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Darden Restaurants Inc  (NYSE:DRI) Gross Profit: $1,569 Mil (TTM As of May. 2017)

Darden Restaurants Inc's gross profit for the three months ended in May. 2017 was $438 Mil. Darden Restaurants Inc's gross profit for the trailing twelve months (TTM) ended in May. 2017 was $1,569 Mil.

Gross Margin % is calculated as gross profit divided by its revenue. Darden Restaurants Inc's gross profit for the three months ended in May. 2017 was $438 Mil. Darden Restaurants Inc's Revenue for the three months ended in May. 2017 was $1,935 Mil. Therefore, Darden Restaurants Inc's Gross Margin % for the quarter that ended in May. 2017 was 22.65%.

Darden Restaurants Inc had a gross margin of 22.65% for the quarter that ended in May. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin % of Darden Restaurants Inc was 24.01%. The lowest was 20.60%. And the median was 22.13%.


Historical Data

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

* Premium members only.

Darden Restaurants Inc Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,304.40 1,295.10 1,422.50 1,541.10 1,569.40

Darden Restaurants Inc Quarterly Data

Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17
Gross Profit Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 407.90 371.70 321.00 438.50 438.20

Competitive Comparison
* 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.


Calculation

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Darden Restaurants Inc's Gross Profit for the fiscal year that ended in May. 2017 is calculated as

Gross Profit (A: May. 2017 )=Revenue - Cost of Goods Sold
=7170.2 - 5600.8
=1,569

Darden Restaurants Inc's Gross Profit for the quarter that ended in May. 2017 is calculated as

Gross Profit (Q: May. 2017 )=Revenue - Cost of Goods Sold
=1934.6 - 1496.4
=438

Gross Profit for the trailing twelve months (TTM) ended in May. 2017 was 371.7 (Aug. 2016 ) + 321 (Nov. 2016 ) + 438.5 (Feb. 20 ) + 438.2 (May. 2017 ) = $1,569 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Darden Restaurants Inc's Gross Margin % for the quarter that ended in May. 2017 is calculated as

Gross Margin % (Q: May. 2017 )=Gross Profit (Q: May. 2017 ) / Revenue (Q: May. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=438 / 1934.6
=22.65 %

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

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Darden Restaurants Inc had a gross margin of 22.65% for the quarter that ended in May. 2017 => Competition eroding margins


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