Darden Restaurants Inc (DRI)

Cash conversion cycle

May 31, 2025 May 31, 2024 May 26, 2024 May 31, 2023 May 28, 2023
Days of inventory on hand (DOH) days 31.10 11.81 24.71 12.50 26.98
Days of sales outstanding (DSO) days 2.83 2.53 2.53 2.79 2.80
Number of days of payables days 43.88 16.24 33.98 18.51 39.95
Cash conversion cycle days -9.94 -1.90 -6.74 -3.22 -10.16

May 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.10 + 2.83 – 43.88
= -9.94

The analysis of Darden Restaurants Inc's cash conversion cycle (CCC) over the provided periods reveals fluctuations within a relatively narrow range, indicating operational consistency in managing working capital. As of May 28, 2023, the CCC was approximately -10.16 days, suggesting that Darden effectively collects receivables and manages inventories in such a way that cash inflows precede cash outflows, resulting in a negative cycle. By May 31, 2023, the CCC improved to approximately -3.22 days, indicating a reduction in the negative cycle but still maintaining a position where cash inflows are ahead of outflows.

In the subsequent year, May 26, 2024, the CCC shifted to approximately -6.74 days, reflecting a slight deterioration in the negative cycle but still remaining negative overall, which continues to demonstrate efficient cash flow management. By May 31, 2024, the CCC further improved to about -1.90 days, approaching a near-balance point where cash inflows and outflows are closely aligned.

The latest data point, May 31, 2025, shows a CCC of approximately -9.94 days, indicating a return to a more favorable position similar to the initial periods analyzed. Throughout these periods, Darden Restaurants Inc consistently maintains a negative CCC, which implies the company typically collects receivables and manages inventory in a manner that allows it to operate with a net cash inflow before settling obligations. The cyclical variation in the CCC indicates responsive adjustments in operational practices, but overall, the trend underscores effective management of working capital to support liquidity and operational efficiency.