Darden Restaurants Inc (DRI)

Cash conversion cycle

May 31, 2025 Feb 28, 2025 Nov 30, 2024 Aug 31, 2024 May 31, 2024 May 26, 2024 Feb 29, 2024 Feb 25, 2024 Nov 30, 2023 Nov 26, 2023 Aug 31, 2023 Aug 27, 2023 May 31, 2023 May 28, 2023 Feb 28, 2023 Feb 26, 2023 Nov 30, 2022 Nov 27, 2022 Aug 31, 2022 Aug 28, 2022
Days of inventory on hand (DOH) days 17.75 15.34 14.72 13.69 15.54 15.83 16.45 16.85 17.58 17.61 16.25 16.17 16.37 16.69 18.05 18.39 18.09 18.03 16.52 16.91
Days of sales outstanding (DSO) days 2.83 2.04 2.46 2.00 2.43 2.48 2.31 2.36 2.69 2.67 1.97 1.96 2.64 2.71 1.99 2.06 2.65 2.62 1.84 1.84
Number of days of payables days 25.04 19.71 18.91 18.44 21.38 21.77 22.40 22.94 23.99 24.03 23.75 23.65 24.23 24.70 25.01 25.47 26.59 26.50 24.61 25.20
Cash conversion cycle days -4.45 -2.34 -1.73 -2.75 -3.40 -3.46 -3.64 -3.73 -3.73 -3.75 -5.54 -5.51 -5.22 -5.30 -4.96 -5.03 -5.86 -5.86 -6.25 -6.44

May 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.75 + 2.83 – 25.04
= -4.45

The cash conversion cycle (CCC) of Darden Restaurants Inc. demonstrates a consistent pattern of negative values over the analyzed periods, indicating that the company generally manages its working capital efficiently by collecting cash from sales faster than it pays its suppliers. Starting from August 28, 2022, with a CCC of approximately -6.44 days, the cycle remains negative throughout subsequent periods, albeit with gradual fluctuations.

Between August 2022 and November 2023, the CCC fluctuated within a relatively narrow range, roughly between -6.44 and -3.73 days. Notably, in late 2023, the cycle slightly improved (becoming less negative), reaching around -1.73 days by November 2024. This suggests a trend toward even faster cash collection relative to payment cycles. However, in early 2025, the CCC briefly moved back to more negative territory, with figures like -4.45 days, indicating a brief shift where the company took longer to collect cash relative to its payables, or sped up its payment to suppliers.

Overall, the negative and decreasing magnitude of the CCC over time reflects enhanced operational efficiency, with the company increasingly able to generate cash faster than it settles its obligations. The gradual trend toward less negative values may suggest a slight shift in operating or credit policies, possibly influenced by industry dynamics or strategic adjustments. Nonetheless, the persistent negative CCC implies that Darden maintains a favorable working capital management approach, consistently enabling liquidity and operational flexibility.