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LETTER TO SHAREHOLDERS
Fiscal 2010 Financial Highlights
Although absolute results from continuing operations for
fiscal 2010 were below our long-range targets due to
the challenging economic and industry environment, our
performance was nevertheless competitively superior.
•฀ ฀Sales฀from฀continuing฀operations฀were฀$7.11฀billion,฀a฀
1.4฀percent฀decrease฀from฀scal฀year฀2009’s฀$7.22฀billion.฀
Excluding an additional fiscal week in fiscal 2009, which
contributed฀approximately฀$124฀million฀in฀sales,฀total฀sales฀
increased approximately 0.3 percent in fiscal 2010.
•฀ ฀Total฀sales฀results฀from฀continuing฀operations฀reect฀a฀
combined U.S. same-restaurant sales decline for Olive
Garden, Red Lobster and LongHorn Steakhouse of
2.6 percent, which was 2.3 percentage points better than
the 4.9 percent decline in the Knapp-Track™ benchmark of
U.S. same-restaurant sales, offset partially by incremental
sales from the net addition of 51 restaurants.
•฀ ฀Net฀earnings฀from฀continuing฀operations฀for฀scal฀2010฀were฀
$407.0฀million,฀a฀9.5฀percent฀increase฀from฀net฀earnings฀
from฀continuing฀operations฀of฀$371.8฀million฀in฀scal฀2009.฀
Diluted net earnings per share from continuing operations
for฀scal฀2010฀were฀$2.86,฀a฀7.9฀percent฀increase฀from฀
diluted฀net฀earnings฀per฀share฀of฀$2.65฀in฀scal฀2009.฀
•฀ ฀In฀scal฀2010,฀net฀losses฀from฀discontinued฀operations฀
were฀$2.5฀million,฀and฀diluted฀net฀losses฀per฀share฀from฀
discontinued฀operations฀were฀$0.02,฀related฀primarily฀to฀
the carrying costs and losses on the remaining properties
held for disposition associated with Smokey Bones and
Bahama฀Breeze฀closings฀from฀scal฀2007฀and฀scal฀2008.฀
Including losses from discontinued operations, net earnings
were฀$404.5฀million฀in฀scal฀2010,฀8.7฀percent฀above฀net฀
earnings฀of฀$372.2฀million฀in฀scal฀2009.฀Including฀losses฀
from discontinued operations, diluted net earnings per
share฀were฀$2.84฀in฀scal฀2010฀compared฀to฀$2.65฀in฀
fiscal 2009.
•฀ ฀Olive฀Garden’s฀total฀sales฀were฀a฀record฀$3.32฀billion,฀up฀
1.0 percent from fiscal 2009, despite one less fiscal week.
This฀reected฀average฀annual฀sales฀per฀restaurant฀of฀
$4.7฀million,฀the฀addition฀of฀32฀net฀new฀restaurants฀and฀a฀
U.S. same-restaurant sales decline of 1.0 percent (52 weeks
vs. 52 weeks), which was 3.9 percentage points favorable
to the Knapp-Track competitive benchmark.
•฀ ฀Red฀Lobster’s฀total฀sales฀were฀$2.49฀billion,฀a฀decrease฀of฀
5.3 percent from fiscal 2009, which included the extra fiscal
week.฀Average฀annual฀sales฀per฀restaurant฀were฀$3.6฀million฀
and U.S. same-restaurant sales for fiscal 2010 fell 4.9 percent
(52 weeks vs. 52 weeks), which was equal to the decline
for the Knapp-Track competitive benchmark.
•฀ ฀LongHorn฀Steakhouse’s฀total฀sales฀were฀$882฀million,฀a฀
decrease฀of฀0.7฀percent฀from฀scal฀2009,฀which฀included฀
the฀extra฀scal฀week.฀This฀reected฀average฀annual฀sales฀
per฀restaurant฀of฀$2.7฀million,฀the฀addition฀of฀10฀net฀new฀
restaurants and a U.S. same-restaurant sales decline
of 1.9 percent (52 weeks vs. 52 weeks), which was
3.0 percentage points favorable to the Knapp-Track
competitive benchmark.
•฀ ฀The฀Capital฀Grille’s฀total฀sales฀were฀a฀record฀$242฀million,฀a฀
3.2 percent increase from fiscal 2009, despite one less fiscal
week.฀Average฀annual฀sales฀per฀restaurant฀were฀$6.2฀million,฀
three new restaurants were added and same-restaurant
sales฀declined฀7.8฀percent฀(52฀weeks฀vs.฀52฀weeks).฀
•฀ ฀Bahama฀Breeze’s฀total฀sales฀were฀$130฀million,฀down฀
1.0 percent from fiscal 2009, driven by one less fiscal week
and a same-restaurant sales decline of 2.9 percent (52 weeks
vs. 52 weeks), which was offset partially by the addition of
one new restaurant. Average annual sales per restaurant
were฀$5.4฀million.
2 DARDEN RESTAURANTS, INC. | 2010 ANNUAL REPORT
To Our Shareholders, Employees and Guests: The end of fiscal 2010 marked the 15-year anniversary
of Darden’s June 1995 spin-off from General Mills as an independent, publicly traded company. Fiscal 2010
was also another year, like the preceding two, in which economic and consumer conditions were challenging.
During difficult times, it is tempting to hunker down and take comfort in focusing narrowly on the day
to day. Darden’s rich history consistently reminds us, however, that long-term perspective and planning
is critical. As we look back over our past 15 years, we understand that long-term success depends on
finding the right balance between continuity and change. We would like to share some highlights from
fiscal 2010, then review, as we begin our next 15-year journey, where you can expect continuity and where
we believe there will be a need for change.