Business Analysis of Darden Restaurants

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Darden Restaurants

DARDEN RESTAURANTS

Business Overview

Darden Restaurants, Inc. is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company's segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V's Prime Seafood and Wildfish Seafood Grille (Eddie V's)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues). As of May 29, 2016, the Company also had 50 restaurants operated by independent third parties pursuant to area development and franchise agreements. Olive Garden's menu includes a range of authentic Italian foods featuring fresh ingredients and a selection of imported Italian wines. LongHorn Steakhouse restaurants feature a range of menu items, including fresh steaks and chicken, as well as salmon, shrimp, ribs, pork chops, burgers and prime rib.

Darden Restaurants

Darden Restaurants


R&P Rank: 393
Sector: Restaurants
Industry:Casual Dining Restaurants
H.Q Location:Florida
Website: www.darden.com
Company Address:
1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Ph:407-245-4000

Business Analysis of Darden Restaurants

The Restaurants Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Darden Restaurants compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Darden Restaurants to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Darden Restaurants with an interactive chart.

  1. Revenue Growth: Darden Restaurants reported a revenue growth of 2.5% year-on-year during 2016. Casual Dining Restaurants Industry grew at 2.2% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Darden Restaurants spent 77.8% of its total revenues on COGS. Casual Dining Restaurants industry average (COGS share of revenue) in the same period was 73.9%
  3. R&D share of Revenues: Darden Restaurants R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Darden Restaurants spent 9.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Casual Dining Restaurants industry average SG&A spending in the same period was 8.0%
  5. Inventory share of Revenues: As a percentage of revenue, Darden Restaurants spent 2.5% of its total revenues on Inventories. Casual Dining Restaurants industry average Inventory spending in the same period was 1.7%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Darden Restaurants invested 3.5% of its total revenues on Accounts Payable (A/P) Casual Dining Restaurants industry average Accounts Payable investment in the same period was 4.0%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Darden Restaurants invested 0.9% of its total revenues on Accounts Receivable (A/R). Casual Dining Restaurants industry average Accounts Receivable investment in the same period was 3.1%
  8. PP&E share of Revenues: As a percentage of revenue, Darden Restaurants invested 29.4% of its total revenues on Property, Plants, and Equipments (PP&E). Casual Dining Restaurants industry average PPE investment in the same period was 33.6%
  9. Intangibles share of Revenues: As a percentage of revenue, Darden Restaurants invested 20.9% of its total revenues on Intangibles. Casual Dining Restaurants industry average Intangibles investment in the same period was 20.9%
  10. Net Margins: Darden Restaurants Net Margins in the year 2016 were 5.4%. Casual Dining Restaurants industry average Net Margins in the same period were 4.0%

Sector and Industry Association of Darden Restaurants

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Darden Restaurants is associated with Restaurants Sector and Casual Dining Restaurants Industry.

Restaurants sector is comprised of the following industries: Fast Food Restaurants; Fast-Casual Restaurants; Casual Dining Restaurants; Fine Dining Restaurants. The definitions for each of the industries is as follows:

  • Fast Food Restaurants industry includes fast food restaurants. Fast food restaurants are typically chains like McDonalds and Burger King. Fast food restaurants are also known in the restaurant industry as QSRs or quick-service restaurants.
  • Fast-Casual Restaurants industry include restaurants that do not offer full table service, but offer a higher quality of food with fewer frozen or processed ingredients than other fast food restaurants. It is an intermediate concept between fast food and casual dining. The category is exemplified by chains such as Noodles & Company, El Pollo Loco Holdings, Inc., and Chipotle Mexican Grill, Inc.
  • Casual Dining Restaurants industry includes restaurants that offer table side service, non-disposable dishes at a moderate price. Menu in these restaurants ranges from Italian to seafood to Mexican food.
  • Fine Dining Restaurants industry includes restaurants that are full service restaurants with specific dedicated meal courses. Décor of these restaurants features higher-quality materials.

Industry Ranking of Darden Restaurants

With $6.9 billion revenues, Darden Restaurants ranked number 1 of all the companies in the US Casual Dining Restaurants industry. There were a total of 9 public companies in the US Casual Dining Restaurants industry that had revenues greater than $50 million during 2016.

The top companies in the US Casual Dining Restaurants industry by revenues during 2016 were:

  1. Darden Restaurants ($6.9 billion)
  2. Bloomin' Brands ($4.3 billion)
  3. Brinker International ($3.3 billion)
  4. Cheesecake Factory ($2.3 billion)
  5. Ruby Tuesday ($1.1 billion)
  6. DineEquity ($634 million)
  7. Luby's ($402.6 million)
  8. Kona Grill ($169.5 million)
  9. Famous Daves Of America ($99.2 million)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Darden Restaurantsand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of darden-restaurants

Bloomin’ Brands (BLMN) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Bloomin' Brands, Inc. with $4 billion revenues in the year 2016 was the number 2 Casual Dining Restaurants company. Read this report to know the top competitors of Bloomin' Brands and identify growth and cost optimization opportunities of Bloomin' Brands

Brinker International (EAT) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Brinker International Inc with $3 billion revenues in the year 2016 was the number 3 Casual Dining Restaurants company. Read this report to know the top competitors of Brinker International and identify growth and cost optimization opportunities of Brinker International

Cheesecake Factory (CAKE) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Cheesecake Factory Inc with $2 billion revenues in the year 2016 was the number 4 Casual Dining Restaurants company. Read this report to know the top competitors of Cheesecake Factory and identify growth and cost optimization opportunities of Cheesecake Factory

Ruby Tuesday (RT) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Ruby Tuesday Inc with $1 billion revenues in the year 2016 was the number 5 Casual Dining Restaurants company. Read this report to know the top competitors of Ruby Tuesday and identify growth and cost optimization opportunities of Ruby Tuesday

DineEquity (DIN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

DineEquity Inc with $634 million revenues in the year 2016 was the number 6 Casual Dining Restaurants company. Read this report to know the top competitors of DineEquity and identify growth and cost optimization opportunities of DineEquity

Luby’s (LUB) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Luby's, Inc with $403 million revenues in the year 2016 was the number 7 Casual Dining Restaurants company. Read this report to know the top competitors of Luby's and identify growth and cost optimization opportunities of Luby's

Revenues Analysis

Darden Restaurants (DRI) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Darden Restaurants Inc (DRI) from 2012 to 2016. Darden Restaurants generated a total of $6.9 billion revenues during 2016. Darden Restaurants reported a revenue growth of 2.5% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in May.

Darden Restaurants (DRI) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Darden Restaurants Inc (DRI) from 2002 to 2016. Darden Restaurants generated a total of $6.9 billion revenues during 2016. Darden Restaurants reported a revenue growth of 2.5% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in May.

Darden Restaurants (DRI) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Darden Restaurants Inc (DRI) revenue growth with Casual Dining Restaurants industry growth during the last five years from 2012 to 2016. Darden Restaurants reported a revenue growth of 2.5% year-over-year during 2016. The Casual Dining Restaurants industry growth was 2.2% year-over-year during 2016. Darden Restaurants growth was faster than the industry during 2016.

Profit Analysis