Brinker International(US:EAT)2025-10-29 20:43Financial Performance - Total revenues for the thirteen-week period ended September 24, 2025, were $1,349.2 million, an increase from $1,139.0 million for the same period in 2024, reflecting a growth of approximately 18.4%[71] - Comparable restaurant sales for company-owned locations increased by 18.8%, with Chili's showing a 21.4% increase, while Maggiano's experienced a decline of 6.4%[72] - Chili's total revenues increased by 21.3% to $1,249.7 million for the thirteen-week period ended September 24, 2025, primarily due to favorable comparable restaurant sales[82] - Maggiano's total revenues decreased by 8.4% to $99.5 million for the same period, primarily due to unfavorable comparable restaurant sales and restaurant closures[85] Restaurant Operations - As of September 24, 2025, the company owned, operated, or franchised a total of 1,630 restaurants, including 1,161 company-owned and 469 franchised locations[63] - The company opened 7 new restaurants during the thirteen-week period, with 5 of these being franchise locations, and plans to open 32-38 new restaurants in fiscal 2026[69] - The "3 for Me" value offering has been highlighted as a key traffic driver, allowing guests to enjoy a meal starting at $10.99[65] - The company has focused on enhancing the digital experience for guests, including a seamless To-Go menu available through various platforms[65] Cost Management - Food and beverage costs represented 25.8% of company sales, showing a slight increase from 25.2% in the previous year, primarily due to unfavorable commodity costs[75] - Restaurant labor costs decreased to 32.3% of company sales from 33.5%, benefiting from sales leverage despite higher hourly labor costs[75] Cash Flow and Financing - Net cash provided by operating activities increased by $58.0 million to $120.8 million for the thirteen-week period ended September 24, 2025, due to an increase in operating income[87] - Net cash used in investing activities increased by $1.4 million to $(57.9) million, primarily due to increased spending on new restaurant construction and Maggiano's reimages[88] - Net cash used in financing activities decreased by $6.5 million to $(48.2) million, primarily due to an increase in net borrowings of long-term debt[90] - As of September 24, 2025, the company had $910.0 million available under its $1.0 billion revolving credit facility[91] - The company is focusing on cash flow generation and maintaining a solid financial position amid macroeconomic uncertainties, including commodity and labor inflation[96] - Current cash and cash equivalents, along with cash generated from operations, are expected to meet capital expenditure and working capital needs for at least the next twelve months[97] Shareholder Returns - The Board of Directors approved a $400.0 million increase in the share repurchase program, bringing the total available authority to $507.0 million[94] - In the thirteen-week period ended September 24, 2025, the company repurchased 0.9 million shares for $134.5 million, with approximately $415.0 million remaining under the current share repurchase program[95] Tax and Compliance - The effective income tax rate decreased to 7.5% for the thirteen-week period ended September 24, 2025, from 9.0% in the prior year, primarily due to excess tax benefits from stock-based compensation[79][80] - The company expects to remain in compliance with its covenants under the revolving credit facility and the terms of its 8.25% notes during the remainder of fiscal 2026[93] Future Commitments and Risks - Long-term purchase obligations for marketing programs total $18.0 million in fiscal 2026, $21.2 million in fiscal 2027, $21.1 million in fiscal 2028, and $4.4 million in fiscal 2029[98] - A hypothetical 100 basis point increase in interest rates on the $90.0 million outstanding under the revolving credit facility would result in an additional $0.9 million of annual interest expense[101] - The company faces commodity price risk due to fluctuations in market prices for food and other commodities, which could negatively impact short-term financial results[102] - Depreciation and amortization increased by $7.3 million to $53.6 million for the thirteen-week period ended September 24, 2025, primarily due to additions for new and existing restaurant assets[78] - General and administrative expenses rose by $5.4 million to $57.2 million for the same period, driven by payroll expenses and corporate technology initiatives[78] International Expansion - The company plans to strategically pursue international expansion of Chili's through development agreements with new and existing franchise partners[68]