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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 23, 1998
Darden Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-13666 59-3305930
(State or other juris- (Commission file number) (IRS employer
diction of incorporation) identification No.)
5900 Lake Ellenor Drive, Orlando, Florida 32809
(Address of principal executive offices)
Registrant's telephone number, including area code:
(407) 245-4000
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 23, 1998, the Registrant issued a news release
reporting certain financial results for the fourth quarter
of fiscal 1998.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
99 Press Release dated June 23, 1998,
entitled "Darden Reports Sharply
Higher Annual Earnings and Strong
Fourth Quarter Same-Restaurant Sales
Gains."
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 24, 1998 DARDEN RESTAURANTS, INC.
By: /s/ C.L. Whitehill
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C.L. Whitehill
Senior Vice President,
General Counsel and Secretary
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INDEX TO EXHIBITS
Exhibit Number Page
99 Press Release dated June 23, 1998, entitled
"Darden Reports Sharply Higher Annual Earnings
and Strong Fourth Quarter Same-Restaurant
Sales Gains." 4
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EXHIBIT 99
Press Release dated June 23, 1998, of Darden Restaurants, Inc.
DARDEN REPORTS SHARPLY HIGHER ANNUAL EARNINGS AND STRONG
FOURTH QUARTER SAME-RESTAURANT SALES GAINS
ORLANDO, FL - Strong, double-digit same-restaurant sales gains at Olive Garden
coupled with solid single-digit increases at Red Lobster led to fourth quarter
results well ahead of last year. Earnings after tax rose almost 37% during the
quarter to $40.0 million, or 27 cents per diluted share.
"We are enthused by the results achieved by our teams at Olive Garden, Red
Lobster and Bahama Breeze for the year and especially in the fourth quarter,"
said Joe R. Lee, Chairman and Chief Executive Officer. "I believe our management
teams are the best in the industry and they have made tremendous strides this
year in carrying out our mission of being brilliant with the basics. The
strategies the leaders of our companies have in place are clearly working and
our guests, employees and investors are benefiting from this effort."
Highlights for the quarter and fiscal year ended May 31, 1998, which had an
additional operating week compared to prior year, included:
o Earnings after tax in the fourth quarter were $40.0 million, or 27 cents
per diluted share, on $921.2 million in sales (14 weeks). Prior year
earnings after tax before unusual items were $29.3 million, or 19 cents per
diluted share, on sales of $816.7 million (13 weeks).
o Annual earnings after tax increased 87% to $101.7 million, or 67 cents per
diluted share, on sales of $3.29 billion (53 weeks). Prior year earnings
after tax before unusual items were $54.3 million, or 35 cents per diluted
share, on sales of $3.17 billion (52 weeks).
o Olive Garden posted a 10.6% same-restaurant sales gain in the fourth
quarter on a 13 vs. 13 weeks basis. This represents the fifteenth
consecutive quarter of same-restaurant sales gains and at a rate higher
than any of the previous quarters. This strong momentum enabled Olive
Garden to post record operating profits for the quarter and fiscal year.
o Red Lobster reported its largest same-restaurant sales gain in five
years of 4.5% on a 13 vs. 13 weeks basis.
o Bahama Breeze opened its third restaurant during the quarter. Located in
Memphis, Tennessee, the restaurant is the first Bahama Breeze to open
outside of Florida. Early results are surpassing expectations and several
more restaurants are under development.
o The Company purchased 5.8 million shares of its common stock in the fourth
quarter for a cumulative total of 13.5 million shares purchased for the
year.
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FOURTH QUARTER OPERATING HIGHLIGHTS
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OLIVE GARDEN'S sales of $381.9 million were up over 16% from prior year and
include an extra week of sales resulting from the 53-week fiscal year. Sales of
$1.38 billion for the fiscal year were over 7% above prior year and average
annual restaurant sales for the year were $2.9 million (52 week base). The
same-restaurant sales gain of 10.6% in the fourth quarter demonstrates strong
momentum and marked the fifteenth consecutive quarter of increases. A strong
rise in guest counts caused operating profit to increase at a healthy
double-digit pace for the quarter and fiscal year establishing an all-time
record.
"This has been an outstanding year in so many ways," said Brad Blum, President
of Olive Garden. "I can't say enough about our team and the tireless efforts
they have made to provide Hospitaliano to our guests. I thank our team for their
dedication and our guests for their patronage in making Olive Garden America's
choice for casual dining Italian food now and for generations. We have achieved
a new level of excellence in the dining experience we offer our guests and we
are setting our sights higher still for the future."
RED LOBSTER'S sales of $534.7 million were up 10% from prior year and include an
extra week of sales resulting from the 53-week fiscal year. Sales of $1.89
billion for the fiscal year were 1% above prior year and average annual
restaurant sales for the year were $2.7 million (52 week base). Same-restaurant
sales were up 4.5% in the fourth quarter. There was a strong double-digit
operating profit increase for the quarter while fiscal year operating profit
more than doubled. Margins improved due to lower food and beverage costs as a
percent of sales, reduced restaurant expense and decreased marketing
expenditures.
"This has been a rebuilding year," said Dick Rivera, President of Red Lobster.
"While there is much more work ahead of us, I am very pleased with what our team
has accomplished. I am confident in the turnaround that is taking place, the
direction we are heading and the enthusiasm of our restaurant crews. We are
committed to providing a remarkable dining experience to each and every guest,
each and every time they visit. We are focused on the in-restaurant skills to
make sure that happens."
BAHAMA BREEZE successfully opened its third restaurant during the quarter.
Located in Memphis, TN, it is the first Bahama Breeze outside of Florida. Sales
continue to exceed expectations and plans are underway to develop restaurants in
Tampa, Atlanta, Columbus, OH, Raleigh, NC, Miami, and other locations.
FISCAL YEAR RESULTS
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For fiscal 1998, total company sales of $3.29 billion were up 4% from the prior
year. After-tax earnings were $101.7 million, or 67 cents per diluted share, up
from $54.3 million of earnings after tax before unusual items, or 35 cents per
diluted share in fiscal 1997. In last year's fourth quarter, the Company
recorded a $145.4 million after-tax charge (93 cents per diluted share) to write
down impaired assets under FAS 121 and carry-out other restructuring and
administrative
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actions. Including this charge, after-tax losses last year were $91.0 million,
or 59 cents per diluted share.
OTHER ACTIONS
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The company continued its buyback of common stock in the open market, purchasing
5.8 million shares in the fourth quarter for a total of 13.5 million shares
purchased during the year. Cumulatively, since the initial authorization of its
repurchase program, the Company has repurchased 20.4 million shares out of a
total authorization of 30.8 million shares.
The Board of Directors nominated Maria A. Sastre as a director of the company.
Ms. Sastre is Vice President Latin America for United Airlines in Miami. She
leads and manages the $1 billion Latin America and Miami regions for United. Ms.
Sastre's election is expected in September at the Company's annual meeting.
"Maria Sastre is a proven leader with significant experience in operations,
customer service and strategic development," said Lee, "She will be a tremendous
asset to Darden Restaurants."
Darden Restaurants Inc., headquartered in Orlando, Florida, owns and operates
Red Lobster, The Olive Garden and Bahama Breeze restaurants with annual sales of
$3.3 billion.
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