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Factors Setting the Tone for Brinker's (EAT) Q4 Earnings
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Brinker International, Inc. (EAT - Free Report) is scheduled to report fourth-quarter fiscal 2024 results on Aug 14, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 7.8%.
How Are Estimates Placed?
The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) is pegged at $1.65 per share, indicating an 18.7% increase from the prior-year reported figure of $1.39. The estimated figure moved up from $1.55 in the past 30 days.
The consensus mark for revenues is pegged at $1.16 billion, suggesting a 7.7% increase from the year-ago quarter’s figure.
Brinker International, Inc. Price and EPS Surprise
Let's look at how things have shaped up in the quarter.
Factors at Play
EAT's fiscal fourth-quarter top line is expected to have increased year over year, driven by strong performance at Chili's, new restaurant development and marketing initiatives. Also, traffic improvements, increased menu pricing and an effective menu strategy are likely to have driven the company’s performance in the to-be-reported quarter.
The Chili's segment is likely to have benefited in the to-be-reported quarter from profitable traffic initiatives and operational improvements, creating positive momentum for the business. For the said quarter, our model predicts revenues from Chili's and Maggiano's to increase 6.9% and 0.6% year over year to $1,019.6 million and $122.1 million, respectively.
Sales leverage from top-line growth, moderation in the cost of sales and effective cost management are likely to have positively impacted the company's bottom line in the to-be-reported quarter.
However, inflationary pressures and increased expenses in broad-based advertising and incremental repair and maintenance investments are likely to have hurt margins in the fiscal fourth quarter. EAT expects commodity inflation to increase slightly, around 2%, in the to-be-reported quarter.
Our model predicts fiscal fourth-quarter company restaurant expenses to be $965.8 million, up 4.7% year over year. Per the model, restaurant labor expenses are expected to increase 3.6% year over year to $376 million.
What Our Model Says
Our proven model predicts an earnings beat for Brinker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Brinker has an Earnings ESP of +8.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks from the Zacks Retail-Wholesale space that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +5.40% and a Zacks Rank #1.
The stock has risen 49.1% year to date. ANF’s earnings beat estimates in each of the trailing four quarters, the average surprise being 210.3%.
Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #3 at present.
The company’s shares have risen 128.5% in the past year. SG’s earnings missed estimates in each of the trailing four quarters, delivering an average negative surprise of 8.7%.
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) has an Earnings ESP of +7.32% and a Zacks Rank of 3.
RRGB’s shares have declined 55.3% year to date. It reported better-than-expected earnings in two of the trailing four quarters and missed the mark twice, the average negative surprise being 22.4%.
Image: Bigstock
Factors Setting the Tone for Brinker's (EAT) Q4 Earnings
Brinker International, Inc. (EAT - Free Report) is scheduled to report fourth-quarter fiscal 2024 results on Aug 14, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 7.8%.
How Are Estimates Placed?
The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) is pegged at $1.65 per share, indicating an 18.7% increase from the prior-year reported figure of $1.39. The estimated figure moved up from $1.55 in the past 30 days.
The consensus mark for revenues is pegged at $1.16 billion, suggesting a 7.7% increase from the year-ago quarter’s figure.
Brinker International, Inc. Price and EPS Surprise
Brinker International, Inc. price-eps-surprise | Brinker International, Inc. Quote
Let's look at how things have shaped up in the quarter.
Factors at Play
EAT's fiscal fourth-quarter top line is expected to have increased year over year, driven by strong performance at Chili's, new restaurant development and marketing initiatives. Also, traffic improvements, increased menu pricing and an effective menu strategy are likely to have driven the company’s performance in the to-be-reported quarter.
The Chili's segment is likely to have benefited in the to-be-reported quarter from profitable traffic initiatives and operational improvements, creating positive momentum for the business. For the said quarter, our model predicts revenues from Chili's and Maggiano's to increase 6.9% and 0.6% year over year to $1,019.6 million and $122.1 million, respectively.
Sales leverage from top-line growth, moderation in the cost of sales and effective cost management are likely to have positively impacted the company's bottom line in the to-be-reported quarter.
However, inflationary pressures and increased expenses in broad-based advertising and incremental repair and maintenance investments are likely to have hurt margins in the fiscal fourth quarter. EAT expects commodity inflation to increase slightly, around 2%, in the to-be-reported quarter.
Our model predicts fiscal fourth-quarter company restaurant expenses to be $965.8 million, up 4.7% year over year. Per the model, restaurant labor expenses are expected to increase 3.6% year over year to $376 million.
What Our Model Says
Our proven model predicts an earnings beat for Brinker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Brinker has an Earnings ESP of +8.02%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With a Favorable Combination
Here are some other stocks from the Zacks Retail-Wholesale space that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +5.40% and a Zacks Rank #1.
The stock has risen 49.1% year to date. ANF’s earnings beat estimates in each of the trailing four quarters, the average surprise being 210.3%.
Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #3 at present.
The company’s shares have risen 128.5% in the past year. SG’s earnings missed estimates in each of the trailing four quarters, delivering an average negative surprise of 8.7%.
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) has an Earnings ESP of +7.32% and a Zacks Rank of 3.
RRGB’s shares have declined 55.3% year to date. It reported better-than-expected earnings in two of the trailing four quarters and missed the mark twice, the average negative surprise being 22.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.