DR

Darden Restaurants, Inc. stock research

Nov 26, 2023

FY2024 Q2

Darden Restaurants (DRI) Gross Margin — Quarter Ended Nov 26, 2023

Revenue remained stable compared to the prior quarter, while gross profit declined slightly, causing gross margin to weaken. Relative to the same quarter last year, both revenue and gross profit increased, and gross margin improved.

Gross margin takeaway

Quarter ended Nov 26, 2023 · FY2024 Q2

Revenue remained stable compared to the prior quarter, while gross profit declined slightly, causing gross margin to weaken. Relative to the same quarter last year, both revenue and gross profit increased, and gross margin improved.

  • The most notable margin driver was the year-over-year improvement in gross margin, as gross profit rose more than revenue.
  • Compared to the prior quarter, gross margin weakened slightly, while compared to the same quarter last year, it improved.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

18.8%

Gross profit

$513.3M

Revenue

$2.7B

Cost of revenue

$2.2B

Quarter-over-quarter change

-0.2 pts

Year-over-year change

+2.3 pts

Quarterly gross margin trend

A four-quarter view of the revenue and direct-cost bridge behind gross margin.

PeriodRevenueGross profitCost of revenueGross margin
Feb 26, 2023$2.8B$556.5M$2.2B20.0%
May 28, 2023$2.8B$599.7M$2.2B21.7%
Aug 27, 2023$2.7B$519.1M$2.2B19.0%
Nov 26, 2023$2.7B$513.3M$2.2B18.8%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Aug 27, 2023

-0.2 pts

Year-over-year change

Nov 27, 2022

+2.3 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

The most notable margin driver was the year-over-year improvement in gross margin, as gross profit rose more than revenue.

Compared to the prior quarter, gross margin weakened slightly, while compared to the same quarter last year, it improved.

Monitor the sequential weakening of gross margin, especially given that revenue was unchanged.