Gross Margin % is calculated as gross profit divided by its revenue. Darden Restaurants's Gross Profit for the
three
months ended in Feb. 2021 was $337 Mil. Darden Restaurants's Revenue for the
three
months ended in Feb. 2021 was $1,733 Mil. Therefore, Darden Restaurants's Gross Margin % for the quarter that ended in Feb. 2021 was 19.47%.
Warning Sign:
Darden Restaurants Inc gross margin has been in long term decline. The average rate of decline per year is -2.4%.
NYSE:DRI'
s Gross Margin % Range Over the Past 10 Years
Min: 15.59 Med: 21.81 Max: 24.01
Current: 15.59
15.59
-
24.01
During the past 13 years, the highestGross Margin % of Darden Restaurants was 24.01%. The lowest was 15.59%. And the median was 21.81%.
NYSE:DRI's Gross Margin % is ranked lower than
86% of the 324
Companies
in the Restaurants industry.
( Industry Median: 42.54
vs. NYSE:DRI: 15.59
)
Darden Restaurants had a gross margin of 19.47% for the quarter that ended in Feb. 2021 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Darden Restaurants was -2.40% per year.
Darden Restaurants Gross Margin % Historical Data
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
* Premium members only.
Darden Restaurants Annual Data
May11
May12
May13
May14
May15
May16
May17
May18
May19
May20
Gross Margin %
22.23
21.89
21.60
21.73
18.04
Darden Restaurants Quarterly Data
May16
Aug16
Nov16
Feb17
May17
Aug17
Nov17
Feb18
May18
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
Gross Margin %
22.93
0.83
19.73
19.04
19.47
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.
Darden Restaurants Gross Margin % Distribution
* The bar in red indicates where Darden Restaurants's Gross Margin % falls into.
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange 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.
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 had a gross margin of 19.47% for the quarter that ended in Feb. 2021 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
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