Brinker International Q4 Earnings Call Highlights

Key Points

• Chili’s continued its strong momentum, posting roughly 6% fourth-quarter same-store sales growth and extending its streak to 21 consecutive quarters of gains. The Big Crispy Chicken Sandwich helped drive traffic, with daily sales rising 175% after its launch.
• Brinker reported fourth-quarter revenue of $1.536 billion, adjusted EPS of $3.07, and an 18% restaurant operating margin. For fiscal 2027, management expects $12.60–$13.40 in adjusted EPS, mid-single-digit same-store sales growth, and further margin expansion.
• The company plans to invest $265–$285 million in fiscal 2027, including 60–80 Chili’s restaurant reimages, while repurchasing shares and reducing debt. Maggiano’s remained a weak spot, with comparable sales declining 2.5% amid lower traffic.

Brinker International NYSE: EAT reported fourth-quarter fiscal 2026 results marked by continued same-store sales growth at Chili’s, higher earnings and restaurant margin expansion, while management said it expects another year of sales and traffic gains in fiscal 2027.

Chili’s same-store sales increased 6% in the fourth quarter, extending the brand’s streak to 21 consecutive quarters of same-store sales growth, Chief Executive Officer Kevin Hochman said. The result followed a 24% gain in the prior year and a 15% gain two years earlier, producing a three-year cumulative comp gain of 50%, according to Hochman.

For the full fiscal year, Brinker reported revenue growth of 7.9%, restaurant operating margin expansion of 30 basis points and adjusted earnings-per-share growth of 20.6%, Chief Financial Officer Mika Ware said. Chili’s average annual unit volumes rose to $5 million from just over $4.5 million at the end of the prior fiscal year.

Fourth-Quarter Results

Brinker reported fourth-quarter revenue of $1.536 billion and consolidated comparable sales growth of 5%. Adjusted diluted earnings per share rose 23% to $3.07 from $2.49 a year earlier. Adjusted EBITDA increased 7.1% to approximately $228 million.

Chili’s comparable sales rose 5.6%, driven by 4.3% price and 1.5% positive traffic, partly offset by 0.2% negative mix. Ware said sales and traffic accelerated in July compared with the fourth quarter, though the company did not provide a specific quarter-to-date comp figure.

Maggiano’s comparable sales declined 2.5% in the quarter, reflecting a 5.3% traffic decline and 0.1% negative mix, partially offset by 2.9% price. Hochman said the Maggiano’s turnaround has been mixed, with progress in operational and culinary improvements partly offset by losses among core guests tied to its prior strategy. The brand represents 8% of Brinker sales, he said.

Restaurant operating margin reached 18%, up 20 basis points from the prior year. Sales leverage was partly offset by higher food and beverage costs, advertising and insurance costs. Food and beverage costs increased 80 basis points, driven by 4.4% commodity inflation, including higher beef prices and a temporary rise in tomato costs after a late freeze in Florida. Ware said tomato costs have normalized and are not expected to affect first-quarter costs.

Labor expense improved 90 basis points year over year, while restaurant expenses improved 10 basis points. Fourth-quarter advertising expense was 3% of sales, up 20 basis points, as Brinker supported the launch of Chili’s Big Crispy Chicken Sandwich.

Big Crispy Launch and Traffic Strategy

Hochman said the Big Crispy Chicken Sandwich has exceeded the company’s expectations since its launch. Chili’s was selling about 20 chicken sandwiches per restaurant per day before the launch; by the end of the fourth quarter, that figure had reached 55 per day, a 175% increase. He said the product’s sales continued to build in the current quarter.

The company is continuing its “Better Than Fast Food” positioning, emphasizing its value proposition and a per-person average spend that management said is $3 to $4 below competitors. Hochman said Chili’s is using marketing, menu innovation and operating improvements to support traffic and repeat visits.

Management also pointed to the Margarita of the Month program, including the July “Bombshell Marg,” and a social-media-driven addition allowing customers to add a Molten dessert to a skillet cookie. Hochman said the latter initiative helped reverse a decline in dessert incidence alongside upgrades to other desserts.

Ware said the 3 For Me value platform remained stable. Just over 21% of guests used the platform in the fourth quarter, compared with just under 21% in the third quarter, and approximately 40% of those guests selected the $10.99 tier.

Fiscal 2027 Outlook and Investment Plans

For fiscal 2027, Brinker forecast revenue of $6.15 billion to $6.27 billion and adjusted diluted EPS of $12.60 to $13.40. The guidance includes a 53rd operating week in the fourth quarter, which the company expects will add about 2% to total revenue and $0.70 to earnings per share.

Ware said the outlook assumes mid-single-digit same-store sales growth and positive traffic at Chili’s for most of the year, with some upside included for July. The company expects Chili’s pricing to be slightly above 3% for the full year, with mix approximately flat.

• Capital expenditures are projected at $265 million to $285 million.
• The company expects low-single-digit commodity and wage inflation, with commodity inflation expected to moderate through the year.
• Brinker expects three net new company-owned restaurant openings.
• Management expects 20 to 40 basis points of restaurant-level margin expansion on a 52-week basis; the 53rd week could lift the year-over-year increase to as much as 50 basis points.

Brinker plans to complete 60 to 80 Chili’s restaurant reimages in fiscal 2027 after completing 11 during fiscal 2026. The company expects to begin reimaging roughly 10% of the fleet annually in fiscal 2028. New-unit growth is expected to be modest in fiscal 2027 before ramping more significantly in fiscal 2028, with a new run rate planned for fiscal 2029.

The company also expects to acquire 12 Chili’s franchise restaurants in Alabama and Mississippi, including real estate at six locations, in a transaction expected to close at the end of August. Ware said the restaurants are below the brand average in performance and are expected to add about $30 million in annual revenue, with an approximately flat EPS impact.

Capital Allocation and Operations

Brinker repurchased $100 million of common stock during the fourth quarter, bringing fiscal-year repurchases to nearly $400 million. The board authorized additional repurchase capacity in August, bringing the amount available under the program to $750 million.

After year-end, the company redeemed its outstanding $350 million of 8.25% bonds using liquidity from its $1 billion revolver. Ware said the move is expected to reduce interest expense in fiscal 2027 and provide flexibility for further leverage reduction.

Management said it is also working to improve restaurant throughput and service. Chili’s reduced its manager shift-line-check process from eight pages to one page, which Hochman said frees approximately 30 minutes of manager time per day. The company upgraded its HotSchedules labor-planning tool and simplified loyalty-reward redemptions through Ziosk tablets.

Looking ahead, Hochman said Chili’s will focus on host-stand operations, table seating and bussing, drink-refill bottlenecks, dessert preparation and off-premise execution. He said the company sees several years of opportunity to improve the dining experience and accelerate its takeout business.

About Brinker International (NYSE:EAT)

Brinker International, Inc NYSE: EAT is a leading global operator of casual dining restaurants. The company's portfolio is anchored by its flagship Chili's® Grill & Bar concept and Maggiano's® Little Italy full‐service restaurants, offering a range of American‐style menu items, handcrafted cocktails and family‐friendly dining experiences. Through dine‐in, takeout, delivery and catering services, Brinker seeks to meet consumer preferences across multiple channels.

The Chili's brand features signature items such as baby back ribs, burgers and fajitas alongside a rotating selection of limited‐time offerings and seasonal beverages.

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