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Darden Restaurants Q4 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 8:57 PM ET June 29 2009

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Darden fourth quarter sales rose 8% to $1.98 billion and net earnings from continuing operations grew 18.87% to $122.8 million, performing well above Knapp-Track benchmark. Earnings per share were 87 cents as against 71 cents in the prior year quarter.


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Okay, and then just one more, on food cost, how far into fiscal 2010 do you have visibility for food costs?

Clarence Otis

I would say the major components we had through the calendar year, there’s a few elements that go into the new calendar year, so the first half of them were of our fiscal year but as I mentioned in the prepared remarks, we’re trying to leave ourselves open to the opportunity that there may be some more continued erosion in prices. So we haven’t taken all the coverage that we would but we continue to monitor that and we’ll look for those opportunities. As we think about that, that last point, to the extent that we don’t see further declines, it’s likely to mean a better environment than we base our plan on in terms of top line, and so we are comfortable with that balance.

Operator

Our next question comes from the line of Steve Anderson of MKM Partners. Please go ahead.

Stephen Anderson - MKM Partners

Thanks and good morning and congratulations on the year. Very quickly on LongHorn, I noticed that you started a $6.99 lunch special. I just wanted to get a little bit more color on that and I just want to see if that has, if you envision that as having a similar effect on lunch as Red Lobster is having with its quick catch special?

Clarence Otis

At LongHorn, we’ve got on the current menu every day pricing, a range of items that are under $10, some as low as $6.99. So what you are referring to is probably just some local marketing efforts to communicate to people the fact that the everyday menu features a range of price points and some of them at $6.99. But we haven’t started a new lunch program or lunch promotion similar to what Red Lobster is doing.

Stephen Anderson - MKM Partners

Okay. Thank you.

Matthew Stroud

We’ve got time for one more question, please.

Operator

And the last question at this time will come from the line of Ms. Nicole Miller of Piper Jaffray. Please go ahead.

Rob Wyler - Piper Jaffray

Actually this is Rob Wyler in for Nicole. A quick question for you guys, you mentioned incremental LongHorn marketing spend in FY10. Could you quantify how much better volumes were at the units receiving the media last year, as well as, and also where the same-store sales was negative for those units?

Clarence Otis

We added probably 60 restaurants, maybe a little more than that, that were receiving media coverage and there was a meaningful out-performance, and there has been for several years in terms of the markets that are getting television and not getting television but we haven’t in the past disclosed what that difference is.

Rob Wyler - Piper Jaffray
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