The Next Winning Recipe?
A series of concepts has sputtered, and Darden is taking extra caution as it expands a new, healthy-eating chain of restaurants.
CEO Clarence Otis
Both Bahama Breeze and Smokey Bones were narrower than they had to be in terms of their breadth of appeal, Darden CEO Clarence Otis said in at CIBA World Market’s Consumer Growth Conference last July.
The $1-Billion Question
Darden Restaurants has been looking for a blockbuster to match the billion-dollar annual sales of Red Lobster and Olive Garden. So far, its last three concepts — China Coast, Bahama Breeze and Smokey Bones — have failed to deliver.
|Olive Garden||$2.8 billion||614|
|Red Lobster||2.6 billion||680|
|Smokey Bones*||337 million||126|
|Bahama Breeze||138 million||23|
|Seasons 52||40 million||7|
|* Fiscal year 2006
Source: Darden Restaurants 2006 and 2007 annual reports
|Meals Served||350 million|
|Source: Form 10-K for fiscal year ended May 27, 2007, as filed by
Darden Restaurants with the Securities and Exchange Commission
Joe Lee, former CEO of Darden Restaurants, once told investors he envisioned the company as the blue chip of the restaurant world. Trading at around $42 a share, DRI has outperformed the S&P 500 and its top three competitors over the past 10 years through the end of 2006.
|Brinker (Chili's, Romano's Macaroni Grill)||15.7|
|Source: Bloomberg and Research Insights|