Chili's Traffic Boom Powers Brinker's FY25 Revenue Outlook, But EPS Miss Raises Caution Flags

Brinker International, Inc.  EAT shares are trading lower after the company reported fiscal fourth-quarter 2024 results. Total revenue increased 12.3% year-on-year to $1.21 billion, beating the analyst consensus estimate of $1.16 billion.

Adjusted EPS of $1.61 missed the analyst consensus estimate of $1.65.

Comparable restaurant sales rose 13.5% for Brinker, 14.8% for Chili’s, and 2.5% for Maggiano’s.

Also Read: Brinker International Stock Climbs 38% Over Past Month, Analyst Turns Bullish Despite Outperformance

The comparable restaurant sales increase at Chili’s was primarily due to increased menu pricing and higher traffic. The launch of the “Big Smasher” burger and the strength of Chili’s advertising highlighting value drove traffic during the quarter.

The adjusted operating margin expanded 180 basis points to 15.2%, and adjusted operating income for the quarter rose 27.7% to $182.1 million, driven by higher sales. Adjusted EBITDA of $141.8 million rose 23.8% Y/Y.

The company held $64.6 million in cash and equivalents as of June 26, 2024. Net cash provided by operating activities for twelve months totaled $421.9 million.

CEO Kevin Hochman: “With significantly increased traffic at Chili’s and many guests trying Chili’s for the first time, we quickly accelerated investments in labor and the facilities to ensure a great experience.”

Outlook: Brinker expects fiscal 2025 adjusted EPS of $4.35-$4.75 against the analyst estimate of $4.78.

Brinker expects fiscal 2025 revenue of $4.55 billion-$4.62 billion against a consensus estimate of $4.53 billion.

Brinker International stock gained 92% in the last 12 months.

Price Action: EAT traded lower by 15.3% at $59.62 premarket at the last check Wednesday.