Brinker International Inc.
) recently revised its guidance for fiscal 2013 and also updated
its long-term outlook.
Revised Fiscal 2013 Guidance
The company now expects that its adjusted earnings per share
for fiscal 2013 will be at the lower end of its previously
provided guidance of $2.30-$2.45. Diluted weighted average shares
outstanding are now projected between 73 and 75 million.
The company also reduced its comparable restaurant sales
(comps) growth guidance from 2%-3% to 1% in fiscal 2013. Comps
are likely to be affected by lower traffic, higher fuel costs and
soft economic condition. However, the company has retained its
outlook for operating margin, which is likely to grow by 100
basis points (bps) year over year.
Improved commodity inflation and reduced food prices would
help the company to increase its cost of sales by 50 bps.
Moreover, for fiscal 2013, the company expects restaurant labor
to be up 50 bps, driven by Brinker's enhanced efficiency.
Year to date, the comps at Chili's were down 2.2% while the
same at Maggiano's remained consistent.
The company is aiming to double its fiscal 2012 earnings to
$4.00 per share by fiscal 2017. In this regard, the company is
trying to grow its earnings by 10%-15% annually.
The company has taken various strategic initiatives, including
cost-cutting approach, slower unit growth and top-line
improvement to enhance its business, moving ahead.
Brinker's long-term revenues growth target is 3% - 5%, which
is partially based on 2%-3% domestic as well as 3% international
comps growth. Moreover, the company also expects that its Chili's
and Maggiano's units in U.S. will grow by 1%-2% and 5%-10%,
respectively. The company is also planning to increase its
margins by 1% annually with the help of lowered labor and
The company is also intending to repurchase nearly $1 billion
shares over the next five years with its strong cash
Brinker recently reported second-quarter fiscal 2013 adjusted
earnings of 50 cents per share, up 6.4% from the year-ago
quarter. The annual surge in the earnings was due to the
company's higher margins. During the quarter, revenues have
increased 1.2% year over year to $689.8 million, driven by
system-wide comparable restaurants sales growth of 1.5%.
Brinker currently retains a Zacks Rank #3 (Hold). Another
Red Robin Gourmet Burgers Inc.
) adjusted earnings in the fourth quarter of 2012 were way ahead
of the Zacks Consensus Estimate as well as the year-ago quarter's
earnings. Red Robin Gourmet currently carries a Zacks Rank #1
Other restaurant companies like
Krispy Kreme Doughnuts, Inc.
Burger King Worldwide, Inc
) both with a Zacks Rank #2 (Buy) are expected to perform well,
BURGER KING WWD (BKW): Free Stock Analysis
BRINKER INTL (EAT): Free Stock Analysis
KRISPY KREME (KKD): Free Stock Analysis
RED ROBIN GOURM (RRGB): Free Stock Analysis
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