Darden Restaurants Inc., parent to the Olive Garden and LongHorn Steakhouse casual-dining brands, expects to have 65% of its 1,800 restaurants open for some dine-in service by the end of May as coronavirus restrictions ease further across the nation, the company said Tuesday.
The Orlando, Fla.-based company said same-store sales for the fourth quarter, which started Feb. 24, through May 17 had declined 47.9% amid the COVID-19 pandemic restrictions.
“Beginning April 27, we began reopening dining rooms limited to between 25%-50% capacity, depending on local or state regulations,” the company said in a business update. “As of May 17, we had 49% of our dining rooms open in limited capacity, and based on information we have available today, we expect to have more than 65% of our dining rooms open with limited capacity by the end of May.”
“Early signs show that our loyal guests are grateful for the opportunity to dine-in with us, and they appreciate the added safety measures we have implemented,” said Gene Lee, Darden CEO, in a statement.
“At the same time, our to-go business remains strong,” Lee added. “I am pleased that we are able to return some team members from furlough to support these phased openings, and we look forward to safely serving more guests as more communities begin to reopen.”
In early April, Darden furloughed 150,000 hourly workers and 20% of its corporate staff.
Blended same-store sales have improved in each of the past five weeks, including: down 60.1% for the week ended April 26; down 57.7% for the week ended May 3; down 50.8% for the week ended May 10 and down 49% for the week ended May 17.
Darden said, based results for the week ended May 17, the company’s weekly cash burn rate had improved to less than $10 million, including capital expenditures.
“Given the increased confidence in our cash-flow projections and stabilization in the credit markets, the company fully repaid its $750 million credit facility on May 5,” Darden said. The company said it had about $700 million cash on hand.
“Including cash available through the credit facility and cash on hand, we have access to over $1.4 billion of liquidity,” Darden added.
For the third quarter ended Feb. 23, Darden’s reported net income of $232.3 million, or $1.89 a share, compared to $223.6 million, or $1.79 a share, in the same period last year. Total sales increased 4.5% to $2.35 billion driven by the addition of 40 net new restaurants and a blended same-restaurant sales increase of 2.3%.
Darden has more than 1,800 restaurants systemwide, including such other brands as Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s.
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