:max_bytes(150000):strip_icc()/GettyImages-1289252849-102cab1dce4845cca07f7a15a37b2e75.jpg "Share price of Chili’s parent company Brinker International falls as rising costs reduce profits")
Key findings
- Brinker International shares fell in intraday trading on Wednesday after the company missed fourth-quarter earnings expectations and also fell short of its full-year guidance due to increased costs.
- The parent company of Chili’s and Maggiano’s reported an 11.7% increase in operating costs and expenses compared to the previous year.
- Brinker reported better sales and comparable sales than expected.
Brinker International (EAT) shares fell in intraday trading on Wednesday after rising costs hit the restaurant chain operator’s earnings and revenue outlook.
The parent company of Chili’s and Maggiano’s reported fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $1.61, $0.14 below the average estimate of analysts surveyed by Visible Alpha. Revenue rose 12.3% year over year to $1.21 billion, beating forecasts.
Operating costs and expenses increased 11.7% to $1.14 billion. Excluding depreciation and general expenses, the company’s restaurant expenses increased 10.8% to $910.5 million.
However, higher menu prices and increased customer traffic helped comparable sales at Brinker’s Chili’s restaurants increase 14.8%, accounting for most of the 13.5% increase for the overall company. At Maggiano’s, comparable restaurant sales were 2.5% higher. These figures do not include sales at Chili’s franchises.
Adjusted earnings per share forecast for fiscal year 2025 misses estimates
The company expects adjusted earnings per share for fiscal 2025 to be in a range of $4.35 to $4.75, below Visible Alpha’s consensus estimate of $4.84, but revenue guidance of $4.55 billion to $4.62 billion beat estimates.
Brinker stock was trading 11.3% lower at $62.45 as of 11:00 a.m. ET on Wednesday. Even with today’s losses, the company’s shares are up about 45% year-to-date.
