Brinker International Earnings: Chili’s Drives Double-Digit Sales Growth, Strong FY26 Outlook
- Hardik Shah
- Aug 12
- 2 min read
TLDR
Revenue Strength: Q4 sales +21.3% companywide, Chili’s +23.7% driven by +16.3% traffic.
Margin Trends: Restaurant operating margin expanded to 17.8% (+260 bps YoY).
Forward Outlook: FY26 revenue $5.6B–$5.7B, EPS $9.90–$10.50, continued traffic gains expected.
Business Overview
Brinker International, Inc. (NYSE: EAT) is a leading casual dining operator, owning and franchising over 1,600 restaurants across Chili’s Grill & Bar and Maggiano’s Little Italy. Chili’s anchors the portfolio with a strong domestic presence and growing international reach, supported by a simplified menu and operational efficiencies. Maggiano’s offers Italian-American cuisine in a polished casual setting.
Brinker International Earnings Q4 FY25
Total Revenue: $1.46B, up 21% YoY.
Chili’s: Comp sales +23.7% (traffic +16.3%, mix +4.7%, price +2.7%).
Maggiano’s: Comp sales -0.4%, as lower traffic offset pricing gains.
Operating Income: $142.7M, margin 9.8% vs. 6.1% LY.
Restaurant Operating Margin: 17.8%, +260 bps YoY, aided by sales leverage.
Adjusted EPS: $2.49, up from $1.61 LY.
Full-Year FY25 Highlights
Revenue: $5.38B, +21.9% YoY.
Adjusted EPS: $8.90, +117% YoY.
Debt Reduction: $350M repaid in FY25; leverage down to 1.7x lease-adjusted.
Forward Guidance (FY26)
Revenue: $5.60B–$5.70B
Adjusted EPS: $9.90–$10.50
Capex: $270M–$290M
Weighted Avg Shares: 45M–46M
Risks & Opportunities:
Risks: Commodity/wage inflation (low-single-digit expected), competitive pricing pressures.
Opportunities: Product upgrades (ribs, queso, chicken sandwiches), barbell pricing strategy, tech-driven service improvements.
Operational Performance
Chili’s:
Sustained traffic leadership for 7 straight quarters.
Menu simplification (-25% SKUs since FY22) boosting execution and food quality.
Equipment upgrades (TurboChefs) improving consistency and efficiency.
New product launches—ribs relaunch, premium frozen margaritas—generating buzz and sales lift.
Maggiano’s:
Turnaround focus on core Italian-American favorites, value portions, and service speed.
Leadership change: Kevin Hochman now interim president, bringing Chili’s playbook to brand.
Market Insights
Chili’s leveraging value leadership through “Big QP” burger ($10.99) and $6 Margarita of the Month.
Positive guest sentiment across income cohorts; new and lapsed guests matching existing customer frequency.
Casual dining category still competitive, but Chili’s widening its traffic gap via marketing and operational execution.
Consumer Behavior & Sentiment
Strong engagement with upgraded core menu categories (burgers, fajitas, margaritas).
Value-driven promotions resonating without margin erosion.
Brand perception boosted by Ad Age “Brand of the Year” award.
Strategic Initiatives
Menu & Quality: Premium ingredient investments (thicker bacon, premium mayo/ranch).
Tech: Server iPad app redesign (700+ SKUs removed, offline mode), upgraded restaurant Wi-Fi.
Reimaging & Development: Testing “Modern Greenville” remodel package; target 10% of fleet annually starting CY27.
Growth: Exploring accelerated new unit development given higher restaurant contribution margins.
Capital Allocation
Share repurchase authorization increased by $400M to $507M available.
Ongoing reinvestment in kitchens, maintenance, and remodels.
Balance sheet strength allows flexibility for growth and shareholder returns.
The Bottom Line
Brinker’s FY25 capped a transformative three-year turnaround at Chili’s, delivering outsized traffic and margin gains. FY26 guidance points to sustained momentum, underpinned by menu innovation, operational discipline, and disciplined capital deployment. Key watch items include Maggiano’s turnaround pace, remodel ROI, and traffic retention amid competitive pressures.
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