# Darden Restaurants (DRI.US)

Canonical: https://gigainvestors.com/s/DRI

Analysis as of: 2026-10-16T07:34:33.900Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $214.31 per share; close as of 2026-10-15.

Estimated value: low $139.49 per share, central $189.17 per share, high $221.68 per share. Buy at or below the central value $189.17 per share. Valuation as of 2026-10-16T07:34:33.900Z; scenarios are not confidence intervals.

Expected annual return: 9.2% at the stated quote. About 9.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 1

- Operating margin variation: 0.33×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.09×

- FY2018: 0.09×

- FY2019: 0.10×

- FY2020: 0.01×

- FY2021: 0.09×

- FY2022: 0.12×

- FY2023: 0.11×

- FY2024: 0.12×

- FY2025: 0.11×

- FY2026: 0.12×

### moat: pass

- ROIC, median of available years: 18.9%

- ROIC, second-lowest year: 10.3%

- Typical minus recent gross margin: -0.4 pp

- Typical gross margin (annual median): 21.5%

- Recent gross margin (lower of latest and 3-year median): 21.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.5%

- ROIC including acquisitions, ten-year median: 14.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 28.4%

- FY2018: 37.8%

- FY2019: 45.5%

- FY2020: 0.6%

- FY2021: 10.3%

- FY2022: 18.0%

- FY2023: 18.9%

- FY2024: 18.9%

- FY2025: 18.2%

- FY2026: 21.7%

### economics: pass

- Owner earnings / net income, 5-yr: 1.00×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $5.2B

- Net income, five-year total: $5.2B

- Return on incremental invested capital: 80.3%

- Working capital / revenue, annual change: -0.0 pp

- Working capital / revenue, change between three-year averages: -0.0 pp

- Working capital / revenue, final three-year average: -0.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

- FY2026: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 37.8% vs 18.9%

- Per-share earnings: 3.80 to 8.86 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.1%

- Ordinary dilution, 5-year annual growth: -2.5%

- Market cap gain: $12B

- Cumulative retained earnings: -$669M

- Diluted shares, 10-year annual growth: -1.1%

- Diluted shares, 5-year annual growth: -2.5%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 11.2%

- Per-share value change: $5.06

- Per-share value, starting three-year median: $3.80

- Per-share value, ending three-year median: $8.86

- Buybacks concentrated in cheaper years (correlation): 0.47

- Average buyback yield: 2.6%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $1.9B

- Cumulative net income, 10 years: $7.6B

- ROIC, first three-year median: 37.8%

- ROIC, last three-year median: 18.9%

Chart: Earnings per share; fiscal year observations.

- FY2017: $3.80

- FY2018: $4.73

- FY2019: $5.69

- FY2020: -$0.43

- FY2021: $4.77

- FY2022: $7.39

- FY2023: $7.99

- FY2024: $8.51

- FY2025: $8.86

- FY2026: $10.38

### accounting: pass

- Sloan accruals: -5.0%

- Receivables to sales index (DSRI): 1.27×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 4.3%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.54×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.36×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -7.6%

- FY2018: -7.4%

- FY2019: -9.3%

- FY2020: -7.7%

- FY2021: -5.3%

- FY2022: -3.0%

- FY2023: -5.5%

- FY2024: -5.2%

- FY2025: -5.2%

- FY2026: -5.0%

## Holders

## Price story

Price needs cash profits to grow 6.8% a year for ten years · "Darden Restaurants Gains on Menu Innovation Amid Cost Headwinds" (finance.yahoo.com, Mar 2026) · sales +9.4%

Story as of 2026-10-16T10:00:01.231Z; price observation 2026-10-15.

Price needs cash profits to grow 6.8% a year for ten years

- 2025-06-20: Darden Restaurants lifts sales forecast, beats quarterly estimates on casual dining demand ([investing.com](https://www.investing.com/news/stock-market-news/darden-restaurants-lifts-sales-forecast-beats-quarterly-estimates-on-casual-dining-demand-4103778))

- 2025-09-18: Darden Q1 Earnings Miss Estimates, Revenues Top, Stock Down ([finance.yahoo.com](https://finance.yahoo.com/news/darden-q1-earnings-miss-estimates-140800410.html))

- 2025-12-18: Darden Restaurants Lifts Full-Year Sales Outlook Following Second-Quarter Revenue Beat ([finance.yahoo.com](https://finance.yahoo.com/news/darden-restaurants-lifts-full-sales-165402650.html))

- 2026-01-06: Mizuho Sees Sales Upside at Darden (DRI), Flags Ongoing Commodity Cost Pressure ([finance.yahoo.com](https://finance.yahoo.com/news/mizuho-sees-sales-upside-darden-024137197.html))

- 2026-04-09: Beef Inflation Bites Darden: Can Pricing Power Offset Costs? ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/beef-inflation-bites-darden-pricing-132700365.html))

- 2026-09-24: Darden Restaurants falls as Q1 revenue misses expectations ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/darden-restaurants-falls-q1-revenue-114131274.html))

### Sales · FY2025–2026

sales +9.4%; source https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm; observed 2026-07-24.

- FY2017: $7.2B 

- FY2018: $8.1B 

- FY2019: $8.5B 

- FY2020: $7.8B 

- FY2021: $7.2B 

- FY2022: $9.6B 

- FY2023: $10B 

- FY2024: $11B 

- FY2025: $12B 

- FY2026: $13B 

### Gross margin · FY2026

gross margin 69.4%; source https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm; observed 2026-07-24.

- FY2017: 21.9% 

- FY2018: 21.6% 

- FY2019: 21.7% 

- FY2020: 18.0% 

- FY2021: 20.8% 

- FY2022: 20.7% 

- FY2023: 20.1% 

- FY2024: 21.4% 

- FY2025: 21.9% 

- FY2026: 69.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in restaurants; annual sales are USD 13.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); FY2026: revenue 13210900000; grossProfit 9172100000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 21.4% to 69.4% during 2024–26; it earns 18.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2024: grossProfit / revenue = 21.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2025: grossProfit / revenue = 21.9%.

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); FY2026: grossProfit / revenue = 69.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); 10-year return on capital observations [[2017,0.2835934266176614],[2018,0.37751612545300095],[2019,0.45459064710050734],[2020,0.005785820222313961],[2021,0.10266027314880755],[2022,0.1803073799238138],[2023,0.1886980260972096],[2024,0.18934852661120666],[2025,0.18158453937072935],[2026,0.21672458167379274]]; median 0.18902327635420813. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 21% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); Gross margin observations: [[2021,0.2075429746668334],[2022,0.2071651090342679],[2023,0.20111939586948646]]; range within 2 percentage points.

### Where the cash goes

Spends 14.3% of cash earnings on expansion; earns 80.3% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2017: growth capex 42600000; upkeep 272900000; owner earnings 479100000. Growth capex / owner earnings = 0.08891671884783969.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2018: growth capex 100900000; upkeep 313100000; owner earnings 596000000. Growth capex / owner earnings = 0.16929530201342283.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2019: growth capex 139100000; upkeep 336700000; owner earnings 713400000. Growth capex / owner earnings = 0.19498177740398093.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2021: growth capex 0; upkeep 269100000; owner earnings 711100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2022: growth capex 30700000; upkeep 368400000; owner earnings 952800000. Growth capex / owner earnings = 0.0322208228379513.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2023: growth capex 206000000; upkeep 387800000; owner earnings 981900000. Growth capex / owner earnings = 0.2097973317038395.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2024: growth capex 168400000; upkeep 459900000; owner earnings 1027600000. Growth capex / owner earnings = 0.16387699493966523.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); FY2025: growth capex 155800000; upkeep 516100000; owner earnings 1049600000. Growth capex / owner earnings = 0.1484375.

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); FY2026: growth capex 172900000; upkeep 561100000; owner earnings 1206700000. Growth capex / owner earnings = 0.14328333471451066.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); Incremental return on capital 0.8025393766422497, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); Dividend observations: [[2017,279100000],[2018,313500000],[2019,370800000],[2020,322300000],[2021,202600000],[2022,563000000],[2023,589800000],[2024,628400000],[2025,658500000],[2026,693000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); FY2026: cash repurchases 671700000 USD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DRI.US SharesStats.PercentInsiders = 0.301 percentage points; cache date 2026-10-16.

### What could break it

"A failure to address cost pressures" (SEC filing, Jul 2026)

- Source: https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm (filed 2026-07-24); A failure to address cost pressures

### What the price says

The price assumes cash profits grow 6.8% yearly over ten years; actual growth was 11.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-07-24); Ten-year compound average after fade. Initial solved rate 0.08406284524111773. Price 214.31; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 3.3789636504253675 → FY2026 10.375752364574376. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $64.79 per share

- 2016-11: $73.30 per share

- 2016-12: $72.72 per share

- 2017-01: $73.28 per share

- 2017-02: $74.68 per share

- 2017-03: $83.67 per share

- 2017-04: $85.19 per share

- 2017-05: $88.93 per share

- 2017-06: $90.44 per share

- 2017-07: $83.88 per share

- 2017-08: $82.09 per share

- 2017-09: $78.78 per share

- 2017-10: $82.27 per share

- 2017-11: $84.32 per share

- 2017-12: $96.02 per share

- 2018-01: $95.85 per share

- 2018-02: $92.19 per share

- 2018-03: $85.25 per share

- 2018-04: $92.86 per share

- 2018-05: $87.41 per share

- 2018-06: $107.06 per share

- 2018-07: $106.94 per share

- 2018-08: $116.04 per share

- 2018-09: $111.19 per share

- 2018-10: $106.55 per share

- 2018-11: $110.54 per share

- 2018-12: $99.86 per share

- 2019-01: $104.93 per share

- 2019-02: $112.11 per share

- 2019-03: $121.47 per share

- 2019-04: $117.60 per share

- 2019-05: $116.32 per share

- 2019-06: $121.73 per share

- 2019-07: $121.56 per share

- 2019-08: $120.98 per share

- 2019-09: $118.22 per share

- 2019-10: $112.27 per share

- 2019-11: $118.44 per share

- 2019-12: $109.01 per share

- 2020-01: $116.43 per share

- 2020-02: $97.50 per share

- 2020-03: $54.46 per share

- 2020-04: $73.79 per share

- 2020-05: $76.86 per share

- 2020-06: $75.77 per share

- 2020-07: $75.90 per share

- 2020-08: $86.67 per share

- 2020-09: $100.74 per share

- 2020-10: $91.92 per share

- 2020-11: $107.98 per share

- 2020-12: $119.12 per share

- 2021-01: $116.89 per share

- 2021-02: $137.33 per share

- 2021-03: $142.00 per share

- 2021-04: $146.72 per share

- 2021-05: $143.23 per share

- 2021-06: $145.99 per share

- 2021-07: $145.88 per share

- 2021-08: $150.65 per share

- 2021-09: $151.47 per share

- 2021-10: $144.14 per share

- 2021-11: $137.95 per share

- 2021-12: $150.64 per share

- 2022-01: $139.87 per share

- 2022-02: $145.22 per share

- 2022-03: $132.95 per share

- 2022-04: $131.73 per share

- 2022-05: $125.00 per share

- 2022-06: $113.12 per share

- 2022-07: $124.49 per share

- 2022-08: $123.71 per share

- 2022-09: $126.32 per share

- 2022-10: $143.14 per share

- 2022-11: $146.99 per share

- 2022-12: $138.33 per share

- 2023-01: $147.97 per share

- 2023-02: $142.99 per share

- 2023-03: $155.16 per share

- 2023-04: $151.93 per share

- 2023-05: $158.52 per share

- 2023-06: $167.08 per share

- 2023-07: $168.92 per share

- 2023-08: $155.51 per share

- 2023-09: $143.22 per share

- 2023-10: $145.53 per share

- 2023-11: $156.47 per share

- 2023-12: $164.30 per share

- 2024-01: $162.58 per share

- 2024-02: $170.71 per share

- 2024-03: $167.15 per share

- 2024-04: $153.41 per share

- 2024-05: $150.39 per share

- 2024-06: $151.32 per share

- 2024-07: $146.29 per share

- 2024-08: $158.15 per share

- 2024-09: $164.13 per share

- 2024-10: $160.02 per share

- 2024-11: $176.27 per share

- 2024-12: $186.69 per share

- 2025-01: $195.24 per share

- 2025-02: $200.46 per share

- 2025-03: $207.76 per share

- 2025-04: $200.64 per share

- 2025-05: $214.21 per share

- 2025-06: $217.97 per share

- 2025-07: $201.67 per share

- 2025-08: $206.94 per share

- 2025-09: $190.36 per share

- 2025-10: $180.15 per share

- 2025-11: $179.58 per share

- 2025-12: $184.02 per share

- 2026-01: $199.35 per share

- 2026-02: $213.85 per share

- 2026-03: $196.04 per share

- 2026-04: $200.56 per share

- 2026-05: $203.91 per share

- 2026-06: $206.01 per share

- 2026-07: $203.58 per share

- 2026-08: $214.26 per share

- 2026-09: $193.25 per share

- 2026-10: $214.31 per share

## Annual estimated value (USD per share)

- FY2017: low $42.64 per share, central $51.93 per share, high $60.42 per share

- FY2018: low $50.72 per share, central $62.74 per share, high $73.19 per share

- FY2019: low $60.97 per share, central $74.17 per share, high $86.09 per share

- FY2020: low $51.42 per share, central $57.82 per share, high $66.35 per share

- FY2021: low $52.14 per share, central $58.21 per share, high $66.29 per share

- FY2022: low $83.21 per share, central $112.99 per share, high $132.14 per share

- FY2023: low $106.84 per share, central $147.70 per share, high $173.04 per share

- FY2024: low $112.73 per share, central $150.97 per share, high $176.80 per share

- FY2025: low $118.39 per share, central $153.75 per share, high $179.79 per share

- FY2026: low $134.13 per share, central $181.90 per share, high $213.15 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/940944/000094094426000025/dri-20260531.htm); period 2026-05-31, filed 2026-07-24.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.