Brinker International Inc. (NYSE: EAT), today, posted better-than-expected profit in its fiscal third quarter, driven by higher menu prices and more diners at its restaurants. The stronger-than-expected third-quarter financial results have sent Brinker shares sharply higher in trading today.
Dallas, Texas-based Brinker International, which owns, develops and franchises the Chili’s Grill & Bar and Maggiano’s Little Italy restaurant brands, this morning said that its total revenue for the third quarter was $742 million, compared with $717.1 million reported for the same period in the previous year. Analysts surveyed by Thomson Reuters, on average, were expecting the company to report total revenue of $729.8 million.
EAT said that sales at its Chili’s Grill & Bar restaurants opened at least 18 months rose 4.6% in the fiscal third quarter, while sales at Maggiano’s Little Italy restaurants opened at least 18 months climbed 3.9%.
Net income for the quarter was $44.9 million, compared with $40.2 million reported for the same period in the previous year. EAT’s adjusted earnings per share for the quarter was $0.60, compared with $0.47 reported in the third quarter of fiscal 2011. Analysts were expecting the company to report adjusted earnings per share of $0.56.
Brinker’s results were positively impacted by improving margins. The company has been modernizing its systems, renovating restaurants and looking at ways to reduce costs. All these efforts helped in boosting the margins during the quarter.
Brinker also benefited from an increase in U.S. restaurant sales, which were boosted by warmer than usual winter and early spring.
Doug Brooks, President and CEO of Brinker International, said that EAT just achieved its fifth straight quarter of positive sales and traffic growth demonstrating the effectiveness of the company’s top-line strategies and its ability to take market share. Brooks also said that Brinker continues to improve the middle of the P&L, further strengthening its business model. He added that these factors combined with returning value to shareholders through share repurchases makes the company’s confident it will deliver on its promise to double earnings per share by 2015.
Investors have reacted positively to comments from Brinker’s CEO and the company’s third-quarter financial results as shares touched a new 52-week high of $31 in trading today. At last check, EAT shares were trading 8.82% higher at $30.36 on above average volume of 3.25 million.
Brinker shares are up 13.04% so far this year.
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