Chili's parent Brinker's stock rocked by a profit-target miss and downbeat outlook

By Tomi Kilgore

Chili's same-store sales rose more than expected, helped by price increases and increased traffic

Shares of Brinker International Inc. tumbled Wednesday toward their worst day since the height of the COVID-19 pandemic after the parent of the Chili's and Maggiano's restaurant chains missed quarterly profit expectations and provided a downbeat full-year outlook.

Meanwhile, total revenue and comparable-restaurant sales, or sales of restaurants open for more than 18 months, rose above expectations, boosted by increased menu pricing and higher traffic.

Brinker's stock (EAT) sank 15.3% in morning trading, which put it on track for the biggest one-day selloff since it plunged 23.7% on March 27, 2020.

The coronavirus public health emergency, declared in January 2020, ended in May 2023.

Net income for the quarter through June 26 rose to $57.3 million, or $1.24 a share, from $54.2 million, or $1.19 a share, in the same period a year before.

Excluding nonrecurring items, adjusted EPS increased to $1.61 from $1.39 but missed the FactSet consensus of $1.72, to snap a seven-quarter streak of beats.

Total revenue grew 12.3% to $1.21 billion, above the FactSet consensus of $1.16 billion, after back-to-back quarterly misses.

Comparable-restaurant sales jumped 13.5%, or more than double the FactSet consensus, which called for a 6.1% rise.

At Chili's, sales increased 14.8% to beat the expected 8.6% growth, boosted by higher menu pricing and a 5.9% increase in traffic.

Maggiano's sales were up 2.5%, as boosted pricing helped offset lower traffic, but that missed the analyst consensus expectation of 2.7% growth.

For fiscal 2025, the company expects adjusted EPS of between $4.35 and $4.75, compared with a current FactSet consensus of $4.78. Total revenue is projected to be in the range of $4.55 billion to $4.62 billion, which would be above the current expectation of $4.52 billion.

The stock has run up 38% to date in 2024, while the S&P 500 has advanced 13.9%.

-Tomi Kilgore

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08-14-24 0948ET

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