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Brinker (EAT) Stock Gains on Q4 Earnings & Revenue Beat
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Brinker International, Inc. (EAT - Free Report) posted better-than-expected results in fourth-quarter fiscal 2017 with both earnings and revenues surpassing the Zacks Consensus Estimate.
Shares of this Texas-based casual-dining restaurant gained nearly 2% in yesterday’s trading session following the release.
Earnings and Revenue Discussion
Adjusted earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.05 by nearly 4%. However, earnings decreased 12.1% year over year due to lower revenues and margins.
Quarterly revenues declined 8.1% year over year to $810.6 million due to company sales and franchise and other revenues. Notably, company sales decreased 8.1% to $785.8 million while franchise and other revenues declined 5.7%. However, revenues surpassed the Zacks Consensus Estimate of $801.6 million by 1.1%.
In the reported quarter, comps declined 1.8%, flat with the prior-year quarter figure. The figure compared favorably with the comps decline of 2.2% in the preceding quarter.
Behind the Headline Numbers
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).
Chili's
Chili's reported revenues of $682.9 million, down 8.6% year over year.
Chili's company-owned comps fell 2.2% due to a 6.5% decline in traffic, partially offset by a 2.9% and 1.4% improvement in pricing and mix, respectively. Comps compared favorably with the prior-quarter decline of 2.3% but unfavorably with the 1.8% drop in the year-ago quarter.
Comps at its franchised restaurants went down 1.7%, compared with a 3.4% decline in the year-ago quarter and 2.5% drop last quarter.
Comps declined 4.2% in international franchised Chili’s restaurants, narrower than the year-ago quarter’s decrease of 5.5% and the prior quarter’s decline of 7.1%. Meanwhile, the same fell in the domestic franchised units by 0.2%, as against a rise of 0.3% in the last quarter and fall of 2.1% in the year-ago quarter.
Domestic comps (including company-owned and franchised) at Chili's declined 1.7%, same as last quarter. Meanwhile, the figure compared favorably with the prior-year quarter’s decline of 1.8%.
Maggiano's
Maggiano's sales decreased 4.8% year over year to $102.9 million.
Comps rose 0.5% in the quarter due to a 1% and 1.6% improvement in pricing and mix, respectively, partially offset by a 2.1% decline in traffic. Comps compared favorably with the prior-quarter decline of 1.6% and the year-ago comparable period fall of 1.7%.
Expenses and Margins
Total operating costs and expenses decreased 6.6% to $730.4 million from $782.3 million in the year-ago period.
Cost of sales margin improved nearly 40 basis points (bps), while restaurant labor margin was almost flat.
Restaurant operating margin, as a percentage of company sales, declined 130 bps.
Fiscal 2017 Results
Brinker’s fiscal 2017 adjusted earnings of $3.20 topped the Zacks Consensus Estimate of $3.14 by nearly 2%. However, it decreased 9.9% from the year-ago quarter figure of $3.55 owing to lower revenues.
In the fiscal, total revenues of $3.15 billion met the Zacks Consensus Estimate but declined 3.3% year over year.
Brinker International, Inc. Price, Consensus and EPS Surprise
For fiscal 2018, Brinker expects earnings per share in the range of $3.25 to $3.35. Notably, the Zacks Consensus Estimate for fiscal 2018 earnings is pegged at $3.12.
Revenues are expected to be up roughly 0.5–1.5%.
Moreover, the company anticipates comps growth to be flat to up 1% for the full year. Restaurant operating margin is estimated to be down 25–40 bps year over year.
Zacks Rank & Peer Stocks
Brinker currently has a Zacks Rank #4 (Sell).
Restaurant Brands International, Inc.’s (QSR - Free Report) second-quarter 2017 adjusted earnings of 51 cents per share outpaced the Zacks Consensus Estimate of 45 cents by 13.3%. The figure also improved from the prior-year quarter’s 41 cents on revenue growth.
Darden Restaurants, Inc.’s (DRI - Free Report) fourth-quarter fiscal 2017 adjusted earnings of $1.18 per share surpassed the Zacks Consensus Estimate of $1.15 by 2.6%. Further, the bottom line rose 7.3% year over year on the back of higher revenues and lower share count.
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) second-quarter 2017 adjusted earnings of $2.32 per share outpaced the Zacks Consensus Estimate of $2.16 by 7.4%. The figure also improved significantly from the prior-year quarter’s 87 cents on a substantial rise in revenues.
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Brinker (EAT) Stock Gains on Q4 Earnings & Revenue Beat
Brinker International, Inc. (EAT - Free Report) posted better-than-expected results in fourth-quarter fiscal 2017 with both earnings and revenues surpassing the Zacks Consensus Estimate.
Shares of this Texas-based casual-dining restaurant gained nearly 2% in yesterday’s trading session following the release.
Earnings and Revenue Discussion
Adjusted earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.05 by nearly 4%. However, earnings decreased 12.1% year over year due to lower revenues and margins.
Quarterly revenues declined 8.1% year over year to $810.6 million due to company sales and franchise and other revenues. Notably, company sales decreased 8.1% to $785.8 million while franchise and other revenues declined 5.7%. However, revenues surpassed the Zacks Consensus Estimate of $801.6 million by 1.1%.
In the reported quarter, comps declined 1.8%, flat with the prior-year quarter figure. The figure compared favorably with the comps decline of 2.2% in the preceding quarter.
Behind the Headline Numbers
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).
Chili's
Chili's reported revenues of $682.9 million, down 8.6% year over year.
Chili's company-owned comps fell 2.2% due to a 6.5% decline in traffic, partially offset by a 2.9% and 1.4% improvement in pricing and mix, respectively. Comps compared favorably with the prior-quarter decline of 2.3% but unfavorably with the 1.8% drop in the year-ago quarter.
Comps at its franchised restaurants went down 1.7%, compared with a 3.4% decline in the year-ago quarter and 2.5% drop last quarter.
Comps declined 4.2% in international franchised Chili’s restaurants, narrower than the year-ago quarter’s decrease of 5.5% and the prior quarter’s decline of 7.1%. Meanwhile, the same fell in the domestic franchised units by 0.2%, as against a rise of 0.3% in the last quarter and fall of 2.1% in the year-ago quarter.
Domestic comps (including company-owned and franchised) at Chili's declined 1.7%, same as last quarter. Meanwhile, the figure compared favorably with the prior-year quarter’s decline of 1.8%.
Maggiano's
Maggiano's sales decreased 4.8% year over year to $102.9 million.
Comps rose 0.5% in the quarter due to a 1% and 1.6% improvement in pricing and mix, respectively, partially offset by a 2.1% decline in traffic. Comps compared favorably with the prior-quarter decline of 1.6% and the year-ago comparable period fall of 1.7%.
Expenses and Margins
Total operating costs and expenses decreased 6.6% to $730.4 million from $782.3 million in the year-ago period.
Cost of sales margin improved nearly 40 basis points (bps), while restaurant labor margin was almost flat.
Restaurant operating margin, as a percentage of company sales, declined 130 bps.
Fiscal 2017 Results
Brinker’s fiscal 2017 adjusted earnings of $3.20 topped the Zacks Consensus Estimate of $3.14 by nearly 2%. However, it decreased 9.9% from the year-ago quarter figure of $3.55 owing to lower revenues.
In the fiscal, total revenues of $3.15 billion met the Zacks Consensus Estimate but declined 3.3% year over year.
Brinker International, Inc. Price, Consensus and EPS Surprise
Brinker International, Inc. Price, Consensus and EPS Surprise | Brinker International, Inc. Quote
Fiscal 2018 Guidance
For fiscal 2018, Brinker expects earnings per share in the range of $3.25 to $3.35. Notably, the Zacks Consensus Estimate for fiscal 2018 earnings is pegged at $3.12.
Revenues are expected to be up roughly 0.5–1.5%.
Moreover, the company anticipates comps growth to be flat to up 1% for the full year. Restaurant operating margin is estimated to be down 25–40 bps year over year.
Zacks Rank & Peer Stocks
Brinker currently has a Zacks Rank #4 (Sell).
Restaurant Brands International, Inc.’s (QSR - Free Report) second-quarter 2017 adjusted earnings of 51 cents per share outpaced the Zacks Consensus Estimate of 45 cents by 13.3%. The figure also improved from the prior-year quarter’s 41 cents on revenue growth.
Darden Restaurants, Inc.’s (DRI - Free Report) fourth-quarter fiscal 2017 adjusted earnings of $1.18 per share surpassed the Zacks Consensus Estimate of $1.15 by 2.6%. Further, the bottom line rose 7.3% year over year on the back of higher revenues and lower share count.
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) second-quarter 2017 adjusted earnings of $2.32 per share outpaced the Zacks Consensus Estimate of $2.16 by 7.4%. The figure also improved significantly from the prior-year quarter’s 87 cents on a substantial rise in revenues.
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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