QUOTE AND NEWS
SeekingAlpha  Oct 21  Comment 
By SA Transcripts: Brinker International, Inc. (NYSE:EAT) Q1 2015 Results Earnings Conference Call October 21, 2014, 10:00 AM ET Executives Jill Cuthbertson - IR Wyman Roberts - President and CEO Marie Perry - SVP and CFO ...
Benzinga  Oct 21  Comment 
Brinker International (NYSE: EAT) reported in-line earnings for the first quarter. The Dallas, Texas-based company reported a quarterly profit of $32.7 million, or $0.49 per share, versus a year-ago profit of $29.2 million, or $0.42 per share....
Wall Street Journal  Oct 21  Comment 
Brinker International Inc. said its first-quarter profit increased 12%, helped by higher sales at its Chili’s Grill & Bar and Maggiano’s Little Italy chains.
Benzinga  Oct 14  Comment 
Analysts at KeyBanc downgraded Brinker International (NYSE: EAT) from Buy to Hold and removed the price target of $52. Brinker shares have gained 28.41% over the past 52 weeks, while the S&P 500 index has surged 9.62% in the same...
Benzinga  Oct 14  Comment 
Benzinga  Oct 10  Comment 
BMO Capital Markets initiated coverage on Brinker International, Inc. (NYSE: EAT) in a report issued Thursday with a Market Perform rating and $49 price target. Analyst Andrew Strelzik believed that "Brinker is a relatively safe investment...
SeekingAlpha  Sep 11  Comment 
By Andrew Sachais: Brinker International (NYSE:EAT) continues to see its share price rise as aggressive expansion and brand reimaging drive earnings higher. Earnings per share reached five year highs in the most recent quarter on strong sales...
Benzinga  Aug 19  Comment 
Brinker International (NYSE: EAT) shares trended up Tuesday after an analyst upgraded the shares citing its recent performance in a tough industry. Wunderlich's Robert M. Derrington took the action on the restaurant chain despite what he...
Market Intelligence Center  Aug 15  Comment 
After Thursday’s trading in Brinker International Inc. (EAT) the option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center uncovered a trade that offers a 3.66% return, or 8.63% annualized (for...




 

Brinker International, Inc. (NYSE: EAT) operates and franchises 1,689 casual dining restaurants in 49 states and 24 countries. Brinker owns approximately 75% of its restaurants and franchises the remaining 25%. The company's chains include Chili's Grill & Bar, Romano's Macaroni Grill , On the Border Mexican Grill and Cantina, and Maggiano's Little Italy. The company earned $3.6 billion in revenue and $79 million in net income in 2009.[1]

Brinker's is highly leveraged to the success of its Chili's brand. Although Brinker's has 4 different brands, Chili's, its flagship chain accounts for 76% of its restaurants. The company plans to grow this number to 2000, over the next several years. The company has announced no similar plans to expand its other chains. However, growth has been stunted by a sluggish economy, which in turn has also hurt Brinker's sales. In 2009, the company's comparable store sales fell by more than 4% in all of its restaurants.[1]

Business Overview

Brinker's International Inc. (EAT) owns and franchises four brands of causal dining restaurants[2]: Chili's, Macaroni Grill, On the Border, and Maggiano's. Brinker's restaurants can be found nationwide, including Washington D.C. and it has a small international presence.

  • Chili's Bar & Grill is famous for its Baby Back Ribs. Food and non-alcoholic drinks account for 86.5% of sales (Entrees range from $6 to $15) and alcoholic beverages constitute the other 13.5%. Chili's is Brinker's brand with the most revenue. Brinker's has announced plans to expand Chili's to around 2,000 restaurants in new and existing markets.
  • Romano's Macaroni Grill is a casual Italian restaurant. Food (Entrees are priced between $6 and $20) and non-alcoholic beverages generate 88% Macaroni Grill's sales and alcoholic beverages account for the remaining 12%. The Macaroni Grill is Brinker's second largest brand.
  • On the Border Mexican Grill and Cantina serves a wide variety of traditional Mexican entrees priced between $5.50 and $15. Food and non-alcoholic beverages account for 80.7% of On the Border's total sales. Alcoholic beverages constitute the remaining 19.3%.
  • Maggiano's Little Italy is a casual New York Italian restaurant which generates over $350 million in revenue throughout its 41 locations. 21% of Maggiano's revenues come from banquet services and facilities, which can host up to 300 people at a time. The average meal ticket is approximately $26 and entrees cost between $8 and $36. Alcoholic beverages account for 19.5% of sales and food and non-alcoholic beverages make up 80.5% of sales.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue fell 14% to $3.6 billion. Same store sales decreased by more than 4% at all of the company's restaurants, with Macaroni Grill sales suffering the worst with a 9.8% decline.
  • Net income increased 53% to $79 million. However, this total is well shy of the $220 million the company earned two years ago.
  • The company operated a total of 1,689 restaurants at the end of 2009.

Trends and Forces

Brinker's future rests on Chili's growth

Although Brinker's has 5 different restaurant chains, the company's success is highly dependent on the continued growth of its Chili's franchise. Chili's constitutes three-quarters of Brinker's restaurants and is by far Brinker's largest, most popular brand. Brinker's plans on expanding Chili's to approximately 2,000 restaurants but has not announced any formal plans to expand any of its other brands in so dramatic a fashion.

Falling sales in restaurant industry lead to falling comps

Slowing economic growth and concerns among consumers, economists and business owners alike began to take their toll on the restaurant and foodservice industries. This downturn has largely been a result of lower consumer spending. Initially, rising interest rates combined with slowing home appreciation resulted in tighter economic constraints for many consumers. Since the home is considered the primary form of wealth or savings for many Americans, millions of homeowners have suddenly found themselves significantly poorer while facing higher costs in the form of food and energy inflation, and thus are less willing to spend money on eating out. As evidenced by falling levels of foot traffic to Brinker's various chains, the company has been far from immune to this trend. In 2009, comparable store sales fell by more than 4% at all of the company's restaurants.[1]

Competition

The restaurant and foodservice industries are extremely competitive, especially within the casual dining sector. Brinker's had $4.4 billion in revenue operating 1801 restaurants. Brinker's main competition includes:

  • Darden Restaurants (DRI): Darden owns and operates The Olive Garden, Red Lobster, Bahama Breeze, and Seasons 52 restaurants. Brinker's competes with Darden directly for casual dining customers.
  • Cheesecake Factory (CAKE): The Cheesecake Factory and its secondary chain, Grand Lux Cafes directly compete with Brinker's Italian brands, Macaroni Grill and Maggiano's. All four restaurants compete in the casual dining sector and have very similar cuisines and entree prices.

References

  1. 1.0 1.1 1.2 1.3 EAT 2009 10-K "Selected Financial Data" pg. F-1
  2. EAT 2009 10-K "Restaurant Brands" pg. 1-2
  1. 1.0 1.1 1.2 1.3 EAT 2009 10-K "Selected Financial Data" pg. F-1
  2. EAT 2009 10-K "Restaurant Brands" pg. 1-2
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