NEW YORK - Brinker International (NYSE:EAT), the parent company of Chili's and Maggiano's, reported a slight uptick in its shares by +0.8% following the announcement of its third-quarter earnings, which surpassed analyst expectations.
The company reported an adjusted EPS of $1.24, outdoing the consensus estimate of $1.14. Revenue for the quarter was in line with expectations at $1.12 billion.
The company's third-quarter performance showed resilience with a 3.3% increase in comparable restaurant sales, contributing to a YoY revenue growth from $1,072.9 million to $1,108.9 million. Chili's led the way with a 3.5% rise in comparable sales, attributed to higher menu pricing and improved dine-in traffic.
However, overall traffic declined by 1.8%, influenced by a strategic decision to reduce focus on virtual brands. Despite this, Brinker's operating income margin improved to 6.2%, and the adjusted restaurant operating margin rose to 14.2%.
Brinker's CEO, Kevin Hochman, stated, "Our strong third quarter results were driven by the continued progress on guest experience, team member experience, and traffic driving initiatives." He credited these initiatives for the company's significant outperformance in sales and traffic within the industry, as well as enhanced restaurant economics.
Looking ahead, Brinker provided an optimistic outlook for the full fiscal year 2024, forecasting an adjusted EPS range of $3.80 to $4.00, which is above the analyst consensus of $3.69. The company also expects total revenues to reach between $4.33 billion and $4.35 billion, closely aligned with the consensus of $4.34 billion.
The positive earnings report and the company's ability to exceed EPS estimates have given investors cause for cautious optimism, reflected in the modest stock price increase post-announcement. Brinker's focus on enhancing the dining experience and strategic adjustments appear to be paying off, positioning the company for a potentially strong finish to the fiscal year.
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