10-KPeriod: FY2008

DARDEN RESTAURANTS INC Annual Report, Year Ended May 25, 2008

Filed July 17, 2008For Securities:DRI

Summary

Darden Restaurants, Inc. is the world's largest company-owned and operated full-service restaurant company, serving over 380 million meals in fiscal year 2008. As of May 25, 2008, the company operated 1,702 restaurants across the United States and Canada, with its primary brands being Red Lobster and Olive Garden, complemented by a growing presence of LongHorn Steakhouse and The Capital Grille following a significant acquisition. The company's strategy focuses on expanding its existing concepts and developing or acquiring new ones, emphasizing operational excellence, strong brand building, and customer insights. In fiscal year 2008, Darden continued its growth trajectory, opening 65 new restaurants. A key event during the year was the acquisition of RARE Hospitality International, Inc. in October 2007, which significantly expanded its portfolio with the addition of LongHorn Steakhouse and The Capital Grille brands. Darden is committed to a multi-brand growth strategy within the full-service dining segment.

Financial Highlights

33 data points
Beta

Revenue

$6.63B

22.5% Gross Margin

Net Income

$377.20M

5.7% Net Margin

EPS (Diluted)

$2.60

Cash & Equivalents

$43.20M

Free Cash Flow

$337.60M

Financial Statements
Beta
Revenue$6.63B
Cost of Revenue$5.14B
Gross Profit$1.49B
SG&A Expenses$641.70M
Operating Expenses$6.11B
Operating Income$369.50M
Net Income$377.20M
EPS (Basic)$2.69
EPS (Diluted)$2.60
Shares Outstanding (Basic)140.40M
Shares Outstanding (Diluted)145.10M

Key Highlights

  • 1As of May 25, 2008, Darden operated 1,702 restaurants, making it the world's largest company-owned full-service restaurant operator.
  • 2The company acquired RARE Hospitality International, Inc. in October 2007, adding the LongHorn Steakhouse and The Capital Grille brands to its portfolio.
  • 3In fiscal year 2008, Darden opened 65 new restaurants across its various concepts.
  • 4Red Lobster and Olive Garden remain the largest brands, with Red Lobster having 680 locations and Olive Garden 653.
  • 5Darden's strategy is to grow by increasing the number of restaurants in existing concepts and developing or acquiring new profitable concepts.
  • 6The company experienced seasonal sales fluctuations, with highest average sales per restaurant in spring and winter, and lowest in fall.
  • 7Darden is subject to intense competition within the full-service dining sector from national, regional, and local competitors.

Frequently Asked Questions

As of May 25, 2008, Darden's primary restaurant brands included Red Lobster (680 locations), Olive Garden (653 locations), LongHorn Steakhouse (305 locations), and The Capital Grille (32 locations). They also operated Bahama Breeze (23 locations) and Seasons 52 (7 locations), along with two specialty restaurants.

The acquisition of RARE Hospitality International in October 2007 was a significant event, adding approximately 288 LongHorn Steakhouse locations and 29 The Capital Grille locations to Darden's portfolio, strengthening its position in the steakhouse segment.

Darden's growth strategy focused on increasing the number of restaurants within its existing concepts and exploring opportunities to develop or acquire new concepts. In fiscal year 2008, the company opened 65 new restaurants and projected 76-89 new openings for fiscal year 2009.

Darden highlighted several risks, including intense competition, adverse economic conditions, fluctuations in food and utility prices, supply chain disruptions, increased labor and insurance costs, reliance on information technology, and the inherent risks associated with opening new restaurants and integrating acquisitions like RARE.