Red Lobster 2012 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2012 Red Lobster annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 74

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74

Left: Clarence Otis, Jr.
Chairman and Chief Executive Officer
Right: Andrew H. Madsen
President and Chief Operating Officer
The underlying resilience and vibrancy of our business came through clearly in fiscal
2012, despite several important challenges. These included a frustratingly slow and
uneven economic recovery; flagging sales momentum at Olive Garden, our largest brand;
and a meaningful spike in the cost of seafood, our largest food expenditure category.
TO OUR SHAREHOLDERS, EMPLOYEES AND GUESTS:
In the face of these difficulties, we generated solid sales
and earnings growth, largely because our other brands
performed well while we continued to enhance the cost-
effectiveness of our support platform. As we look to the
future, we are highly confident that – with a return to stronger
growth at Olive Garden, continued momentum across the
balance of our soon-to-be-expanded brand portfolio, our
increasingly efficient support platform, the considerable
collective expertise we possess as an organization and
our winning culture – Darden can generate compelling
shareholder value. Following a review of fiscal 2012, we
summarize what that compelling value should look like
over the next five years.
FISCAL 2012 FINANCIAL HIGHLIGHTS
Driven by higher same-restaurant sales growth than the
prior year and continued acceleration in new-restaurant
growth, we enjoyed strong sales growth in fiscal 2012.
However, because of Olive Garden’s lower-than-expected
sales growth and the abnormally elevated seafood cost
inflation we experienced, our growth in diluted net earnings
per share for the fiscal year was more modest.
`    Total sales from continuing operations were $8.0 billion,
a 6.6 percent increase from the $7.5 billion generated in
fiscal year 2011. This compares to a 2.7 percent increase
in total sales growth for the year for the Knapp-Track™
restaurant benchmark.
`    Our total sales growth from continuing operations continued
to reflect a balance of new- and same-restaurant sales
growth. Combined U.S. same-restaurant sales increased
1.8 percent in fiscal 2012 for the Company’s large brands
(Olive Garden, Red Lobster and LongHorn Steakhouse),
which was higher than the 1.4 percent increase in fiscal
2011 and exceeded the 1.3 percent same-restaurant sales
increase in fiscal 2012 for the Knapp-Track™ restaurant
benchmark, excluding Darden. Combined U.S. same-
restaurant sales increased 4.6 percent in fiscal 2012 for
the Company’s Specialty Restaurant Group (The Capital
Grille, Bahama Breeze, Seasons 52 and Eddie V’s). The
Company also had a 4.7 percent increase in sales in fiscal
year 2012 due to new restaurants, which included the
acquisition of 11 Eddie V’s restaurants in fiscal 2012 and
the net addition of 89 net new restaurants during the year
at our other brands.
Darden Restaurants, Inc. 2012 Annual Report 1