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Brinker International, Inc.

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Brinker International’s aggressive expansion strategies and sales building initiatives, like menu innovation, promotional offerings along with introduction of loyalty program, should boost comps. Additionally, Brinker’s increased focus on company-owned restaurants, which allows it to have full control over operations, should boost the bottom as well as the top line. Also, various operational, remodeling and digital initiatives undertaken by the company should drive growth. However, the company’s revenues missed the Zacks Consensus Estimate in six of the trailing seven quarters, mainly due to traffic decline at its restaurants. The company’s presence in energy-exposed markets, where the economy is currently sluggish due to the persistent decline in oil prices, is likely to hurt traffic. Further, higher labor as well as costs related to various promotional and marketing initiatives might continue to hurt margins in the near term.

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