Back to top

Image: Bigstock

Brinker (EAT) Q1 Earnings & Revenues Surpass Estimates

Read MoreHide Full Article

Brinker International, Inc. (EAT - Free Report) reported first-quarter fiscal 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Despite reporting better-than-expected results, the company’s shares declined 3% in the after-hour trading session as high inflation woes linger.

Earnings & Revenue Discussion

In the quarter under review, adjusted loss per share (EPS) was 57 cents compared with the Zacks Consensus Estimate of a loss of 60 cents. In the prior-year quarter, the company reported an adjusted EPS of 34 cents.

In the fiscal first quarter, total revenues of $955.5 million beat the Zacks Consensus Estimate of $933 million. The top line increased 9.3% on a year-over-year basis. The company gained from the solid performance of Maggiano's.

Chili's

Chili’s revenues in the fiscal first quarter increased 7.9% year over year to $904.2 million. The gain was primarily due to increased menu pricing and the acquisition of 68 restaurants in fiscal 2022, marginally overshadowed by lower traffic.

Chili's company restaurant expenses (as a percentage of company sales) in the fiscal first quarter increased to 94.2% year over year from 89% reported in the prior-year quarter. The upside can be attributed to a rise in commodity costs, delivery fees, manager salary expenses, hourly wage rates, utility expenses and rent expenses, marginally offset by sales leverage and lower advertising.

Chili's company-owned traffic in the quarter decreased 6.6% year over year against 9.4% growth reported in the prior-year quarter.

The segment’s company-owned comps increased 3.8% in the fiscal first quarter from the year-ago quarter.

At Chili's, domestic comps (including company-owned and franchised) rose 3.4% year over year compared with a 13.8% rise in the prior-year quarter.

Brinker International, Inc. Price, Consensus and EPS Surprise

 

Brinker International, Inc. Price, Consensus and EPS Surprise

Brinker International, Inc. price-consensus-eps-surprise-chart | Brinker International, Inc. Quote

Maggiano's

Maggiano's sales rose 18.9% year over year to $105.6 million primarily due to an increase in the dining room and banquet traffic, and a rise in menu pricing. Comps increased 18.2% year over year. Traffic in the quarter rose 9.3% year over year compared with a gain of 39.1% reported in the prior-year quarter.

Maggiano's company restaurant expenses (as a percentage of company sales) in the fiscal first quarter were 91.5% compared with 89% reported in the prior-year quarter. The increase was due to a rise in commodity costs, restaurant labor costs, utility expenses, maintenance costs and rent expenses.

Operating Results

Total operating costs and expenses in the fiscal first quarter were $975.3 million compared with $850.8 million reported in the year-ago quarter. The restaurant operating margin, as a percentage of company sales, was 6% compared with the 11% reported in the prior-year quarter.

Balance Sheet

As of Sep 28, 2022, cash and cash equivalents amounted to $19.5 million compared with $31.2 million as of Sep 29, 2021.

Long-term debt as of Sep 28, 2022, was $1,020.8 million compared with $989.1 million as of Jun 29, 2022. Total shareholders’ deficit in the reported quarter was ($296.6) million compared with ($268.1) million reported in the previous quarter.

The company currently has a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks in the Zacks Retail – Restaurants industry are Potbelly Corporation (PBPB - Free Report) , Wingstop Inc. (WING - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .

Potbelly currently sports a Zacks Rank #1 (Strong Buy). PBPB has a trailing four-quarter earnings surprise of 22.2%, on average. Shares of PBPB have declined 20.6% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.9% and 101.9%, respectively, from the year-ago period’s reported levels.

Wingstop also sports a Zacks Rank #1 at present. WING has a long-term earnings growth rate of 11%. Shares of WING have improved 2.3% in the past year.

The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 17.1%, respectively, from the year-ago period’s reported levels.

Chipotle currently carries a Zacks Rank #2 (Buy). CMG has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has declined 16.4% in the past year.

The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.2% and 30.7%, respectively, from the year-ago period’s reported levels.

Published in