Darden Restaurants Inc (DRI)

Return on total capital

		May 31, 2025	May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	1,185,800	1,315,300	1,314,200	1,205,600	1,169,100
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	2,311,300	2,242,500	2,242,500	2,201,500	2,201,500
Return on total capital		51.30%	58.65%	58.60%	54.76%	53.10%

May 31, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,185,800K ÷ ($—K + $2,311,300K)
= 51.30%

The return on total capital (ROTC) for Darden Restaurants Inc exhibits notable fluctuations across the analyzed periods. As of May 28, 2023, the ROTC stands at 53.10%, reflecting the company's profitability relative to its total capital employed at that time. This figure increases slightly by May 31, 2023, reaching 54.76%, indicating a marginal improvement in the efficiency with which the company is generating profits from its capital base within that period.

A more significant rise is observed by May 26, 2024, where the ROTC reaches 58.60%, and it sustains a similar level at May 31, 2024, at 58.65%. This upward trend suggests that Darden Restaurants has been enhancing its capacity to generate returns relative to its total capital, potentially through improved operational efficiencies, revenue growth, or effective capital management during this phase.

However, by May 31, 2025, the ROTC declines to 51.30%, indicating a decrease in the company's efficiency or profitability in terms of capital utilization. This reduction could be attributed to factors such as increased operational costs, investment in growth initiatives that have yet to yield proportional returns, or broader market conditions affecting performance.

Overall, the data portrays a trend of initial growth in return on total capital, peaking around mid-2024, followed by a decline into 2025. The fluctuations highlight varying periods of operational efficiency and profitability, which merit further investigation into underlying business dynamics, capital deployment strategies, and external factors influencing these metrics.