10-KPeriod: FY2011

DARDEN RESTAURANTS INC Annual Report, Year Ended May 29, 2011

Filed July 22, 2011For Securities:DRI

Summary

Darden Restaurants, Inc. (DRI) operates as the world's largest company-owned and operated full-service restaurant company. As of May 29, 2011, the company managed 1,894 restaurants across the United States and Canada, with key brands including Red Lobster, Olive Garden, and LongHorn Steakhouse. The company's strategy focuses on brand relevance, support, a vibrant business model, superior leadership, and a motivating culture to drive growth through expanding existing brands and potentially acquiring new ones. For fiscal year 2011, Darden demonstrated robust growth, opening 70 net new restaurants and achieving total sales of $7,500.2 million. The company emphasizes a strong operational framework, including rigorous quality assurance, strategic purchasing, and effective marketing. Darden also highlights its commitment to its employees, having been recognized as one of Fortune's "100 Best Companies to Work For," and invests in technology to enhance operational efficiency and guest experience.

Financial Highlights

54 data points
Beta

Revenue

$7.50B

24.0% Gross Margin

Net Income

$476.30M

6.4% Net Margin

EPS (Diluted)

$3.39

Total Assets

$5.47B

Cash & Equivalents

$70.50M

Free Cash Flow

$347.00M

Financial Statements
Beta
Revenue$7.50B
Cost of Revenue$5.70B
Gross Profit$1.80B
SG&A Expenses$742.70M
Operating Expenses$6.85B
Operating Income$478.70M
Interest Expense$93.70M
Net Income$476.30M
EPS (Basic)$3.48
EPS (Diluted)$3.39
Shares Outstanding (Basic)136.80M
Shares Outstanding (Diluted)140.30M

Key Highlights

  • 1Darden Restaurants operated 1,894 restaurants across the US and Canada as of May 29, 2011, with Red Lobster and Olive Garden being the largest brands.
  • 2Total company sales reached $7,500.2 million in fiscal year 2011, with the opening of 70 net new restaurants.
  • 3The company's growth strategy involves expanding existing brands and exploring new brand development or acquisitions.
  • 4Darden places a strong emphasis on quality assurance, food safety, and strategic supply chain management.
  • 5The company utilizes a multi-faceted advertising and marketing approach, leveraging national and local media, digital channels, and social media.
  • 6Darden was recognized as one of Fortune's '100 Best Companies to Work For' in 2011, highlighting its focus on employee culture.
  • 7The company is investing in technology, including a new meal pacing system and table management system, to improve guest experience and operational efficiency.

Frequently Asked Questions

Darden Restaurants is the world's largest owner and operator of full-service restaurants. As of May 29, 2011, they operated 1,894 restaurants, primarily under brands like Red Lobster, Olive Garden, and LongHorn Steakhouse, serving over 404 million meals annually.

In fiscal year 2011, Darden opened 70 net new restaurants across its brands and achieved total company sales of $7,500.2 million. The company projected further growth with approximately 80-90 net new restaurant openings planned for fiscal year 2012.

Key risks identified include food safety and food-borne illness concerns, potential litigation from employees or customers, negative publicity, evolving federal, state, and local regulations (including healthcare reform and environmental matters), increased labor and insurance costs, information technology failures, natural disasters, health concerns from pandemics, intense competition, challenges in executing growth strategies, indebtedness from acquisitions, and risks associated with newer or expanding brands.

Darden emphasizes its strong purchasing capabilities, sourcing from over 2,000 suppliers globally and maintaining long-term relationships. They implement strict quality control standards, use independent third parties for inspections, and require suppliers to maintain Hazard Analysis and Critical Control Point (HACCP) programs. They also utilize a Total Quality Department and conduct periodic restaurant audits to ensure food safety and sanitation.