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Likely Coronavirus Impact on Brinker's (EAT) Q3 Earnings

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Brinker International, Inc. (EAT - Free Report) is scheduled to report third-quarter fiscal 2020 results on Apr 29. In the last-reported quarter, the company delivered a positive earnings surprise of 4.1%. Further, it has a trailing four-quarter beat of 2.5%, on average.

How Are Estimates Placed?

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 48 cents per share, indicating a decline from earnings of $1.26 recorded in the year-ago quarter. For quarterly revenues, the consensus mark is pegged at $849.9 million, suggesting an 1.3% increase from the year-earlier figure.

Let's take a look at how things have shaped up in the quarter.

Brinker International, Inc. Price and EPS Surprise

 

Factors at Play

The coronavirus pandemic is expected to have materially affected Brinker’s performance in the fiscal third quarter. In a recent operational update, the company announced that company-owned comparable restaurant sales declined 5.9% in the quarter due to the pandemic. 

With the dine in facility shut, the company is operating only through pickup and delivery services. Although online delivery is likely to have seen strong growth, it may not be able to offset the negative impact of store closures in the third quarter. Moreover, costs related to various sales-boosting initiatives, advertising expenses along with commodity inflation are expected to have affected margins in the to-be-reported quarter.

The Zacks Consensus Estimate for sales at Chili's of $758 million suggests an increase of 3.5% year over year. However, revenues at Maggiano’s are predicted to be $91 million, indicating a decline of 14.6% from the prior-year quarter.

Moreover, continuous focus on menu innovation, digital enhancement, advertisement campaigns and introduction of better service platforms is likely to have boosted the top line in the third quarter.

What Our Model Says

Our proven model predicts an earnings beat for Brinker this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. 

Earnings ESP: Brinker has an Earnings ESP of +14.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:

Papa John's International, Inc. (PZZA - Free Report) has a Zacks Rank #3 and an Earnings ESP of +15.44%.

Potbelly Corporation (PBPB - Free Report) has a Zacks Rank #3 and an Earnings ESP of +16.18%.

Builders FirstSource, Inc. (BLDR - Free Report) has a Zacks Rank #3 and an Earnings ESP of +9.16%.

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