DALLAS Brinker International Inc., parent to Chili’s Grill & Bar and two other casual-dining chains, swung to a profit in its fiscal third quarter, from a loss in the same quarter a year ago, as cost controls were able to offset a double-digit revenue decline.
For the quarter ended March 25, Brinker earned $35 million, or 34 cents per share, compared with a loss of $38.8 million, or 38 cents per share, in the same year-ago quarter.
Excluding one-time special items and the costs associated with the company’s December sale of Romano’s Macaroni Grill, Brinker said it earned 45 cents per share in the latest quarter, compared with 33 cents per share in the same quarter last year.
Brinker credited cost cutting strategies, a slowed development schedule and reduced operating expenses, especially for labor, in helping drive profitability. In addition, menu item changes and menu price increases helped to reduce both commodity cost pressures and cost of sales, the company added.
“Operating margins for the third quarter of fiscal 2009 were positively impacted by a disciplined focus on cost of sales, labor productivity and fixed costs, which helped offset the impact of the current sales environment,” the company said. “Efforts to reduce waste and update menus to reflect the guests’ current focus on value resulted in improvements in cost of sales.”
Latest-quarter revenue fell 20 percent to $857.4 million, from $1.08 billion in the same quarter last year, when sales from Macaroni Grill and other closed stores were included. The company has closed 47 restaurants and sold 198 locations since last year.
Third-quarter systemwide same-store sales fell 5.6 percent and reflected declines of 5.2 percent at Chili’s, 9.5 percent at Maggiano’s Little Italy and 5 percent at On the Border Mexican Grill & Cantina.
At the end of the quarter, Brinker operated or franchised 1,679 restaurants, including 1,478 Chili’s, 156 On the Borders and 45 Maggiano’s.
Contact Ron Ruggless at [email protected].