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):
December 16, 1998
Darden Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-13666 59-3305930
(State or other jurisdiction (Commission file number) (IRS employer
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)
<PAGE>
Item 5. Other Events.
On December 16, 1998, the Registrant issued a news release
reporting certain financial results for the second quarter of
fiscal 1999.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
99 Press Release dated December 16,
1998, entitled "Darden Reports 120%
Increase In Second Quarter Earnings
Per Share"
2
<PAGE>
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: December 17, 1998 DARDEN RESTAURANTS, INC.
By: /s/ C.L. Whitehill
-----------------------------
C.L. Whitehill
Senior Vice President,
General Counsel and Secretary
3
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Page
- -------------- ----
99 Press Release dated December 16, 1998, entitled
"Darden Reports 120% Increase In Second Quarter
Earnings Per Share" 5
4
EXHIBIT 99
DARDEN REPORTS 120% INCREASE IN
SECOND QUARTER EARNINGS PER SHARE
ORLANDO, FL - Darden Restaurants reported a 120% increase in second quarter
earnings per share to 11 cents (diluted) on earnings after tax of $15.9 million.
This increase was led by healthy comparable restaurant sales gains at Olive
Garden and Red Lobster, which were achieved with fewer promotions than prior
year and an adverse shift versus prior year in the Thanksgiving holiday (during
which Darden's restaurants are closed).
"We are exceptionally pleased with the results at both Olive Garden and Red
Lobster," said Joe R. Lee, Chairman and Chief Executive Officer. "Olive Garden
or Red Lobster has led the Knapp Track survey of casual dining comparable sales
10 out of 11 months this calendar year. Through diligent attention to guest
satisfaction and hard work on the part of all our restaurant teams, Olive Garden
is clearly becoming America's choice for Italian casual dining and Red Lobster
is building momentum even as it makes the fundamental changes required for
enduring success. I could not be more delighted with the performance of our
teams."
Highlights for the quarter ended November 29, 1998 included:
o Earnings after tax for Darden Restaurants, Inc. in the second quarter were
$15.9 million, or 11 cents per diluted share, on $791.2 million in sales.
This compares to earnings after tax of $7.5 million, or 5 cents per diluted
share, on sales of $745.3 million in the prior year.
o Olive Garden's strong growth continued with an 8.7% comparable restaurant
sales gain in the second quarter, making this the 17th consecutive quarter
of comparable sales gains. This increase is on top of 9.1% sales growth
achieved in the same quarter last year. Adjusting for the Thanksgiving
holiday shift (it fell in the second quarter this year and the third
quarter last year) Olive Garden's comparable restaurant sales increased
9.6%.
o Red Lobster posted a 5.4% comparable restaurant sales gain in the second
quarter and, adjusting for the Thanksgiving holiday shift, the increase was
7.2%. This is Red Lobster's fourth consecutive quarter of comparable
restaurant sales growth.
o Bahama Breeze continued to produce strong sales at all three locations.
Restaurants are currently under construction in Atlanta, and Raleigh, NC.
o The Company purchased 2.1 million shares of its common stock in the second
quarter, proceeding with its previously announced share buyback program.
5
<PAGE>
Operating Highlights
- --------------------
OLIVE GARDEN'S 8.7% comparable restaurant sales gain led the casual dining
industry (as measured by Knapp-Track) in the second quarter and marks the 17th
consecutive quarter of comparable restaurant sales gains. Olive Garden has led
the Knapp Track survey in eight of the last 11 months. As indicated, adjusting
for the Thanksgiving holiday shift, comparable restaurant sales rose 9.6%. Total
sales were $352.1 million, up over 8%. Operating profits and returns hit record
levels for the quarter as a result of strong sales, increased traffic and margin
improvements.
"We are thrilled with our second quarter performance," said Brad Blum, President
of Olive Garden. "It reflects the tremendous efforts of our restaurant teams,
who are working hard to provide great food and attentive service. We are truly
committed to being a family of local restaurants focused on delighting every
guest with a genuine Italian dining experience. As satisfying as our recent
results have been, we know we will only achieve our long term goals through
continued innovation and delivering even better guest experiences."
RED LOBSTER'S comparable restaurant sales were up 5.4% from prior year and,
adjusting for the Thanksgiving holiday shift, the increase was 7.2%. Total sales
of $434.6 million were up 4% with one fewer promotion than last year. Operating
profits were sharply higher than prior year, led by strong sales, lower
marketing expenses and an improved guest experience.
"We are excited by the continuing momentum that is evident in our increasing
sales and operating profits," said Dick Rivera, President of Red Lobster. "It is
especially gratifying to have this kind of improvement even before we receive
the full benefit of the heavy investments we're making in training, menu
development and other phases of our business in our effort to strengthen it for
the long term. Our restaurant crews are responding to the challenges of our
transition by delivering hospitality with great enthusiasm and energy, and the
result is improving guest satisfaction across the country."
BAHAMA BREEZE produced strong sales and restaurant level earnings at all three
locations in operation during the second quarter. A fourth restaurant, located
in Tampa, opened November 30. Restaurants are currently under construction in
Atlanta, and Raleigh, NC, both with a projected fiscal year 1999 opening.
Additional locations are also under development throughout the U.S.
Other Actions
- -------------
In other actions, the Board of Directors elected Julius Erving II a director.
Mr. Erving, known as "Dr. J" during his career as a professional basketball
player, is President of The Erving Group, co-owner of the Philadelphia Coca-Cola
Bottling Company in Philadelphia, PA, Executive Vice President of the Orlando
Magic Basketball Franchise, and Vice President of RDV Sports in Orlando. "We
welcome Julius Erving to our board," said Lee. "He is a successful entrepreneur,
known for his character, integrity and civic contributions."
6
<PAGE>
Also, the Board of Directors authorized the repurchase of an additional 13.8
million shares of the Company's common stock. This represents approximately 10%
of the shares outstanding as of the end of the second quarter and brings the
total authorizations to date to 44.6 million shares, of which the Company has
cumulatively repurchased 25.8 million shares. These shares will continue to be
purchased opportunistically on the open market based on price and operating
performance considerations.
Darden Restaurants Inc., headquartered in Orlando, Florida, owns and operates
Red Lobster, Olive Garden and Bahama Breeze restaurants with annual sales of
$3.3 billion.
DARDEN RESTAURANTS, INC.
NUMBER OF RESTAURANTS
11/23/97 11/29/98
-------- --------
649 Red Lobster USA 642
35 Red Lobster Canada 34
-------- -------
684 Total Red Lobster 676
460 Olive Garden USA 459
05 Olive Garden Canada 05
-------- -------
465 Total Olive Garden 464
2 Bahama Breeze 3
-------- -------
1,151 Total Restaurants 1,143
7
