Brinker's earnings per share beat estimates, shares edge up

NEW YORK – Shares of Brinker International (NYSE: Brinker International), the parent company of Chili's and Maggiano's, edged up 0.8% after reporting third-quarter earnings that beat analysts' expectations.

The company reported adjusted earnings of $1.24 per share, beating the consensus estimate of $1.14. Revenue for the quarter was $1.12 billion, in line with expectations.

The company's third-quarter results showed resilience, with comparable restaurant sales rising 3.3%, resulting in revenue growing from $1.0729 billion to $1.1089 billion year-over-year. Chili's led the way with comparable sales growth of 3.5%, thanks to improved menu pricing and increased dine-in traffic.

However, overall traffic fell 1.8% due to the strategic decision to reduce focus on virtual brands. Still, Brinker's operating margin improved to 6.2%, and adjusted restaurant operating margin rose to 14.2%.

“Our strong third quarter results were driven by continued improvements in guest experience, team member experience and traffic-driven initiatives,” said Brinker CEO Kevin Hochman, who attributed these measures to the company's significant performance in industry sales and traffic. performance, as well as the improvement of restaurant economic benefits.

Looking ahead, Brinker gave an optimistic outlook for the full fiscal year 2024, predicting an adjusted earnings per share range of $3.80 to $4.00, above analysts' average estimate of $3.69. The company also expects total revenue of $4.33 billion to $4.35 billion, very much in line with the consensus of $4.34 billion.

The positive earnings report and the company's ability to beat EPS estimates gave investors reason to be cautiously optimistic, which was reflected in the modest rise in the stock price following the announcement. Brinker's focus on improving dining experiences and strategic changes appear to be paying off, leading the company to expect strong results this fiscal year.

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