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Brinker's (EAT) Q4 Earnings Miss Estimates, Revenues Beat
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Brinker International, Inc. (EAT - Free Report) reported mixed fourth-quarter fiscal 2022 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. Following the announcement, shares of the company declined 4.9% during trading hours on Aug 24. The bottom line was negatively impacted by high inflation.
Earnings & Revenue Discussion
In the quarter under review, adjusted earnings per share (EPS) came in at $1.15, missing the Zacks Consensus Estimate of $1.16. In the prior-year quarter, the company had reported an adjusted EPS of $1.68.
During the fiscal fourth quarter, total revenues of $1,021.5 million beat the Zacks Consensus Estimate of $1,017 million by 0.4%. The top line increased 1.3% on a year-over-year basis. The company gained from the solid performance of Maggiano's.
Chili's
Chili’s revenues in the fiscal fourth quarter decreased 1.1% year over year to $904.2 million. The decline was primarily due to the impact of the additional operating week in the prior year as well as the decline in To-Go sales, marginally overshadowed by dining room sales growth. Moreover, the acquisition of 66 restaurants in fiscal 2022 (previously owned by franchisees) added to the positives in the prior year’s quarter.
Chili's company restaurant expenses (as a percentage of company sales) in the fiscal fourth quarter increased to 89.8% year over year from 82.9% reported in the prior-year quarter. The upside can be attributed to a rise in commodity costs, sales deleverage, advertising, utility expenses, rent expenses and increased restaurant labor costs, which include wage rates.
Chili's company-owned traffic in the quarter decreased 5.7% year over year compared with the 51.2% growth reported in the prior-year quarter.
The segment’s company-owned comps increased 3.1% in the fiscal fourth quarter from the year-ago quarter’s levels.
At Chili's, domestic comps (including company-owned and franchised) rose 0.1% year over year compared with a 62.1% rise reported in the prior-year quarter.
Brinker International, Inc. Price, Consensus and EPS Surprise
Maggiano's sales soared 24% year over year to $117.3 million, primarily due to an increase in dining and banquet room sales. Comps increased 30.1% year over year. Traffic in the quarter rose 17.9% year over year compared with a gain of 81.7% reported in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal fourth quarter were 89% compared with 85% reported in the prior-year quarter. The increase was due to a rise in commodity costs, restaurant labor costs, manager bonuses and supervision expenses.
Operating Results
Total operating costs and expenses in the fiscal fourth quarter came in at $976.8 million compared with $908 million reported in the year-ago quarter. Restaurant operating margin — as a percentage of company sales — was 10.2% compared with the 17.1% reported in the prior-year quarter.
Balance Sheet
As of Jun 29, 2022, cash and cash equivalents amounted to $13.5 million compared with $23.6 million as of Jun 30, 2021.
Long-term debt as of Jun 29, 2022, came in at $989.1 million compared with $917.9 million as of Jun 30, 2021. Total shareholders’ deficit in the reported quarter came in at ($268.1) million compared with ($303.3) million reported in the previous quarter.
Fiscal 2023 Outlook
For fiscal 2023, The company anticipates total revenues in the range of $3.9-$4 billion. Capital expenditures are expected in the range of $155-$165 million. The company expects fiscal 2022 diluted EPS in the range of $2.45-$2.85.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.1% and 90.4%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2. ARCO has long-term earnings growth of 34.4%. Shares of the company have increased 38.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 25.7% and 120.8%, respectively, from the year-ago period’s levels.
Dollar Tree carries a Zacks Rank #2. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 77.5% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.
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Brinker's (EAT) Q4 Earnings Miss Estimates, Revenues Beat
Brinker International, Inc. (EAT - Free Report) reported mixed fourth-quarter fiscal 2022 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. Following the announcement, shares of the company declined 4.9% during trading hours on Aug 24. The bottom line was negatively impacted by high inflation.
Earnings & Revenue Discussion
In the quarter under review, adjusted earnings per share (EPS) came in at $1.15, missing the Zacks Consensus Estimate of $1.16. In the prior-year quarter, the company had reported an adjusted EPS of $1.68.
During the fiscal fourth quarter, total revenues of $1,021.5 million beat the Zacks Consensus Estimate of $1,017 million by 0.4%. The top line increased 1.3% on a year-over-year basis. The company gained from the solid performance of Maggiano's.
Chili's
Chili’s revenues in the fiscal fourth quarter decreased 1.1% year over year to $904.2 million. The decline was primarily due to the impact of the additional operating week in the prior year as well as the decline in To-Go sales, marginally overshadowed by dining room sales growth. Moreover, the acquisition of 66 restaurants in fiscal 2022 (previously owned by franchisees) added to the positives in the prior year’s quarter.
Chili's company restaurant expenses (as a percentage of company sales) in the fiscal fourth quarter increased to 89.8% year over year from 82.9% reported in the prior-year quarter. The upside can be attributed to a rise in commodity costs, sales deleverage, advertising, utility expenses, rent expenses and increased restaurant labor costs, which include wage rates.
Chili's company-owned traffic in the quarter decreased 5.7% year over year compared with the 51.2% growth reported in the prior-year quarter.
The segment’s company-owned comps increased 3.1% in the fiscal fourth quarter from the year-ago quarter’s levels.
At Chili's, domestic comps (including company-owned and franchised) rose 0.1% year over year compared with a 62.1% rise reported in the prior-year quarter.
Brinker International, Inc. Price, Consensus and EPS Surprise
Brinker International, Inc. price-consensus-eps-surprise-chart | Brinker International, Inc. Quote
Maggiano's
Maggiano's sales soared 24% year over year to $117.3 million, primarily due to an increase in dining and banquet room sales. Comps increased 30.1% year over year. Traffic in the quarter rose 17.9% year over year compared with a gain of 81.7% reported in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal fourth quarter were 89% compared with 85% reported in the prior-year quarter. The increase was due to a rise in commodity costs, restaurant labor costs, manager bonuses and supervision expenses.
Operating Results
Total operating costs and expenses in the fiscal fourth quarter came in at $976.8 million compared with $908 million reported in the year-ago quarter. Restaurant operating margin — as a percentage of company sales — was 10.2% compared with the 17.1% reported in the prior-year quarter.
Balance Sheet
As of Jun 29, 2022, cash and cash equivalents amounted to $13.5 million compared with $23.6 million as of Jun 30, 2021.
Long-term debt as of Jun 29, 2022, came in at $989.1 million compared with $917.9 million as of Jun 30, 2021. Total shareholders’ deficit in the reported quarter came in at ($268.1) million compared with ($303.3) million reported in the previous quarter.
Fiscal 2023 Outlook
For fiscal 2023, The company anticipates total revenues in the range of $3.9-$4 billion. Capital expenditures are expected in the range of $155-$165 million. The company expects fiscal 2022 diluted EPS in the range of $2.45-$2.85.
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Potbelly Corporation (PBPB - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Dollar Tree Inc. (DLTR - Free Report) .
Potbelly has a Zacks Rank #2 (Buy), at present. PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 11.7% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.1% and 90.4%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2. ARCO has long-term earnings growth of 34.4%. Shares of the company have increased 38.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 25.7% and 120.8%, respectively, from the year-ago period’s levels.
Dollar Tree carries a Zacks Rank #2. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 77.5% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.