A month has gone by since the last earnings report for Brinker International (EAT Quick QuoteEAT - Free Report) . Shares have lost about 10% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Brinker International due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Brinker International, Inc. before we dive into how investors and analysts have reacted as of late.

Brinker Q4 Earnings Meet Estimates, Revenues Beat on Chili's Growth

Brinker reported fourth-quarter fiscal 2026 results, with earnings in line with the Zacks Consensus Estimate while revenues surpassed the same. Both the top and bottom lines increased on a year-over-year basis.

In the quarter under review, Brinker reported adjusted earnings per share (EPS) of $3.07, up 23.3% year over year and in line with the Zacks Consensus Estimate.

Total revenues rose 5.1% year over year to $1.54 billion and beat the consensus mark by 0.4%.

The quarter benefited from sustained momentum at Chili’s, supported by positive traffic, menu pricing, strong everyday value, the Big Crispy launch and continued operational improvements. However, results were partly pressured by weaker traffic and restaurant closures at Maggiano’s, along with higher commodity, advertising and insurance costs.

EAT's Chili's Momentum Extends in Q4

Chili’s total revenues increased 6.2% year over year to $1.423 billion. Company sales rose 6.2% to $1.409 billion, while franchise revenues advanced 12.5% to $14.4 million. The brand continued to benefit from its value platform and menu innovation.

Comparable restaurant sales for Chili's increased 5.6% year over year, reflecting 4.3% pricing and 1.5% traffic growth, partly offset by a 0.2% negative mix impact. Management said the Big Crispy chicken sandwich helped sustain momentum, with sales rising to 55 sandwiches per restaurant per day by quarter-end from 20 before the launch.

Brinker's Maggiano's Trends Remain Challenged

Maggiano’s total revenues declined 7.8% year over year to $112.8 million. Company sales also fell 7.8% to $112.6 million, reflecting lower traffic and restaurant closures, partly offset by menu pricing.

Comparable restaurant sales decreased 2.5%. Traffic dropped 5.3% and mix was down 0.1%, while price contributed 2.9%. The brand’s non-GAAP restaurant operating margin contracted to 10.3% from 13.3%. Management said the turnaround is progressing more slowly than planned and modeled flat revenues and profits for fiscal 2027.

EAT's Q4 Margins Expand Despite Food Inflation

Operating income increased 17% year over year to $167 million, while operating income margin expanded 110 basis points to 10.9%. Non-GAAP restaurant operating margin improved 20 basis points to 18% of company sales. Net income rose 22.5% to $131.1 million, and GAAP earnings advanced to $2.99 from $2.30. Adjusted EBITDA increased 7.2% to $227.6 million.

Food and beverage costs rose to 26.3% of company sales from 25.5%, pressured by 4.4% commodity inflation, mainly higher beef costs and a temporary spike in tomato prices. Restaurant labor improved 90 basis points to 31.3%, as sales leverage offset 3.1% wage inflation and other investments. Restaurant expenses edged down 10 basis points to 24.4%. Advertising expense was 3% of sales, up 20 basis points, supporting the Big Crispy campaign.

Brinker's Cash Flow Supports Capital Returns

For fiscal 2026, net cash provided by operating activities rose 16.3% year over year to $789.4 million. Cash and cash equivalents ended the year at $110 million compared with $18.9 million a year earlier. Payments for property and equipment totaled $231.9 million.

Brinker used operating cash flow to repurchase $400 million of common stock during fiscal 2026. The board subsequently authorized total repurchase capacity of $750 million. After year-end, the company redeemed $350 million of 8.25% notes using its revolving credit facility, which management expects to generate interest savings in fiscal 2027. Brinker also plans to acquire 12 Chili’s franchise restaurants in Alabama and Mississippi.

EAT's FY27 Outlook Targets Continued Growth

For fiscal 2027, EAT expects total revenues of $6.15-$6.27 billion and adjusted earnings of $12.60-$13.40 per share. Capital expenditures are projected at $265-$285 million, with diluted weighted average shares of 42-43 million. The company plans 60-80 Chili’s reimages after completing 11 in fiscal 2026.

The outlook includes a 53rd operating week, which is expected to add about 2% to revenues and $0.70 to adjusted earnings per share. Management assumes low-single-digit commodity and wage inflation and three net new company-owned restaurant openings. For Chili’s, the plan assumes mid-single-digit same-store sales growth and positive traffic for the remainder of the year, along with 20-40 basis points of restaurant-level margin improvement on a 52-week basis.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 13.04% due to these changes.

VGM Scores

Currently, Brinker International has a strong Growth Score of A, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Brinker International is part of the Zacks Retail - Restaurants industry. Over the past month, Chipotle Mexican Grill (CMG Quick QuoteCMG - Free Report) , a stock from the same industry, has gained 10.8%. The company reported its results for the quarter ended June 2026 more than a month ago.

Chipotle reported revenues of $3.35 billion in the last reported quarter, representing a year-over-year change of +9.3%. EPS of $0.33 for the same period compares with $0.33 a year ago.

Chipotle is expected to post earnings of $0.29 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chipotle. Also, the stock has a VGM Score of C.