Brinker International Inc.'s (EAT) fiscal second-quarter
earnings more than doubled as the casual-dining company benefited
from stronger margins and lower overhead costs, though sales
continued to weaken.
The results beat analysts' expectations.
The parent company of Chili's has emerged from the recession
considerably smaller and with a renewed focus on improving the
existing operations. Brinker has been struggling to increase sales,
in contrast to some of its rivals, and in late October expected
sales at flagship Chili's Grill & Bar would remain weak.
Brinker had been losing customers, partly because it toned down
the aggressiveness of its promotions. In the latest period,
same-store sales dropped 3.5%, including 4.9% at Chili's while
Maggiano's increased 4.7%. Chili's customer traffic was down 7.1%,
though that was an improvement from the fiscal first quarter when
it dropped 8.1%. Chili's capacity was down 3.1% due to fewer
restaurants.
For the quarter ended Dec. 29, Brinker reported a profit of
$37.5 million, or 41 cents a share, up from $18.3 million, or 18
cents a share, a year earlier. Excluding restructuring related
expenses and restaurant closings, earnings from continuing
operations were 38 cents a share, up from 25 cents.
Revenue decreased 4.8% to $671.9 million, though that was an
improvement from a year earlier, when revenue fell 18%, partly on
restaurant closures and the sale of the Romano's Macaroni Grill
locations.
Analysts polled by Thomson Reuters most recently forecast
earnings of 32 cents on revenue of $670 million.
Restaurant operating margin rose 2.1 percentage points to
17.4%.
Some analysts and industry executives have been predicting the
sector will benefit from a temporary Social Security payroll tax
reduction this year.
Shares closed Monday at $20.89 and were inactive premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com;