Brinker International, Inc. (EAT - Free Report) provided selected business results for first-quarter fiscal 2022 and business update for second-quarter fiscal 2022. The company’s shares declined 12.2% in the after-hour trading session on Oct 19 following its announcement that higher-than-expected labor and commodity costs due to the COVID-19 surge in August impacted the bottom line and margins.
First-Quarter Results
Adjusted earnings in the quarter increased to 34 cents, compared with 28 cents reported in the prior-year quarter. However, adjusted earnings missed the Zacks Consensus Estimate of 68 cents.
In first-quarter fiscal 2022, Brinker’s company sales increased 18% year over year to $859.6 million. Total revenues were $876.4 million, marginally missing the Zacks Consensus Estimate of $877 million.
In the quarter under review, Restaurant operating margin, as a percentage of company sales decreased 120 basis points year over year to 10.4%. The decline was primarily due to 150 bps of higher restaurant labor costs and 60 bps of higher commodity costs.
The company-owned comparable restaurant sales increased 17% year over year owing to 10.8% increase in traffic. Comparable restaurant sales at Chili's and Maggiano's improved 13.4% and 62.6%, respectively.
Shares of Brinker have declined 27% in the past six months against the industry’s growth of 1.5%. The dismal performance can primarily be attributed to the coronavirus pandemic.
Comparable Restaurant Sales (Fiscal 22 vs. Fiscal 20)
Brinker comparable restaurant sales for the month of July, August and September increased 8%, 2.4% and 6.1%, respectively. Chili's comparable restaurant sales for the month of July, August and September climbed 8.8%, 3.1% and 7%, respectively. Meanwhile, Maggiano's comparable restaurant sales in July advanced 1.6%, but declined 2.2% and 0.5%, in August and September, respectively.
Month to date through Oct 13, comparable restaurant sales for Brinker, Chili's and Maggiano's increased 6.6%, 7.3% and 1.5%, respectively.
Zacks Rank & Key Picks
Brinker currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same space are Darden Restaurants, Inc. (DRI - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Darden Restaurants has a three-five year earnings per share growth rate of 10%.
Chipotle's 2021 earnings are expected to surge 137.3%.
Dave & Buster's Entertainment has a trailing four-quarter earnings surprise of 201.8%, on average.
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Brinker International, Inc. (EAT - Free Report) provided selected business results for first-quarter fiscal 2022 and business update for second-quarter fiscal 2022. The company’s shares declined 12.2% in the after-hour trading session on Oct 19 following its announcement that higher-than-expected labor and commodity costs due to the COVID-19 surge in August impacted the bottom line and margins.
First-Quarter Results
Adjusted earnings in the quarter increased to 34 cents, compared with 28 cents reported in the prior-year quarter. However, adjusted earnings missed the Zacks Consensus Estimate of 68 cents.
In first-quarter fiscal 2022, Brinker’s company sales increased 18% year over year to $859.6 million. Total revenues were $876.4 million, marginally missing the Zacks Consensus Estimate of $877 million.
In the quarter under review, Restaurant operating margin, as a percentage of company sales decreased 120 basis points year over year to 10.4%. The decline was primarily due to 150 bps of higher restaurant labor costs and 60 bps of higher commodity costs.
The company-owned comparable restaurant sales increased 17% year over year owing to 10.8% increase in traffic. Comparable restaurant sales at Chili's and Maggiano's improved 13.4% and 62.6%, respectively.
Shares of Brinker have declined 27% in the past six months against the industry’s growth of 1.5%. The dismal performance can primarily be attributed to the coronavirus pandemic.
Comparable Restaurant Sales (Fiscal 22 vs. Fiscal 20)
Brinker comparable restaurant sales for the month of July, August and September increased 8%, 2.4% and 6.1%, respectively. Chili's comparable restaurant sales for the month of July, August and September climbed 8.8%, 3.1% and 7%, respectively. Meanwhile, Maggiano's comparable restaurant sales in July advanced 1.6%, but declined 2.2% and 0.5%, in August and September, respectively.
Month to date through Oct 13, comparable restaurant sales for Brinker, Chili's and Maggiano's increased 6.6%, 7.3% and 1.5%, respectively.
Zacks Rank & Key Picks
Brinker currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same space are Darden Restaurants, Inc. (DRI - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Darden Restaurants has a three-five year earnings per share growth rate of 10%.
Chipotle's 2021 earnings are expected to surge 137.3%.
Dave & Buster's Entertainment has a trailing four-quarter earnings surprise of 201.8%, on average.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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