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Brinker swings to 4Q profit, but sales tumble

DALLAS Brinker International Inc. on Thursday reported weak sales at its three casual-dining brands, including flagship Chili’s Grill & Bar, during the fourth quarter and predicted that same-store sales would continue to decline in the new fiscal year.

Shares in Brinker were down more than 16 percent in midday trading Thursday after the company reported its fourth-quarter results.

Brinker said same-store sales in the quarter fell 9 percent across all three of its concepts, including 9.4 percent at Chili’s, 9.2 percent at Maggiano’s Little Italy and 5.8 percent at On The Border Mexican Grill & Cantina.

Brinker’s same-store sales declines eclipsed those recently reported by such casual-dining competitors as Darden Restaurant Inc.’s Olive Garden and Red Lobster chains as well as Ruby Tuesday and DineEquity Inc.’s Applebee’s. Same-store sales at those chains declined fractionally to around 6 or 7 percent.

Casual-dining chains have been offering discounts and value-priced packages to keep guest traffic up, but customers hit hard by the recession continue to reduce their visits.

Brinker said profit in the quarter, which ended June 24, was $42.1 million, or 41 cents a share, compared to a loss of $1.5 million, or 2 cents a share, in the same quarter last year. Excluding write-downs and other impacts, most associated with the sale of a majority interest in Macaroni Grill last year, earnings rose to 52 cents in the quarter, up from 42 cents last year.

Revenue in the quarter fell 22.7 percent to $829.4 million from the nearly $1.1 billion in the same quarter last year. Since last year, Brinker has closed 55 restaurants and sold 198 others, most of which were Macaroni Grill units.

For the full year, Brinker posted net income of $79.2 million, or 77 cents a share, compared with profit of $51.7 million, or 49 cents a share, in fiscal 2008. Excluding the impact of the Macaroni Grill sale and other items, full-year earnings totaled $1.44 a share, up from $1.41 a share last year. Revenue in fiscal 2009 was $3.6 billion, down 14.5 percent from last year.

Brinker's annual same-store sale fell 5.6 percent systemwide, which included declines of 5.6 percent at Chili's, 4.4 percent at On The Border and 7.3 percent at Maggiano's.

Brinker said it expected same-store sales in fiscal 2010 to be down 2 percent to 4 percent. Adjusted annual earnings are projected to fall 10 percent to 20 percent.

At the end of the fiscal year 2009, Brinker owned or franchised 1,689 restaurants, including 1,485 Chili’s, 160 On The Border Mexican Grill & Cantinas and 44 Maggiano’s Little Italy restaurants.

Contact Ron Ruggless at [email protected].

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