Same-stores sales for Olive Garden bottomed out during the third week of March with a drop of 71.1%, but rising takeout and delivery business has tempered the damage in the weeks since, easing the decline to 59.7% for the week ending April 5.
The Italian chain saw its average weekly off-premise revenues rise from just under $15,000 in mid-March to $39,133 at the start of the current month, a leap of 162%, according to preliminary figures released by parent Darden Restaurants.
Darden’s midmarket steakhouse brand, LongHorn Steakhouse, did not fare as well. Takeout and delivery business rose from a low of $6,210 for the week ending March 15 to $19,358 for the seven days ending April 5, an increase of about 220%. Nevertheless, LongHorn’s comp sales fell during that period from negative 15.9% to a decline of 71.9%.
Darden’s fine-dining restaurants, a group that includes The Capital Grille, finished the week ended April 5 with a comps decline of 89.1%.
It’s remaining holdings, which include the Cheddar’s Scratch Kitchen chain, ended the week with a 92.1% decline.
The casual-dining giant did not reveal off-premise sales for those other brands.
Darden said it has negotiated a $270 million term loan credit agreement to enhance its liquidity. A provision enables the company to borrow an additional $100 million if those funds should be necessary. It now has about $1 billion in cash and cash equivalents on hand to weather the crisis. With most restaurants offering takeout and delivery, Darden's weekly cash burn rate is running at about $25 million, officials said.
Simultaneously, the company has sought to further reduce costs. Darden said in releasing quarter-to-date results for its fourth fiscal quarter that it has furloughed additional headquarters employees and cut the pay of those who retained their jobs.
The salaries of senior executives have been reduced by 50%. CEO Gene Lee had already announced that he was completely waiving his salary.
While cutting costs on some fronts, Darden increased its aid to employees who have had their work lives disrupted by the COVID-19 pandemic. Hourly restaurant-level employees will receive an additional payment to cover costs such as transportation and child care, the company said.
It earlier rolled out a three-week emergency pay program and adopted a permanent paid sick leave program as the crisis was starting.
“And to our furloughed team members: Hang in there,” Lee wrote in the sales preview. “We will get through this. And when our dining rooms reopen, we will be together as a family once again.”
Darden said 99% of its 1,812 restaurants remain open, though exclusively for takeout snd delivery service. The numbers suggest that about 18 restaurants have closed.
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