Brinker raises 2027 earnings outlook to $13.30–$13.90 per share after strong results
Key Facts
Brinker International raised its fiscal 2027 revenue and earnings outlook after reporting on October 28 results for its first quarter, which ended September 23, beating analysts’ estimates for earnings and revenue. The company said the new adjusted earnings range is $13.30–$13.90 per share, compared with $12.60–$13.40 previously, while it raised its revenue outlook to $6.23–$6.33 billion from $6.15–$6.27 billion. The update came as Chili’s sales continued to grow, making it the biggest driver of operating performance cited in the results. Adjusted earnings were $2.77 per share, above the average estimate of $2.42, according to Investing.com. Revenue was also $1.47 billion, compared with an estimate of $1.45 billion.
Total revenue was $1.476 billion for the quarter, up from $1.349 billion in the same period of the prior fiscal year. The company’s sales rose to $1.461 billion from $1.335 billion, according to Brinker’s statement. Net income increased to $113.3 million from $99.5 million, while diluted earnings per share rose to $2.64 from $2.17. The comparison shows year-over-year growth in revenue, net income and diluted earnings per share, alongside a beat on the adjusted estimates reported by Investing.com. The company’s shares closed at $196.72 on October 27, according to EL7 data.
Comparable restaurant sales across the group rose 9.1%, driven by Chili’s, which posted growth of 10.1%. By contrast, comparable sales at Maggiano’s fell 3.4%, reflecting divergent performance between the two brands. Brinker said Chili’s comparable sales growth was tied to higher customer traffic and menu pricing, while it attributed Maggiano’s decline to lower traffic, partly offset by pricing. According to the company, Chili’s posted its twenty-second consecutive quarter of comparable sales growth, with an increase of nearly 10% following growth of 21% in the year-earlier period. These figures align with Investing.com’s description of Chili’s momentum as one of the factors behind the results beat and outlook revision.
Operating performance improved alongside sales growth: operating income rose to $151.0 million from $117.9 million, and its margin increased to 10.2% from 8.7%. Chili’s restaurant operating margin was 18.7%, compared with 17.3% a year earlier, while Maggiano’s margin rose to 3.1% from 2.4% despite the decline in its comparable sales. Cash generated from operating activities also increased to $169.1 million from $120.8 million, which the company said was mainly due to higher operating income. Free cash flow rose to $105.7 million from $62.2 million. The company repurchased $125 million of shares during the quarter, according to its statement.
CEO Kevin Hochman attributed Chili’s momentum to “industry-leading value, world-class marketing and ongoing investments in operations,” saying these efforts are aimed at attracting new guests and encouraging regular customers to return. According to the company, the results reflect comparable sales growth at Chili’s and improved operating and cash metrics, while Maggiano’s sales performance remained weaker. The increase in the annual outlook does not reflect only a review of quarterly results: fiscal 2027 includes an additional operating week in the fourth quarter. Brinker expects the 53rd week to add about 2.0% to revenue and $0.70 to adjusted earnings per share. The company kept its fiscal-year capital expenditure outlook at $265–$285 million.