Darden Restaurants sales fell by 19.4% in the quarter that ended Nov. 29 compared with last year as hundreds of the company’s dining rooms across the nation closed down again amid the coronavirus pandemic.
The Orlando-based owner of Olive Garden, LongHorn Steakhouse and other chains reported total sales of $1.66 billion. Same-restaurant sales were down 20.6%.
But net earnings held up at $96 million, compared with $24.7 million last year when the company reported higher operating expenses including labor as well as food and beverage costs. Last year also included $113 million of one-time charges not related to ongoing operations, Darden spokesman Justin Sikora said in an email.
During an earnings call Friday, CEO Gene Lee said 80% of dining rooms were open at the end of the quarter, down from 97% in the middle of that period. The company had 1,818 restaurants at the end of November, meaning about 360 dining rooms were closed.
The company’s largest brand, Olive Garden, began the month of November with 56 dining rooms closed and that number grew to 208 by the end of the month, Lee said. Olive Garden had 874 restaurants as of Nov. 29.
Lee said the company would return to a program that began in the spring to provide three weeks of emergency pay to workers furloughed from restaurants where dining rooms are closed.
“With multiple jurisdictions implementing dining room closures, we know many team members will not get the hours they needed during this holiday season,” Lee said.
CFO Rick Cardenas said as of Friday about 77% of the company’s restaurants were operating with at least partial dining room capacity.
“Moving forward, we may experience further dining room closures and increasing capacity restrictions in the third quarter,” Cardenas said.
The third quarter, which the company is now in, is historically the strongest for the chain, driven by Christmas, New Year’s and Valentine’s Day as well as travel, Cardenas said.
But the dining room closures and restrictions along with less travel from the ongoing pandemic are expected to widen the gulf compared to last year’s sales.
The company is projecting total sales for the third quarter will be between $1.53 billion and $1.65 billion, or 65% to 70% compared with last year, Cardenas said.
Darden’s board also declared a quarterly cash dividend of $0.37 per share on its outstanding common stock.
The business also announced some shifts in leadership. Lee was elected as chairman of the board in addition to being CEO.
Cardenas was named president and chief operating officer. Raj Vennam, a senior vice president and treasurer, was named the new CFO. The leadership changes take effect on Jan. 4.
afuller@orlandosentinel.com