ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Darden Restaurants's annualizedNet Income for the quarter that ended in Aug. 2024 was $829 Mil.
Darden Restaurants's average Total Assets over the quarter that ended in Aug. 2024 was $11,339 Mil. Therefore, Darden Restaurants's annualized ROA % for the quarter that ended in Aug. 2024 was 7.31%.
The historical rank and industry rank for Darden Restaurants's ROA % or its related term are showing as below:
DRI'
s ROA % Range Over the Past 10 Years
Min: -0.66 Med: 9.59 Max: 12.56
Current: 9.19
During the past 13 years, Darden Restaurants's highest ROA % was 12.56%. The lowest was -0.66%. And the median was 9.59%.
DRI's ROA % is ranked better than 83.86% of 347
companies
in the Restaurants industry
Industry Median: 2.46
vs DRI: 9.19
Darden Restaurants ROA % Historical Data
The historical data trend for Darden Restaurants's ROA % 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.
Competitive Comparison of Darden Restaurants's ROA %
For the Restaurants subindustry, Darden Restaurants's ROA %, along with its competitors' market caps and ROA % 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's ROA % Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Darden Restaurants's ROA % distribution charts can be found below:
* The bar in red indicates where Darden Restaurants's ROA % falls into.
Darden Restaurants ROA % Calculation
Darden Restaurants's annualized ROA % for the fiscal year that ended in May. 2024 is calculated as:
* 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Aug. 2024) net income data.
ROA % is displayed in the 30-year financial page.
Darden Restaurants (NYSE:DRI) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Aug. 2024) net income data. The Revenue data used here is four times the quarterly (Aug. 2024) revenue data.
* 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Darden Restaurants ROA % Related Terms
Thank you for viewing the detailed overview of Darden Restaurants's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
Darden Restaurants is the largest restaurant operator in the us full-service space, with consolidated revenue of $11.4 billion in fiscal 2024 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 2024, the company operated 2,031 restaurants in the us.
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