During the quarter, the restaurant operator achieved sales of $1.41 billion, an increase of 10.2%, and diluted net earnings per share of 53 cents, a 20% increase from prior year. Net earnings were $85.5million, compared to $71 million, or 44 cents per diluted share, for the same period last year.
Otis attributes the growth to an increase in same-store sales and the opening of 57 new stores during the quarter. "We really had a competitively strong quarter," he says. "We had industry leadingsame-store sales growth and industry leasing earnings growth."
In fact, Olive Garden achieved its 44th consecutive quarter of US same- restaurant sales growth with a 7.4% increase, and Red Lobster had US same-restaurant sales growth of 5.7% for the quarter.
Olive Garden's first quarter sales of $643.5 million were 10.8% above prior year, while Red Lobster's sales of $634.1 million represented a 6.6% increase. "Our two established brands are intrinsically strong and are operating at a very high level," Otis says. "The combination of the strong brands and strong operations served us well during the quarter."
The company's two other chains, Bahama Breeze and Smokey Bones, alsoshowed improvement. Smokey Bones, for example, saw its first quarter sales increase 46% to $81.7 million. Otis mentioned during the call that Darden expects to contribute roughly $1 million in hurricane relief funds through the National Hurricane Relief Dine Out Day, which is scheduled for October 5, 2005.
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