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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Darden Restaurants's Sloan Ratio for the quarter that ended in May. 2026 was 0.54%.
As of May. 2026, Darden Restaurants has a Sloan Ratio of 0.54%, indicating the company is in the safe zone and there is no funny business with accruals.
Darden Restaurants (NYSE:DRI) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of May. 2026, Darden Restaurants has a Sloan Ratio of 0.54%, indicating the company is in the safe zone and there is no funny business with accruals.
Darden Restaurants Sloan Ratio % Related Terms
Darden Restaurants Sloan Ratio % Historical Data
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The historical data trend for Darden Restaurants's Sloan Ratio % 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.
For the Restaurants subindustry, Darden Restaurants's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % 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 Sloan Ratio % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Darden Restaurants's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Darden Restaurants's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Darden Restaurants's Sloan Ratio for the fiscal year that ended in May. 2026 is calculated as
Darden Restaurants's Net Income for the trailing twelve months (TTM) ended in May. 2026 was 257.8 (Aug. 2025 ) + 237.2 (Nov. 2025 ) + 306.8 (Feb. 2026 ) + 404.9 (May. 2026 ) = $1,207 Mil.
Darden Restaurants's Cash Flow from Operations for the trailing twelve months (TTM) ended in May. 2026 was 342.5 (Aug. 2025 ) + 320.4 (Nov. 2025 ) + 615.7 (Feb. 2026 ) + 569.7 (May. 2026 ) = $1,848 Mil.
Darden Restaurants's Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2026 was -159.3 (Aug. 2025 ) + -204.6 (Nov. 2025 ) + -159.2 (Feb. 2026 ) + -188.3 (May. 2026 ) = $-711 Mil.
* 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.
Darden Restaurants (DRI) has a Sloan Ratio % of 0.54% as of May. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Darden Restaurants and its competitors.
Is Darden Restaurants' Sloan Ratio % too high?
Darden Restaurants' current Sloan Ratio % is 0.54%. Overall, Darden Restaurants has a GF Score™ of 85/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Darden Restaurants' Sloan Ratio % compare to YUMC and TXRH?
Darden Restaurants' Sloan Ratio % of 0.54% can be compared against companies in the Restaurants industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Restaurants company?
A good Sloan Ratio % depends on the Restaurants industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Darden Restaurants and its competitors. Darden Restaurants's current Sloan Ratio % is 0.54%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Darden Restaurants stock overvalued right now?
Based on GuruFocus' analysis, Darden Restaurants (DRI) is currently considered Fairly Valued. The stock's GF Value™ is $210.45, compared to a current price of $208.85 — trading 0.8% below its estimated fair value. The current Sloan Ratio % is 0.54%. Darden Restaurants' overall GF Score™ is 85/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Darden Restaurants (DRI), the current Sloan Ratio % is 0.54% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Darden Restaurants (DRI) Overvalued in 2026?
Based on GuruFocus' analysis, Darden Restaurants stock appears to be undervalued.
The current stock price of $208.85 is trading 0.8% below its estimated GF Value™ of $210.45.
GuruFocus considers Darden Restaurants to be Fairly Valued.
Key valuation signals for DRI:
Sloan Ratio %: 0.54%
GF Value™: $210.45 vs. price of $208.85 (0.8% below fair value)
No single metric tells the full story. See the DRI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Darden Restaurants is the largest global full-service dining operator, with over $12 billion in system sales across 2,159 company-owned stores at the end of fiscal 2025, spanning the US and Canada. The firm operates 10 banners in four segments, including Olive Garden (43% of sales), LongHorn Steakhouse (25%), and fine dining (21%), which includes The Capital Grille, Ruth's Chris, and Eddie V's. The other 11% of sales comes from smaller concepts such as Yard House and Cheddar's. Darden primarily generates revenue through sales of food and beverage items at its company-owned restaurants. It also earns royalties on sales from 154 franchised locations in US and international markets, which sit within the other segment but are immaterial to consolidated results.
85GF Score
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