DARDEN

anywhere between 50 and 70% of the initial workforce coming back.”

Darden — which owns Olive Garden, LongHorn, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s — has reopened 91% of its more than 1,800 dining rooms.

The company reported samerestaurant sales were down 47.7% for the quarter ending May 31 compared with the same period last year. Total sales for the quarter fell 43% to $1.27 billion. Darden reported a net loss of $479.7 million in the quarter, after reporting earnings of $208.7 million in the same quarter last year. Its stock was up more than 5% Thursday at close.

For the fiscal year that ended May 31, total sales decreased 8.3% to $7.81 billion, with negative same-restaurant sales of 11%.

For three weeks in June, Darden reported same-restaurant sales were down 33.2%, but based on the week ending June 21 the company said it is generating positive operating cash flow. The company provided an outlook for the new quarter, with total sales expected to be about 70% of last year’s. In early April, the company reported an ongoing weekly cash loss rate of about $25 million.

Restaurant analyst John Gordon said the positive cash flow momentum is proof of improving conditions, but he did have a big picture concern.

“All hospitality and all retail operations that involve customer contact, a macro concern in the economy has to be the … curve up again of new [coronavirus] infections,” Gordon said.

The company permanently closed 11 restaurants during the quarter.

It is expected to open between 35 to 40 new restaurants in the coming year, CFO Rick Cardenas said.

“We believe that we can get back to 2 to 3% unit growth pretty quickly,” Lee said. “We’re going to continue to open restaurants. We’re going to continue to do new deals. We think the economics going forward here in the short term should get better for us on new restaurant development.”

Lee added that construction and land costs should come down as fewer companies grow following the pandemic.

“I think the big work that needs to be done is to think about what do we need to do inside the box to better support and stage curbside [pickup] if it’s going to be that big part of our business,” Lee said. “Up until recently, in our existing restaurants, we’ve been doing remodels to create capacity for inside pickup, now we’ve got to really re-look at that as we go forward.”

As for occupancy restraints, Lee said once a location is past 25% occupancy, the 6 feet of social distancing requirement trumps all other restrictions as it keeps a restaurant from getting to 50% capacity.

The company is installing temporary barriers in about 100 restaurants in the next couple of weeks to improve efficiency, especially at Olive Garden, Lee said.

Darden spokesman Rich Jeffers said the partitions will be installed on the backs of booths to create a barrier between those that are lined up back to back. Different styles will be tested.

One permanent change for Darden is expected to be smaller menus.

“Some of the, what I would I would call the superfluous menu items, that are on our menu that one out of 100 people were buying … just aren’t important,” Lee said. “Most of those created the complexity in the kitchen. And so with this hopefully once in a lifetime opportunity, we’re able to pull those out, and I think that’s what’s going to be the lasting change.”