As Brinker International Inc. begins to bring dining rooms back online as coronavirus restrictions ease in states like Georgia and Texas, the company’s casual-dining Chili’s Grill & Bar and Maggiano’s Little Italy restaurants were able to claw back to about 57% of last year’s total sales in the week ended April 22 with off-premise traffic alone, executives said Wednesday.
“Over the past four weeks, Chili's has gone from running close to 35% of our prior year's total sales to more than 50% of our total sales with just take-out and delivery,” said Wyman Roberts, Brinker CEO and president, on a third-quarter earnings call.
This year's last day of positive same-store sales for Brinker’s brands was March 8, as the COVID-19 pandemic intensified, Roberts said.
But the company’s technology investments offered a competitive advantage, he said, giving the customers and employees quick and safe ways to order and pay.
“More than 70% of our restaurant transactions are coming through Olo, which means the majority of our guests are ordering and paying from their own devices,” Roberts said.
Roberts said management teams were nimble in transitioning Chili’s casual-dining service model to one that was entirely off-premise.
“Our operators and our teams did an amazing job reconfiguring our table management system for the dining room to work in the parking lot,” Roberts said. “And so those cars became tables.
“We took our tabletop payment system, Presto, and converted the technology to be a pay-at-the-car touchless system for those guests that don't pay online,” he explained.
As some states allow restaurant to reopen dining rooms after closures to stem the spread of the virus, Roberts said Brinker is accommodating local restrictions and prioritizing the safety of guests and employees. Georgia, for example, has allowed restaurants to seat 10 guests per 500 square feet of floor space and Texas on Friday will allow units to reopen dining rooms at 25% of capacity.
“We have a team intact that's working with every operator in every state as they become able to open their dining room to put in the system,” Roberts said, “ that puts in the safety, the sanitation and the systems in place for safety.”
Roberts said Brinker furloughed employees, but it has brought back about 10% of those as sales increased, and the company has provided masks and gloves for workers. Employees are also asked several health questions before shifts, their body temperature (with thermometers available in the units) and whether they have come into contact with obvious coronavirus symptoms or diagnoses.
The company has reopened dining rooms in Georgia at reduced capacity, and at those 38 restaurants over two days – Monday and Tuesday – the guest response has been positive, he said.
Brinker is also evaluating its manager bonus formula to account for the coronavirus impact on sales. The company’s employee relief fund has paid out more than $15 million to help workers.
As of April 24, Brinker had liquidity of about $175 million in cash and its revolving credit line, the company said. “We estimate an average cash burn level of approximately $5 million per week while our business is primarily operating as off-premise,” the company said.
For the third quarter ended March 25, Brinker said net income was down 38.2% to $30.8 million, or 81 cents a share, from $49.8 million, or $1.31 a share, in the same period last year. Revenues were up 2.5% to $860 million from $839.3 million in the prior-year quarter.
Same-store sales experienced “significant traffic declines due to the COVID-19 pandemic” in the third quarter:
- Chili's company-owned unit sales were down 5.3%
- Maggiano's company-owned unit sales were down 9.9%
- Chili's U.S franchise unit sales were down 6.3%
- Chili's international franchise unit sales were down 9.5%
As of March 25, Brinker owned, operated or franchised 1,675 restaurants, including 1,622 Chili’s and 53 Maggiano’s.
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