Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potent ...

Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today: The First of Long Island Corporation (FLIC) : This holding company for The First National Bank of Long Island has seen the Zacks Consensus Estimate for its current year earnings increasing 8.8% over the last 60 days. First Financial Bancorp. (FFBC) : This bank holding company for First Financial Bank has seen the Zacks Consensus Estimate for its current year earnings increasing 6.6% over the last 60 days. SharkNinja, Inc. (SN) : This p ...

Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, August 16th: Norwegian Cruise Line Holdings Ltd. (NCLH) : This cruise company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 9.1% over the last 60 days. Norwegian Cruise Line has a PEG ratio of 0.20 compared with 1.77 for the industry. The company possesses a Growth Score of A. Brinker International, Inc. (EAT) : This franchisor of casual d ...

Here are three stocks with buy rank and strong value characteristics for investors to consider today, August 16th: Brinker International, Inc. (EAT) : This franchisor of casual dining restaurants carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.8% over the last 60 days. Brinker has a price-to-earnings ratio (P/E) of 13.28, compared with 41.90 for the industry. The company possesses a Value Score of A. Alpine Income Property Trust, Inc. (PINE) ...

An ad campaign targeting fast-food chains and a TikTok-viral appetizer helped Chili's same-store sales climb nearly 15% in its latest quarter. But Kevin Hochman, CEO of parent company Brinker International, told CNBC that the chain's strong performance is just a sign that customers are finally catching onto the chain's two-year turnaround. Shares of Brinker have climbed 53% this year, bringing its market value up to $2.93 billion. However, the stock closed 10.7% lower Wednesday after the company disappointe ...

The annual inflation rate in the United States slowed for a fourth successive month to 2.9% in July 2024, the lowest since March 2021, compared to 3% in June and below forecasts of 3%. Inflation eased for shelter (5.1% vs 5.2%), transportation (8.8% vs 9.4%) and apparel (0.2 vs 0.8%). Also, prices continued to decline for new vehicles (-1% vs -0.9%) and used cars and trucks (-10.9% vs -10.1%) and food inflation steadied at 2.2%. Despite this cooling, below we highlight a few sector ETFs and stocks that may ...

Core Insights - The full-service dining and fast-casual restaurant sectors have shown resilience since 2020, despite initial setbacks due to the pandemic and ongoing inflationary pressures [3][4] - Publicly traded restaurant stocks have generally increased, with the Dow Jones US Restaurants & Bars Index up 34% over the past five years, indicating a mixed recovery in the industry [3] - Fast-casual chains like Chipotle and Cava are performing well, while dine-in focused companies face more challenges, exemplified by Darden's struggles and Red Lobster's bankruptcy [3][4] Company Performance - Brinker International, primarily through Chili's, has seen its stock double in value over the past year but recently experienced a 16% drop after missing earnings expectations [3][6] - Despite a slight sales beat of $40 million, Brinker reported a non-GAAP EPS of $1.61, which was $0.11 below estimates, reflecting high market expectations due to its recent stock performance [3][6] - Chili's reported 13.5% comparable restaurant sales growth, with a 5.9% increase in traffic, attributed to successful marketing strategies like the "Bid Smasher" burger [6][8] Market Dynamics - The restaurant market is sensitive to economic changes, with full-service dining often viewed as a luxury, leading to potential declines in consumer spending as economic pressures mount [4][8] - The competitive landscape is shifting, with many independent restaurants closing, which may provide a temporary advantage to chains like Chili's, although this growth may not be sustainable [6][8] - The overall macroeconomic outlook for the restaurant industry is turning negative, with expectations of declining consumer demand and persistent operating costs [8][9] Valuation and Outlook - Brinker International's current TTM P/E ratio is 18X, which is relatively reasonable compared to peers, but the stock may be conditionally overvalued if a consumer-driven recession occurs [8][9] - The stock's 20% short interest indicates significant market skepticism regarding its recent performance and future prospects [9] - Overall, the company is viewed as slightly bearish, with concerns that its stock price has risen too quickly relative to its fundamental improvements [9]

Global Research and Evidence Lab 14 August 2024 First Read Brinker International Inc Initial Thoughts on F4Q Results Strong F4Q sales beat, but disappointing flow-through; FY25 guidance mixed F4Q results included an adj EBITDA miss ($141.8MM vs Cons. $144.7MM), reflecting restaurant margin downside (15.2% vs. Cons. 15.5%) and higher stock-based compensation despite better than expected revenues ($1.21 BN vs Cons. $1.16 BN). Restaurant expenses were higher than expected (27.1% vs Cons. 26.7%) and G&A above C ...

Financial Data and Key Metrics - Brinker reported total revenues of $1.208 billion for Q4, with consolidated comp sales of positive 13.5% [18] - Adjusted diluted EPS for Q4 was $1.61, up from $1.39 last year [18] - Full-year adjusted EBITDA totaled $444 million, a 28% increase versus the prior year [23] - Chili's comp sales came in at positive 14.8%, driven by price (8.1%), positive mix (0.8%), and positive traffic (5.9%) [19] - Maggiano's reported 2.5% positive comp sales for Q4, driven by price (9.2%) and positive mix (2.2%), offset by negative traffic (-8.9%) [19] - Restaurant operating margin for Q4 was 15.2%, a 180 basis points improvement year-over-year [21] Business Line Performance - Chili's AUVs grew by $440,000 to $3.6 million over the past two fiscal years [5] - Chili's menu has 22% fewer items than two years ago, simplifying operations [5] - Core 4 menu items (margaritas, Chicken Crispers, burgers, and fajitas) have seen significant improvements, with margarita sales doubling over $10 price points [9] - Fajitas platform, a $200 million business, will be relaunched in Q4 with improved recipes and new menu merchandising [13] Market Performance - Chili's outperformed the industry in Q4 with 14.8% sales growth and 5.9% traffic growth, 15.6 points better than the industry on sales and 9.4 points better on traffic [12] - July sales for Chili's were in the high single digits, including positive traffic, maintaining a 13% gap to the casual dining industry in sales and 8% in traffic [24] Strategic Direction and Industry Competition - The company is focused on improving 4-wall economics through operational simplification, technology investments, and labor and facility improvements [4][6][7] - Brinker is leveraging a barbell pricing strategy to offer both value and premium options, maintaining a balance between low-price and high-price menu items [10][24] - The company plans to continue driving traffic through advertising, superior value, and food innovation, with a focus on the Big Smasher and fajitas relaunch in FY25 [13][16] Management Commentary on Operating Environment and Future Outlook - Management highlighted the success of the turnaround strategy, with significant improvements in guest experience and operational efficiency [4][8] - The company expects FY25 annual revenues in the range of $4.55 billion to $4.62 billion, with adjusted diluted EPS in the range of $4.35 to $4.75 [25] - Wage rate inflation is expected in the mid-single digits, and commodity inflation in the low-single digits [25] Other Important Information - The company has made significant investments in technology, including Ziosk pay-at-the-table technology and AI labor forecasting, which have improved reliability and reduced errors [7] - Brinker has also invested in labor and facilities, leading to record food grade scores and improved guest experience [8] - The company plans to remove curbside service by the end of Q1 to streamline off-premise business execution [15] Q&A Session Summary Question: Chris O'Cull (Stifel) - Margin pressure in FY25 guidance - The margin pressure is driven by wage rate inflation, commodity inflation, and incremental investments in labor ($15M-$20M) and media ($15M-$18M) [27] Question: Dennis Geiger (UBS) - Top line outlook for FY25 - The company expects mid-single-digit same-store sales growth, with pricing in the 4%-5% range and traffic flat to slightly positive [32] - The company has baked in a 4%-5% decline in industry traffic into its assumptions [33] Question: Jeffrey Bernstein (Barclays) - Competitive environment and consumer stickiness - The company is seeing new guests return, with 18% of guests eating on the $10.99 tier and 80% on full-price menu items [40] - The barbell pricing strategy is working, with no evidence of overpricing on the regular menu [44] Question: David Palmer (Evercore ISI) - Restaurant expenses and $10.99 strategy - Restaurant repairs were up $16M year-over-year, and advertising was up $14M [47] - The company plans to refresh the $10.99 message with new product news in the back half of FY25 [50][52] Question: Andrew Strelzik (BMO) - Listening sessions and traffic growth - The company is focusing on empowering restaurant teams to raise the bar on performance and guest experience [54] - Traffic growth is broad-based across all demographics, with the company winning market share [57] Question: Jeff Farmer (Gordon Haskett) - Restaurant-level margin and G&A - The company expects 30-50 basis points of ROM improvement in FY25 [58] - G&A is expected to increase by $5M-$7M due to ERP system transition and team growth [59] Question: Brian Vaccaro (Raymond James) - TikTok and influencer marketing - The company attributes 60% of May's performance to advertising and 40% to TikTok going viral [63] - The company has increased investment in TikTok and influencer marketing, driving younger consumers to Chili's [66][68] Question: John Ivankoe (JPMorgan) - Advertising and CapEx - The company is increasing advertising spend but has baked in a 4%-5% industry traffic decline, which could limit profitability upside [71] - CapEx for FY25 will be similar to FY24, with a shift from R&M to reimage spending and new restaurant development [73] Question: Eric Gonzalez (KeyBanc) - Recent trends and capital allocation - The company did not delay marketing windows and saw a tail effect from previous advertising [78] - Capital allocation for FY25 will focus on investing in the business, paying down debt, and share buybacks to offset dilution [81] Question: Brian Mullan (Piper Sandler) - Development and Maggiano's priorities - The company plans to open 10-12 new Chili's restaurants in FY25, with potential to accelerate to 15 [83] - Maggiano's is focusing on simplifying operations and elevating the guest experience, with new food and beverage innovation coming in September [85][87]

Brinker International (EAT) shares were down over -14% this morning after posting mixed results for its fiscal fourth quarter. Still, Brinker's stock is sitting on +60% gains this year as the operator of Chili's Bar & Grill and Maggiano's Little Italy. Considering its stellar year-to-date performance, investors may be wondering if the post-earnings dip is a buying opportunity. To that point, Brinker has vastly outperformed the broader indexes and the Zacks RetailRestaurants Market including two of its top i ...