10-KPeriod: FY2004

DARDEN RESTAURANTS INC Annual Report, Year Ended May 30, 2004

Filed August 12, 2004For Securities:DRI

Summary

Darden Restaurants, Inc. is presented as the world's largest publicly held casual dining company in its 2004 10-K filing. As of May 30, 2004, the company operated 1,325 restaurants across the United States and Canada, primarily under the Red Lobster (649 units) and Olive Garden (537 units) brands. Darden entirely owns and operates its domestic restaurants, with a licensing agreement for 38 Red Lobster locations in Japan. The company's strategy centers on expanding its existing concepts and developing or acquiring new ones within the casual dining segment. Fiscal year 2004 saw significant growth, with 66 new restaurant openings and plans for 49-65 new locations in fiscal 2005, focusing on Olive Garden and the rapidly expanding Smokey Bones. While Red Lobster and Olive Garden are the established cash cows, Darden is actively managing and revamping underperforming concepts like Bahama Breeze, including closures and a new prototype evaluation, while testing the newer Seasons 52 concept.

Key Highlights

  • 1As of May 30, 2004, Darden operated 1,325 restaurants, with Red Lobster (649) and Olive Garden (537) being the dominant brands.
  • 2The company has a strategy focused on expanding existing restaurant concepts and developing new ones within the casual dining segment.
  • 3Fiscal year 2004 saw the opening of 66 new restaurants, with plans for 49-65 new openings in fiscal 2005, primarily for Olive Garden and Smokey Bones.
  • 4Bahama Breeze is undergoing restructuring, including closures of underperforming locations and evaluation of a new prototype, with no new openings planned for fiscal 2005.
  • 5Smokey Bones is a key growth area, with 30 new openings in fiscal 2004 and plans for 30-40 new locations in fiscal 2005, showing strong expansion potential.
  • 6Darden emphasizes leadership excellence, brand building, service, and culinary excellence as strategic imperatives.
  • 7The company owns most of its restaurant sites (816 out of 1,325), indicating a strong asset base.

Frequently Asked Questions

As of May 30, 2004, Darden Restaurants, Inc. operated 1,325 restaurants. The primary brands and their unit counts were: Red Lobster (649 restaurants), Olive Garden (537 restaurants), Bahama Breeze (32 restaurants), Smokey Bones Barbeque & Grill (69 restaurants), and Seasons 52 (1 restaurant).

For fiscal year 2005, Darden plans to open approximately 49-65 new restaurants across its concepts (excluding relocations and rebuilds). The focus for expansion will be on Olive Garden (15-20 new units) and Smokey Bones (30-40 new units). Red Lobster expansion will be limited to allow for operational focus, and new openings at Bahama Breeze are on hold pending evaluation of a new prototype. Two to three Seasons 52 restaurants are also planned.

Darden is actively managing underperforming concepts. For Bahama Breeze, this included closing six restaurants and writing down four others in fiscal 2004. The company is also evaluating a new, reduced-investment prototype and has postponed further new restaurant development until this evaluation is complete. The strategy for Bahama Breeze involves focusing on its most profitable locations and improving overall financial performance.

Darden Restaurants demonstrates a strong preference for owning its restaurant sites. As of May 30, 2004, 816 out of its 1,325 restaurants were located on owned sites, with the remaining 509 on leased sites. The company also utilizes REIT subsidiaries to manage its real estate portfolio.