Red Lobster 2013 Annual Report Download - page 8

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Our financial performance in fiscal 2013
was certainly disappointing, with sales
and earnings results that were well
below what we expected when the year
began. As we emerge from the year,
however, we have greater clarity about
what we have to do to regain operating
momentum in fiscal 2014 and remain the
leader in our industry long term. We have
to achieve consistent guest traffic growth
in existing restaurants. And to do that,
we have to deliver guest experiences that
are more responsive to several important
consumer and competitive realities.
We will review our fiscal 2013 financial
performance, then discuss the strengths
we bring to the challenge of reigniting
traffic growth, the consumer and industry
dynamics driving the need for change and
our response to those dynamics.
Fiscal 2013 Financial Highlights
Despite blended same-restaurant sales
and traffic declines at our three large
brands (Olive Garden, Red Lobster and
LongHorn Steakhouse), we had significant
total sales growth in fiscal 2013, due to
growth in sales from new restaurants,
same-restaurant sales growth at our
Specialty Restaurant Group (SRG) and
our acquisition of Yard House USA, Inc.
on August 29, 2012. However, some of
the steps we took to mitigate same-
restaurant sales and traffic erosion at
Olive Garden and Red Lobster and support
continued same-restaurant sales and
traffic growth at LongHorn Steakhouse
adversely affected margins. In addition,
we incurred costs in connection with our
acquisition of Yard House. Because of
these and other factors, our diluted net
earnings per share from continuing
operations declined in fiscal 2013.
• Total sales from continuing operations
were $8.6 billion, a 6.9 percent increase
from the $8.0 billion generated in
fiscal 2012. Excluding sales from
Yard House, total sales from continuing
operations were $8.3 billion, a 3.7 percent
increase from fiscal 2012.
To Our
Shareholders,
Employees
and Guests
Clarence Otis, Jr.
Chairman and
Chief Executive Officer
4 Darden Restaurants, Inc. 2013 Annual Report