With the addition of 40 net new restaurants and a blended same-restaurant sales increase of 2.3 percent, Darden Restaurants, Inc. reported that total sales increased 4.5 percent in the fiscal third quarter of 2020. The restaurant company also repurchased roughly 0.6 million common stock shares for a cost of about $69 million.
Darden Restaurants reported that same-restaurant sales were up 4.2 percent for The Capital Grille, up 3.9 percent for LongHorn Steakhouse, up 3.9 percent for Eddie V's, up 3 percent at Seasons 52, up 2.1 percent for Olive Garden, up 1.8 percent for Yard House, down 1.6 percent for Cheddar’s Scratch Kitchen and down 0.5 percent for Bahama Breeze.
CEO Gene Lee briefly addressed the quarter in a conference call with analysts on Thursday (March 19), noting that “our results were impressive.” But Lee dedicated most of his remarks on the earnings call to the coronavirus. As part of the company’s continued response, Lee said, it has created a “cross-functional crisis team” that he leads.
Lee also said the firm is in close contact with the CDC, as well as other government agencies, to make sure it has the most current information to inform the decisions that it is making. It has developed an action plan addressing business continuity, operations, communications and supply chain.
“Our plan is updated as we receive and process new information,” Lee said in the call.
“The health and safety of our team members, their families and our guests remains our top priority,” Lee said in the company’s earnings press release. “We are committed to supporting our team members during this unprecedented time and are pleased to have an emergency pay program to supplement our permanent paid sick leave policy for all of our hourly team members.”
The company’s board of directors has halted the quarterly cash dividend. According to the release, “The Board made this determination due to uncertainty driven by the significant reduction in effective restaurant seating capacity and other restrictions mandated by state and local governments in response to COVID-19.”
The firm also noted, “Out of an abundance of caution, the Company is also fully drawing on its $750 million credit facility.”
Darden Restaurants, Inc. came out ahead of estimates on the top and bottom line of its third quarter of 2020 with revenue of $2.35 billion and earnings per share of $1.89. Analysts had forecast revenue of $2.32 billion and earnings per share of $1.88.