Darden Restaurants (Darden Restaurants) Interest Coverage

: 10.62 (As of Feb. 2024)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Darden Restaurants's Operating Income for the three months ended in Feb. 2024 was $388 Mil. Darden Restaurants's Interest Expense for the three months ended in Feb. 2024 was $-37 Mil. Darden Restaurants's interest coverage for the quarter that ended in Feb. 2024 was 10.62. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Darden Restaurants's Interest Coverage or its related term are showing as below:

DRI' s Interest Coverage Range Over the Past 10 Years
Min: 2.23 Med: 8.55 Max: 16.43
Current: 10.42

DRI's Interest Coverage is ranked better than
61.33% of 256 companies
in the Restaurants industry
Industry Median: 6.835 vs DRI: 10.42

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Darden Restaurants Interest Coverage Historical Data

The historical data trend for Darden Restaurants's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Darden Restaurants Annual Data

Trend

May14

May15

May16

May17

May18

May19

May20

May21

May22

May23

Interest Coverage

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15.77

7.04

10.05

16.43

13.37

Darden Restaurants Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
Interest Coverage	Get a 7-Day Free Trial															17.92	17.03	8.62	7.71	10.62

Competitive Comparison

For the Restaurants subindustry, Darden Restaurants's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Darden Restaurants Interest Coverage Distribution

For the Restaurants industry and Consumer Cyclical sector, Darden Restaurants's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Darden Restaurants's Interest Coverage falls into.

Darden Restaurants Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Darden Restaurants's Interest Coverage for the fiscal year that ended in May. 2023 is calculated as

Here, for the fiscal year that ended in May. 2023, Darden Restaurants's Interest Expense was $-89 Mil. Its Operating Income was $1,191 Mil. And its Long-Term Debt & Capital Lease Obligation was $4,598 Mil.

Interest Coverage	=	-1	*	Operating Income (A: May. 2023 )	/	Interest Expense (A: May. 2023 )
	=	-1	*	1191.2	/	-89.1
	=	13.37

Darden Restaurants's Interest Coverage for the quarter that ended in Feb. 2024 is calculated as

Here, for the three months ended in Feb. 2024, Darden Restaurants's Interest Expense was $-37 Mil. Its Operating Income was $388 Mil. And its Long-Term Debt & Capital Lease Obligation was $5,147 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Feb. 2024 )	/	Interest Expense (Q: Feb. 2024 )
	=	-1	*	387.8	/	-36.5
	=	10.62

The higher the ratio, the stronger the company's Financial Strength is.

Darden Restaurants (NYSE:DRI) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Darden Restaurants Interest Coverage Related Terms

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Darden Restaurants (Darden Restaurants) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Darden Restaurants Inc (NYSE:DRI) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

DDN:Germany DDN:Germany

Address

1000 Darden Center Drive, Orlando, FL, USA, 32837

Website

https://www.darden.com

Darden Restaurants is the largest restaurant operator in the U.S. full-service space, with consolidated revenue of $10.5 billion in fiscal 2023 resulting in 3%-4% full-service market share (per NRA data and our calculations). The company maintains a portfolio of 10 restaurant brands: Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Ruth's Chris, Yard House, The Capital Grille, Seasons 52, Eddie V's, Bahama Breeze, and The Capital Burger. Darden generates revenue almost exclusively from company-owned restaurants, though a small network of franchised restaurants and consumer-packaged goods sales through the traditional grocery channel contribute modestly. As of the end of its fiscal 2023, the company operated 1,914 restaurants in the U.S.

Executives

John W. Madonna	officer: SVP, Corporate Controller	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Douglas J. Milanes	officer: SVP, Chief Supply Chain Ofcr	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Melvin John Martin	officer: President, SRG	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Sarah H. King	officer: SVP, Chief HR Officer	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Susan M. Connelly	officer: SVP, Chief Comm & PA Officer	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Lee Eugene I Jr	officer: President, Speciality Rest Grp	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Rajesh Vennam	officer: SVP, CFO and Treasurer	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Ricardo Cardenas	officer: SVP Chief Strategy Officer	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Matthew R Broad	officer: SVP General Counsel	C/O DARDEN RESTAURANTS, INC., 1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Todd Burrowes	officer: President, LongHorn Steakhouse	150 WEST CHURCH AVENUE, MARYVILLE TN 37801
Daniel J. Kiernan	officer: President, Olive Garden	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
William S Simon	director	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Nana Mensah	director	1301 AVENUE OF THE AMERICAS, NEW YORK NY 10019
Richard L. Renninger	officer: SVP, Chief Development Officer	1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Timothy J Wilmott	director	C/O PENN NATIONAL GAMING, INC., 825 BERKSHIRE BLVD., SUITE 200, WYOMISSING PA 19610