Darden Restaurants Reports 16% Increase in First Quarter Diluted Net Earnings Per Share; Announces Quarterly Dividend of 25 Cents Per Share

First quarter sales from continuing operations were $1.73 billion, compared to $1.77 billion in the prior year, a 2.3% decrease. Blended same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 5.3% this quarter, which compares to an estimated decline of 7.8% for the Knapp-Track(TM) benchmark of U.S. same-restaurant sales, excluding Darden.

"We are pleased to report solid earnings growth for the quarter in such a difficult macro-economic environment," said Clarence Otis, Chairman and Chief Executive Officer of Darden. "Despite the challenges, our brands once again posted meaningfully stronger sales results than our industry as measured by the Knapp-Track(TM) benchmark."

"Our competitively strong sales are the result of outstanding Marketing and Restaurant Operations teams across the Company," continued Otis. "We also have very talented Restaurant Support teams whose collective expertise reflects scale and resources that are unmatched in the full-service restaurant industry. While we benefited this quarter from favorable food and energy costs, our earnings growth in the face of a challenging sales environment is also a tribute to the increasingly efficient Restaurant Support platform these leaders have created. As a result of our Marketing, Restaurant Operations and Restaurant Support strengths, we look forward to emerging from the current challenging environment as a company that's even better positioned competitively."

Highlights for the quarter ended August 30, 2009 include the following:

• Net earnings from continuing operations for the first quarter were $95.0 million, or 67 cents per diluted share on sales of $1.73 billion. Last year, net earnings from continuing operations were $82.4 million, or 58 cents per diluted share, on sales of $1.77 billion.

• Total first quarter sales from continuing operations of $1.73 billion represent a 2.3% decrease over the prior year.

• In the first quarter, U.S. same-restaurant sales decreased 2.9% at Olive Garden, 7.9% at Red Lobster and 6.2% LongHorn Steakhouse. These results compare to an estimated decrease of 7.8% in the Knapp-Track(TM) benchmark of U.S. same-restaurant sales, excluding Darden.

• The Company's Board of Directors declared a quarterly dividend of 25 cents per share.

Operating Highlights

OLIVE GARDEN'S first quarter sales of $821 million were 1.2% above prior year, driven by revenue from 33 net new restaurants, partially offset by a U.S. same-restaurant sales decline of 2.9%. For the quarter, on a percentage of sales basis, the concept's lower food and beverage expenses, restaurant expenses and selling, general and administrative expenses were partially offset by the company's increased restaurant labor expenses and depreciation expenses, and the net result was an increase in absolute operating profit for the quarter.

RED LOBSTER'S first quarter sales of $605 million were 6.3% below prior year, driven by a U.S. same-restaurant sales decrease of 7.9%, partially offset by revenue from 11 net new restaurants. For the quarter, on a percentage of sales basis, lower food and beverage expenses and restaurant expenses were partially offset by the concept's increased restaurant labor expenses and selling, general and administrative expenses and depreciation expenses. Absolute operating profit declined modestly for the quarter.

LONGHORN STEAKHOUSE'S first quarter sales of $211 million were 2.0% below the prior year, driven by a same-restaurant sales decrease of 6.2%, partially offset by revenue from 14 net new restaurants. For the quarter, on a percentage of sales basis, the concept's decreased food and beverage expenses, restaurant expenses and selling, general and administrative expenses were partially offset by increased restaurant labor expenses and depreciation expenses, resulting in an increase in absolute operating profit for the quarter.

THE CAPITAL GRILLE'S first quarter sales of $50 million were 8.4% below the prior year results, driven by a same-restaurant sales decrease of 18.0% and partially offset by the addition of five net new restaurants.

BAHAMA BREEZE'S first quarter sales of $35 million were 1.5% below prior year, driven by a same-restaurant sales decrease of 6.3%, partially offset by the addition of one net new restaurant.

Other Actions

Darden's Board of Directors declared a quarterly cash dividend of 25 cents per share on the Company's outstanding common stock. The dividend is payable on November 2, 2009 to shareholders of record at the close of business on October 9, 2009.

  Fiscal June, July and August 2009 U.S. Same-Restaurant Sales Results

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  Darden reported that U.S. same-restaurant sales for the fiscal months of

  June, July and August were as follows:



  Olive Garden                  June *        July *        August

                             ----------    ----------     ----------

  Same-Restaurant Sales      -4% to -5%    -1% to -2%     -2% to -3%

  Same-Restaurant

   Traffic                      -6%        -3% to -4%     -3% to -4%

  Pricing                        3%            3%             3%

  Menu-mix                   -1% to -2%       -1%         -2% to -3%



                                June *        July *        August

  Red Lobster                ----------    ----------     ----------

  Same-Restaurant Sales        -11%           -6%            -6%

  Same-Restaurant

   Traffic                     -13%        -8% to -9%        -7%

  Pricing                      2% to 3%      2% to 3%       1% to 2%

  Menu-mix                    0% to -1%       Flat           -1%



                                June *        July *        August

  LongHorn Steakhouse        ----------    ----------     ----------

  Same-Restaurant Sales        -6%         -4% to -5%     -8% to -9%

  Same-Restaurant

   Traffic                   -7% to -8%       -6%           -10%

  Pricing                       3%           2% to 3%         2%

  Menu-mix                     -1%            -1%          0% to -1%



  * Fiscal June sales results were adversely affected by an estimated 150 to

  200 basis points (and fiscal July was positively affected by approximately

  the same amount) because the July Fourth holiday week was in fiscal June

  this year versus fiscal July last year.

Fiscal 2010 Outlook

Darden affirmed that it continues to anticipate reported diluted net earnings per share growth from continuing operations of approximately -2% to +8% in fiscal 2010. This compares to reported diluted net earnings per share from continuing operations of $2.65 in fiscal 2009. The Company reported that its earnings expectations for the fiscal year are based on (1) blended U.S. same-restaurant sales for Red Lobster, Olive Garden and LongHorn Steakhouse of approximately -3% to flat in fiscal 2010, a range that is one percentage point lower on the bottom end than the range the Company provided at the start of the fiscal year; (2) the opening of approximately 50 to 55 net new restaurants in fiscal 2010, an expansion pace which remains consistent with that disclosed at the beginning of the year; (3) total sales growth of between -2% and +1% in fiscal 2010, which compares to reported sales from continuing operations of $7.22 billion in fiscal 2009; and (4) lower net cost inflation than anticipated at the start of the year.

"Macro-economic conditions and full-service restaurant industry sales levels in our fiscal first quarter were softer than we anticipated," said Brad Richmond, the Company's Chief Financial Officer. "As a result, we are reducing the lower end of the range of our blended same-restaurant sales we expect this fiscal year. At the same time, food costs were also lower in the first quarter than initially expected, and are likely to remain more muted for the balance of the year than we previously anticipated. And, we are finding additional cost management opportunities as well. The net result is that our fiscal year earnings per share outlook remains unchanged. Given industry sales trends, however, at this time the lower half of the diluted net earnings per share range we've provided is more likely than the upper half of the range."

  Fiscal 2009 and Fiscal 2010 Estimated Diluted Net Earnings Per Share From

  Continuing Operations

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  Diluted Net Earnings Per Share   Fiscal 2009    Fiscal 2010 Estimated

  ------------------------------   -----------    ---------------------

  52-Week Basis                           $2.59         $2.59 to $2.85

  Impact of 53(rd) Week                   $0.06           N.A.

  53-Week Basis (GAAP)                    $2.65           N.A.

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