Summary
Darden Restaurants, Inc. (DRI) reported its second quarter fiscal year 2003 results on December 18, 2002, showcasing robust performance driven by strong sales and double-digit earnings per share (EPS) growth. The company achieved record quarterly sales of $1.07 billion, a 6.4% increase year-over-year. Diluted EPS reached $0.21, an 11% increase when excluding a prior-year restructuring credit. This performance was supported by the continued success of its key brands, Olive Garden and Red Lobster, both reporting same-restaurant sales growth.
Key Highlights
- 1Reported record second quarter sales of $1.07 billion, up 6.4% from the prior year.
- 2Achieved a diluted EPS of $0.21, an 11% increase year-over-year (excluding a prior year restructuring credit).
- 3Olive Garden demonstrated strong performance with a 3.5% increase in same-restaurant sales, marking its 33rd consecutive quarter of growth.
- 4Red Lobster also reported same-restaurant sales growth of 2.3%, extending its streak to 20 consecutive quarters.
- 5Bahama Breeze and Smokey Bones continued their expansion, opening a combined eight new restaurants during the quarter.
- 6The company continued its share repurchase program, buying back 1.2 million shares.
- 7Announced plans to test a new restaurant concept, Seasons 52, a fresh grill and wine bar.
Frequently Asked Questions
Sales growth was driven by a combination of increased same-restaurant sales at its core brands, Olive Garden and Red Lobster, and the opening of new locations for Bahama Breeze and Smokey Bones. Olive Garden's sales increased by 7.2% due to same-restaurant sales growth and an expanded restaurant base, while Red Lobster's sales grew by 3.5% primarily from its same-restaurant sales increase.
Olive Garden continued its strong track record with a 3.5% increase in same-restaurant sales, its 33rd consecutive quarter of growth, and opened 11 new restaurants. Red Lobster achieved a 2.3% increase in same-restaurant sales, marking its 20th consecutive quarter of growth, and saw a strong rebound in sales during the final month of the quarter after a softer start.
Yes, Darden announced it is beginning the next phase of testing for a new restaurant concept called Seasons 52. This concept is described as a casually sophisticated fresh grill and wine bar with seasonally inspired menus, focused on fresh, nutritionally balanced, and lower-calorie entrees. The first Seasons 52 is scheduled to open in Darden's fiscal third quarter.
The company expressed optimism, with CEO Joe Lee stating that while the quarter had some variability, Darden is well-positioned to achieve solid, consistent growth for the fiscal year and the long-term. The strong performance of Olive Garden and the renewed momentum at Red Lobster are positive indicators.