Darden FY 1Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“From a same-restaurant sales prospective, this was a difficult quarter for the restaurant industry generally, in casual dining in particular, and obviously, was a difficult quarter for us. This summer’s sharp spike down in comparable sales within casual dining follows, I think we all know, were some pronounced spikes up and down this past winter and spring.”

“Darden’s total sales from continuing operations increased 6.1% to $2.16 billion. On a blended same-restaurant sales basis, the results for Red Lobster, Olive Garden and LongHorn Steakhouse declined 3.3%”

“Food inflation in the first quarter was approximately 2%, with beef and chicken inflation in the mid-single-digit range and dairy inflation in the low double-digit range. Seafood inflation was nominal, but we now expect double-digit inflation in the second, third and fourth quarters primarily related to the shrimp production [ph] issues in Asia”

“When you change every point of sale or POS terminal inside a restaurant, there is a distraction to every single employee. And until they become unconsciously confident with that, your service standards will drop a little bit.”

“We have to address affordability. We also have to address the need of the consumer who can afford to spend more. And we need to make sure that we continue to improve that part of what we deliver to each and every guest.”

” if you look back to the beginning of this calendar year, we’ve seen some pretty — more pronounced volatility than we’ve been seeing before. So some pretty big downward spikes, February comes to mind, followed by some reasonably big up spikes and then we saw the down spike this summer. ”

“from a industry perspective, this first quarter was really an outlier in terms of the spike down. And so we do hope and expect that that’s the case, and that we would see it, as I think Brad said, bounce back from — it looks a little bit more flat for the balance of the year. ”