Darden Restaurants Inc (DRI)

Return on total capital

		May 26, 2024	Feb 25, 2024	Nov 26, 2023	Aug 27, 2023	May 28, 2023	Feb 26, 2023	Nov 27, 2022	Aug 28, 2022	May 29, 2022	Feb 27, 2022	Nov 28, 2021	Aug 29, 2021	May 30, 2021	Feb 28, 2021	Nov 29, 2020	Aug 30, 2020	May 31, 2020	Feb 23, 2020	Nov 24, 2019	Aug 25, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,314,200	1,293,300	1,255,800	1,210,500	1,201,800	1,165,500	1,116,400	1,125,800	1,162,200	1,147,400	994,600	872,700	648,700	-266,800	-136,500	-97,000	47,900	869,800	857,000	844,900
Long-term debt	US$ in thousands	—	—	—	—	—	880,900	885,800	895,100	901,000	916,400	929,000	936,700	929,800	929,700	929,400	929,100	928,800	928,500	928,200	928,000
Total stockholders’ equity	US$ in thousands	2,242,500	2,180,900	2,039,700	2,148,000	2,201,500	2,043,900	2,020,900	2,064,100	2,198,200	2,285,800	2,543,000	2,752,400	2,813,100	2,575,500	2,455,100	2,375,000	2,331,200	2,341,200	2,273,700	2,381,300
Return on total capital		58.60%	59.30%	61.57%	56.35%	54.59%	39.85%	38.41%	38.04%	37.50%	35.83%	28.65%	23.66%	17.33%	-7.61%	-4.03%	-2.94%	1.47%	26.60%	26.77%	25.53%

May 26, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,314,200K ÷ ($—K + $2,242,500K)
= 58.60%

The return on total capital for Darden Restaurants Inc has shown a generally positive trend over the past several quarters. It has consistently remained above 20% for the majority of the time period, indicating that the company has been efficient in generating returns from its total capital employed in its operations. The ratio peaked at 61.57% in the November 26, 2023 period, showcasing a strong performance in capital utilization.

However, it is worth noting that there was a significant decline in the return on total capital in the most recent quarter, dropping to -7.61% on February 28, 2021. This negative value could be a cause for concern as it may suggest that the company's capital efficiency deteriorated significantly during that period. It is essential for investors and analysts to closely monitor this metric in future quarters to assess whether this negative trend persists or if it was a temporary anomaly.