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ORLANDO, FL-Supported by a relatively strong performance at Olive Garden, Darden Restaurants will only slightly cut back on restaurant openings this year, executives said at the company’s second quarter conference call. The company plans to open approximately 70 net new restaurants in fiscal 2009, down from the 75 to 80 planned earlier. “This reduction reflects our desire for slow growth, and that the retail developments we were expected to open in have slowed,” says Andrew Madsen, president and COO.

Olive Garden will open 35 to 40 new units, LongHorn Steakhouse is on target for 15 to 17 new units, and Red Lobster will open 10 new units. The remainder will open in the firm’s specialty group, primarily in Capital Grille. However, Seasons 52 will open in Cherry Hill, NJ, its first location outside the Southeast.

“We believe (Olive Garden) has the potential for 800 to 900 restaurants in North America,” Madsen says. “Ultimately, we believe LongHorn has the potential for 600 to 800 restaurants in North America.”

However, fiscal 2010 may be slower, says Clarence Otis, chairman and CEO, with the company looking carefully at its commitments. Expansion will be based on the current return on invested capital, which would lead to further growth primarily in Olive Garden and Capital Grille.

For the quarter, sales from continuing operations were $1.67 billion, up 9.6% from the same period last year. Combined same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 0.2% for the quarter, vs. an estimated 5.3% decline in the Knapp-Track casual dining benchmark (excluding Darden). Olive Garden’s US same-restaurant sales increased 0.8%, Red Lobster’s US same-restaurant sales increased 0.3% and LongHorn Steakhouse’s same-restaurant sales decreased 5.7%. Net earnings from continuing operations for the second quarter were $58.5 million, up from $44.1 billion last year.

“Certainly this was a very challenging quarter given the economic environment,” Otis said. “We do feel very good about our competitive position. We think we’re better able to weather the current storm better than our competitors.” Darden owns and operates more than 1,700 restaurants including Red Lobster, Olive Garden, LongHorn Steakhouse, the Capital Grille, Bahama Breeze and Seasons 52.

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