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Brinker International, Inc. (EAT - Free Report) has provided an update on its fourth quarter and fiscal 2016 outlook and as well outlined some of its financial forecasts for fiscal 2017, ahead of its Investor Day that is scheduled to be held on Jun 9.
Outlook
Notably, Brinker primarily engages in the ownership, operation, development and franchising of various restaurant brands under the names Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s).
Brinker continues to anticipate comps to improve sequentially in the fiscal fourth quarter but not return to positive territory yet. Notably, in third-quarter fiscal 2016, comps declined 3.6%, majorly because of a 4.1% drop in Chili's franchised restaurants comps.
As of Jun 2, Brinker witnessed a 2% decline in comps on a quarter-to-date basis. This includes a 2% and 1.5% decrease in Chili's and Maggiano's restaurants, respectively. Notably, the quarter-to-date comps figures signify an increase of 160 basis points, from the number reported in the third quarter.
Meanwhile, for full-year fiscal 2016, Brinker reaffirmed its expectations of earnings per share at the lower end of its guidance of $3.55 to $3.65, up 15% to 18% year over year.
Select Fiscal 2017 View
For fiscal 2017, Brinker expects comps to grow in the range of 0.5% to 2%. Moreover, the company expects fiscal 2017 earnings per share in the range of $3.40 to $3.50. Meanwhile, capital expenditures are anticipated in $110–$120 million band.
Notably, the company plans to provide a full comprehensive guidance for fiscal 2017, when it reports fiscal fourth-quarter earnings on Aug 11, 2016.
Bottom Line
So far, the company is content with the growth of its brands and plans to shed more light at its investor day on several initiatives to boost comp sales and market share in fiscal 2017 and beyond.
We note that elevated expenses and slowdown in some of the major emerging markets are potent headwinds for Brinker. Nonetheless, sales-building initiatives undertaken by the company, such as menu innovation, extensive reimaging, better food presentation, kitchen system optimization and introduction of a better service platform should continue to drive revenues for this Zacks Rank #4 (Sell) company despite the comps decline.
Stocks to Consider
Better-ranked stocks in this sector include Papa John's International Inc. (PZZA - Free Report) , BJ's Restaurants, Inc. (BJRI - Free Report) and The Wendy's Company (WEN - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
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Brinker Updates Fiscal 2016 Outlook; Offers Select 2017 View
Brinker International, Inc. (EAT - Free Report) has provided an update on its fourth quarter and fiscal 2016 outlook and as well outlined some of its financial forecasts for fiscal 2017, ahead of its Investor Day that is scheduled to be held on Jun 9.
Outlook
Notably, Brinker primarily engages in the ownership, operation, development and franchising of various restaurant brands under the names Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s).
Brinker continues to anticipate comps to improve sequentially in the fiscal fourth quarter but not return to positive territory yet. Notably, in third-quarter fiscal 2016, comps declined 3.6%, majorly because of a 4.1% drop in Chili's franchised restaurants comps.
As of Jun 2, Brinker witnessed a 2% decline in comps on a quarter-to-date basis. This includes a 2% and 1.5% decrease in Chili's and Maggiano's restaurants, respectively. Notably, the quarter-to-date comps figures signify an increase of 160 basis points, from the number reported in the third quarter.
Meanwhile, for full-year fiscal 2016, Brinker reaffirmed its expectations of earnings per share at the lower end of its guidance of $3.55 to $3.65, up 15% to 18% year over year.
Select Fiscal 2017 View
For fiscal 2017, Brinker expects comps to grow in the range of 0.5% to 2%. Moreover, the company expects fiscal 2017 earnings per share in the range of $3.40 to $3.50. Meanwhile, capital expenditures are anticipated in $110–$120 million band.
Notably, the company plans to provide a full comprehensive guidance for fiscal 2017, when it reports fiscal fourth-quarter earnings on Aug 11, 2016.
Bottom Line
So far, the company is content with the growth of its brands and plans to shed more light at its investor day on several initiatives to boost comp sales and market share in fiscal 2017 and beyond.
We note that elevated expenses and slowdown in some of the major emerging markets are potent headwinds for Brinker. Nonetheless, sales-building initiatives undertaken by the company, such as menu innovation, extensive reimaging, better food presentation, kitchen system optimization and introduction of a better service platform should continue to drive revenues for this Zacks Rank #4 (Sell) company despite the comps decline.
Stocks to Consider
Better-ranked stocks in this sector include Papa John's International Inc. (PZZA - Free Report) , BJ's Restaurants, Inc. (BJRI - Free Report) and The Wendy's Company (WEN - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>