Group 1 - Brinker International (NYSE: EAT) shares have more than doubled in value over the past year, indicating strong performance [1] - Fast casual chains such as Cava (CAVA), Chipotle (CMG), and SweetGreen (SG) have also been highlighted in the context of market performance [1]

Core Insights - Brinker International, Inc. reported better-than-expected fourth-quarter EPS and sales results, raising FY2026 guidance above estimates [1][2] - The company achieved fourth-quarter adjusted EPS of $2.49, surpassing the analyst consensus estimate of $2.45, with quarterly sales of $1.462 billion, reflecting a 21% year-over-year increase [1] - For FY2026, Brinker projects adjusted EPS between $9.90 and $10.50, exceeding the consensus estimate of $8.84, and expects sales of $5.6 billion to $5.7 billion, above the forecast of $5.36 billion [2] Financial Performance - The company reported a two-year sales growth of 39% and a three-year growth of 45%, indicating sustained momentum [2] - Brinker shares rose 1.1% to $159.12 following the earnings announcement [3] Analyst Ratings and Price Targets - Barclays analyst Jeffrey Bernstein maintained an Equal-Weight rating and raised the price target from $166 to $170 [8] - BMO Capital analyst Andrew Strelzik maintained a Market Perform rating and increased the price target from $150 to $170 [8] - Evercore ISI Group analyst David Palmer maintained an In-Line rating and raised the price target from $180 to $190 [8] - UBS analyst Dennis Geiger maintained a Neutral rating and increased the price target from $155 to $165 [8] - Piper Sandler analyst Nicole Miller Regan maintained a Neutral rating and raised the price target from $155 to $168 [8] - B of A Securities analyst Katherine Griffin maintained a Neutral rating and increased the price target from $186 to $190 [8] - Morgan Stanley analyst John Glass maintained an Equal-Weight rating and raised the price target from $149 to $161 [8]

Core Insights - Brinker International, Inc. (EAT) reported strong fourth-quarter fiscal 2025 results, with earnings and revenues exceeding expectations and showing year-over-year growth [1][4][9] - The stock price increased by 1.6% following the earnings report [1] Financial Performance - Adjusted earnings per share (EPS) for Q4 were $2.49, surpassing the Zacks Consensus Estimate of $2.43, and up from $1.61 in the prior-year quarter [4][9] - Total revenues reached $1,461.9 million, exceeding the consensus estimate of $1,411 million, and reflecting a 21% increase year-over-year [4][11] Segment Performance - Chili's segment revenues rose 24% year-over-year to $1,339.6 million, driven by increased foot traffic and effective marketing strategies [5][9] - Maggiano's revenues decreased by 1.2% year-over-year to $122.3 million, primarily due to lower customer traffic, although menu price increases provided some offset [8][10] Operational Metrics - Chili's same-store sales increased by 24%, significantly outperforming the casual dining sector by 1,890 basis points [2] - Maggiano's comparable restaurant sales fell by 0.4% year-over-year, with traffic down 8.9% [8][10] Cost and Margin Analysis - Chili's restaurant expenses as a percentage of sales improved to 81.8% from 84.9% in the prior year, aided by sales leverage [6] - Adjusted restaurant operating margin for EAT was 17.8%, up from 15.2% in the prior-year quarter [11] Balance Sheet Highlights - As of June 25, 2025, cash and cash equivalents were $64.6 million, up from $15.1 million a year earlier, while long-term debt decreased to $426 million from $786.3 million [12] Future Outlook - For fiscal 2026, management anticipates total revenues between $5.60 billion and $5.70 billion, with adjusted diluted EPS projected in the range of $9.90 to $10.50 [13]

Core Viewpoint - Brinker International reported strong second-quarter earnings, with significant same-store sales growth, indicating resilience in consumer dining habits despite a cautious outlook for the remainder of 2025 [1][2][3]. Financial Performance - Overall revenue reached $1.46 billion, reflecting a 20% year-over-year increase [2]. - The company achieved a remarkable 54% year-over-year growth in earnings, showcasing its pricing power and ability to attract customers [2]. - Same-store sales growth for Chili's and Maggiano's chains was reported at 21.3% [1]. Future Outlook - The company provided cautious guidance for 2025, highlighting potential volatility in commodity costs and emphasizing menu innovation, digital ordering, and loyalty programs to enhance customer engagement [4]. - Analysts project a 12.65% earnings growth over the next 12 months, which is above the sector average [8]. Market Position - EAT stock has been one of the strongest-performing restaurant stocks over the past five years, trading at an attractive valuation of around 19x forward sales, which is a discount to the sector average [7][8]. - Despite recent gains, EAT stock is still down overall for the last five days, indicating a need for further confirmation of a new trend [2][9]. Stock Performance and Analyst Ratings - The current price target for EAT stock is $156.41, with a consensus hold rating among analysts [9][11]. - The stock is trading near the consensus price target, and analysts have been raising their price targets in the last two months [10][11].

Marketing Strategy & Investment - The company emphasizes its marketing team's excellence, recognized as brand of the year by Adage [1] - Marketing budget significantly increased from approximately $32 million to $137 million, a roughly 328% increase, providing more resources for marketing activities [2] - The company's marketing efforts aim to demonstrate the relevance of its proposition to people's lives [2] Media & Communication - Mentions of following Jim Kramer on X (formerly Twitter) and using madmentions to tweet questions [2] - Provides contact information for the show, including email (madmoney@cnbc.com) and phone number (1-800-743-CNNBC) [2] - Directs viewers to madmoney.cnbc.com for missed content [3]

Core Insights - Brinker International has significantly increased its marketing budget from $32 million three years ago to $137 million in the most recent fiscal year, which has positively impacted business performance [1] - The company reported strong earnings and revenue, with Chili's same-store sales rising by 23.7%, leading to an increase in the full-year forecast [1] - Social media influencers have played a crucial role in driving traffic to Chili's, with a mix of paid endorsements and organic customer posts contributing to the brand's visibility [2] Marketing Strategy - The refortification of marketing budgets has allowed the company to effectively promote its restaurant brands [1] - The use of social media influencers has been beneficial, providing them with creative freedom in advertising [2] Product Offering - The standardization of Chili's $10.99 value meal across various U.S. markets has been well-received by customers, eliminating the need for coupons or apps [3] Cost Management - The company is leveraging growth to address rising labor and goods costs, emphasizing that cost-cutting alone is insufficient to maintain margins in the current inflationary environment [4] - Investments in improving locations, food quality, and labor are starting to yield positive results, allowing the company to enhance margins [4]

Core Insights - Brinker International reported a significant increase in comparable sales for Chili's, with a year-over-year rise of 23.7% for the quarter ending June 25, while Maggiano's experienced a slight decline of 0.4% [2] - The growth in traffic at Chili's is attributed to effective advertising and operational improvements as part of a three-year turnaround plan [3] Marketing Strategies - A notable marketing initiative was the "Fast Food Financing" pop-up experience in New York City, which highlighted the value of Chili's meals compared to fast food [4][5] - The marketing efforts have successfully created nationwide buzz and reinforced Chili's position as a value leader in the restaurant sector [5] Operational Improvements - Recent operational enhancements at Chili's include the installation of new kitchen equipment for better cooking efficiency and a streamlined menu to simplify the ordering process [5] - Future plans for 2026 involve a significant simplification of the iPad application used for order taking, aimed at improving user experience and operational efficiency [6] Management and Leadership Changes - Brinker International is making leadership changes at Maggiano's, with plans to implement successful strategies from Chili's turnaround [7] - The company emphasizes the importance of listening to restaurant teams for ideas to accelerate Maggiano's recovery [8]

Economic Outlook - Pre-market futures are up following all-time closing highs from the S&P 500 and Nasdaq, driven by optimism around potential rate cuts by the Federal Open Market Committee (FOMC) [1] - U.S. Treasury Secretary suggested a 50 basis points cut in the Fed funds rate, which would lower rates to 3.75-4.00%, a level last seen in December 2022 [2][1] - July Inflation Rate reported at +2.7%, alleviating concerns about tariffs re-igniting inflation [2] Inflation and Price Trends - Current inflation is below +2.0%, with sub-3.0% inflation expected to be absorbed by the economy without significant disturbance [3] - Concerns arise about potential inflation increases if interest rates decrease while tariffs rise, with projections of 2-3 rate cuts leading to a Fed funds rate of 3.50-3.75% amid rising inflation [4] - Recent CPI report showed food prices steady, gasoline down -9.5%, and used cars and trucks up +4.8%, indicating a core CPI at a 5-month high [4] Producer Price Index (PPI) Expectations - Upcoming PPI report for July is projected to show +0.2% on headline and +0.3% on core, indicating potential tariff effects before retailers adjust prices [5] Company Earnings - Brinker International (EAT) reported fiscal Q4 earnings of $2.49 per share, exceeding expectations and showing significant growth from $1.61 per share year-over-year [6] - Revenues of $1.46 billion surpassed estimates by +2%, with a +16% growth in restaurant traffic [7] - Maggiano's Little Italy franchise saw a slight decline of -0.4%, but Chili's experienced exceptional growth of +24% year-over-year [7] Market Expectations - Cisco Systems (CSCO) is expected to report earnings after the closing bell, with shares up +20% year-to-date and projected earnings growth of +11.5% year-over-year [8]

Financial Data and Key Metrics Changes - In Q4, Chili's same store sales increased by 24%, outperforming the casual dining industry by 189 basis points, with a two-year comp of 39% [6][7] - Total revenue for the year grew by 21.9%, surpassing $5 billion for the first time, with adjusted EPS growth of 117.1% [38][39] - Restaurant operating margin improved from 11.9% in fiscal 2022 to 17.6% in fiscal 2025 [8][14] Business Line Data and Key Metrics Changes - Chili's reported top line sales growth with comps at 23.7%, driven by positive traffic of 16.3%, mix of 4.7%, and price of 2.7% [39] - Maggiano's reported comp sales for the quarter of negative 0.4% [40] Market Data and Key Metrics Changes - Chili's average annual volumes increased from $3.6 million to over $4.5 million [38][14] - The company has seen a significant increase in marketing investment from $32 million in fiscal 2022 to $137 million in fiscal 2025 [17] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes food, service, and atmosphere, with a streamlined menu and improved operational efficiency [13][19] - Plans for fiscal 2026 include a full year of the ribs upgrade, new frozen margarita offerings, and a major relaunch of the chicken sandwich platform [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum, with expectations for continued positive same store sales and traffic [46][47] - The company plans to ramp up reimaging programs for both Chili's and Maggiano's, aiming for a 10% annual refresh rate [24][90] Other Important Information - The company has paid down over $570 million of outstanding debt in the past three years, achieving a lease adjusted leverage ratio of 1.7 [18][44] - A new Vice President of Restaurant Development has been appointed to lead reimaging and new restaurant openings [25] Q&A Session Summary Question: Comments on restaurant margins and Maggiano's turnaround - Management clarified that margin expansion is expected to be in the range of 30 to 40 basis points, with some inflation in the cost of sales [51][52] - The turnaround for Maggiano's will focus on enhancing the guest experience based on core customer preferences [54][56] Question: Update on growth targets and marketing investment - Management indicated that while growth targets remain relevant, there may be updates as new unit growth ramps up [60][62] - Marketing investment is set at about 3% of total revenues, with plans for incremental increases [66][68] Question: Expectations for same store sales components in FY 2026 - Price increases are expected to be closer to 3% in FY 2026, with mix planned to be flat and positive traffic anticipated [75][78] - The company is focused on maintaining industry-leading value while managing pricing strategies [74][76] Question: Insights on new customer dynamics - The company is experiencing growth across all income levels, with frequency of visits remaining stable among new customers [83][84] Question: Details on STORE reimage plans - The company plans to reimage four restaurants initially, with evaluations to inform future investments and sales lift expectations [89][90]

Financial Data and Key Metrics Changes - In Q4, Chili's same store sales increased by 24%, outperforming the casual dining industry by 189 basis points, following a 15% increase in the same quarter last year, resulting in a two-year comp of 39% [5][36] - Total revenue for the year grew by 21.9%, surpassing $5 billion for the first time, with adjusted EPS growth of 117.1% [36][41] - Restaurant operating margin improved from 11.9% in fiscal 2022 to 17.6% in fiscal 2025 [6][13] Business Line Data and Key Metrics Changes - Chili's reported top line sales growth with comps at 23.7%, driven by positive traffic of 16.3%, positive mix of 4.7%, and price increase of 2.7% [37] - Maggiano's reported comp sales for the quarter of negative 0.4%, indicating challenges in that segment [38] Market Data and Key Metrics Changes - Chili's has consistently outperformed the casual dining industry for seven consecutive quarters in terms of traffic [6] - The average annual volume (AUV) at Chili's increased from $3.6 million to over $4.5 million [36][41] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes food, service, and atmosphere, with a streamlined menu and improved operational efficiency [12][18] - Plans for fiscal 2026 include continued investment in marketing, menu management, and a barbell pricing strategy to maintain value while offering premium options [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth, with expectations for continued positive same store sales and traffic above industry averages [36][44] - The company plans to ramp up reimaging programs for both Chili's and Maggiano's, aiming for a 10% annual refresh rate of restaurants [22][88] Other Important Information - The company has significantly improved its balance sheet, repaying over $570 million in debt over the past three years, resulting in a lease adjusted leverage ratio of 1.7 [16][41] - A new Vice President of Restaurant Development has been appointed to lead reimaging and new restaurant openings [23] Q&A Session Summary Question: Insights on restaurant margins and Maggiano's turnaround - Management clarified that margin expansion is expected to be around 30 to 40 basis points, with some inflation in the cost of sales line [50][51] - The turnaround for Maggiano's will focus on core guest preferences, emphasizing food quality and service [53] Question: Future growth targets and marketing investments - Management indicated that while the current growth targets remain relevant, there may be updates as new unit growth ramps up [59][61] - Marketing investments will continue to be around 3% of total revenues, with plans for new value messaging [66][68] Question: Expectations for same store sales components - Pricing is expected to be closer to 3% in fiscal 2026, with flat mix and positive traffic anticipated [75][81] - The company is seeing growth across all income levels, maintaining frequency among new guests [82][83] Question: STORE Reimage plans - The company plans to reimage four restaurants initially, with evaluations to inform future investments and expected sales lifts [87][89]