Darden Restaurants Reports First Quarter Diluted N Darden Restaurants Reports First Quarter Diluted Net Earnings Per Share Of 85 Cents; Declares A Quarterly Dividend Of 50 Cents Per Share
September 21, 2012
ORLANDO, Fla., Sept. 21, 2012 /PRNewswire/ -- Darden Restaurants, Inc. (NYSE: DRI) today reported diluted net earnings per share and sales for the first quarter ended August 26, 2012.
Highlights for the quarter include the following:
•First quarter diluted net earnings per share from continuing operations were 85 cents, a 9% increase from the 78 cents per diluted share in the first quarter of last year. Earnings from continuing operations in this year's first quarter were $111.0 million and sales were $2.03 billion, which compare to earnings from continuing operations of $106.8 million and sales of $1.94 billion in the first quarter last year.
•First quarter total sales from continuing operations of $2.03 billion represent an increase of 4.8% compared to the first quarter of last year. The increase reflects same-restaurant sales growth of 2.2% for the Company's Specialty Restaurant Group, the acquisition of 11 Eddie V's restaurants on November 14, 2011, and the addition and operation of another 92 net new restaurants compared to the first quarter last year, offset by a combined same-restaurant sales decline of 0.3% for Olive Garden, Red Lobster and LongHorn Steakhouse. In the first quarter, U.S. same-restaurant sales increased 3.6% at LongHorn Steakhouse and 0.3% at Olive Garden, and declined 2.6% at Red Lobster.
•The Company estimated that costs associated with the acquisition of Yard House USA, Inc., which was completed on August 29, 2012, the beginning of this year's second quarter, adversely affected diluted net earnings per share for this year's first quarter by approximately one cent.
•The Company also reported that, an increase in the fair value of its benefits programs increased selling, general and administrative expenses for the quarter by approximately 60 basis points compared to the prior year. These programs are economically hedged on an after-tax basis such that the tax and earnings impacts related to these activities were offsetting for the quarter on a diluted net earnings per share basis. As a result of the hedging activities, the effective tax rate was reduced by approximately 100 basis points for the first quarter this year compared to the prior year.
•During the first quarter, Darden purchased 1.0 million shares of its common stock.
•Darden's Board of Directors declared a quarterly dividend of 50 cents per share.
"We're pleased with our very solid start to the fiscal year," said Clarence Otis, Chairman and Chief Executive Officer of Darden. "Red Lobster's sales held up well given the exceptional same-restaurant sales results in last year's first quarter and its margins expanded, Olive Garden had meaningful sales and margin improvement and LongHorn Steakhouse and the Specialty Restaurant Group continued to have good sales momentum. We also benefitted from our diverse food basket, with a decline in seafood costs on a year over year basis moderating the significant spike in the cost of beef."
"We remain confident we can achieve solid sales and earnings growth in fiscal 2013," continued Otis. "More importantly, with the collective strength of our brands, the considerable combined expertise and experience within the company and our ever more cost-effective support platform, we're confident that over the long-term we can successfully navigate the sales and cost volatility of our industry, as well as the inevitable ups and downs of any single business unit, to produce consistently superior value for our guests, employees and shareholders."
Operating Highlights
OLIVE GARDEN'S first quarter sales of $922 million were 4.3% higher than the prior year, driven by revenue from 40 net new restaurants and a 0.3% increase in U.S. same-restaurant sales. For the quarter, on a percentage of sales basis, lower food and beverage expenses, restaurant labor expenses and restaurant expenses more than offset an increase in selling, general and administrative expenses and depreciation expense, which resulted in an increase for the quarter in both operating profit and operating profit as a percentage of sales.
RED LOBSTER'S first quarter sales of $660 million were 2.1% lower than the prior year as a result of a U.S. same-restaurant sales decrease of 2.6% that was offset somewhat by revenue from six net new restaurants. For the quarter, on a percentage of sales basis, lower food and beverage expenses and restaurant labor expenses more than offset an increase in selling, general and administrative expenses and depreciation expense, which resulted in an increase for the quarter in both operating profit and operating profit as a percentage of sales.
LONGHORN STEAKHOUSE'S first quarter sales of $285 million were 12.7% higher than the prior year, driven by revenue from 34 net new restaurants and a U.S. same-restaurant sales increase of 3.6%. For the quarter, on a percentage of sales basis, higher food and beverage expenses, selling, general and administrative expenses and depreciation expense more than offset lower restaurant labor expenses and restaurant expenses, resulting in a decline for the quarter in both operating profit and operating profit as a percentage of sales.
THE SPECIALTY RESTAURANT GROUP'S first quarter sales of $163 million were 26.4% higher than prior year, driven by same-restaurant sales increases of 4.0% at The Capital Grille, 1.2% at Bahama Breeze and 1.3% at Seasons 52; one net new restaurant at The Capital Grille, four net new restaurants at Bahama Breeze and five net new restaurants at Seasons 52; and the addition of the 11 Eddie V's restaurants purchased on November 14, 2011.
Fiscal 2013 June, July and August U.S. Same-Restaurant Sales Results
Darden reported U.S. same-restaurant sales for the fiscal months of June, July and August as follows:
https://investor.darden.com/investors/news-releases/press-release-details/2012/Darden-Restaurants-Reports-First-Quarter-Diluted-Net-Earnings-Per-Share-Of-85-Cents-Declares-A-Quarterly-Dividend-Of-50-Cents/default.aspx
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