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# UNITED STATES
                                     SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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# FORM 10-Q

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# Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

# For the Quarterly Period Ended June 27, 2004

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# Commission file number 0-19924

# RARE Hospitality International, Inc.(Exact name of registrant as specified in its charter)

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# Internal Revenue Service - Employer Identification No. 58-1498312

# 8215 Roswell Rd; Bldg. 600; Atlanta, GA 30350
(770) 399-9595(Registrant's telephone number, including area code)

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Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

# XX   Yes      No

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).

# XX   Yes      No

As of July 30, 2004, there
were 33,881,221 shares of common stock of the Registrant outstanding.

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# RARE Hospitality International, Inc. and Subsidiaries

# Index

`Part I - Financial Information                                           Page
                                                                         ----

     Item 1. Consolidated Financial Statements:

                 Consolidated Balance Sheets as of
                 June 27, 2004 and December 28, 2003                       1

                 Consolidated Statements of Earnings
                 for the quarters and six months ended
                 June 27, 2004  and June 29, 2003                          2

                 Consolidated Statement of Shareholders' Equity
                 and Comprehensive Income for the six months
                 ended June 27, 2004                                       3

                 Condensed Consolidated Statements of Cash Flows
                 for the six months ended June 27, 2004 and
                 June 29, 2003                                             4

                 Notes to the Consolidated Financial Statements           5-9

     Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations            9-12

     Item 3. Quantitative and Qualitative Disclosures About
                 Market Risk                                             12-13

     Item 4. Controls and Procedures                                      13


Part II - Other Information

     Item 1. Legal Proceedings                                            13

     Item 2. Changes in Securities and Use of Proceeds                    13

     Item 3. Defaults Upon Senior Securities                              13

     Item 4. Submission of Matters to a Vote of Securities
                 Holders                                                 13-14

     Item 5. Other Information                                            14

     Item 6. Exhibits and Reports on Form 8-K                             14

     Signatures                                                           15`

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# Part I. Financial Information
Item 1. Financial Statements

# RARE Hospitality International, Inc. and Subsidiaries
                                          Consolidated Balance Sheets
                                     (In thousands, except share amounts)
                                                  (Unaudited)

`June 27,                 December 28,
Assets                                              2004                        2003
------                                              ----                        ----

Current assets:
    Cash and cash equivalents                       $  8,265                 $ 20,508
    Short-term investments                            26,251                   24,036
    Accounts receivable                                8,803                    8,730
    Inventories                                       17,545                   16,558
    Prepaid expenses                                   4,617                    5,039
    Refundable income taxes                            3,420                    2,162
    Deferred income taxes                              6,901                    4,887
                                                    --------                 --------
        Total current assets                          75,802                   81,920

Property & equipment, less accumulated
  depreciation                                       397,418                  354,448
Goodwill, net                                         19,187                   19,187
Other                                                 11,107                    8,987
                                                    --------                 --------
        Total assets                                $503,514                 $464,542
                                                    ========                 ========

Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
    Accounts payable                                $ 16,155                 $ 18,729
    Accrued expenses                                  52,878                   55,218
    Current installments of obligations under
        capital leases                                   205                      124
                                                    --------                 --------
        Total current liabilities                     69,238                   74,071

Obligations under capital leases, net
  of current installments                             38,995                   27,462
Deferred income taxes                                 11,101                    5,452
Other                                                  5,439                    4,131
                                                    --------                 --------
        Total liabilities                            124,773                  111,116

Minority interest                                      1,363                    1,371

Shareholders' equity:
    Preferred stock                                       --                       --
    Common stock                                     209,182                  203,624
    Unearned compensation-restricted stock            (1,454)                 (1,303)
    Retained earnings                                182,827                  154,723
    Treasury stock at cost; 593,000 shares
     in 2004 and 293,000 shares in 2003             (13,177)                  (4,989)
                                                    --------                 --------

        Total shareholders' equity                   377,378                  352,055
                                                    --------                 --------
        Total liabilities and shareholders'
         equity                                     $503,514                 $464,542
                                                    ========                 ========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                      Consolidated Statements of Earnings
                               (In thousands, except per share data)
                                         (Unaudited)

`Quarter Ended                Six months Ended
                                                  -------------                ----------------
Revenues:                                    June 27,       June 29,        June 27,       June 29,
                                               2004           2003            2004           2003
                                               ----           ----            ----           ----
   Restaurant sales:
     LongHorn Steakhouse                      $147,183      $121,661         $292,342       $240,320
     The Capital Grille                         31,113        24,653           60,950         48,107
     Bugaboo Creek Steak House                  23,615        20,249           47,901         40,484
     Specialty concepts                          2,052         1,959            3,788          3,669
                                              --------      --------         --------       --------
        Total restaurant sales                 203,963       168,522          404,981        332,580
  Franchise revenues                               101            98              200            189
                                              --------      --------         --------       --------
        Total revenues                         204,064       168,620          405,181        332,769
                                              --------      --------         --------       --------
Costs and expenses:
   Cost of restaurant sales                     75,152        60,518          147,726        119,158
   Operating expenses - restaurants             87,911        73,591          173,584        144,217
   Depreciation and amortization
     - restaurants                               7,457         6,460           14,636         12,717
   Pre-opening expense                           1,612         1,668            3,206          2,725
   General and administrative expenses          11,746        10,024           23,406         19,895
                                              --------      --------         --------       --------
        Total costs and expenses               183,878       152,261          362,558        298,712
                                              --------      --------         --------       --------
     Operating income                           20,186        16,359           42,623         34,057
Interest expense, net                              207           213              323            459
Minority interest                                   92            82              201            200
                                              --------      --------         --------       --------
   Earnings before income taxes                 19,887        16,064           42,099         33,398
Income tax expense                               6,610         5,224           13,995         10,857
                                              --------      --------         --------       --------
        Net earnings                          $ 13,277      $ 10,840         $ 28,104       $ 22,541
                                              ========      ========         ========       ========

Basic earnings per common share               $   0.39      $   0.33         $   0.84       $   0.68
                                              ========      ========         ========       ========
Diluted earnings per common share             $   0.37      $   0.31         $   0.79       $   0.65
                                              ========      ========         ========       ========

Weighted average common shares outstanding:
   Basic                                        33,646        33,092           33,618         32,981
                                              ========      ========         ========       ========
   Diluted                                      35,585        34,763           35,551         34,700
                                              ========      ========         ========       ========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                Consolidated Statement of Shareholders' Equity
                                          And Comprehensive Income
                                   For the six months ended June 27, 2004
                                          (In thousands, unaudited)

`Common Stock
                                     ------------                                             Total
                                                      Restricted    Retained     Treasury  Shareholders'
                                Shares       Amount      Stock      Earnings       Stock      Equity
                                ------       ------      -----      --------       -----      ------

Balance, December 28, 2003      34,042      $203,624    $(1,303)    $154,723     $  (4,989)   $352,055

Net earnings and comprehensive
  income                            --            --         --       28,104            --      28,104
Amortization of restricted
  stock                             --            --        509           --            --         509
Purchase of common stock
  for treasury                      --            --         --           --        (8,188)     (8,188)
Issuance of shares pursuant
  to restricted stock award         26           660       (660)          --            --          --
Issuance of shares pursuant
  to exercise of stock
  options                          297         3,031         --           --            --       3,031
Tax benefit of stock options
  exercised                         --         1,867         --           --            --       1,867
                                ------      --------     ------      -------      --------    --------

Balance, June 27, 2004          34,365      $209,182    $(1,454)    $182,827      $(13,177)   $377,378
                                ======      ========    ========    ========      =========   ========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc. and Subsidiaries
                                Condensed Consolidated Statements of Cash Flows
                                           (In thousands, unaudited)

`Six Months Ended
                                                                 ----------------

                                                              June 27,       June 29,
                                                                2004           2003
                                                                ----           ----
Cash Flows from operating activities:
  Net earnings                                               $  28,104       $  22,541
  Adjustments to reconcile net earnings to
    net cash provided by operating activities:
      Depreciation and amortization                             15,856          13,494
      Changes in working capital accounts                       (8,727)         (5,580)
      Minority interest                                            201             200
      Deferred tax expense                                       3,635           3,428

  Purchase of short-term investments                            (2,215)        (5,228)
                                                             ----------      ---------

  Net cash provided by operating activities                     36,854          34,083
                                                             ---------       ---------

Cash flows from investing activities:
  Purchase of property and equipment                           (46,635)        (35,241)
                                                             ----------      ----------

  Net cash used by investing activities                        (46,635)        (35,241)
                                                             ----------      ----------

Cash flows from financing activities:
  Distributions to minority partners                              (209)           (192)
  Increase in bank overdraft included in
    accounts payable                                             2,958           1,665
  Principal payments on capital leases                             (54)            (37)
  Purchase of common stock for treasury                         (8,188)        (2,625)
  Proceeds from exercise of stock options                        3,031           3,816
                                                             ---------       ---------

  Net cash (used in) provided by financing activities          (2,462)           2,627
                                                             ---------       ---------

Net (decrease) in cash and cash equivalents                    (12,243)        (3,759)
Cash and cash equivalents, beginning of period                  20,508          13,732
                                                             ---------       ---------

Cash and cash equivalents, end of period                      $  8,265        $  9,973
                                                             =========       =========

Supplemental disclosure of cash flow information
  Cash paid for income taxes                                  $  9,745        $  6,285
                                                             =========       =========

  Cash paid for interest                                      $  1,284        $  1,007
                                                             =========       =========

Supplemental disclosure of non-cash financing and
  investing activities:
Assets acquired under capital lease                           $ 11,668        $     --
                                                             =========       =========`

See accompanying notes to consolidated financial statements

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# RARE Hospitality International, Inc.
                                  Notes to Consolidated Financial Statements
                                                  (Unaudited)

1.    Basis of Presentation

The consolidated financial
statements of RARE Hospitality International, Inc. and subsidiaries (the
Company) as of June 27, 2004 and December 28, 2003 and for the
quarters and six months ended June 27, 2004 and June 29, 2003 have been prepared
by the Company, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments), which are, in the
opinion of management, necessary to fairly present the operating results for the
respective periods. Certain information and footnote disclosures normally
presented in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations. Certain amounts for the prior year have been reclassified to
conform with the current years presentation. These financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto contained in the Companys Annual Report on Form 10-K for the
year ended December 28, 2003.

The Company records
revenues for normal recurring sales upon the performance of services. Revenues
from the sales of franchises are recognized as income when substantially all of
the Companys material obligations under the franchise agreement have been
performed. Continuing royalties, which are a percentage of net sales of
franchised restaurants, are accrued as income when earned.

The Company operates on a
52- or 53-week fiscal year ending on the last Sunday in each calendar year. Each
of the four fiscal quarters is typically made up of 13 weeks. The fiscal
quarters and year-to-date periods ended June 27, 2004, and June 29, 2003 each
contained 13 weeks and 26 weeks, respectively.

2.      New Accounting Pronouncements

In
January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities, an Interpretation of ARB No.
51, which addresses consolidation by business enterprises of variable
interest entities (VIEs) either: (1) that do not have sufficient
equity investment at risk to permit the entity to finance its activities without
additional subordinated financial support, or (2) in which the equity investors
lack an essential characteristic of a controlling financial interest. In
December 2003, the FASB issued modifications to FIN 46 (Revised
Interpretations) resulting in multiple effective dates based on the nature
as well as the creation date of the VIE. VIEs created after January 31, 2003,
but prior to January 1, 2004, may be accounted for either based on the original
interpretation or the Revised Interpretations. However, the Revised
Interpretations must be applied no later than the first quarter of 2004. VIEs
created after January 1, 2004 must be accounted for under the Revised
Interpretations. Non-Special Purpose Entities created prior to February 1, 2003,
should be accounted for under the revised interpretations provisions no
later than the first quarter of fiscal 2004. As of the beginning of 2004, the
Company adopted FIN 46 and the Revised Interpretations, neither of which had an
impact on the Companys consolidated financial statements.

3.       Shareholders' Equity and Stock Based Compensation

During the second quarter
of 2004, the Company purchased 300,000 shares of its common stock for a total
purchase price of approximately $8,188,000 (average price of $27.29 per share).
As of June 27, 2004, approximately $16,812,000 remained available under the
Companys $25.0 million share repurchase authorization.

The Company has stock
option plans that provide for the granting of incentive and non-qualified stock
options to employees, officers, directors, consultants, and advisors. Under the
plans, options are granted at an exercise price equal to the fair market value
of the underlying common stock on the date of grant. The Company applies APB
Opinion No. 25 and related interpretations in accounting for its stock option
plans as permitted under SFAS 123 and SFAS 148. Accordingly, no compensation
cost has been recognized for the Companys stock option plans. Had the
compensation cost for the Companys stock option plans been determined
based on the fair value at the grant dates for awards under those plans
consistent with the fair value methodology of SFAS 123, the Companys net
income and earnings per share would have been as follows (in thousands, except
per share data):

`Quarter Ended             Six Months Ended
                                               -------------             ----------------
                                           June 27,      June 29,       June 27,     June 29,
                                             2004          2003           2004         2003
                                             ----          ----           ----         ----

Net earnings, as reported                  $ 13,277       $ 10,840      $ 28,104     $ 22,541
Stock-based compensation expense
  determined under fair value
  method for all awards, net of tax           1,098            958         2,087        1,793
                                           --------       --------      --------     --------
Proforma net earnings                      $ 12,179       $  9,882      $ 26,017     $ 20,748
                                           ========       ========      ========     ========
Earnings per share:

Basic - as reported                        $   0.39       $   0.33      $   0.84     $   0.68
                                           ========       ========      ========     ========
Basic - proforma                           $   0.36       $   0.30      $   0.77     $   0.63
                                           ========       ========      ========     ========
Diluted - as reported                      $   0.37       $   0.31      $   0.79     $   0.65
                                           ========       ========      ========     ========
Diluted - proforma                         $   0.35       $   0.29      $   0.74     $   0.61
                                           ========       ========      ========     ========`

4.  Long-Term Debt

At June 27, 2004, no
borrowings were outstanding under the Companys $100 million revolving
credit agreement, and the Company was in compliance with all of its compliance
provisions. Interest expense is reported net of interest income, which equated
to $67,000 and $96,000 for the second quarter of 2004 and 2003, respectively and
to $187,000 for the first six months of both 2004 and 2003. Interest capitalized
in the second quarter of 2004 and 2003 was $413,000 and $274,000, respectively,
and was $829,000 and $504,000, for the first six months of 2004 and 2003,
respectively.

5.  Income Taxes

Income tax expense for the
second quarter and first six months of 2004 has been provided for based on an
estimated 33.25% effective tax rate expected to be applicable for the full 2004
fiscal year. The effective income tax rate differs from applying the statutory
federal income tax rate of 35% to pre-tax earnings primarily due to employee
FICA tip tax credits (a reduction in income tax expense) and work opportunity
tax credits partially offset by state income taxes.

6.    Earnings Per Share

Basic earnings per common
share equals net earnings divided by the weighted average number of common
shares outstanding and does not include the dilutive effect of stock options or
restricted stock. Diluted earnings per common share equals net earnings divided
by the weighted average number of common shares outstanding, after giving effect
to dilutive stock options and restricted stock. A reconciliation between basic
and diluted weighted average shares outstanding and the related earnings per
share calculation is presented below (in thousands, except per share amounts):

`Quarter Ended             Six months Ended
                                                     -------------             ----------------
                                                 June 27,      June 29,       June 27,     June 29,
                                                   2004          2003           2004         2003
                                                   ----          ----           ----         ----

Basic weighted average shares outstanding          33,646         33,092        33,618       32,981

Dilutive effect of stock options                    1,727          1,500         1,722        1,551
Dilutive effect of restricted stock                   212            171           211          168
                                                 --------       --------      --------     --------
Diluted weighted average shares outstanding        35,585         34,763        35,551       34,700
                                                 ========       ========      ========     ========
Net earnings                                     $ 13,277       $ 10,840      $ 28,104     $ 22,541
                                                 ========       ========      ========     ========
Basic earnings per common share                  $   0.39       $   0.33      $   0.84     $   0.68
                                                 ========       ========      ========     ========
Diluted earnings per common share                $   0.37       $   0.31      $   0.79     $   0.65
                                                 ========       ========      ========     ========`

7.  Comprehensive Income

For the quarter and six
months ended June 27, 2004, there was no difference between the Companys
net earnings and comprehensive income.

# Item 2.     Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

Results of Operations

# Revenues

The Company currently
derives all of its revenues from restaurant sales and franchise revenues. Total
revenues increased 21.0% and 21.8% for the quarter and six months ended June 27,
2004, respectively, as compared to the same periods of the prior fiscal year.

Same store sales
comparisons for each of the Companys restaurant concepts for the quarter
ended June 27, 2004, consist of sales at restaurants opened prior to September
30, 2002.

# LongHorn Steakhouse:

Sales in the LongHorn
Steakhouse restaurants for the quarter and six months ended June 27, 2004
increased 21.0% and 21.6%, respectively, as compared to the same periods of the
prior year. The increase reflects (i) a 13.5% and 12.3% increase in restaurant
operating weeks in the quarter and six months ended June 27, 2004, respectively,
as compared to the same periods of the prior fiscal year, resulting from an
increase in the restaurant base from 177 LongHorn Steakhouse restaurants at the
end of the second quarter of 2003 to 201 at the end of the second quarter of
2004 and (ii) an increase in average weekly sales. Average weekly sales for all
LongHorn Steakhouse restaurants in the second quarter of 2004 were $57,045, a
6.6% increase over the comparable period in 2003. Same store sales for the
comparable LongHorn Steakhouse restaurants increased 6.0% in the second quarter
of 2004 as compared to the same period in 2003, due primarily to an increase in
average check.

# The Capital Grille:

Sales in The Capital Grille
restaurants for the quarter and six months ended June 27, 2004, increased 26.2%
and 26.7%, respectively, as compared to the same periods of the prior fiscal
year. The increase reflects (i) a 12.8% and 13.1% increase in restaurant
operating weeks for the quarter and six months ended June 27, 2004, as compared
to the same periods of the prior fiscal year, resulting from an increase in the
restaurant base from 16 The Capital Grille restaurants at the end of the second
quarter 2003 to 18 restaurants at the end of the second quarter of 2004 and (ii)
an increase in average weekly sales. Average weekly sales for all The Capital
Grille restaurants in the second quarter of 2004 were $135,863, an 11.9%
increase from the comparable period in 2003. Same store sales for the comparable
The Capital Grille restaurants increased 13.2% in the second quarter of 2004,
due to approximately equal increases in customer counts and average check.

# Bugaboo Creek Steak House:

Sales in the Bugaboo Creek
Steak House restaurants increased for the quarter and six months ended June 27,
2004, by 16.6% and 18.3%, respectively, as compared to the same periods of the
prior fiscal year. The increase reflects (i) a 16.2% and 16.5% increase in
restaurant weeks in the quarter and six months ended June 27, 2004,
respectively, as compared to the same periods of the prior fiscal year,
resulting from an increase in the restaurant base from 23 Bugaboo Creek Steak
House restaurants at the end of the second quarter of 2003 to 26 restaurants at
the end of the second quarter of 2004 and (ii) an increase in average weekly
sales. Average weekly sales for all Bugaboo Creek Steak House restaurants in the
second quarter of 2004 were $69,866, a 0.4% increase from the comparable period
for 2003. Same store sales for the comparable Bugaboo Creek Steak House
restaurants in the second quarter of 2004 increased 2.5% as compared to the same
period in 2003, due to an increase in average check partially offset by a
decrease in customer counts.

# Franchise Revenue:

Franchise revenues
increased to $101,000 for the second quarter of 2004, from $98,000 for the same
period in 2003 due to sales increases at the three franchised LongHorn
Steakhouse restaurants in Puerto Rico.

# Costs and Expenses

Cost of restaurant sales as
a percentage of restaurant sales increased to 36.8% for the second quarter of
2004, from 35.9% for the second quarter of 2003, and increased to 36.5% for the
first six months of 2004 as compared to 35.8% during the same period of 2003.
This increase resulted primarily from higher contract pricing on commodities in
2004, particularly pricing with respect to new beef contracts, and was partially
offset by a 2% - 3% increase in menu prices. The Company is currently under
fixed price contracts with respect to its anticipated beef needs and these
contracts are in effect for the remainder of 2004. The Company expects its cost
of restaurant sales as a percentage of restaurant sales in the third quarter of
2004 to be higher than the comparable quarter of 2003 by 0.8% to 0.9%. Many of
the food products, other than protein products, purchased by the Company are
affected by commodity pricing and are, therefore, subject to price volatility
caused by weather, production problems, delivery difficulties and other factors,
which are outside the control of the Company.

Restaurant operating
expense as a percentage of restaurant sales decreased to 43.1% for the second
quarter of 2004 from 43.7% for the second quarter of 2003 and decreased slightly
to 42.9% for the first six months of 2004, as compared to 43.1% for the same
period of 2003. These decreases in restaurant operating expenses as a percentage
of restaurant sales for the 2004 periods as compared to the prior year are
primarily due to the favorable leveraging effect on labor, utilities and other
fixed and semi-fixed expenses of increases in average weekly sales.

Restaurant depreciation as
a percentage of restaurant sales decreased to 3.7% for the second quarter and
3.6% for the first six months of 2004, as compared to 3.8% for the same periods
of the prior fiscal year due to the favorable leveraging effect of higher
average weekly sales.

Pre-opening expense for the
second quarter of 2004 was $1,612,000, a decrease of $56,000 from the same
period of the prior year. Pre-opening expense for the first six months of 2004
was $3.2 million as compared to $2.7 million during the same period of the prior
year. The increase in pre-opening expense for the first six months of 2004, as
compared to the same period of the prior year, was primarily due to accelerated
expenditures in the first quarter of 2004, resulting from a greater number of
planned new restaurant openings in 2004, as compared to 2003.

General and administrative
expenses, as a percentage of total revenues, decreased to 5.8% for the second
quarter of 2004 from 5.9% for the same period in 2003, and decreased to 5.8% for
the first six months of 2004 from 6.0% for the same period of 2003. These
decreases were principally due to greater leverage of fixed and semi-fixed
general and administrative expenses resulting from higher average weekly sales
volumes.

As a result of the
relationships between revenues and expenses discussed above, the Companys
operating income increased to $20.2 million for the second quarter of 2004 and
increased to $42.6 million for the first six months of 2004 as compared to $16.4
million and $34.1 million, respectively, for the same periods of the prior year.

Interest expense, net
decreased to $207,000 in the second quarter of 2004, and $323,000 for the first
six months of 2004, from $213,000 and $459,000 during the same periods of the
prior year, primarily due to an increase in the level of capitalized interest
associated with the Companys new restaurant construction program. The
Company had no amounts outstanding under the revolving credit facility during
2004 or 2003.

Minority interest expense
increased to $92,000 for the second quarter and $201,000 for the first six
months of 2003, from $82,000 and $200,000 for the same periods of the prior
year, which reflects the joint venture partners share of the increased
profitability of the Companys three joint venture restaurants.

Income tax expense for the
second quarter and first six months of 2004 was 33.25% of earnings before income
taxes, which reflects the effective tax rate expected to be applicable for the
full 2004 fiscal year. These rates in 2004 compared to a rate of 32.5% for the
second quarter and first six months of 2003, which reflected the effective
income tax rate for the full 2003 fiscal year. The Companys effective
income tax rate differs from applying the statutory federal income tax rate of
35% to pre-tax income, primarily due to employee FICA tip tax credits and work
opportunity tax credits partially offset by state income taxes.

Net earnings increased to
$13.3 million for the second quarter of 2004 from net earnings of $10.8 million
for the second quarter of 2003 and increased to $28.1 million for the six months
ended June 27, 2004 from $22.5 million for the six months ended June 29, 2003,
reflecting the net effect of the items discussed above.

# Liquidity and Capital Resources:

The Company requires
capital primarily for the development of new restaurants, selected acquisitions
and the remodeling of existing restaurants. During the first six months of 2004
the Companys principal sources of working capital were cash provided by
operating activities ($36.8 million) and proceeds from the exercise of employee
stock options ($3.0 million). For the first six months of 2004, the principal
uses of working capital were capital expenditures ($46.6 million) for new and
improved facilities, the purchase of short-term investments ($2.2 million) and
the purchase of common stock for treasury ($8.2 million). As of June 27, 2004,
the Company had no borrowings outstanding under its $100 million revolving
credit facility.

The Company intends to open
an aggregate 23 to 24 Company-owned LongHorn Steakhouse restaurants, three
Bugaboo Creek Steak House restaurants and three The Capital Grille restaurants
in fiscal year 2004. The Company estimates that its capital expenditures for
fiscal year 2004 will be approximately $83-$88 million. During the first six
months of 2004, the Company opened 14 LongHorn Steakhouse restaurants, one The
Capital Grille restaurant and one Bugaboo Creek Steak House restaurant.
Management believes that available cash, cash provided by operations, and
available borrowings under the Companys $100 million revolving credit
facility will provide sufficient funds to finance the Companys expansion
plans through the year 2005.

Since substantially all
sales in the Companys restaurants are for cash, and accounts payable are
generally due in seven to 30 days, the Company operates with little or negative
working capital.

# Forward-Looking Statements

Statements contained in
this report concerning liquidity and capital resources and future operating
results contain certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements include
statements regarding the intent, belief or current expectations of the Company
and members of its management team, as well as assumptions on which such
statements are based. All forward-looking statements in this Form 10-Q are based
upon information available to the Company on the date of this report.
Forward-looking statements involve a number of risks and uncertainties, and in
addition to the factors discussed elsewhere in this Form 10-Q, other factors
that could cause actual results, performance or developments to differ
materially from those expressed or implied by those forward-looking statements
include the following: failure of facts to conform to necessary management
estimates and assumptions regarding financial and operating matters; the
Companys ability to identify and secure suitable locations for new
restaurants on acceptable terms, open the anticipated number of new restaurants
on time and within budget, achieve anticipated rates of same store sales, hire
and train additional restaurant personnel and integrate new restaurants into its
operations; the continued implementation of the Companys business
discipline over a large restaurant base; unexpected increases in cost of sales
or employee, pre-opening or other expenses; the economic conditions in the new
markets into which the Company expands and possible uncertainties in the
customer base in these areas; fluctuations in quarterly operating results;
seasonality; unusual weather patterns or events; changes in customer dining
patterns; the impact of any negative publicity or public attitudes related to
the consumption of beef; disruption of established sources of product supply or
distribution; competitive pressures from other national and regional restaurant
chains; legislation affecting the restaurant industry; business conditions, such
as inflation or a recession, or other negative effect on dining patterns, or
some other negative effect on the economy, in general, including (without
limitation) war, insurrection and/or terrorist attacks on United States soil;
growth in the restaurant industry and the general economy; changes in monetary
and fiscal policies, laws and regulations; and the risks identified from time to
time in the Companys SEC reports, including the Companys Annual
Report on Form 10-K for 2003, registration statements and public announcements.
The Company undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results over time.

# Item 3. Quantitative and Qualitative Disclosures About Market Risk

# Interest Rate Risk

The Company may be exposed
to market risk from changes in interest rates on debt.

As of June 27, 2004, the
Company had no borrowings outstanding under its $100 million revolving credit
facility. Amounts outstanding under such credit facility bear interest at LIBOR
plus a margin of 1.25% to 2.0% (depending on the Companys leverage ratio),
or the administrative agents prime rate of interest plus a margin of 0% to
0.75% (depending on the Companys leverage ratio) at the Companys
option. Accordingly, the Company may be exposed to the impact of interest rate
fluctuations. To achieve the Companys objective of managing its exposure
to interest rate changes, the Company may from time to time use interest rate
swaps.

# Cash
Equivalents and Investment Portfolio

The Company invests
portions of its excess cash, if any, in highly liquid investments. At June 27,
2004, the Company had $6.2 million invested in high-grade overnight repurchase
agreement cash equivalents, and $26.3 million in short-term investments in the
form of Federal, state and municipal bonds. As of June 27, 2004, the Company has
classified all short-term investments as trading securities. The market risk on
such investments is minimal due to their short-term nature.

# Item 4.  Controls and Procedures

In accordance with the
Securities Exchange Act Rules 13a-15 and 15d-15, the Companys management,
under the supervision of the Chief Executive Officer and Chief Financial
Officer, conducted an evaluation of the effectiveness of the design and
operation of the Companys disclosure controls and procedures as of the end
of the period covered by this report. Based on that evaluation, the
Companys Chief Executive Officer and Chief Financial Officer concluded
that the design and operation of the Companys disclosure controls and
procedures were effective. There have been no significant changes in internal
controls over financial reporting or in other factors that could significantly
affect internal controls over financial reporting subsequent to the date of such
evaluation.

# Part II - Other Information

Item 1. Legal Proceedings

None

# Item 2.  Changes in Securities and Use of Proceeds

None

# Item 3. Defaults Upon Senior Securities

None

# Item 4. Submission of Matters to a Vote of Securities Holders

The 2004 Annual Meeting of
Shareholders of the Company was held on May 10, 2004 at which the following
proposals were voted upon by the shareholders: (i) election of three Class III
directors to serve until the 2007 Annual Meeting of Shareholders and the
election of one Class I director to serve until the 2005 Annual Meeting of
Shareholders; (ii) approval of amendments to the RARE Hospitality International,
Inc. Amended and Restated 2002 Long-Term Incentive Plan; and (iii) ratification
of the selection of KPMG LLP as the Companys independent auditors for the
fiscal year ending December 26, 2004. Holders of 33,964,193 shares of the
Companys common stock were entitled to vote at that meeting. The
shareholders elected three Class III directors with a term expiring at the 2007
Annual Meeting and one Class I director with a term expiring at the 2005 Annual
Shareholder Meeting. As to each of the following named individuals, the holders
of the indicated number of shares of the Companys common stock voted for
his election, and the holders of the indicated number of shares withheld
authority to vote for election. There were no broker non-votes.

`Shares                          Shares Withholding
Class III                                  Voting For:                            Authority:
James D. Dixon                             30,709,728                               893,295
Eugene I. Lee, Jr.                         28,809,735                             2,793,288
Ronald W. San Martin                       16,076,522                            15,526,501

Class I
Roger L. Boeve                             30,611,785                               991,238`

Carolyn H. Byrd,  Philip J. Hickey,  Jr., Dick R.  Holbrook,  Don L. Chapman,  Lewis H. Jordan and George W.
McKerrow,  Sr. continued their terms as directors.  Amendments to the RARE Hospitality  International,  Inc.
Amended and Restated 2002  Long-Term  Incentive  Plan were approved as follows:  22,100,880  shares voted in
favor of  approval;  7,749,874  shares voted  against  approval;  10,242  shares  abstained;  and there were
1,742,027  broker  non-votes.  The  selection  of KPMG LLP as  independent  auditors for the Company for the
fiscal  year  ending  December  26,  2004 was  ratified  as  follows:  29,132,565  shares  voted in favor of
ratification;  2,448,323 shares voted against the  ratification;  22,134 shares  abstained;  and there was 1
broker non-vote.

# Item 5. Other Information

None

# Item 6. Exhibits and Reports on Form 8-K

| | (a) | Exhibits Filed.
             31(a) -- Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the
             Exchange Act.
             31(b) -- Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the
             Exchange Act.
             32(a) -- Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
             adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1).
             32(b) -- Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
             906 of the Sarbanes-Oxley Act of 2002. (1).

             (1)  These exhibits are deemed to accompany this report and are not "filed" as part of the report.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Reports filed on Form 8-K.
             None
| | --- | --------------------------------------------

---

# Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

               /s/ W. Douglas Benn

               W. Douglas Benn
               Executive Vice President, Finance
               and Chief Financial Officer
               (Principal Financial and
               Accounting Officer)

Date:   August 5, 2004

---

# Exhibit 31(a)

# CERTIFICATION PURSUANT TO
                                                SECTION 302 OF THE
                                            SARBANES-OXLEY ACT OF 2002

I, Philip J. Hickey, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of RARE Hospitality International, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit
    to state a material fact necessary to make the statements made, in light of the circumstances under
    which such statements were made, not misleading with respect to the period covered by this quarterly
    report;
3. Based on my knowledge, the financial statements, and other financial information included in this
    quarterly report, fairly present in all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
    report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  for the
    registrant and we have:

    a)       Designed such disclosure controls and procedures, or caused such disclosure controls and
        procedures to be designed under our supervision, to ensure that material information relating to
        the registrant, including its consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this quarterly report is being prepared;

    b)       Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in
        this Quarterly report our conclusions about the effectiveness of the disclosure controls and
        procedures, as of the end of the period covered by this Quarterly report based on such evaluation;
        and

    c)       Disclosed in this quarterly report any change in the registrant's internal control over financial
        reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
        likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation
     of internal control over financial reporting, to the registrant's auditors and the audit committee of
     registrant's board of directors (or persons performing the equivalent functions):

    a)       All significant deficiencies and material weaknesses in the design or operation of internal controls over financial
        reporting which are reasonably likely to adversely affect the registrant's ability to record,
        process, summarize and report financial information; and

    b)       Any fraud, whether or not material, that involves management or other employees who have a
        significant role in the registrant's internal control over financial reporting.

/s/ Philip J. Hickey, Jr.
               Philip J. Hickey, Jr.
               Chairman of the Board and
               Chief Executive Officer

               August 5, 2004

---

# Exhibit 31(b)

# CERTIFICATION PURSUANT TO
                                                SECTION 302 OF THE
                                            SARBANES-OXLEY ACT OF 2002

I, W. Douglas Benn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of RARE Hospitality International, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit
    to state a material fact necessary to make the statements made, in light of the circumstances under
    which such statements were made, not misleading with respect to the period covered by this quarterly
    report;
3. Based on my knowledge, the financial statements, and other financial information included in this
    quarterly report, fairly present in all material respects the financial condition, results of
    operations and cash flows of the registrant as of, and for, the periods presented in this quarterly
    report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  for the
    registrant and we have:

    a)       Designed such disclosure controls and procedures, or caused such disclosure controls and
        procedures to be designed under our supervision, to ensure that material information relating to
        the registrant, including its consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this quarterly report is being prepared;

    b)       Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in
        this Quarterly report our conclusions about the effectiveness of the disclosure controls and
        procedures, as of the end of the period covered by this Quarterly report based on such evaluation;
        and

    c)       Disclosed in this quarterly report any change in the registrant's internal control over financial
        reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth
        fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
        likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation
     of internal control over financial reporting, to the registrant's auditors and the audit committee of
     registrant's board of directors (or persons performing the equivalent functions):

    a)       All significant deficiencies and material weaknesses in the design or operation of internal controls over financial
        reporting which are reasonably likely to adversely affect the registrant's ability to record,
        process, summarize and report financial information; and

    b)       Any fraud, whether or not material, that involves management or other employees who have a
        significant role in the registrant's internal control over financial reporting.

/s/ W. Douglas Benn
               W. Douglas Benn
               Executive Vice President, Finance and
               Chief Financial Officer
               August 5, 2004

---

# Exhibit 32(a)

# CERTIFICATION PURSUANT TO SECTION 906 OF THE
                                               SARBANES-OXLEY ACT OF 2002

In connection with the
Quarterly Report of RARE Hospitality International, Inc. (the
Company) on Form 10-Q for the period ended June 27, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the
Report), I, Philip J. Hickey, Jr., Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The  Report  fully  complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
        Exchange Act of 1934, as amended; and
2. The information  contained in the Report fairly presents,  in all material  respects,  the financial
        condition and results of operations of the Company.

/s/ Philip J. Hickey, Jr.
Philip J. Hickey, Jr.
Chief Executive Officer
August 5, 2004

A signed original of this
written statement required by Section 906, or other document authenticating,
acknowledging, or otherwise adopting the signature that appears in typed form
within the electronic version of this written statement required by Section 906,
has been provided to RARE Hospitality International, Inc. and will be retained
by RARE Hospitality International, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.

---

# Exhibit 32(b)

# CERTIFICATION PURSUANT TO SECTION 906 OF THE
                                               SARBANES-OXLEY ACT OF 2002

In connection with the
Quarterly Report of RARE Hospitality International, Inc. (the
Company) on Form 10-Q for the period ended June 27, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the
Report), I, W. Douglas Benn, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

1. The  Report  fully  complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
        Exchange Act of 1934, as amended; and
2. The information  contained in the Report fairly presents,  in all material  respects,  the financial
        condition and results of operations of the Company.

/s/ W. Douglas Benn
W. Douglas Benn
Chief Financial Officer
August 5, 2004

A signed original of this
written statement required by Section 906, or other document authenticating,
acknowledging, or otherwise adopting the signature that appears in typed form
within the electronic version of this written statement required by Section 906,
has been provided to RARE Hospitality International, Inc. and will be retained
by RARE Hospitality International, Inc. and furnished to the Securities and
Exchange Commission or its staff upon request.