Core Insights - Chili's Grill & Bar is launching the Margarita of the Month Club, inspired by its fanbase, to celebrate National Margarita Day on February 22, 2026, with a limited-edition merchandise collection and special promotions [1][2] Group 1: Club Launch and Promotions - The Margarita of the Month Club allows guests aged 21 and older to join for free, track their monthly margaritas, and purchase merchandise [1][2] - The club is a response to the popularity of the Margarita of the Month program, which sold nearly 30 million margaritas in 2025, making Chili's the top restaurant brand for margarita sales in the U.S. [1] - To celebrate the launch, Chili's will offer margarita specials on February 22, including a $5 Tequila Classic, a $6 StrawEddy Margarita of the Month, and a $7 PATRÓN® Frozen Margarita at participating locations [1][2] Group 2: Merchandise Collection - The merchandise collection includes various items such as: - Cabana Shirt ($45): Nautical-inspired short-sleeve button-up with club graphics [2] - Crewneck ($60): Cozy crewneck featuring margarita embroidery [2] - Polo Shirt ($45): Throwback collared polo with sporty striping [2] - Snapback Athletic Hat ($30): Lightweight and durable hat [2] - Salt Brim Snapback Hat ($30): Chino twill cap with club graphics [2] - Crescent Bag ($25): Lightweight bag for essentials [2] - Plastic Keychain ($5): Motel-style keychain with club messaging [2] - Club Field Book (Free with every order): Collectible booklet to track margaritas [2] Group 3: Company Background - Chili's is a leading casual dining brand under Brinker International, Inc. (NYSE: EAT), operating 1,600 restaurants across 29 countries and two territories [1][2] - The brand was named Ad Age's 2025 Brand of the Year and has a history of community support, raising over $120 million for St. Jude Children's Research Hospital [1][2]

Core Insights - Brinker International's CFO Michaela M. Ware sold 5,000 shares at a weighted average price of $162.40, totaling approximately $812,000, which represents a 17.74% reduction in her direct ownership stake [1][2][9] Company Overview - Brinker International operates casual dining restaurants, primarily under the Chili's and Maggiano's brands, generating revenue through food and beverage sales [7][8] - The company reported a revenue of $5.7 billion and a net income of $454.1 million for the trailing twelve months (TTM) [4] - As of February 5, 2026, the company's stock price was $160.64, with a 1-year price change of 0.63% [4] Recent Performance - Fiscal Q2 sales reached $1.5 billion, an increase from $1.4 billion the previous year, with Chili's restaurants achieving 19 consecutive quarters of same-store sales growth, including a 9% increase in Q2 [10] - Following strong performance, Brinker raised its fiscal 2026 full-year guidance to a range of $5.76 billion to $5.83 billion, up from the previous forecast of $5.6 billion to $5.7 billion [10] Market Position - Brinker International is a leading operator in the casual dining segment, leveraging a dual approach of company-owned and franchised locations to maximize market reach and operational flexibility [8] - The company's price-to-earnings ratio is currently 17, which is lower than it was a year ago, indicating a potential buying opportunity for investors [11]

Core Insights - The efficiency ratio is a key indicator of a company's financial health, reflecting how effectively it utilizes its assets and liabilities internally [1] - A selection of companies that have passed the efficiency screening process includes Owlet (OWLT), Texas Capital Bancshares (TCBI), Western Digital (WDC), and Brinker International (EAT) [1] Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2] - **Asset Utilization**: This ratio assesses how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold (COGS), with higher values reflecting better inventory management [4] - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses relative to sales, with higher values indicating better expense management [5] Screening Criteria - The screening process utilized efficiency ratios that exceed industry averages, narrowing down the stock universe from over 7,906 to six candidates [7] - The screening also included a favorable Zacks Rank, specifically Zacks Rank 1 (Strong Buy), to enhance profitability [6] Company Highlights - **Owlet (OWLT)**: Achieved an average four-quarter positive earnings surprise of 87.8% after passing the efficiency screen [8][9] - **Texas Capital Bancshares (TCBI)**: Recorded a 15.1% average four-quarter earnings surprise, serving major Texas metropolitan clients [8][10] - **Western Digital (WDC)**: Developed NAND flash and HDD storage solutions, with an 11.2% average four-quarter earnings surprise [8][11] - **Brinker International (EAT)**: Operates various restaurant brands and has an average four-quarter positive earnings surprise of 8.2% [8][12]

Industry Overview - High prices are challenging consumers, leading to cautious spending, yet the retail sector, particularly restaurants, has shown resilience amid inflationary pressures [1][5] - Restaurant sales in the U.S. reached $735.9 billion in November, marking a 0.6% increase from the previous month and a 3.3% year-over-year growth [4] Investment Opportunities - The current environment suggests investing in restaurant stocks with a strong online presence, specifically Aramark (ARMK), Brinker International, Inc. (EAT), and BJ's Restaurants, Inc. (BJRI) [2] - These selected stocks have experienced positive earnings estimate revisions in the past 60 days and are expected to deliver solid returns, with Zacks Ranks of 1 (Strong Buy) or 2 (Buy) [3] Company Insights Aramark (ARMK) - Aramark benefits from steady restaurant sales and provides food services across various sectors including healthcare and education [10] - The expected earnings growth rate for Aramark is 16.9%, with a Zacks Consensus Estimate improvement of 0.5% over the past 60 days, currently holding a Zacks Rank 2 [12] Brinker International, Inc. (EAT) - Brinker International operates restaurants under the Chili's and Maggiano's brands, with a strong presence in casual dining [13] - The expected earnings growth rate for Brinker is 18.7%, with a Zacks Consensus Estimate improvement of 3.4% over the past 60 days, currently holding a Zacks Rank 1 [14] BJ's Restaurants, Inc. (BJRI) - BJ's Restaurants operates a chain of high-end casual dining establishments, offering a diverse menu for various dining occasions [15] - The expected earnings growth rate for BJ's is 49.7%, with a Zacks Consensus Estimate improvement of 0.5% over the past 60 days, currently holding a Zacks Rank 2 [15]

Group 1 - Brinker International, Inc. reported a strong quarter with a 25-cent earnings beat on a $2.62 basis, indicating robust financial performance [1] - The company experienced higher than expected revenue, with Chili's same store sales growing by 8.6%, surpassing Wall Street's expectation of 6.1% [1] - Brinker raised its full-year forecast for both sales and earnings, reflecting confidence in future performance [1] Group 2 - Despite a significant increase in stock value, which has more than tripled since the start of 2024, the stock has declined nearly 14% over the past 12 months [1] - The stock price experienced volatility, rising by $4 before giving back most of those gains, suggesting potential market mispricing [1] - The current situation is viewed as a buying opportunity for investors [1]

Core Insights - Chili's is exploring a model to make managers ownership partners, similar to successful restaurant brands like Texas Roadhouse and Chick-fil-A, to enhance restaurant performance and community engagement [2][3] Group 1: Company Strategy - The CEO of Chili's, Kevin Hochman, indicated that the motivation for this ownership model stems from the chain's impressive performance in recent years [3] - The company aims to upgrade talent at both hourly and managerial levels, providing significant ownership training to enhance decision-making and business growth at the restaurant level [4][6] - Chili's plans to implement long-term ownership incentives for managers to align their interests with the business's growth [6][7] Group 2: Training and Development - The company has initiated training programs focused on "extreme ownership," which will take a few years to fully implement [5] - The training curriculum includes a deeper understanding of profit-and-loss statements to equip managers with tools to improve financial performance [8] - A new P&L tool is being launched as part of a broader Oracle upgrade to support this training initiative [8]

Restaurant Operations - As of December 24, 2025, the company owned, operated, or franchised a total of 1,627 restaurants, including 1,160 company-owned and 467 franchised locations[63]. - The company plans to open 32 to 38 new restaurants in fiscal 2026, with 6 openings projected for the full year as of December 24, 2025[69]. - The company has strategically pursued international expansion, with 10 new franchise restaurant openings and one new development agreement during the twenty-six-week period ended December 24, 2025[68]. Financial Performance - Total revenues for the thirteen-week period ended December 24, 2025, increased to $1,452.2 million, up from $1,358.2 million for the same period in 2024, reflecting a change of 6.9%[71]. - Total revenues for the Chili's segment increased by 9.0% to $1,317.3 million, driven by favorable comparable restaurant sales and higher traffic[86]. - Chili's total revenues increased by 14.6% to $2,567.0 million for the twenty-six week period ended December 24, 2025, compared to $2,239.2 million for the same period in 2024[90]. - Maggiano's total revenues decreased by 9.7% to $134.9 million for the thirteen week period ended December 24, 2025, compared to $149.4 million for the same period in 2024, primarily due to restaurant closures[95]. Comparable Sales and Traffic - Comparable restaurant sales for company-owned locations increased by 7.5% in the thirteen-week period ended December 24, 2025, driven by a price impact of 4.6% and a traffic impact of 1.4%[73]. - Franchise revenues increased due to higher royalties, with Chili's franchisee sales reaching $271.9 million in the thirteen-week period ended December 24, 2025, compared to $232.3 million in the same period in 2024[73]. Cost Management - Food and beverage costs increased to $370.5 million, representing 25.7% of company sales, with a 0.2% unfavorable variance due to higher commodity costs and unfavorable menu item mix[76]. - Restaurant labor costs rose to $446.4 million, accounting for 31.0% of company sales, with a favorable variance of 0.3% attributed to sales leverage[76]. - Food and beverage costs for the twenty-six week period ended December 24, 2025, were $715.1 million, with a 0.4% unfavorable variance due to commodity costs[81]. - Chili's food and beverage costs were unfavorable by 0.1%, primarily due to a 0.9% unfavorable menu item mix and 0.2% unfavorable commodity costs, partially offset by 1.2% favorable menu pricing[89]. - Maggiano's food and beverage costs were unfavorable by 2.6%, driven by a 3.0% unfavorable menu item mix and 0.7% unfavorable commodity costs, partially offset by 1.1% favorable menu pricing[99]. - Maggiano's food and beverage costs were unfavorable by 2.3%, driven by a 2.8% unfavorable menu item mix and 0.6% higher commodity costs, partially offset by 1.1% favorable menu pricing[104]. Expenses - General and administrative expenses increased by $6.6 million to $59.7 million, primarily due to higher payroll expenses and stock-based compensation[78]. - Chili's general and administrative expenses increased by $3.3 million to $27.3 million for the twenty-six week period ended December 24, 2025, compared to $24.0 million for the same period in 2024[94]. - Depreciation and amortization rose to $54.6 million, reflecting an increase of $6.9 million from the previous year[78]. - Chili's depreciation and amortization increased by $11.9 million to $94.2 million for the twenty-six week period ended December 24, 2025, compared to $82.3 million for the same period in 2024[92]. Cash Flow and Financing - Net cash provided by operating activities increased by $58.7 million to $339.7 million for the twenty-six week period ended December 24, 2025, compared to $281.0 million for the same period in 2024[100]. - Net cash used in investing activities increased by $15.8 million to $121.6 million for the twenty-six week period ended December 24, 2025, primarily due to increased spending on new restaurant construction[101]. - Net cash used in financing activities decreased slightly to $(222.0) million for the twenty-six week period ended December 24, 2025, compared to $(225.0) million in the prior year, primarily due to a decrease in net repayments of long-term debt[102]. - As of December 24, 2025, net borrowings of $20.0 million were drawn on the revolving credit facility, with $949.9 million of credit available[103]. - The company repurchased 1.8 million shares for $235.0 million during the twenty-six week period ended December 24, 2025, with approximately $315.0 million remaining under the current share repurchase program[108]. Tax and Interest - Effective income tax rate for the thirteen-week period ended December 24, 2025, was 18.7%, up from 16.4% in the prior year[83]. - Interest expenses decreased by $4.0 million to $10.7 million, primarily due to a lower average revolver balance[80]. - The company's interest rate on the revolving credit facility was 4.98% as of December 24, 2025, consisting of SOFR of 3.73% plus an applicable margin of 1.25%[105]. - A hypothetical 100 basis point increase in the current interest rate on the outstanding balance of the revolving credit facility would result in an additional $0.2 million of annual interest expense[114]. Risk Factors - Commodity price risks remain a concern, with potential fluctuations in food and other commodity prices impacting financial results due to supply and demand factors[115]. - Other (gains) and charges for the twenty-six week period ended December 24, 2025, were $1.4 million, a decrease of $19.6 million from the previous year[82]. - Other (gains) and charges for Chili's resulted in a net unfavorable variance of $10.8 million, with losses from natural disasters and litigation impacting the results[91]. Operational Improvements - The company has focused on enhancing the digital experience, including a seamless To-Go menu available through various platforms, which has improved customer convenience[65]. - The company has simplified its menu to focus on core items, which has helped improve consistency and quality in food preparation[65]. - The company has invested in technology to enhance operational efficiency, including the use of handheld tablets for order placement and tabletop devices for guest interaction[66].

Core Insights - Brinker International, Inc. reported strong financial performance with an EPS of $2.87, surpassing estimates of $2.53, and revenue of approximately $1.45 billion, exceeding the estimated $1.41 billion [1][6] Financial Performance - The company achieved a revenue increase from $1.36 billion in the same period last year to $1.45 billion, marking a 6.6% year-over-year growth [4] - Brinker has consistently outperformed earnings expectations, with a +13.39% surprise for the current quarter and a +9.66% surprise in the previous quarter, indicating strong operational execution [3] Brand Performance - The Chili's brand has shown remarkable resilience, achieving a growth of 9% and a two-year comparable sales growth of 43%, contributing significantly to the overall stock increase [2][6] Challenges - Brinker faces challenges with a high debt-to-equity ratio of approximately 5.29, indicating reliance on debt financing [5] - The current ratio of 0.35 suggests potential liquidity challenges in covering short-term liabilities [5] - Despite these challenges, the company maintains a strong earnings yield of about 6.21%, providing a solid foundation for future growth [5][6]

Starbucks, Chili's Parent Gobble Up Gains On Earnings, Score Breakouts | Investor's Business DailyANALYSIS: [AI Bubble Or Boom? Wall Street Weighs In]Investors.com will undergo scheduled maintenance from 10:00 PM ET to 2:00 AM ET and some features may be unavailable. We apologize for any inconvenience.---Chili's parent Brinker International surged early Wednesday, with shares closing in on a buy point following second-quarter results. Starbucks stock jumped on its fiscal Q1 report. Brinker International (EA ...

Core Viewpoint - Brinker International, Inc. reported strong second-quarter results driven by menu updates, competitive pricing, and effective advertising, leading to increased customer acquisition and repeat visits Quarterly Sales - The company achieved adjusted earnings per share of $2.87, surpassing the analyst consensus estimate of $2.62 [2] - Quarterly sales reached $1.452 billion, exceeding the expected $1.411 billion [2] - Comparable restaurant sales increased by 7.5%, with Chili's showing an 8.6% increase, while Maggiano's experienced a decline of 2.4% [2] Operational Performance - Chili's reported a two-year comparable sales growth of 43%, with 19 consecutive quarters of same-store sales growth [3] - Operating income for the quarter was $168.4 million, up from $156 million a year ago, with an operating margin increase to 11.6% from 11.5% [3] - Adjusted restaurant operating margin decreased to 18.8% from 19.1% year-over-year [4] - Adjusted EBITDA was $223.5 million, compared to $215.8 million in the previous year [4] - The company ended the quarter with $15 million in cash and equivalents [4] Outlook - Brinker raised its fiscal 2026 adjusted earnings forecast to a range of $10.45 to $10.85 per share, up from $9.90 to $10.50, aligning with analysts' average estimate of $10.46 [5] - The fiscal 2026 revenue guidance was increased to $5.76 billion to $5.83 billion, from $5.60 billion to $5.70 billion, compared to the Street estimate of $5.761 billion [5] - The company anticipates a negative impact on fiscal 2026 results due to Winter Storm Fern, estimating a $20 million revenue loss and a 15 cents per-share hit to non-GAAP earnings [6]