Why Brinker International Stock Was Tumbling Today

Core Viewpoint - Brinker International, the parent company of Chili's, reported strong growth in the third quarter, but the stock price fell significantly due to high investor expectations and concerns about a potential recession from trade wars [1][2]. Financial Performance - Comparable sales at Chili's increased by 31%, with traffic growth of 21%, attributed to effective marketing strategies [3]. - Revenue rose by 27.2% to $1.43 billion, surpassing the consensus estimate of$1.39 billion [4]. - Operating income more than doubled to $156.9 million, and adjusted earnings per share increased from$1.24 to $2.66, exceeding estimates of$2.57 [4]. Guidance and Market Reaction - The company raised its full-year revenue guidance to $5.33 billion-$5.35 billion, up from $5.15 billion-$5.25 billion, and above the consensus of $5.25 billion [4]. - Adjusted EPS guidance was lifted to$8.50-$8.75, an increase from the previous range of$7.50-$8.00, leading to a forward P/E of around 16 [5]. - Despite the positive adjustments, investor skepticism remains regarding the company's ability to sustain its growth momentum [5]. Demand Outlook - Chili's appears to have tapped into a new level of demand, which is expected to persist in the future [6].