10-KPeriod: FY2014

DARDEN RESTAURANTS INC Annual Report, Year Ended May 25, 2014

Filed July 18, 2014For Securities:DRI

Summary

Darden Restaurants, Inc. is a leading full-service restaurant operator, managing a diverse portfolio of well-known brands including Olive Garden, LongHorn Steakhouse, and others. As of May 25, 2014, the company operated 2,207 restaurants in the U.S. and Canada. A significant development highlighted in the filing is the agreement to sell its Red Lobster brand and associated assets for $2.11 billion, expected to close in fiscal year 2015, with Red Lobster's operations classified as discontinued. This strategic move signals a shift in Darden's focus towards its remaining core brands and future growth initiatives. The company emphasizes its strategy for value creation, which includes completing the Red Lobster divestiture, revitalizing the Olive Garden brand, driving growth at brands like LongHorn Steakhouse, and optimizing operational costs. Darden is committed to operational excellence, talent management, and leveraging its robust supply chain and IT infrastructure to enhance guest experience and drive profitability across its portfolio.

Financial Highlights

56 data points
Beta

Revenue

$6.29B

16.6% Gross Margin

Net Income

$286.20M

4.6% Net Margin

EPS (Diluted)

$2.15

Total Assets

$7.08B

Cash & Equivalents

$98.30M

Free Cash Flow

$140.60M

Financial Statements
Beta
Revenue$6.29B
Cost of Revenue$4.99B
Gross Profit$1.04B
SG&A Expenses$663.50M
Operating Expenses$5.98B
Operating Income$308.90M
Interest Expense$134.00M
Net Income$286.20M
EPS (Basic)$2.18
EPS (Diluted)$2.15
Shares Outstanding (Basic)131.00M
Shares Outstanding (Diluted)133.20M

Key Highlights

  • 1Darden Restaurants entered into an agreement to sell its Red Lobster brand for $2.11 billion, with operations classified as discontinued.
  • 2The company operates a diversified portfolio of full-service restaurant brands, including Olive Garden, LongHorn Steakhouse, The Capital Grille, Yard House, Seasons 52, Bahama Breeze, and Eddie V's.
  • 3As of May 25, 2014, Darden operated a total of 2,207 restaurants across the United States and Canada.
  • 4Key strategic priorities for fiscal year 2015 include completing the Red Lobster sale and continuing the 'brand renaissance' for Olive Garden.
  • 5Darden focuses on operational excellence, talent management, and cost reduction opportunities to drive value creation.
  • 6The company has invested in technology to enhance guest engagement and operational efficiencies across its brands.

Frequently Asked Questions

The agreement to sell Red Lobster for $2.11 billion is a major strategic event for Darden. It allows the company to streamline its portfolio, focus resources on its core brands like Olive Garden and LongHorn Steakhouse, and potentially reinvest capital into growth opportunities or return it to shareholders. The sale is expected to be completed in the first quarter of fiscal year 2015.

Darden operates a range of well-known full-service restaurant brands. Its primary brands include Olive Garden (Italian-American) and LongHorn Steakhouse (Steakhouse). The company also operates specialty brands such as The Capital Grille (fine dining steakhouse), Yard House (American sports bar), Seasons 52 (fresh grill and wine bar), Bahama Breeze (Caribbean-inspired), and Eddie V's (luxury seafood).

For fiscal year 2015, Darden's primary strategic priorities include the successful completion of the Red Lobster sale, continuing the revitalization efforts for Olive Garden ('brand renaissance'), driving new restaurant growth primarily at LongHorn Steakhouse, implementing a new management incentive plan focused on key performance indicators, controlling restaurant support platform costs, and improving capital allocation discipline.

Darden emphasizes high-quality restaurant management through detailed operations and food/beverage manuals. They employ a structured management team at each restaurant and ensure regular oversight from operations management. A dedicated Total Quality Department focuses on food safety, quality assurance, and supplier standards, utilizing rigorous testing and inspections. Darden also invests in extensive training programs for its management and staff.