Darden Restaurants off mark in 4Q


SeafoodSource staff

Published on
June 23, 2010

Darden Restaurants on Wednesday unveiled its fourth-quarter and year-end results.

The world’s largest casual-dining company watched its earnings slip to USD 115.6 million in the quarter ending 30 May from USD 123 million in the year-earlier quarter, while sales fell to USD 1.86 billion from USD 1.98 billion a year earlier, falling shy of Wall Street expectations.

However, in fiscal 2010, the Orlando-based company saw its earnings jump to USD 404.5 million from USD 372.2 million in the previous year, as sales dropped to 7.11 billion from USD 7.22 billion.

Same-restaurant sales at Darden’s casual-seafood chain, Red Lobster, fell 4.6 percent in the fourth quarter, compared to a 1.5 percent drop for Olive Garden and a 4.6 percent increase for LongHorn Steakhouse, the company’s other two top brands.

Red Lobster’s fourth-quarter sales fell 9.6 percent to USD 663 million, while its year-end sales dipped 5.3 percent to USD 2.49 billion. Its year-end same-restaurant sales fell 4.9 percent.

As of 30 May, Red Lobster operated 694 restaurants throughout the United States and Canada, up from 690 locations a year ago.

“Our financial performance for the quarter was solid, capping a year of strong earnings growth despite very challenging economic and consumer conditions,” said Darden CEO and Chairman Clarence Otis. “The month-to-month sales volatility we saw in our industry during the quarter is an indication that consumers remain cautious. Nevertheless, there was meaningful improvement compared to the beginning of the year. And we’re pleased that this year we once again outperformed the Knapp-Track™ same-restaurant sales benchmark, which is a testament to the trust our brands and teams have earned with consumers.

“In fiscal 2011, we expect economic and industry conditions to continue to improve,” he added. “We also expect to leverage this improvement, with our talented teams and the foundation of trust our brands enjoy, to deliver another year of superior sales results and strong earnings growth.”

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