How Is Darden Restaurants Expanding Its Business?

At the end of the second quarter of fiscal 2019, Darden Restaurants (DRI) operated 1,762 restaurants:

• Olive Garden: 858
• LongHorn Steakhouse: 510
• Cheddar’s Scratch Kitchen: 158
• Yard House: 75
• The Capital Grille: 58
• Bahama Breeze: 41
• Seasons 52: 42
• Eddie V’s: 20

Darden Restaurants has added 40 restaurants in the last four quarters, which represents year-over-year growth of 2.3% from 1,722 restaurants at the end of the second quarter of fiscal 2018.

In the last four quarters, Olive Garden has added net nine new restaurants, while LongHorn Steakhouse has added net 14 restaurants, including four new restaurants in the second quarter of fiscal 2018. In the Fine Dining segment, both the Capital Grille and Eddie V’s have increased their restaurant counts by one unit in the last four quarters.

In terms of its other brands, Darden has added net five Cheddar’s restaurants, seven Yard House restaurants, two Bahama Breeze restaurants, and one Seasons 52 restaurant in the last four quarters.

During the same period, Texas Roadhouse (TXRH) and Brinker International (EAT) have increased their unit counts by 30 restaurants and four restaurants, respectively. The unit count of Bloomin’ Brands (BLMN) has fallen by three during the period.

In fiscal 2019, Darden’s management expects to open 45–50 restaurants. Next, we’ll look at Darden’s EBIT margin in the second quarter of fiscal 2019.