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Brinker (EAT) Q3 Earnings and Revenues Surpass Estimates
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Brinker International, Inc. (EAT - Free Report) reported third-quarter fiscal 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by improved dine-in traffic, increased menu pricing and a favorable menu item mix.
Kevin Hochman, chief executive officer and president of Brinker International, stated, "We are pleased to report quarterly operating performance for Brinker International that represents a nice step forward for our strategy, enabling us to make needed investments into the business, translating into an improved guest experience."
Earnings & Revenue Discussion
In the quarter under review, Brinker reported adjusted earnings per share (EPS) of $1.23, surpassing the Zacks Consensus Estimate of $1.17. In the prior-year quarter, the company reported an adjusted EPS of 92 cents.
In the fiscal third quarter, total revenues of $1,083.2 million beat the Zacks Consensus Estimate of $1,072 million. The top line increased 10.5% on a year-over-year basis. The company gained from the solid performance of Chili's and Maggiano's.
Brinker International, Inc. Price, Consensus and EPS Surprise
Chili’s revenues in the fiscal third quarter increased 9.5% year over year to $963.4 million. The upside was primarily driven by increased menu pricing, higher dine-in traffic and a favorable menu item mix. However, this was partially offset by lower off-premise traffic.
Chili's company restaurant expenses (as a percentage of company sales) in the fiscal third quarter came in at 86.8% year over year compared with 86.9% reported in the prior-year quarter. The downside was primarily due to sales leverage. This was partially offset by a rise in commodity costs, repair and maintenance expenses, manager salary expenses, hourly wage rates and rent and utilities expenses.
Chili's company-owned traffic in the quarter declined 5.8% year over year against a 2.1% growth reported in the prior-year quarter.
The segment’s company-owned comps increased 9.6% in the fiscal third quarter from the year-ago quarter’s levels.
At Chili’s, domestic comps (including company-owned and franchised) rose 9.1% year over year compared with a 9.9% rise in the prior-year quarter’s levels.
Maggiano’s
Maggiano’s sales rose 18.8% year over year to $119.8 million, primarily due to an increase in the dining room and banquet traffic and a rise in menu pricing. Comps in the segment increased 21.6% year over year. Traffic in the quarter rose 9.5% year over year compared with a rise of 28.9% reported in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal third quarter were 85.1% compared with 86.9% reported in the prior-year quarter. The downside was primarily due to sales leverage. However, this was partially offset by commodity price inflation, higher hourly wage rates, delivery fees and repair and maintenance costs, property taxes and utilities.
Operating Results
Total operating costs and expenses in the fiscal second quarter were $1,019 million compared with $931 million reported in the year-ago quarter. The restaurant operating margin, as a percentage of company sales, was 13.4% compared with the 13.1% reported in the prior-year quarter.
Balance Sheet
As of Mar 29, 2023, cash and cash equivalents amounted to $13.8 million compared with $14.7 million as of Dec 28, 2022.
Long-term debt as of Mar 29, 2023, was $930.7 million compared with $1,023.3 million as of Dec 28, 2022. Total shareholders’ deficit in the reported quarter was ($210.3) million compared with ($267.5) million reported in the previous quarter.
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.2%. The stock has gained 6.2% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle carries a Zacks Rank #1. CMG has a long-term earnings growth rate of 31.8%. The stock has improved 43.4% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 43.4% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.9% and 19%, respectively, from the year-ago period’s levels.
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Brinker (EAT) Q3 Earnings and Revenues Surpass Estimates
Brinker International, Inc. (EAT - Free Report) reported third-quarter fiscal 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by improved dine-in traffic, increased menu pricing and a favorable menu item mix.
Kevin Hochman, chief executive officer and president of Brinker International, stated, "We are pleased to report quarterly operating performance for Brinker International that represents a nice step forward for our strategy, enabling us to make needed investments into the business, translating into an improved guest experience."
Earnings & Revenue Discussion
In the quarter under review, Brinker reported adjusted earnings per share (EPS) of $1.23, surpassing the Zacks Consensus Estimate of $1.17. In the prior-year quarter, the company reported an adjusted EPS of 92 cents.
In the fiscal third quarter, total revenues of $1,083.2 million beat the Zacks Consensus Estimate of $1,072 million. The top line increased 10.5% on a year-over-year basis. The company gained from the solid performance of Chili's and Maggiano's.
Brinker International, Inc. Price, Consensus and EPS Surprise
Brinker International, Inc. price-consensus-eps-surprise-chart | Brinker International, Inc. Quote
Chili's
Chili’s revenues in the fiscal third quarter increased 9.5% year over year to $963.4 million. The upside was primarily driven by increased menu pricing, higher dine-in traffic and a favorable menu item mix. However, this was partially offset by lower off-premise traffic.
Chili's company restaurant expenses (as a percentage of company sales) in the fiscal third quarter came in at 86.8% year over year compared with 86.9% reported in the prior-year quarter. The downside was primarily due to sales leverage. This was partially offset by a rise in commodity costs, repair and maintenance expenses, manager salary expenses, hourly wage rates and rent and utilities expenses.
Chili's company-owned traffic in the quarter declined 5.8% year over year against a 2.1% growth reported in the prior-year quarter.
The segment’s company-owned comps increased 9.6% in the fiscal third quarter from the year-ago quarter’s levels.
At Chili’s, domestic comps (including company-owned and franchised) rose 9.1% year over year compared with a 9.9% rise in the prior-year quarter’s levels.
Maggiano’s
Maggiano’s sales rose 18.8% year over year to $119.8 million, primarily due to an increase in the dining room and banquet traffic and a rise in menu pricing. Comps in the segment increased 21.6% year over year. Traffic in the quarter rose 9.5% year over year compared with a rise of 28.9% reported in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal third quarter were 85.1% compared with 86.9% reported in the prior-year quarter. The downside was primarily due to sales leverage. However, this was partially offset by commodity price inflation, higher hourly wage rates, delivery fees and repair and maintenance costs, property taxes and utilities.
Operating Results
Total operating costs and expenses in the fiscal second quarter were $1,019 million compared with $931 million reported in the year-ago quarter. The restaurant operating margin, as a percentage of company sales, was 13.4% compared with the 13.1% reported in the prior-year quarter.
Balance Sheet
As of Mar 29, 2023, cash and cash equivalents amounted to $13.8 million compared with $14.7 million as of Dec 28, 2022.
Long-term debt as of Mar 29, 2023, was $930.7 million compared with $1,023.3 million as of Dec 28, 2022. Total shareholders’ deficit in the reported quarter was ($210.3) million compared with ($267.5) million reported in the previous quarter.
Zacks Rank & Key Picks
Brinker currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) .
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.2%. The stock has gained 6.2% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales suggests growth of 13.4% from the year-ago period’s levels.
Chipotle carries a Zacks Rank #1. CMG has a long-term earnings growth rate of 31.8%. The stock has improved 43.4% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2024 sales and EPS suggests growth of 12.4% and 20%, respectively, from the year-ago period’s levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 43.4% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.9% and 19%, respectively, from the year-ago period’s levels.