Brinker International Inc. has opened an urban kitchen in Manhattan to deliver items from its casual-dining Chili’s Grill & Bar and virtual It’s Just Wings brands, company executives said Wednesday.
The Dallas-based company, also parent to the casual-dining Maggiano’s Little Italy and virtual Maggiano’s Italian Classics brands, said the new urban kitchen opened in New York City last month and two are planned for near college campuses in Dallas and Columbus, Ohio.
Wyman Roberts, Brinker CEO and president, said the company was pleased with the urban kitchen’s performance.
“I never thought I'd see the day when I'd see Chili's in Manhattan, but it's been up and running for a month,” he said on a second-quarter earnings call. “We plan to open two small footprint locations and trade areas adjacent to college campuses in the near future. And virtual brands continue to be an important growth vehicle for us. We remain fully committed to this strategy.”
Joseph Taylor, Brinker’s chief financial officer, added that the Manhattan outlet was opened in a third-party kitchen location and takes advantage of urban population density.
“The two units that we're looking at are by college campuses, one here in Dallas and one in Columbus,” Taylor said, and they will be in leased or managed space that is larger than the Manhattan kitchen, likely between 1,500 to 1,800 square feet.
“That's one of the COVID takeaways is that off-premises is a bigger component of what we will do going forward,” he said, “so we want to make sure we're taking full advantage of that consumer shift.”
Brinker introduced the delivery-only It’s Just Wings to more than 1,000 units systemwide in June 2020 and debuted the Maggiano’s Italian Classics virtual brand at 250 restaurants in summer 2021. Roberts said Maggiano’s Italian Classics is now in more than 700 units.
“We're actively working to expand sales channels, build brand awareness and accelerate this part of our business,” he said.
The virtual brands allow Brinker to leverage smaller spaces, Roberts added, and the company’s four brands allow it to reach needed sales volumes.
“This is where our portfolio has helped us and our ability to understand how to run this portfolio in a very tight kitchen environment, even in the Chili's.” he said. “It translates very well into this world.”
Taylor said the company had taken some price increases to deal with commodity and labor inflation, averaging more than 4% at Chili’s and 5% in Maggiano’s latest menu rollout.
Roberts said the company now had hand-held technology for staff in all of its Chili’s restaurants.
“We've had it in some restaurants for years, but that was 10% or less of the system, and now it's 100% of the system,” he said. “The payback is really kind of linked to the cost of those hourly team members. So, in California, where you're paying a much higher wage rate, it's a significant number. And in some other places, it's not as much, but it's just a better program.”
For the second quarter ended Dec. 29, Brinker reported net income of $27.6 million, or 60 cents a share, up from $12 million, or 26 cents a share, in the same period last year. Revenues increased 21.7%, to $925.8 million, from $760.7 million in the prior-year quarter.
Same-store sales for the Brinker system were up 17.7% over the comparable period in 2021 and up 3.5% over the period in pre-pandemic fiscal 2020. Chili’s same-store sales were up 12.1% over fiscal 2021 and up 5% from fiscal 2020. Maggiano’s same-store sales were up 78.1% from the 2021 period and down 5.6% from the 2020 fiscal quarter.
Brinker International operates the Chili's Grill & Bar and Maggiano's Little Italy restaurants as well as the It's Just Wings and Maggiano's Italian Classics virtual brands. As of Dec. 29, it had 1,653 restaurants, including 1,599 Chili’s and 54 Maggiano’s, in 29 countries and two U.S. territories.
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