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Brinker International(EAT) - 2025 Q3 - Quarterly Report
EATBrinker International(EAT)2025-04-29 20:16
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Restaurant Operations - As of March 26, 2025, the company owned, operated, or franchised a total of 1,626 restaurants, including 1,163 company-owned and 463 franchised locations[70]. - The company opened 27 new franchise restaurants during the thirty-nine week period ended March 26, 2025, and plans to pursue international expansion through development agreements[76]. - The company acquired land and buildings valued at 11.1millionassociatedwithfourcompany−ownedrestaurantsduringthethirdquarteroffiscal2025[78].FinancialPerformance−Totalrevenuesforthethirteen−weekperiodendedMarch26,2025,increasedto11.1 million associated with four company-owned restaurants during the third quarter of fiscal 2025[78]. Financial Performance - Total revenues for the thirteen-week period ended March 26, 2025, increased to 1,425.1 million, up from 1,120.3millionforthesameperiodin2024,representingagrowthofapproximately27.11,120.3 million for the same period in 2024, representing a growth of approximately 27.1%[80]. - Total revenues for the Chili's segment increased by 30.5% to 1,304.1 million, driven by favorable comparable restaurant sales and higher traffic[94]. - Chili's total revenues increased by 25.0% to 3,543.3millionforthethirty−nineweekperiodendedMarch26,2025,comparedto3,543.3 million for the thirty-nine week period ended March 26, 2025, compared to 2,834.9 million for the same period in 2024[97]. - Maggiano's total revenues increased by 1.9% to 379.0millionforthethirty−nineweekperiodendedMarch26,2025,comparedto379.0 million for the thirty-nine week period ended March 26, 2025, compared to 372.0 million in 2024[104]. Comparable Sales and Traffic - Comparable restaurant sales for company-owned restaurants increased by 28.2% in the thirteen-week period ended March 26, 2025, driven by a 17.7% increase in traffic[81]. - Franchise revenues rose due to higher royalties, with Chili's franchisees generating sales of approximately 237.4millioninthethirteen−weekperiodendedMarch26,2025,comparedto237.4 million in the thirteen-week period ended March 26, 2025, compared to 216.2 million in the same period of 2024[80]. Cost Management - Food and beverage costs for the thirteen-week period ended March 26, 2025, were 353.1million,representing25.0353.1 million, representing 25.0% of company sales, a favorable variance of 0.1% compared to the previous year[82]. - Restaurant labor costs increased to 452.2 million, accounting for 32.0% of company sales, with a 1.4% favorable variance driven by sales leverage[82]. - Chili's food and beverage costs were 324.5million,25.1324.5 million, 25.1% of company sales, with a favorable variance of 0.1% attributed to menu pricing[95]. - Chili's food and beverage costs were favorable by 0.2%, with menu pricing contributing 1.4%, offset by unfavorable commodity costs primarily driven by poultry and produce[100]. - Restaurant labor costs for Chili's were favorable by 1.8%, attributed to sales leverage and lower other labor expenses, despite higher hourly labor costs[100]. - Maggiano's food and beverage costs were favorable by 0.5%, driven by menu pricing, despite unfavorable commodity costs primarily from dairy and poultry[105]. Expenses - General and administrative expenses rose by 12.2 million to 58.3million,primarilyduetocorporatetechnologyinitiativesandstock−basedcompensation[85].−GeneralandadministrativeexpensesforChili′sroseby58.3 million, primarily due to corporate technology initiatives and stock-based compensation[85]. - General and administrative expenses for Chili's rose by 5.7 million to 36.7millionforthethirty−nineweekperiodendedMarch26,2025,comparedto36.7 million for the thirty-nine week period ended March 26, 2025, compared to 31.0 million in 2024[101]. - Depreciation and amortization for the thirty-nine-week period ended March 26, 2025, increased by 22.9millionto22.9 million to 148.7 million, primarily due to additions for new and existing restaurant assets[88]. - Chili's depreciation and amortization increased by 22.9million,totaling22.9 million, totaling 131.2 million for the thirty-nine week period ended March 26, 2025, up from 108.3millionintheprioryear[99].CashFlowandFinancing−Chili′snetcashprovidedbyoperatingactivitiesincreasedby108.3 million in the prior year[99]. Cash Flow and Financing - Chili's net cash provided by operating activities increased by 212.6 million to 493.0millionforthethirty−nineweekperiodendedMarch26,2025,comparedto493.0 million for the thirty-nine week period ended March 26, 2025, compared to 280.4 million in 2024[106]. - Net cash used in investing activities increased by 47.4millionto47.4 million to (185.4) million for the thirty-nine week period ended March 26, 2025, primarily due to increased spending on equipment and capital maintenance[107]. - Net cash used in financing activities increased by 212.7million,from212.7 million, from (142.0) million in fiscal 2024 to (354.7)millioninfiscal2025,primarilyduetoincreasednetrepaymentsoflong−termdebtandsharerepurchaseactivity[108].−Thecompanyrefinanced(354.7) million in fiscal 2025, primarily due to increased net repayments of long-term debt and share repurchase activity[108]. - The company refinanced 350.0 million of 5.000% notes through its existing revolving credit facility and drew net borrowings of 90.0millionduringthethirty−nineweekperiodendedMarch26,2025[109].−AsofMarch26,2025,thecompanyhad90.0 million during the thirty-nine week period ended March 26, 2025[109]. - As of March 26, 2025, the company had 810.0 million available under its 900.0millionrevolvingcreditfacility,whichmaturesonAugust18,2026,withaninterestrateof5.93900.0 million revolving credit facility, which matures on August 18, 2026, with an interest rate of 5.93%[110]. - The company repurchased 1.2 million shares for 86.3 million during the thirty-nine week period ended March 26, 2025, with approximately 107.0millionremainingunderthecurrentsharerepurchaseprogram[114].−Thecompanyexpectsitscurrentcashandcashequivalents,alongwithcashgeneratedfromoperationsandavailabilityundertherevolvingcreditfacility,tomeetcapitalexpenditureandworkingcapitalneedsforatleastthenexttwelvemonths[115].TaxandInterest−Theeffectiveincometaxrateforthethirteen−weekperiodendedMarch26,2025,was17.2107.0 million remaining under the current share repurchase program[114]. - The company expects its current cash and cash equivalents, along with cash generated from operations and availability under the revolving credit facility, to meet capital expenditure and working capital needs for at least the next twelve months[115]. Tax and Interest - The effective income tax rate for the thirteen-week period ended March 26, 2025, was 17.2%, up from 9.6% in the previous year, primarily due to higher income before income taxes[91]. - Interest expenses decreased by 3.0 million to 13.2millionforthethirteen−weekperiod,mainlyduetoloweraverageoutstandingdebtbalances[85].−Ahypothetical100basispointincreaseinthecurrentinterestrateontheoutstandingbalanceoftherevolvingcreditfacilitywouldresultinanadditional13.2 million for the thirteen-week period, mainly due to lower average outstanding debt balances[85]. - A hypothetical 100 basis point increase in the current interest rate on the outstanding balance of the revolving credit facility would result in an additional 0.9 million of annual interest expense[118]. Risks - The company faces commodity price risk due to fluctuations in market prices for food and other commodities, which could negatively affect short-term financial results if costs cannot be passed on to customers[119].