Financial Data and Key Metrics Changes - Brinker reported total revenues of $1.45 billion for Q2 FY 2026, an increase of 7% over the prior year, with consolidated comp sales of +7.5% [19] - Adjusted diluted EPS for the quarter was $2.87, up from $2.80 last year [19] - Restaurant operating margin was 18.8%, compared to 19.1% in the prior year, a decrease of 30 basis points year over year [20] - Adjusted EBITDA for the quarter was approximately $223.5 million, a 3.6% increase from the prior year [23] Business Line Data and Key Metrics Changes - Chili's same-store sales were at +8.6%, outpacing the casual dining industry by 680 basis points, with a 2-year cumulative comp of 43% [5] - Maggiano's reported comp sales for the quarter of -2.4%, but showed sequential improvement during the quarter [20][15] - Chili's top-line sales growth was driven by a price increase of 4.4%, positive traffic of 2.7%, and a positive mix of 1.5% [19] Market Data and Key Metrics Changes - Chili's was the number one traffic brand in casual dining for the entire 2025 year [13] - The company captured value leadership in casual dining and the broader restaurant industry over the past three years [12] - The per person check average at Chili's is more than $3 less than direct casual dining competitors and more than $4 less than casual dining as a whole [13] Company Strategy and Development Direction - The company is focused on improving food, service, and atmosphere, with plans to continue menu renovations and introduce new offerings [7][9] - A reimage program for Chili's has started, with plans to complete 60-80 reimages in fiscal 2027 [24][92] - The company aims to maintain a disciplined capital allocation strategy while investing in restaurants and returning excess cash to shareholders [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the fifth consecutive year of same-store sales growth and second consecutive year of traffic gains [18] - The company anticipates mid-single-digit comps for the back half of the year, despite potential pressure from weather-related impacts [39] - Management noted that the macroeconomic environment is mixed, but emphasized the importance of focusing on controllable factors like food service and atmosphere [67] Other Important Information - The company repurchased an additional $100 million of common stock under its share repurchase program [25] - Capital expenditures for the quarter were approximately $63.7 million, driven by capital maintenance spend [23] - The company expects to face mid-single-digit inflation for the back half of the year due to rising beef prices, despite favorable commodity prices from tariff removals [27][100] Q&A Session Summary Question: What contributed to the strong traffic and sales growth in the quarter? - Management highlighted stable pricing and positive mix driven by successful menu items like the Margarita of the Month and Triple Dippers [30][32] Question: What are the expectations for top-line performance in the back half of the year? - Management expects solid mid-single-digit comps for Chili's, with potential traffic pressure due to weather impacts [39][44] Question: Can you elaborate on the reimaging prototypes being tested? - Management noted that all four reimage units received positive feedback, with insights on cost-effective improvements being gathered [53][56] Question: How is the company addressing store-level employee incentives? - Management is focusing on training managers to understand P&L and ownership before changing incentive structures, with changes expected in 1-2 years [82][85] Question: What is the outlook for new unit growth? - Management confirmed plans for 60-80 remodels in 2027 and expressed optimism about new unit growth in 2028, with a focus on capital allocation [92][95]