Brinker International Inc.
), recently reported first-quarter 2013 adjusted earnings of 37
cents per share, lagging the Zacks Consensus Estimate by a penny,
but up 23.3% from the year-ago quarter earnings of 30 cents per
CHIPOTLE MEXICN (CMG): Free Stock Analysis
BRINKER INTL (EAT): Free Stock Analysis
To read this article on Zacks.com click here.
Total revenue nudged up 2.0% year over year to $683.5 million due
to a 2.7% hike in system-wide comparable restaurants sales.
Chili's Grill & Bar restaurant reported revenues of $581.3
million, up 2.7% year over year, while Maggiano's sales crept up
0.9% to $82.4 million in the quarter. However, Royalty and
franchise revenue slid 3.9% to $19.8 million, due to a dip in
gift card breakage income, partially offset by rise in royalty
Comparable restaurant sales at Chili's Grill & Bar restaurant
climbed up 2.8% for the sixth consecutive quarter, benefiting
from a 0.4% rise in traffic, 1.4% spike in menu price and 1%
favorable mix-shift. Same-restaurant sales at Maggiano's inched
up 0.9% for the 11th time in a row driven by menu price (up 2.6%)
and mix-shift (up 0.8%), partially offset by lower traffic of
Comparable restaurant sales at franchised restaurants ascended
2.9%, aided by growth of 3.7% and 1.31% in franchised domestic
and international, respectively.
Restaurant operating margin enhanced 150 basis points (bps) year
over year to 14.6%, aided by the initiatives that have
streamlined staffing, and upgraded kitchen and point of sale
systems. Restaurant margins at Chili's Grill & Bar expanded
on lower restaurant labor and restaurant expenses as well as flat
cost of sales. Restaurant margin at Maggiano's improved mainly on
better cost of sales, lower credit card fees and benefits from
sales leverage on fixed costs related to higher revenue.
At the end of 2012, the company had current assets of $190.6
million and shareholders' equity of $268.1 million.
During the quarter, the company repurchased 2.5 million shares
for approximately $86.3 million and currently has $579 million
remaining under the share repurchase authorization.
During the quarter, the company opened nine international
franchise restaurants and closed five franchise-owned Chili's
At the end of the quarter, Brinker operated 1,585 restaurants, of
which 1,274 were Chili's, 44 were Maggiano's and 267 franchised
restaurants in the international market. The international
franchise restaurants operate 266 Chili's restaurants and one
Maggiano's restaurant in 32 countries and two territories.
For 2013, Brinker expects adjusted earnings to be in the range of
$2.30 to $2.45, up 17% to 25%. The company anticipates comparable
restaurant sales for full-year to increase 2-3% year over year
and operating margin to expand by 100 bps.
As a result of unfavorable employment environment leading to
lower consumer spending and slowing restaurant industry sales,
the company, for the second quarter of 2013, anticipates comps
growth at or even below the 2%-3% guidance and earnings in the
range of 48 cents to 50 cents, down from the provided range of
17% to 25% for 2013.
Brinker remains optimistic about improving its margin by 400
basis points and to double its EPS by 2015, supported by top-line
growth and improving operational efficiencies. However, the
outlook for the next quarter remains weak, owing to feeble growth
in employment and frail industry sales. Hence, we expect
estimates to go down for the second quarter of 2013. The Zacks
Consensus Estimates for the next quarter is pegged at 55 cents.
Brinker currently retains a Zacks #3 Rank, which translates into
a short-term 'Hold' rating. We are also maintaining our long-term
'Outperform' recommendation on the stock.
Chipotle Mexican Grill Inc.
), one of Brinker's peers, reported third-quarter 2012 earnings
of $2.27 per share, which fell shy of the Zacks Consensus
Estimate of $2.30. However, the result was ahead of the year-ago
earnings of $1.90 per share. Double-digit top-line growth and
margin expansion led to the year-over-year growth in earnings.