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Darden Restaurants: A Bellwether for the Casual Dining Sector

03/22/2020

In a March 20th statement, Ricardo Cardenas, CFO of Darden Restaurants noted that same-store sales were down 60 percent following imposition of regulations aimed at reducing transmission of COVID-19.  Over half the 1,800 locations operated by the Company are now only  “to-go” and the remainder operate under mandated capacity or other restraints.

Cardenas noted that for the first week of the fourth quarter, same-restaurant sales were 3 percent above the corresponding week in fiscal 2018 followed by a static second week and a 21 percent decline during the third week for the fourth quarter.  All restaurants within the group were affected with Olive Garden down 19 percent, Longhorn Steakhouse down 16 percent and fine dining restaurants down 28 percent.

 

The management of Darden is developing contingency plans aimed at preserving the jobs of workers based on a strong balance sheet but their plan ultimately will require government assistance.

 

For the third quarter ending February 23rd, Darden posted net income of $232 million on sales of $2.4 billion with an EPS of $1.92.  Corresponding values for fiscal 2018 were net revenue of $224 million on sales of $2.3 billion with an EPS of $1.81.  Business segments during the quarter posed increases of 3.5 percent for Olive Garden to 8 percent for fine dining.