Darden continues cost savings, ends fiscal Q3 with $127 million cash

By Lisa Kerner

Charlotte, N.C., March 21 - Darden Restaurants, Inc. is on track to realize $60 million of annual cost savings by the end of fiscal 2015, according to chief financial officer Brad Richmond.

The company realized cost savings of $10 million in the fiscal third quarter ended Feb. 23 and expects savings to be the same in the fiscal fourth quarter, Richmond said during Darden's earnings call on Friday.

For fiscal 2014, the company is on track for about $28 million of gross savings, offset by about $11 million of upfront implementation costs for a net savings of about $17 million.

Richmond said that fiscal third-quarter earnings were in line with expectations, given the impact of the unusual items, including weather. The severe winter weather impacted the per-share results by seven cents, he said.

Total sales for the quarter were down 1.1% at $2.23 billion.

Darden had cash and cash equivalents of $127 million at Feb. 23, compared with $103 million for the prior-year period, according to the earnings news release.

Long-term debt less the current portion was about $2.5 billion at quarter's end.

Financial highlights

Darden reported fiscal third-quarter diluted net earnings per share from continuing operations of $0.82 cents, a 19.6% decrease from the same period last year.

The Olive Garden's fiscal third-quarter sales were down 3.4% year over year at $929 million, while Red Lobster's sales for the period were down 8.7% at $611 million.

Longhorn Steakhouses' fiscal third-quarter sales increased 9.1% from the year-ago period to $363 million.

The specialty restaurant group's sales for the fiscal third quarter were up 11.6% at $320 million.

Darden's board of directors declared a quarterly cash dividend of $0.55 per share on the company's outstanding common stock payable on May 5 to shareholders of record at the close of business on April 10.

Darden is an Orlando, Fla.-based casual dining operator.

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