EXHIBIT 99.3
Press Release dated September 23, 1999, of Darden Restaurants, Inc.
DARDEN'S FIRST QUARTER RESULTS INCLUDE RECORD QUARTERLY
EARNINGS PER DILUTED SHARE
ORLANDO, FL - Darden Restaurants, Inc. today reported record quarterly earnings
of 35 cents per diluted share for its first quarter, which ended August 29,
1999, a 46% increase. Earnings after tax for the quarter were up over 34% to
$47.3 million. The world's largest casual-dining restaurant company said first
quarter sales rose approximately 5% to $929.4 million, driven by strong
same-restaurant sales growth at Olive Garden and Red Lobster.
"We are off to a great start. Both Olive Garden and Red Lobster continue to
produce industry leading increases in guest counts, sales and earnings," said
Joe R. Lee, Chairman and Chief Executive Officer. "These results are directly
attributable to a focus on operating excellence by the leadership teams and
employees throughout our organization. Our strong operating platform is enabling
each of our restaurant companies to take full advantage of what is clearly a
favorable consumer environment. As consumer conditions change, strong consumer
brands and the best possible delivery of them through operating excellence will
still be the key to sustained success, so we feel well-positioned for the
future."
Highlights for the quarter ended August 29, 1999, included:
o Earnings after tax in the first quarter were $47.3 million, or 35 cents per
diluted share, on $929.4 million in sales. Prior year earnings after tax
were $35.2 million, or 24 cents per diluted share, on sales of $886.1
million.
o Olive Garden far outpaced the industry with same-restaurant sales up 8.1%
in the quarter. This outstanding performance represents the 20th
consecutive quarter of same-restaurant sales increases and enabled Olive
Garden to post strong double-digit growth in operating profit, with
absolute profit at a record quarterly level.
o Red Lobster continued its strong momentum, reporting a same-restaurant
sales increase of 4.0%, to mark its 7th consecutive quarter of positive
same-restaurant sales. As a result of
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solid sales and traffic growth, Red Lobster also reported a strong
double-digit increase in operating profit.
o Bahama Breeze continues to exceed Darden's projections. Six additional
restaurants are currently under construction and expected to open during
fiscal 2000.
o The Company purchased 1.4 million shares of its common stock in the first
quarter.
Operating Highlights
OLIVE GARDEN'S first quarter sales of $396.0 million were 7.8% above the prior
year. The 8.1% same-restaurant sales increase in the quarter comes on top of a
10.7% same-restaurant sales increase in the first quarter of last year. Olive
Garden's sales improvement continued to be driven by strong guest count growth.
This performance combined with lower food and beverage costs and restaurant
expenses as a percentage of sales, generated a very strong double-digit
operating profit increase and record quarterly profits.
"The leadership and dedication of our restaurant teams have propelled Olive
Garden to the best performance in our 16-year history," said Brad Blum,
President of Olive Garden. "Our team is passionate, hungry, and focused on
operating excellence, brand building and innovation to create outstanding long
term growth. Through quality food and wine offerings and gracious service in a
comfortable atmosphere, Olive Garden is truly committed to being a family of
local restaurants, focused on delighting every guest with a genuine Italian
dining experience."
RED LOBSTER'S first quarter sales of $522.5 million were 1.8% higher than the
prior year. Same-restaurant sales increased 4.0% in the quarter, improving upon
an 11.6% increase in the first quarter of the prior year. Operating profit for
the quarter increased at a strong double-digit pace as a result of the
same-restaurant sales growth and favorable food and beverage costs and
restaurant expenses as a percent of sales. These results were achieved even
though Red Lobster operated 29 fewer restaurants than last year and did not
repeat the high-volume "Bottomless Crab" promotion that generated high sales and
traffic volumes in the first quarter last year.
"We are pleased with our results and proud of our team," said Dick Rivera,
President of Red Lobster. "Each member of our crew deserves tremendous credit
for our accomplishments as well
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as for the commitment and spirit they demonstrate each day. We are improving our
operations, strengthening our leadership and performing with more consistency as
we strive to be the best in casual dining.
BAHAMA BREEZE sales continue to exceed expectations at both newly opened and
more established restaurants. In addition, construction has begun on six more
restaurants, which are located in Louisville, KY, Birmingham, AL, Atlanta
(Kennesaw), GA, Austin, TX, Miami, FL, and Phoenix, AZ. These restaurants are
expected to open during fiscal 2000.
Other Actions
Darden continued its buyback of common stock in the open market, purchasing 1.4
million shares in the first quarter. Cumulatively, since the initial
authorization of its repurchase program in December 1995, the Company has
repurchased 34.0 million shares from a total authorization of 44.6 million
shares.
The Board of Directors declared the regular 4 cents per share semi-annual
dividend payable November 1, 1999 to shareholders of record October 11, 1999.
The Company opened its first Smokey Bones restaurant on September 13, 1999 in
Orlando, FL.
Darden Restaurants Inc., headquartered in Orlando, FL, owns and operates Red
Lobster, Olive Garden, Bahama Breeze and Smokey Bones restaurants with annual
sales of $3.5 billion.
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DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
08/30/98 08/29/99
-------- --------
646 Red Lobster USA 617
34 Red Lobster Canada 34
------ ------
680 Total Red Lobster 651
459 Olive Garden USA 459
5 Olive Garden Canada 5
------ ------
464 Total Olive Garden 464
3 Bahama Breeze 6
------ ------
1,147 Total Restaurants 1,121
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DARDEN RESTAURANTS, INC.
FIRST QUARTER FY 2000 FINANCIAL HIGHLIGHTS
(In Millions, Except per Share Data)
13 Weeks Ended
08/29/99 08/30/98
Sales $929.4 $886.1
Net Earnings $47.3 $35.2
Net Earnings per Share:
Basic $0.36 $0.25
Diluted $0.35 $0.24
Average Number of Common Shares
Outstanding:
Basic 132.2 139.7
Diluted 136.4 145.9
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DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
13 Weeks Ended
08/29/99 08/30/98
Sales $929,391 $886,057
Costs and Expenses:
Cost of sales:
Food and beverages 298,828 296,415
Restaurant labor 295,119 282,550
Restaurant expenses 132,121 131,987
Total Cost of Sales 726,068 710,952
Selling, general and administrative 94,150 84,787
Depreciation and amortization 31,370 31,012
Interest, net 4,576 5,435
Total Costs and Expenses 856,164 832,186
Earnings before Income Taxes 73,227 53,871
Income Taxes -25,914 -18,692
Net Earnings $47,313 $35,179
Net Earnings per Share:
Basic $0.36 $0.25
Diluted $0.35 $0.24
Average Number of Common Shares
Outstanding:
Basic 132,200 139,700
Diluted 136,400 145,900
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DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
08/29/99 05/30/99
ASSETS
Current Assets:
Cash and cash equivalents $30,285 $40,960
Receivables 22,526 20,256
Inventories 192,492 144,115
Net assets held for disposal 35,692 35,269
Prepaid expenses and other current assets 16,327 21,475
Deferred income taxes 60,890 65,662
Total Current Assets $358,212 $327,737
Land, Buildings and Equipment 1,468,629 1,473,535
Other Assets 102,482 104,388
Total Assets $1,929,323 $1,905,660
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $156,202 $144,725
Short-term debt 27,000 23,500
Current portion of long-term debt 2,386 2,386
Accrued payroll 63,946 74,265
Accrued income taxes 18,923 16,544
Other accrued taxes 26,573 25,965
Other current liabilities 231,377 246,830
Total Current Liabilities $526,407 $534,215
Long-term Debt 313,490 314,065
Deferred Income Taxes 72,389 72,086
Other Liabilities 21,334 21,258
Total Liabilities $933,620 $941,624
Stockholders' Equity:
Common stock and surplus $1,341,274 $1,328,796
Retained earnings 225,321 178,008
Treasury stock -493,869 -466,902
Accumulated other comprehensive income -12,458 -12,115
Unearned compensation -64,565 -63,751
Total Stockholders' Equity $995,703 $964,036
Total Liabilities and Stockholders' Equity $1,929,323 $1,905,660
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