DALLAS Increased labor and food costs, as well as continued weakness in same-store sales, led to a 15.7-percent drop in profit for multi-chain operator and franchisor Brinker International Inc. during its third quarter ended March 28.
The parent company to Chili's Grill & Bar and three other brands earned $54.6 million, or 43 cents per share, compared with earnings of $64.8 million, or 50 cents per share in the year-ago, fiscal 2006 quarter. Excluding special items like gains from the sale of corporate restaurants and restructuring costs, Brinker would have earned 44 cents per share in the latest quarter, up from 43 cents per share in the prior year, the company reported.
Total revenues for the latest three-month period rose 2.8 percent to $1.12 billion, which was aided by the opening of 55 restaurants. Systemwide same-store sales declined 4.4 percent, which reflected drops of 4.4 percent at Chili's, 4.2 percent at Romano's Macaroni Grill, 5.7 percent at On the Border Mexican Grill & Cantina and 3 percent at Maggiano's Little Italy. The company's total operating costs and expenses rose 4.4 percent in its latest quarter to $1.04 billion.
Brinker also reported that it would enter into agreement to repurchase up to $300 million of its stock through a broker-dealer in an accelerated share repurchase transaction sometime during the first quarter of its fiscal 2008. The company obtained a new $400 million unsecured credit facility to fund the buy back, it said. Through April 23, Brinker has repurchased about 7.7 million shares of its stock for $222.1 million, and about $297 million remain available under its share repurchase authorizations.
Systemwide, Brinker operates or franchises 1,756 restaurants.