Darden Restaurants Financial Model
Restaurants Company Financials Example (Free Excel Download)
Darden Restaurants is the largest full-service restaurant company in the world.
professionals from Deloitte
Used by professionals from
About this model
This model provides a comprehensive equity valuation and operational forecasting tool for Darden Restaurants to help an equity research analyst determine a target price and assess the earnings impact of recent acquisitions like Chuy's and Ruth's Chris Steak House.
Darden Restaurants is the largest full-service restaurant company in the world. The company operates over 2,100 locations across North America under a portfolio of differentiated brands. Business segments:
- Olive Garden (approx. 45% of revenue)
- LongHorn Steakhouse (approx. 25% of revenue)
- Fine Dining (approx. 10% of revenue, includes Ruth's Chris Steak House, The Capital Grille, Eddie V's)
- Other Business (approx. 20% of revenue, includes Cheddar's Scratch Kitchen, Chuy's, Yard House, Bahama Breeze, Seasons 52)
Key geographies: Primarily the United States, with a small franchise presence internationally. Business model type: Asset-heavy traditional restaurant operator. Darden owns a significant portion of its real estate, which provides a competitive advantage in occupancy costs. Competitive position: Market leader in casual dining (Olive Garden) and casual steak (LongHorn), competing with Brinker International, Texas Roadhouse, and Bloomin' Brands. Recent major events: Acquired Ruth's Chris Steak House in June 2023 for $715 million and Chuy's Holdings in October 2024 for $605 million. Fiscal year 2025 included a 53rd operating week.
The downloadable Darden Restaurants financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsDarden Restaurants financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
| Revenue | $9.63B | $10.49B | $11.39B | $12.08B | $13.21B |
| Gross profit | $1.90B | $1.99B | $2.29B | $2.47B | $2.68B |
| Operating income | $1.16B | $1.20B | $1.31B | $1.36B | $1.58B |
| Net income | $952.8M | $981.9M | $1.03B | $1.05B | $1.21B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for Darden Restaurants
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
For EACH revenue segment:
Olive Garden
- Segment name: Olive Garden
- Revenue driver formula: (Beginning Restaurants + Net New Restaurants) x Average Unit Volume x (1 + Same-Restaurant Sales Growth)
- Historical growth rate: 2% to 5% CAGR
- Key growth levers and headwinds: Menu pricing power, off-premise sales retention, and wage inflation impacting consumer discretionary income.
- Pricing dynamics: Highly competitive casual dining pricing, heavily reliant on promotional value (e.g., Never Ending Pasta Bowl).
- Revenue recognition notes: Recognised at point of sale. Gift card breakage is recognised proportionally as redemptions occur.
- Seasonality: Q3 (ending February) and Q4 (ending May) are typically stronger due to holidays and Mother's Day.
LongHorn Steakhouse
- Segment name: LongHorn Steakhouse
- Revenue driver formula: Restaurant Count x Average Unit Volume
- Historical growth rate: 5% to 8% CAGR
- Key growth levers and headwinds: Beef inflation, consumer trade-down from fine dining, and steady unit expansion (25 to 30 new units annually).
- Pricing dynamics: Spot pricing for beef dictates menu price increases.
- Revenue recognition notes: Point of sale.
- Seasonality: Stronger in spring and early summer.
Fine Dining
- Segment name: Fine Dining
- Revenue driver formula: Restaurant Count x Average Unit Volume
- Historical growth rate: 10% to 15% CAGR (distorted by Ruth's Chris acquisition)
- Key growth levers and headwinds: Corporate travel recovery, expense account spending, and high-end consumer confidence.
- Pricing dynamics: Premium pricing with high elasticity.
- Revenue recognition notes: Point of sale.
- Seasonality: Highly seasonal, peaking in Q3 (November/December holiday party season).
Other Business
- Segment name: Other Business
- Revenue driver formula: Restaurant Count x Average Unit Volume
- Historical growth rate: 15% to 20% CAGR (distorted by Chuy's acquisition)
- Key growth levers and headwinds: Integration of Chuy's, turnaround of Cheddar's Scratch Kitchen, and potential divestiture of Bahama Breeze.
- Pricing dynamics: Varies by brand, generally casual dining spot pricing.
- Revenue recognition notes: Point of sale.
- Seasonality: Broadly distributed, though Yard House benefits from major sporting events.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: "Food and beverage" (ingredients, alcohol) and "Restaurant labour" (hourly wages, payroll taxes, benefits).
- Gross margin range: Darden does not report traditional gross margin. Food and beverage costs typically run 28% to 30% of sales. Restaurant labour runs 32% to 33% of sales.
- Key input costs and commodity exposures: Beef, dairy, wheat, and produce.
- How COGS scales with revenue: Food costs are highly variable. Labour has a fixed component (management) and a variable component (hourly staff).
Operating Expenses
- Restaurant expenses: 16% to 17% of sales. Includes utilities, repairs, maintenance, credit card fees, and property taxes.
- Marketing expenses: 1% to 2% of sales. Primarily national television and digital advertising.
- General and administrative expenses: 4% to 5% of sales. Corporate headcount, IT, and executive compensation.
- Depreciation and amortisation: 4% to 5% of sales. Driven by heavy real estate ownership and new unit builds.
- Restructuring / one-time charges: Frequent in recent years due to M&A integration (e.g., $50 to $55 million pre-tax for Chuy's).
Margin Profile
- Restaurant-level EBITDA margin: 20% to 22%.
- Operating margin: 11% to 12% (expanding due to scale and pricing).
- Net margin: 8% to 9%.
- Segment-level margins: LongHorn and Olive Garden typically generate the highest segment profit margins (21% to 23%), while Other Business is lower (15% to 17%).
Balance Sheet Structure
- Total assets: Approximately $11 billion to $12 billion.
- Key asset categories: Land, buildings, and equipment (PP&E) make up the largest portion, alongside operating lease right-of-use assets.
- Goodwill & intangibles: Approximately 20% to 25% of total assets, significantly increased following the Ruth's Chris and Chuy's acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): 3 to 5 days (mostly credit card receivables).
- Days Inventory Outstanding (DIO): 10 to 15 days (perishable food).
- Days Payable Outstanding (DPO): 25 to 30 days.
- Net working capital as % of revenue: Negative 5% to Negative 8%.
- Is working capital positive or negative? Negative. The company funds growth from working capital, collecting cash from guests before paying vendors.
- PP&E: Consists of owned land, restaurant buildings, and kitchen equipment. Useful lives are 5 to 40 years for buildings and 2 to 15 years for equipment.
- Right-of-use assets: Material, representing leased restaurant locations, typically running $1.5 billion to $2.0 billion.
Capital Expenditure & Investment
- Capex as % of revenue: 5% to 6%.
- Maintenance capex vs. growth capex: Approximately 45% maintenance and technology, 55% new restaurant growth.
- Major capex programmes: $700 to $750 million planned for FY26 to open 60 to 65 new restaurants.
- Capitalised software: Minimal compared to physical restaurant builds.
- M&A pattern: Serial acquirer of established, full-service restaurant brands (Ruth's Chris, Chuy's, Cheddar's).
- Typical acquisition multiple paid: 8x to 10x trailing EBITDA (Chuy's was acquired for 10.3x trailing EBITDA).
Debt & Capital Structure
- Total debt: Approximately $1.5 billion to $2.0 billion.
- Debt/EBITDA ratio: 1.5x to 2.0x.
- Credit rating: Investment grade (BBB).
- Key debt instruments: Senior unsecured notes (including $750 million issued in October 2024 for the Chuy's acquisition) and a revolving credit facility.
- Maturity profile: Staggered, with recent notes due in 2027 and 2029.
- Interest rate profile: Primarily fixed-rate senior notes.
- Covenants: Standard investment-grade covenants, primarily limitation on liens and sale-leaseback transactions.
- Share repurchase programme: Highly active. Board authorised a new $1 billion programme in June 2025.
- Dividend policy: Quarterly dividend of $1.40 per share (approximate 50% to 60% payout ratio).
Cash Flow Characteristics
- Operating cash flow conversion: 1.2x to 1.4x Net Income.
- Free cash flow margin: 6% to 8%.
- Major non-cash items: Depreciation, amortisation, and stock-based compensation.
- Working capital cash flow impact: Source of cash during periods of revenue growth due to negative working capital dynamics.
- Capex intensity: High. Building new restaurants requires significant upfront cash.
- Cash tax rate vs. GAAP effective tax rate: Cash taxes are typically lower than the 13% GAAP effective rate due to accelerated depreciation on restaurant assets and FICA tip credits.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic inputs, segment growth, unit expansion, and margin profiles.
- Unit Economics: Roll-forward of restaurant counts (beginning, openings, closures, ending) and Average Unit Volumes by segment.
- Revenue Build: Calculation of total sales by segment (Olive Garden, LongHorn Steakhouse, Fine Dining, Other Business) based on unit counts and Same-Restaurant Sales.
- Income Statement: Consolidated P&L mirroring Darden's reporting (Food and beverage, Restaurant labour, Restaurant expenses, Marketing, G&A, D&A).
- Balance Sheet: Assets, liabilities, and equity, highlighting PP&E, Goodwill, and negative working capital.
- Cash Flow Statement: Operating, investing, and financing cash flows, linking net income to ending cash.
- Debt Schedule: Tranches of senior notes, revolving credit facility, interest expense calculation, and mandatory repayments.
- Working Capital: Schedules for receivables, inventory, payables, and unearned revenues (gift cards).
- Depreciation & Capex: Waterfall schedule for maintenance capex, growth capex, and resulting depreciation.
- Valuation: Discounted Cash Flow analysis and comparable company multiples.
Key Financial Relationships
- Olive Garden Sales = Average Olive Garden Restaurants x Olive Garden AUV
- LongHorn Sales = Average LongHorn Restaurants x LongHorn AUV
- Fine Dining Sales = Average Fine Dining Restaurants x Fine Dining AUV
- Other Business Sales = Average Other Business Restaurants x Other Business AUV
- Total Sales = Sum of segment sales
- Food and Beverage Cost = Total Sales x Food and Beverage Margin (historically 28% to 30%)
- Restaurant Labour Cost = Total Sales x Restaurant Labour Margin (historically 32% to 33%)
- Restaurant Expenses = Total Sales x Restaurant Expense Margin (historically 16% to 17%)
- Segment Profit = Segment Sales - (Segment Food & Beverage + Segment Labour + Segment Expenses + Segment Marketing)
- Operating Income = Total Sales - All Operating Costs - G&A - D&A
- Net New Restaurants = Planned Openings - Planned Closures
- Interest Expense = Average Debt Balance x Weighted Average Interest Rate
- Free Cash Flow = Operating Cash Flow - Capital Expenditures
- Ending Cash = Beginning Cash + Net Change in Cash from Cash Flow Statement
Cross-Sheet Dependencies
The Assumptions sheet feeds the Unit Economics and Revenue Build sheets. The Revenue Build drives the top line of the Income Statement and dictates the volume-driven costs (Food and beverage, Labour). The Income Statement generates Net Income, which starts the Cash Flow Statement. The Cash Flow Statement requires capital expenditure inputs from the Depreciation & Capex sheet and working capital changes from the Working Capital sheet. The Debt Schedule calculates interest expense, which flows back to the Income Statement, creating a potential circularity if interest expense impacts cash balances that sweep into debt paydown. The Balance Sheet aggregates ending balances from the Working Capital, Depreciation & Capex, and Debt Schedule sheets.
Sign Convention
- Revenues and sales metrics are entered and displayed as positive numbers.
- Expenses on the Income Statement are displayed as negative numbers and summed to calculate profit subtotals.
- Assets are positive. Liabilities and Equity are positive.
- Cash inflows on the Cash Flow Statement are positive. Cash outflows (including capital expenditures and dividends) are negative.
Things Most Likely to Go Wrong
- The fiscal year 2025 included a 53rd week. Models must adjust FY26 growth rates downwards to account for the missing week, which added approximately 2% to FY25 sales.
- The acquisition of Chuy's in October 2024 distorts historical comparisons for the Other Business segment. The model must include a stub period for FY25 and full-year run-rate for FY26.
- Darden owns a significant portion of its real estate. Comparing its EBITDA margins directly to heavily franchised or leased peers will be misleading without adjusting for rent expense.
- Gift card sales peak in Q3 (holiday season), creating a massive spike in unearned revenue liabilities that release in subsequent quarters.
- Food and beverage costs are highly sensitive to beef prices. A static margin assumption will fail if commodity markets experience a shock.
- Restaurant labour costs face structural upward pressure from minimum wage legislation. Historical labour margins may not be sustainable without aggressive menu pricing.
- Segment profit reported by Darden excludes corporate G&A and depreciation. Analysts must not confuse segment profit with operating income.
- Share repurchases are a massive use of cash. Failing to model the $1 billion authorisation will result in an artificially inflated cash balance and an incorrect share count for EPS calculations.
Validation Checks
- Total Sales growth should not exceed 8% organically. Anything higher implies unrealistic same-restaurant sales or unit expansion.
- Food and beverage costs must remain between 28% and 31% of sales.
- Restaurant labour must remain between 31% and 34% of sales.
- Operating margin should hover between 11% and 12.5%.
- Net working capital must remain negative. A positive working capital balance indicates a fundamental error in the payables or receivables logic.
- Capex as a percentage of sales should remain between 5% and 6.5% to support the stated 60 to 65 annual new restaurant openings.
- The Balance Sheet must balance perfectly in every forecasted period.
- The effective tax rate should be modelled at approximately 13%, reflecting historical FICA tip credits.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Olive Garden Same-Restaurant Sales Growth | 2.0 | % | Based on FY25 reported blended growth and management guidance |
| LongHorn Steakhouse Same-Restaurant Sales Growth | 1.7 | % | Based on FY25 reported growth |
| Fine Dining Same-Restaurant Sales Growth | 5.1 | % | Based on FY25 reported growth |
| Other Business Same-Restaurant Sales Growth | -3.0 | % | Based on FY25 reported growth |
| Total New Restaurant Openings | 62 | Units | Midpoint of FY26 management guidance (60 to 65) |
| Food and Beverage Cost Margin | -29.0 | % | Historical average, reflecting normalised commodity inflation |
| Restaurant Labour Margin | -32.5 | % | Historical average, reflecting wage inflation offset by pricing |
| Restaurant Expenses Margin | -16.5 | % | Historical average |
| Marketing Expenses Margin | -1.5 | % | Historical average |
| General & Administrative Margin | -4.2 | % | Historical average, adjusting for Chuy's synergies |
| Depreciation & Amortisation Margin | -4.5 | % | Historical average |
| Effective Tax Rate | -13.0 | % | Management guidance for FY26 |
| Capital Expenditures | -725 | $ Millions | Midpoint of FY26 management guidance ($700 to $750 million) |
| Annual Dividend per Share | 5.60 | $ | Based on $1.40 quarterly dividend declared in late 2024 / 2025 |
| Share Repurchases | -500 | $ Millions | Estimated annual run-rate against the $1 billion authorisation |
| Discount Rate (WACC) | 8.5 | % | Standard cost of capital for investment-grade restaurant operator |
| Terminal Growth Rate | 2.0 | % | Aligned with long-term macroeconomic inflation |
Data Sources & Benchmarks
- SEC EDGAR: Darden Restaurants (DRI) 10-K, 10-Q, and 8-K filings.
- Investor Relations: investor.darden.com for earnings presentations and supplemental data.
- Key peers for benchmarking: Texas Roadhouse (TXRH), Brinker International (EAT), Bloomin' Brands (BLMN), and The Cheesecake Factory (CAKE).
- Industry data sources: Knapp-Track (casual dining sales index), Black Box Intelligence (restaurant traffic and sales data).
- Commodity data: USDA reports for beef, poultry, and dairy pricing trends.
Sources
- Darden Restaurants Inc. Form 10-K for the fiscal year ended May 2025.
- Darden Restaurants Inc. Q2 Fiscal 2025 Earnings Release (December 2024).
- Darden Restaurants Inc. Q4 Fiscal 2025 Earnings Release (June 2025).
- PR Newswire: Darden Restaurants Completes Acquisition of Chuy's Holdings, Inc. (October 2024).
- Restaurant Business Online: "Olive Garden parent Darden is not done acquiring restaurants" (January 2026).
Do more with the Darden Restaurants model
Frequently asked
What does Darden Restaurants do?+
Darden Restaurants is the world's largest full-service restaurant company, operating over 2,100 locations across North America. It manages a portfolio of differentiated brands including Olive Garden, LongHorn Steakhouse, and fine dining establishments like Ruth's Chris Steak House.
How does Darden Restaurants generate revenue?+
Darden Restaurants generates revenue primarily through its restaurant sales across brands like Olive Garden and LongHorn Steakhouse. Revenue drivers include the number of restaurants, average unit volume, and same-restaurant sales growth, influenced by menu pricing and off-premise sales.
What are the key cost assumptions in Darden Restaurants' financial model?+
Key cost assumptions in Darden Restaurants' financial model include COGS as approximately 81.6% of revenue and SGA expenses at about 4.5% of revenue. These figures are crucial for forecasting profitability and assessing the company's operational efficiency.
What is Darden Restaurants' capital expenditure strategy?+
Darden Restaurants' capital expenditure typically ranges from 5% to 6% of revenue, with approximately 55% allocated to new restaurant growth. The company plans significant capex for FY26 to open 60 to 65 new restaurants, reflecting its strategy of steady unit expansion.
How do recent acquisitions impact Darden Restaurants' valuation?+
Recent acquisitions like Ruth's Chris Steak House and Chuy's Holdings significantly impact Darden Restaurants' valuation by increasing goodwill and intangibles, which now represent 20% to 25% of total assets. These acquisitions are integrated into the financial model to assess their earnings impact and determine a target price.
Where can I find a financial model for Darden Restaurants (DRI)?+
A comprehensive equity valuation and operational forecasting Excel model for Darden Restaurants (DRI) is available for download. This model helps equity research analysts determine a target price and assess earnings impacts, with a forecast horizon extending from FY2026 to FY2030.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Restaurants Company Financial Models
Browse another company in the same sector.
Chipotle Mexican Grill
Chipotle Mexican Grill operates fast-casual restaurants serving Mexican-inspired food with a focus on responsibly sourced ingredients.
Domino's
Domino's Pizza is the largest pizza company in the world based on global retail sales, operating a highly franchised business model with a massive global footprint.
McDonald's
McDonald's is a leading global foodservice retailer operating and franchising over 40,000 restaurants across more than 100 countries.
Starbucks
Starbucks Corporation is the premier roaster, marketer, and retailer of specialty coffee globally, operating over 41,000 stores.
Yum! Brands
Yum!
Explore more Consumer financial model templates.
