Brinker International(US:EAT)2026-01-28 21:47Restaurant Operations - As of December 24, 2025, the company owned, operated, or franchised a total of 1,627 restaurants, including 1,160 company-owned and 467 franchised locations[63]. - The company plans to open 32 to 38 new restaurants in fiscal 2026, with 6 openings projected for the full year as of December 24, 2025[69]. - The company has strategically pursued international expansion, with 10 new franchise restaurant openings and one new development agreement during the twenty-six-week period ended December 24, 2025[68]. Financial Performance - Total revenues for the thirteen-week period ended December 24, 2025, increased to $1,452.2 million, up from $1,358.2 million for the same period in 2024, reflecting a change of 6.9%[71]. - Total revenues for the Chili's segment increased by 9.0% to $1,317.3 million, driven by favorable comparable restaurant sales and higher traffic[86]. - Chili's total revenues increased by 14.6% to $2,567.0 million for the twenty-six week period ended December 24, 2025, compared to $2,239.2 million for the same period in 2024[90]. - Maggiano's total revenues decreased by 9.7% to $134.9 million for the thirteen week period ended December 24, 2025, compared to $149.4 million for the same period in 2024, primarily due to restaurant closures[95]. Comparable Sales and Traffic - Comparable restaurant sales for company-owned locations increased by 7.5% in the thirteen-week period ended December 24, 2025, driven by a price impact of 4.6% and a traffic impact of 1.4%[73]. - Franchise revenues increased due to higher royalties, with Chili's franchisee sales reaching $271.9 million in the thirteen-week period ended December 24, 2025, compared to $232.3 million in the same period in 2024[73]. Cost Management - Food and beverage costs increased to $370.5 million, representing 25.7% of company sales, with a 0.2% unfavorable variance due to higher commodity costs and unfavorable menu item mix[76]. - Restaurant labor costs rose to $446.4 million, accounting for 31.0% of company sales, with a favorable variance of 0.3% attributed to sales leverage[76]. - Food and beverage costs for the twenty-six week period ended December 24, 2025, were $715.1 million, with a 0.4% unfavorable variance due to commodity costs[81]. - Chili's food and beverage costs were unfavorable by 0.1%, primarily due to a 0.9% unfavorable menu item mix and 0.2% unfavorable commodity costs, partially offset by 1.2% favorable menu pricing[89]. - Maggiano's food and beverage costs were unfavorable by 2.6%, driven by a 3.0% unfavorable menu item mix and 0.7% unfavorable commodity costs, partially offset by 1.1% favorable menu pricing[99]. - Maggiano's food and beverage costs were unfavorable by 2.3%, driven by a 2.8% unfavorable menu item mix and 0.6% higher commodity costs, partially offset by 1.1% favorable menu pricing[104]. Expenses - General and administrative expenses increased by $6.6 million to $59.7 million, primarily due to higher payroll expenses and stock-based compensation[78]. - Chili's general and administrative expenses increased by $3.3 million to $27.3 million for the twenty-six week period ended December 24, 2025, compared to $24.0 million for the same period in 2024[94]. - Depreciation and amortization rose to $54.6 million, reflecting an increase of $6.9 million from the previous year[78]. - Chili's depreciation and amortization increased by $11.9 million to $94.2 million for the twenty-six week period ended December 24, 2025, compared to $82.3 million for the same period in 2024[92]. Cash Flow and Financing - Net cash provided by operating activities increased by $58.7 million to $339.7 million for the twenty-six week period ended December 24, 2025, compared to $281.0 million for the same period in 2024[100]. - Net cash used in investing activities increased by $15.8 million to $121.6 million for the twenty-six week period ended December 24, 2025, primarily due to increased spending on new restaurant construction[101]. - Net cash used in financing activities decreased slightly to $(222.0) million for the twenty-six week period ended December 24, 2025, compared to $(225.0) million in the prior year, primarily due to a decrease in net repayments of long-term debt[102]. - As of December 24, 2025, net borrowings of $20.0 million were drawn on the revolving credit facility, with $949.9 million of credit available[103]. - The company repurchased 1.8 million shares for $235.0 million during the twenty-six week period ended December 24, 2025, with approximately $315.0 million remaining under the current share repurchase program[108]. Tax and Interest - Effective income tax rate for the thirteen-week period ended December 24, 2025, was 18.7%, up from 16.4% in the prior year[83]. - Interest expenses decreased by $4.0 million to $10.7 million, primarily due to a lower average revolver balance[80]. - The company's interest rate on the revolving credit facility was 4.98% as of December 24, 2025, consisting of SOFR of 3.73% plus an applicable margin of 1.25%[105]. - 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 $0.2 million of annual interest expense[114]. Risk Factors - Commodity price risks remain a concern, with potential fluctuations in food and other commodity prices impacting financial results due to supply and demand factors[115]. - Other (gains) and charges for the twenty-six week period ended December 24, 2025, were $1.4 million, a decrease of $19.6 million from the previous year[82]. - Other (gains) and charges for Chili's resulted in a net unfavorable variance of $10.8 million, with losses from natural disasters and litigation impacting the results[91]. Operational Improvements - The company has focused on enhancing the digital experience, including a seamless To-Go menu available through various platforms, which has improved customer convenience[65]. - The company has simplified its menu to focus on core items, which has helped improve consistency and quality in food preparation[65]. - The company has invested in technology to enhance operational efficiency, including the use of handheld tablets for order placement and tabletop devices for guest interaction[66].