Red Lobster 2007 Annual Report Download - page 7

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Our current brands are operating more effectively and consistently so we
can grow them at rates that better capture their full market opportunities.
We believe Darden’s success is a result of our ability to
develop several winning combinations, and we highlight some
of these in this report. One of the most important has been
the combination of two foundational strengths – a proven
approach to managing and evolving casual dining brands,
and a strong, motivating culture. Together, these two strengths
form our operating platform. During the year, we were able
to strengthen that platform and deliver competitively strong
nancial results from continuing operations despite lower-than-
expected sales growth in the casual dining industry.
With our accomplishments, we ended scal 2007 in a
meaningfully stronger competitive position than we had
when the year began. More specifically, we are better
positioned to supplement the same-restaurant excellence
we’ve historically enjoyed with stronger new restaurant
growth going forward, all while maintaining solid protability.
We believe this is a combination that will create long-term
shareholder value over the next decade that matches or
exceeds what we’ve delivered the past 10-plus years.
Fiscal 2007 Highlights
Strategic Highlights
Speaking of winning combinations, we’ve articulated many
times before what underlies our proven approach to the
business. It’s the power of combining strength in our four
strategic pillar areas – competitively superior leadership,
brand management excellence, restaurant operations
excellence and restaurant support excellence. We made
signicant strides in scal 2007 to strengthen our capabilities
in each of these areas. As a result, we are operating our current
brands more eectively and consistently, so we can grow
them at rates that better capture their market opportunities,
and we’re better prepared than ever to successfully bring on
additional brands.
The Company’s strategic progress in 2007 has two
dimensions. First, each operating company delivered on
brand-specific initiatives to bolster their capabilities in
targeted strategic pillar areas. Second, the entire organization
successfully tackled a prioritized list of initiatives to
strengthen both the operational and cultural aspects of
our operating platform. These initiatives focused on improving
and increasing consistency across the Company in the
employee experience we provide, the effectiveness of
our talent assessment and development, and the level of
discipline with which we manage the brand and restau-
rant operations functions that are at the core of what we
do. The initiatives also included meaningfully enhancing
key support functions such as Supply Chain, Information
Technology, and Government and Community Aairs.
In scal 2007, we also established clearer direction for our
emerging businesses. This included making the dicult
but appropriate decision to dispose of Smokey Bones because
we were not making suciently rapid or protable progress
developing it into the nationally advertised brand we
intended. And, based on continued strong guest experiences
and financial results, we decided to restart growth at
Bahama Breeze and to move to the next stage of disciplined
expansion at Seasons 52.
To facilitate Bahama Breeze’s renewed growth and the
disposition of Smokey Bones, we closed nine low-performing
Bahama Breeze restaurants, 54 Smokey Bones restaurants
and two Rocky River Grillhouse restaurants that were part of
a new direction we developed for the potential conversion of
Smokey Bones. The remaining 73 Smokey Bones restaurants
continue to operate, and we’re oering them for sale. Results
for the nine Bahama Breeze restaurants that we closed and
for the Smokey Bones business are reported separately as
discontinued operations for nancial reporting purposes.
Shareholders