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GuruFocus has detected 5 Warning Signs with Darden Restaurants Inc \$DRI.
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Darden Restaurants Inc (NYSE:DRI)
COGS-to-Revenue
0.77 (As of Feb. 2017)

Darden Restaurants Inc's cost of goods sold for the three months ended in Feb. 2017 was \$1,440 Mil. Its revenue for the three months ended in Feb. 2017 was \$1,879 Mil.

Darden Restaurants Inc's COGS to Revenue for the three months ended in Feb. 2017 was 0.77.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Darden Restaurants Inc's Gross Margin for the three months ended in Feb. 2017 was 23.34%.

Definition

Darden Restaurants Inc's COGS to Revenue for the fiscal year that ended in May. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 5392.4 / 6933.5 = 0.78

Darden Restaurants Inc's COGS to Revenue for the quarter that ended in Feb. 2017 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 1440.2 / 1878.7 = 0.77

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

Darden Restaurants Inc's Gross Margin for the three months ended in Feb. 2017 is calculated as:

 Gross Margin = 1 - COGS to Revenue = 1 - Cost of Goods Sold / Revenue = 1 - 1440.2 / 1878.7 = 23.34 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Darden Restaurants Inc Annual Data

 May07 May08 May09 May10 May11 May12 May13 May14 May15 May16 cogs2rev 0.76 0.78 0.78 0.77 0.76 0.77 0.78 0.79 0.79 0.78

Darden Restaurants Inc Quarterly Data

 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 cogs2rev 0.81 0.78 0.77 0.78 0.80 0.77 0.77 0.78 0.80 0.77
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