LongHorn Steakhouse overview
After Olive Garden, LongHorn Steakhouse is Darden Restaurants’s (DRI) second most important brand. In fiscal 2014, LongHorn Steakhouse contributed about 22% to the company’s revenue.
LongHorn Steakhouse is a full-service casual dining steakhouse, with an American West ambiance and menu. The menu primarily includes a variety of steak cuts and dishes, as well as appetizers, burgers, sandwiches, soups, and salads. LongHorn Steakhouse’s menu also includes light-calorie and kids’ meals, as well as its Prime Time menu of small plates offered in late afternoon and early evening. As of fiscal 2014, there were 464 LongHorn Steakhouse restaurants in the US.
LongHorn Steakhouse, with its American West ambiance, directly competes with Bloomin’ Brands’s (BLMN) Outback Steakhouse, which has an Australian-themed ambiance and menu, and Texas Roadhouse (TXRH), with a a casual menu and Texas-inspired atmosphere.
LongHorn Steakhouse also competes with several other standalone steakhouses and casual dining restaurants such as Chili’s, which is under the umbrella of Brinker International (EAT), and Buffalo Wild Wings (BWLD). You can find some of these restaurants in the Consumer Discretionary Select Sector SPDR ETF (XLY), which holds 10% of its portfolio in restaurant stocks.
Olive Garden and LongHorn Steakhouse are Darden Restaurants’s most important brands in terms of revenue, contributing 80% of its revenue. The remaining 20% of Darden’s revenue comes from its Specialty Restaurant Group, which includes brands such as The Capital Grille, Bahama Breeze, Eddie V’s Prime Seafood, and Seasons 52.
We’ll explore the Specialty Restaurant Group in the next article.