation -50,972 -49,322
Total Stockholders' Equity $1,068,833 $1,035,242
Total Liabilities and
Stockholders' Equity $2,254,938 $2,218,458
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