Chili's Parent Brinker Beats On Q2; Warns On Commodity Inflation

  • Brinker International Inc EAT reported second-quarter FY23 revenue growth of 10% year-on-year to $1.01 billion, beating the consensus of $991.73 million.
  • Comparable restaurant sales rose 9.7% for Brinker, 8% for Chili's, and 21.2% for Maggiano's.
  • Operating margin compressed 30 basis points to 4%, and operating income for the quarter rose 2% to $40.7 million.
  • Adjusted EBITDA of $91 million rose 3.6% Y/Y.
  • Adjusted EPS of $0.76 beat the analyst consensus of $0.52.
  • The company held $14.7 million in cash and equivalents as of Dec. 28, 2022. Net cash provided by operating activities for six months totaled $68 million.
  • "Commodity inflation for the quarter increased meaningfully year over year and will continue to be a headwind, although at a diminishing rate as we move through the rest of the fiscal year," the company said.
  • Outlook: Brinker raised its FY23 revenue forecast from $3.9 billion - $4.00 billion to $4.05 billion - $4.15 billion, above the consensus of $4.04 billion.
  • It raised FY23 Adjusted EPS outlook from $2.45 - $2.85 to $2.60 - $2.90, above the consensus of $2.56.
  • Price Action: EAT traded lower by 5.73% at $37.20 on the last check Wednesday.
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