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Why Is Brinker International (EAT) Up 27.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Brinker International (EAT - Free Report) . Shares have added about 27.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brinker International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Brinker reported first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased from the prior-year reported figure.
Furthermore, EAT provided a better-than-expected outlook for fiscal 2025.
EAT’s Q1 Earnings and Revenues
In the quarter under review, Brinker reported adjusted earnings per share (EPS) of 95 cents, which beat the Zacks Consensus Estimate of 69 cents. The company reported an EPS of 28 cents in the prior-year quarter.
In the fiscal first quarter, total revenues of $1.13 billion outpaced the consensus mark of $1.09 billion. The top line increased 12.5% on a year-over-year basis. EAT gained from the solid performance of Chili's.
Chili's
In the fiscal first quarter, revenues in the Chili’s segment rose 13.5% year over year to $1.03 billion. The upside was backed by favorable comparable restaurant sales driven by menu pricing, higher traffic and a favorable menu item mix.
Chili's restaurant expenses (as a percentage of company sales) in the fiscal first quarter were 86.5% compared with 89.4% in the prior year quarter. The downside was caused by sales leverage, marginally overshadowed by an increase in hourly labor, repairs and maintenance expenses.
Chili's company-owned traffic rose 6.5% year over year in the quarter under discussion. The metric fell 5.8% in the prior-year quarter.
The segment’s company-owned comps rose 14.1% in the fiscal first quarter from the year-ago quarter’s levels.
At Chili’s, domestic comps (including company-owned and franchised) gained 13.9% year over year compared with a 6% rise reported in the prior-year period.
Maggiano’s
Maggiano’s sales in the fiscal first quarter increased 4% year over year to $108.6 million. Favorable comparable restaurant sales, courtesy of increased menu pricing and favorable menu item mix, drove the upside. Comps in the segment rose 4.2% year over year.
Traffic in the quarter under discussion fell 8.7% year over year. The metric was down 5.7% in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal first quarter were 86.7% compared with 91.2% a year ago. The downside was caused by sales leverage and lower hourly labor. However, this was partially offset by unfavorable commodity costs and other restaurant expenses.
Operating Results
In the quarter under review, total operating costs and expenses came in at $1.08 billion compared with $988.3 million reported in the year-ago quarter. Adjusted restaurant operating margin, as a percentage of company sales, was 13.5% compared with 10.4% reported in the prior-year quarter.
Adjusted EBITDA in the fiscal first quarter came in at $111.6 million compared with $72.4 million reported in the prior-year quarter.
Balance Sheet
As of Sept. 25, 2024, cash and cash equivalents amounted to $16.2 million compared with $14.4 million as of Sept. 27, 2023. As of Sept. 25, long-term debt was $806.9 million compared with $786.3 million as of June 26, 2024.
Fiscal 2025 Outlook
In fiscal 2025, management anticipates total revenues to be in the range of $4.70-$4.75 billion compared with the previous expectation of $4.55-$4.62 billion. Capital expenditures are expected in the $195-$215 million band. EAT projects fiscal 2025 EPS in the range of $5.2-$5.5, up from the prior estimate of $4.35-$4.75.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 22.36% due to these changes.
VGM Scores
At this time, Brinker International has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brinker International has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Brinker International belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, McDonald's (MCD - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
McDonald's reported revenues of $6.87 billion in the last reported quarter, representing a year-over-year change of +2.7%. EPS of $3.23 for the same period compares with $3.19 a year ago.
McDonald's is expected to post earnings of $2.87 per share for the current quarter, representing a year-over-year change of -2.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
McDonald's has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Brinker International (EAT) Up 27.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Brinker International (EAT - Free Report) . Shares have added about 27.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brinker International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Brinker Q1 Earnings & Revenues Beat Estimates, Increase Y/Y
Brinker reported first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased from the prior-year reported figure.
Furthermore, EAT provided a better-than-expected outlook for fiscal 2025.
EAT’s Q1 Earnings and Revenues
In the quarter under review, Brinker reported adjusted earnings per share (EPS) of 95 cents, which beat the Zacks Consensus Estimate of 69 cents. The company reported an EPS of 28 cents in the prior-year quarter.
In the fiscal first quarter, total revenues of $1.13 billion outpaced the consensus mark of $1.09 billion. The top line increased 12.5% on a year-over-year basis. EAT gained from the solid performance of Chili's.
Chili's
In the fiscal first quarter, revenues in the Chili’s segment rose 13.5% year over year to $1.03 billion. The upside was backed by favorable comparable restaurant sales driven by menu pricing, higher traffic and a favorable menu item mix.
Chili's restaurant expenses (as a percentage of company sales) in the fiscal first quarter were 86.5% compared with 89.4% in the prior year quarter. The downside was caused by sales leverage, marginally overshadowed by an increase in hourly labor, repairs and maintenance expenses.
Chili's company-owned traffic rose 6.5% year over year in the quarter under discussion. The metric fell 5.8% in the prior-year quarter.
The segment’s company-owned comps rose 14.1% in the fiscal first quarter from the year-ago quarter’s levels.
At Chili’s, domestic comps (including company-owned and franchised) gained 13.9% year over year compared with a 6% rise reported in the prior-year period.
Maggiano’s
Maggiano’s sales in the fiscal first quarter increased 4% year over year to $108.6 million. Favorable comparable restaurant sales, courtesy of increased menu pricing and favorable menu item mix, drove the upside. Comps in the segment rose 4.2% year over year.
Traffic in the quarter under discussion fell 8.7% year over year. The metric was down 5.7% in the prior-year quarter.
Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal first quarter were 86.7% compared with 91.2% a year ago. The downside was caused by sales leverage and lower hourly labor. However, this was partially offset by unfavorable commodity costs and other restaurant expenses.
Operating Results
In the quarter under review, total operating costs and expenses came in at $1.08 billion compared with $988.3 million reported in the year-ago quarter. Adjusted restaurant operating margin, as a percentage of company sales, was 13.5% compared with 10.4% reported in the prior-year quarter.
Adjusted EBITDA in the fiscal first quarter came in at $111.6 million compared with $72.4 million reported in the prior-year quarter.
Balance Sheet
As of Sept. 25, 2024, cash and cash equivalents amounted to $16.2 million compared with $14.4 million as of Sept. 27, 2023. As of Sept. 25, long-term debt was $806.9 million compared with $786.3 million as of June 26, 2024.
Fiscal 2025 Outlook
In fiscal 2025, management anticipates total revenues to be in the range of $4.70-$4.75 billion compared with the previous expectation of $4.55-$4.62 billion. Capital expenditures are expected in the $195-$215 million band. EAT projects fiscal 2025 EPS in the range of $5.2-$5.5, up from the prior estimate of $4.35-$4.75.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 22.36% due to these changes.
VGM Scores
At this time, Brinker International has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brinker International has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Brinker International belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, McDonald's (MCD - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
McDonald's reported revenues of $6.87 billion in the last reported quarter, representing a year-over-year change of +2.7%. EPS of $3.23 for the same period compares with $3.19 a year ago.
McDonald's is expected to post earnings of $2.87 per share for the current quarter, representing a year-over-year change of -2.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.1%.
McDonald's has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.