Core Insights - Brinker International, Inc. (EAT) is experiencing growth driven by expansion initiatives, strong operational execution, and effective marketing strategies [1] - The company is focused on balancing value-driven offerings with margin expansion to adapt to evolving consumer preferences [1] Financial Performance - In Q4 of fiscal 2025, Brinker International reported total revenues of $1.46 billion, a 21% increase year over year, primarily driven by the Chili's brand [4][9] - The Restaurant Operating Margin improved by 260 basis points to 17.8%, supported by sales leverage, strategic menu pricing, and operational efficiencies [4] Growth Initiatives - Brinker International is accelerating remodeling initiatives and focusing on international expansion through development agreements with franchise partners [5] - The company aims to remodel 10% of the Chili's system annually and is doubling its pipeline of new restaurant openings [6] Menu Innovation - The company is committed to menu innovation, continually adding new items and reintroducing popular high-margin items to drive sales [7] - The launch of the Big QP burger, priced at $10.99, is positioned as a high-value offering to enhance perceived value [8] Industry Context - Other industry players like The Cheesecake Factory, Dutch Bros, and Shake Shack are also experiencing momentum due to resilient consumer demand and a shift toward premium dining [2] - However, Brinker International faces challenges from rising costs, inflationary pressures, and weaker sales in the Maggiano's segment [2] Cost and Margin Pressures - Total operating costs and expenses rose to $1.32 billion in Q4, up from $1.14 billion in the same period last year, with advertising expenses increasing to 3% of sales [10] - Commodity inflation negatively impacted margins by 60 basis points, which could squeeze profitability despite pricing strategies [11]

Group 1 - Brinker International (NYSE: EAT) shares are considered undervalued with a growth potential of approximately 14% to a target price of $158 [1] - The analysis is based on the revival of Chili's core business [1] Group 2 - The analyst has a background in equity analysis and has worked across various sectors, indicating a strong foundation in financial analysis [1] - The investment project focuses on uncovering hidden value in emerging markets using Western analytical tools [1]

Core Insights - Brinker International reported strong fourth-quarter fiscal 2025 results, with both earnings and revenues surpassing estimates and showing year-over-year growth [3][6] - Chili's performance was a significant driver, with same-store sales increasing by 24%, outperforming the casual dining sector [4][9] - Maggiano's faced challenges with a leadership change and declining sales, indicating potential areas for improvement [5][10] Financial Performance - Adjusted earnings per share (EPS) for Q4 were $2.49, exceeding the Zacks Consensus Estimate of $2.43, compared to $1.61 in the prior year [6] - Total revenues reached $1,461.9 million, beating the consensus mark of $1,411 million, and reflecting a 21% increase year-over-year [6] - Chili's segment revenues rose 24% year-over-year to $1,339.6 million, driven by increased foot traffic and effective marketing strategies [7] Segment Analysis - Chili's same-store sales increased by 23.7%, with company-owned traffic gaining 16.3% year-over-year [9] - Maggiano's revenues decreased by 1.2% year-over-year to $122.3 million, primarily due to poor comparable restaurant sales [10] - Maggiano's company restaurant expenses as a percentage of sales rose to 86.7%, impacted by an unfavorable menu item mix [12] Operating Results - Total operating costs and expenses for the quarter were $1.32 billion, up from $1.14 billion in the previous year [13] - Adjusted restaurant operating margin improved to 17.8% from 15.2% year-over-year [13] - Adjusted EBITDA for Q4 was $212.4 million, compared to $141.8 million in the prior year [13] Balance Sheet - As of June 25, 2025, cash and cash equivalents were $64.6 million, up from $15.1 million a year earlier [14] - Long-term debt decreased to $426 million from $786.3 million year-over-year [14] 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 [15] - Recent estimates have trended upward, with a consensus estimate shift of 10.83% [16] - Brinker International holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [18]

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].

August 13, 2025 Q4 F25 $1,002 $1,064 $1,109 $1,197 $1,127 $1,346 $1,413 $1,449 Q1 Q2 Q3 Q4 Total Company Sales F24 F25 $1,013 $1,074 $1,120 $1,208 $1,139 $1,358 $1,425 $1,462 Q1 Q2 Q3 Q4 Total Revenues F24 F25 * Chili's, Maggiano's, and Company sales restated to include F23 accounting change. Q4 FOOD COST HIGHER DUE TO UNFAVORABLE MENU MIX SAFE HARBOR STATEMENT During these presentations, and in response to your questions, certain items may be discussed which are not based entirely on historical facts. Any ...

Brinker International Inc. fourth-quarter earnings beat expectations with the Chili’s owner expecting that momentum to carry through in the next fiscal year, issuing an outlook eclipsing analyst predictions https://t.co/sJkMfaAKl0 ...

Core Viewpoint - Analysts forecast a significant increase in Brinker International's quarterly earnings and revenues, indicating strong business performance compared to the previous year [1][5]. Earnings and Revenue Estimates - The expected earnings per share (EPS) for Brinker International is $2.43, reflecting a year-over-year increase of 50.9% [1]. - Anticipated revenues are projected to be $1.43 billion, which represents an 18.6% increase from the same quarter last year [1]. Revisions and Consensus Estimates - The consensus EPS estimate has been revised upward by 0.9% in the last 30 days, indicating analysts' reassessment of their initial projections [2]. - Analysts expect 'Franchise and other revenues' to reach $12.97 million, showing a year-over-year change of +10.8% [4]. Specific Revenue Projections - 'Total Revenue - Company Restaurant Sales' is expected to be $1.41 billion, with a year-over-year change of +18.3% [5]. - Revenue from 'Company sales - Chili's' is projected at $1.29 billion, indicating a +20.2% change year over year [5]. - Revenue from 'Company sales - Maggiano's' is estimated to be $125.41 million, reflecting a +1.5% change year over year [5]. Restaurant Metrics - The total number of restaurants for Brinker International is expected to reach 1,629, compared to 1,614 a year ago [6]. - Comparable store sales for Chili's are projected to increase by 21.2%, up from 14.8% in the same quarter last year [6]. - The total number of company-owned restaurants is forecasted to be 1,164, down from 1,171 in the same quarter last year [7]. Comparable Sales and Franchise Metrics - Analysts predict 'Comparable Sales - Company-owned' to be 18.9%, an increase from 13.5% year over year [8]. - The estimate for 'Franchise restaurants - Chili's - International' stands at 364, compared to 344 a year ago [9]. Stock Performance - Brinker International's shares have shown a return of -4.3% over the past month, contrasting with the S&P 500 composite's +1.9% change [10].

Financial Data and Key Metrics Changes - The company reported AFFO per share of $0.44, which is up 2.8% from Q2 last year [20] - Rental income for Q2 was $64.5 million, representing growth of over 11% compared to the same quarter last year [20] - The net debt to adjusted EBITDAre was 4.5 times, which is below the stated guidance of 5.5 to 6 times [18] Business Line Data and Key Metrics Changes - In Q2, the company acquired 24 properties for $84 million at a blended cap rate of 6.7% [12] - The automotive sector accounted for 68% of total acquisition volume, indicating a strong focus on this area [12] - The company has diversified its portfolio, with 34% of rent now coming from sectors outside casual dining [8] Market Data and Key Metrics Changes - The company noted that same-store sales for Olive Garden and LongHorn grew nearly 7% for the quarter ended May 2025 [8] - Chili's reported a same-store sales growth of 32% for the quarter ended March 2025, indicating strong performance in the casual dining sector [7] Company Strategy and Development Direction - The company aims to maintain a defensive portfolio focused on central retail and services, which are seen as tariff resistant [9] - The strategy includes modulating acquisitions based on the cost of capital, allowing the company to protect spreads without compromising portfolio quality [6] - The company is committed to maintaining high-quality standards in acquisitions and has a strong competitive advantage in its ability to fluctuate acquisition volumes [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience, highlighting a strong track record with low bad debt expense and effective releasing results [65] - The company anticipates a pullback in consumer spending due to potential recession or high inflation but believes it is well-positioned with low rents [9] - Management indicated that the current market conditions allow for continued execution of the company's strategy, with significant available capital for acquisitions [65] Other Important Information - The company has raised nearly $505 million in equity over the last twelve months, providing significant capacity for acquisitions [17] - The portfolio occupancy remains strong at 99.4%, with 99.8% of base rent collected for Q2 [22] Q&A Session Summary Question: Inquiry about acquisition team capacity - Management stated that the company is appropriately staffed and has the capacity to do more acquisitions if favorable pricing is available [25][27] Question: Impact of cap rate changes on acquisition opportunities - Management indicated that a 25 basis point decrease in cap rates could significantly increase acquisition opportunities, potentially by $100 million to $200 million [29][30] Question: Darden exposure and acquisition strategy - Management confirmed that while they have diversified Darden exposure, they will not hesitate to acquire Darden-related assets if the pricing is favorable [31][32] Question: Deal flow and competitive landscape - Management noted that deal flow has been consistent, but pricing remains a key factor in determining acquisition activity [48][49] Question: Future of veterinary retail property acquisitions - Management expressed interest in the veterinary retail sector, indicating it is a space they are comfortable exploring further [61]

Group 1 - Schaeffer's Investment Research celebrates its 44th anniversary and expresses gratitude to subscribers by releasing a free report on top stock picks for 2025 [1] Group 2 - Brinker International Inc (NYSE:EAT), the parent company of Chili's, has seen a strong performance with a year-to-date increase of over 37% [2] - The stock broke above resistance levels in the $168-170 range in late May and successfully retested this area in early June [2] Group 3 - Despite the strong technical performance, short positions in EAT have increased by 41% since mid-February, with 12.9% of the stock's float currently sold short [3] - There is potential for bullish sentiment as 14 out of 18 analysts covering Brinker International stock have a "hold" or worse rating [3]

Group 1 - The article expresses a bullish outlook on Brinker International (EAT) due to significant fundamental improvements driven by effective execution and growth in its value-focused Chili's brand [1] - The author emphasizes a value-focused investment strategy, highlighting a preference for stocks that are undervalued and have near-term catalysts [1] - The investment horizon mentioned ranges from one quarter to two years, indicating a medium-term investment approach [1] Group 2 - The author has over three years of active investing experience and has worked as a buy-side analyst at a boutique research firm and family offices [1]