Darden Restaurants, Inc. stock research
FY2024 Q3
Darden Restaurants (DRI) Gross Margin — Quarter Ended Feb 25, 2024
Revenue increased from the prior quarter and from the same quarter last year, while cost of revenue also rose. Gross profit and gross margin both improved compared to both prior periods, indicating a favorable shift in the relationship between revenue and costs.
Gross margin takeaway
Quarter ended Feb 25, 2024 · FY2024 Q3
Revenue increased from the prior quarter and from the same quarter last year, while cost of revenue also rose. Gross profit and gross margin both improved compared to both prior periods, indicating a favorable shift in the relationship between revenue and costs.
- The strongest observable driver is the growth in gross profit outpacing the growth in cost of revenue, leading to a higher gross margin. This is reflected in the widening gap between revenue and cost of revenue.
- Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was also higher. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
20.6%
Gross profit
$613.9M
Revenue
$3.0B
Cost of revenue
$2.4B
Quarter-over-quarter change
+1.8 pts
Year-over-year change
+0.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| May 28, 2023 | $2.8B | $599.7M | $2.2B | 21.7% |
| Aug 27, 2023 | $2.7B | $519.1M | $2.2B | 19.0% |
| Nov 26, 2023 | $2.7B | $513.3M | $2.2B | 18.8% |
| Feb 25, 2024 | $3.0B | $613.9M | $2.4B | 20.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Nov 26, 2023
+1.8 pts
Year-over-year change
Feb 26, 2023
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the growth in gross profit outpacing the growth in cost of revenue, leading to a higher gross margin. This is reflected in the widening gap between revenue and cost of revenue.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was also higher. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved.
Monitor whether cost of revenue continues to rise at a rate similar to or faster than revenue, as that would pressure gross margin.