DALLAS Brinker International Inc. has cut its first quarter and full-year earnings guidance and now expects annual per-share earnings to fall between 15 and 25 percent from a year earlier because of increased operating costs and slowed sales at all of the casual-dining giant’s chains.
For the company’s first fiscal quarter ended Sept. 24, same-store sales fell 3 percent at Chili’s Grill and Bar, 3.3 percent each at On The Border and at Maggiano’s, and 9 percent at Macaroni Grill. Brinker agreed earlier this year to sell a majority stake in Romano's Macaroni Grill.
“While we expected our first quarter results to be down sharply due to rising commodity costs and the lap of the successful Honey Chipotle Chicken Crispers promotion [at Chili’s] ... we did not foresee the sequential pressure on the consumer as the quarter unfolded,” said Doug Brooks, chairman and chief executive of Brinker.
Brooks said “this challenging sales environment” led to the decline in first quarter earnings, which the company will report in full on Oct. 21. On Thursday, Brinker estimated first quarter earnings of between 19 cents per share and 20 cents per share, compared with 35 cents per share a year earlier. That estimate does not including special charges for lease terminations, costs from hurricane-related closures and expenses surrounding the pending sale of Macaroni Grill.
For the full year, Brinker said that before special items and excluding Macaroni Grill operations, per-share earnings should drop as much as 25 percent from a year ago. The company had previously forecast an earnings-per-share increase between 8 percent and 10 percent from fiscal 2008, which ended in June. The revised guidance is based on estimates for a full-year drop of between 2 percent and 4 percent in blended same-store sales.
Brinker owns, operates and franchises 1,911 restaurants, including 1,474 Chili’s, 169 On The Border Mexican Grill & Cantina, 42 Maggiano’s Little Italy, and 226 Romano’s Macaroni Grill.
