Olive Garden will open 35 to 40 new units, LongHorn Steakhouse is on target for 15 to 17 new units, and Red Lobster will open 10 new units. The remainder will open in the firm's specialty group, primarily in Capital Grille. However, Seasons 52 will open in Cherry Hill, NJ, its first location outside the Southeast.
"We believe (Olive Garden) has the potential for 800 to 900 restaurants in North America," Madsen says. "Ultimately, we believe LongHorn has the potential for 600 to 800 restaurants in North America."
However, fiscal 2010 may be slower, says Clarence Otis, chairman and CEO, with the company looking carefully at its commitments. Expansion will be based on the current return on invested capital, which would lead to further growth primarily in Olive Garden and Capital Grille.
For the quarter, sales from continuing operations were $1.67 billion, up 9.6% from the same period last year. Combined same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 0.2% for the quarter, vs. an estimated 5.3% decline in the Knapp-Track casual dining benchmark (excluding Darden). Olive Garden's US same-restaurant sales increased 0.8%, Red Lobster's US same-restaurant sales increased 0.3% and LongHorn Steakhouse's same-restaurant sales decreased 5.7%. Net earnings from continuing operations for the second quarter were $58.5 million, up from $44.1 billion last year.
"Certainly this was a very challenging quarter given the economic environment," Otis said. "We do feel very good about our competitive position. We think we're better able to weather the current storm better than our competitors." Darden owns and operates more than 1,700 restaurants including Red Lobster, Olive Garden, LongHorn Steakhouse, the Capital Grille, Bahama Breeze and Seasons 52.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
