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Brinker International, Inc.

by Tracey Ryniec

March 11, 2010 | Comments : 0 Recommended this article: (0)
EAT

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Brinker International Inc. (EAT - Analyst Report) is managing its way through a rocky restaurant environment. The company has surprised on estimates the last 4 quarters by an average of 18.6%.

Company Description

Brinker International operate casual dining restaurants in 27 countries and 2 territories.

The company runs 1,700 restaurants under the brand names of Chili's, Maggiano's, On the Border Mexican Grill & Cantina, and has a minority interest in Macaroni Grill.

Zacks Consensus Estimates Rise

Analysts are optimistic about the 2010 third fiscal quarter as well as fiscal 2010 as estimates have been trending higher since January when the company reported fiscal second quarter results.

The third quarter Zacks Consensus Estimate is up 1 cent to 41 cents per share in the last 30 days.

Fiscal 2010 Zacks Consensus Estimate rose 8.5% to $1.40 from $1.29 per share in the last 60 days. One estimate has moved higher in the last month.

Brinker is scheduled to report third quarter results on Apr 20.

Brinker Surprised by 31.8% for the Fiscal Second Quarter

On Jan 20, Brinker reported its 2010 fiscal second quarter results and beat the Zacks Consensus Estimate by 7 cents. Earnings per share were 29 cents compared to the Zacks Consensus of 22 cents.

Revenue fell 17.6% to $781.9 million from $949.4 million in the year ago period. The company completed the sale of Macaroni Grill during the quarter but retained a minority ownership interest.

Revenue was affected by a decline in capacity of 17.7% due to the Macaroni Grill sale as well as 47 other restaurant closures and the sale of 21 restaurants to a franchisee that occurred since the year ago period.

Value Fundamentals

Brinker International is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.9 which is just under the value criteria of a ratio of 3.0. The company is also trading with a value forward P/E of 13.7.

Brinker International also rewards shareholders with a tasty dividend, currently yielding 2.30%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

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