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Financial Performance - Total revenues for the thirteen-week period ended September 24, 2025, were $1,349.2 million, an increase from $1,139.0 million for the same period in 2024, reflecting a growth of approximately 18.4%[71] - Comparable restaurant sales for company-owned locations increased by 18.8%, with Chili's showing a 21.4% increase, while Maggiano's experienced a decline of 6.4%[72] - Chili's total revenues increased by 21.3% to $1,249.7 million for the thirteen-week period ended September 24, 2025, primarily due to favorable comparable restaurant sales[82] - Maggiano's total revenues decreased by 8.4% to $99.5 million for the same period, primarily due to unfavorable comparable restaurant sales and restaurant closures[85] Restaurant Operations - As of September 24, 2025, the company owned, operated, or franchised a total of 1,630 restaurants, including 1,161 company-owned and 469 franchised locations[63] - The company opened 7 new restaurants during the thirteen-week period, with 5 of these being franchise locations, and plans to open 32-38 new restaurants in fiscal 2026[69] - The "3 for Me" value offering has been highlighted as a key traffic driver, allowing guests to enjoy a meal starting at $10.99[65] - The company has focused on enhancing the digital experience for guests, including a seamless To-Go menu available through various platforms[65] Cost Management - Food and beverage costs represented 25.8% of company sales, showing a slight increase from 25.2% in the previous year, primarily due to unfavorable commodity costs[75] - Restaurant labor costs decreased to 32.3% of company sales from 33.5%, benefiting from sales leverage despite higher hourly labor costs[75] Cash Flow and Financing - Net cash provided by operating activities increased by $58.0 million to $120.8 million for the thirteen-week period ended September 24, 2025, due to an increase in operating income[87] - Net cash used in investing activities increased by $1.4 million to $(57.9) million, primarily due to increased spending on new restaurant construction and Maggiano's reimages[88] - Net cash used in financing activities decreased by $6.5 million to $(48.2) million, primarily due to an increase in net borrowings of long-term debt[90] - As of September 24, 2025, the company had $910.0 million available under its $1.0 billion revolving credit facility[91] - The company is focusing on cash flow generation and maintaining a solid financial position amid macroeconomic uncertainties, including commodity and labor inflation[96] - Current cash and cash equivalents, along with cash generated from operations, are expected to meet capital expenditure and working capital needs for at least the next twelve months[97] Shareholder Returns - The Board of Directors approved a $400.0 million increase in the share repurchase program, bringing the total available authority to $507.0 million[94] - In the thirteen-week period ended September 24, 2025, the company repurchased 0.9 million shares for $134.5 million, with approximately $415.0 million remaining under the current share repurchase program[95] Tax and Compliance - The effective income tax rate decreased to 7.5% for the thirteen-week period ended September 24, 2025, from 9.0% in the prior year, primarily due to excess tax benefits from stock-based compensation[79][80] - The company expects to remain in compliance with its covenants under the revolving credit facility and the terms of its 8.25% notes during the remainder of fiscal 2026[93] Future Commitments and Risks - Long-term purchase obligations for marketing programs total $18.0 million in fiscal 2026, $21.2 million in fiscal 2027, $21.1 million in fiscal 2028, and $4.4 million in fiscal 2029[98] - A hypothetical 100 basis point increase in interest rates on the $90.0 million outstanding under the revolving credit facility would result in an additional $0.9 million of annual interest expense[101] - The company faces commodity price risk due to fluctuations in market prices for food and other commodities, which could negatively impact short-term financial results[102] - Depreciation and amortization increased by $7.3 million to $53.6 million for the thirteen-week period ended September 24, 2025, primarily due to additions for new and existing restaurant assets[78] - General and administrative expenses rose by $5.4 million to $57.2 million for the same period, driven by payroll expenses and corporate technology initiatives[78] International Expansion - The company plans to strategically pursue international expansion of Chili's through development agreements with new and existing franchise partners[68]

Financial Data and Key Metrics Changes - For Q1 fiscal year 2026, total revenues reached $1.35 billion, an increase of 18.5% year-over-year, with consolidated comp sales up 18.8% [16] - Adjusted diluted EPS for the quarter was $1.93, up from $0.95 last year [16] - Restaurant operating margin improved to 16.2%, a 270 basis points increase year-over-year, primarily driven by sales leverage [17] Business Line Data and Key Metrics Changes - Chili's reported same-store sales growth of 21.4%, driven by a 13.1% increase in traffic, a positive mix of 4.3%, and a price increase of 4% [16][17] - Maggiano's experienced a decline in comp sales of 6.4% for the quarter, with a focus on stabilizing and improving the brand through the "Back to Maggiano's" strategy [17] Market Data and Key Metrics Changes - Chili's outperformed the casual dining industry by 1,650 basis points in same-store sales growth [5] - The customer base for Chili's is growing across all income levels, particularly among households with incomes under $60,000, indicating a strong value proposition [9][10] Company Strategy and Development Direction - The company is focused on enhancing guest experience through food and hospitality initiatives, with successful upgrades in menu items like ribs and beverages [7][8] - A reimaging program for Chili's is underway, with four pilot restaurants expected to be completed by the end of the quarter, aiming to return to the brand's original essence [20][50] - The "Back to Maggiano's" plan includes improving service levels, focusing on guest-facing repairs, and restoring pride in ownership among management teams [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong sales growth despite economic uncertainties and anticipated commodity inflation in the mid-single digits [22] - The company expects Q2 to show moderate gains compared to the previous year due to high comparison bases, with same-store sales normalizing in the mid-single digit range for the remainder of the fiscal year [23][56] Other Important Information - The company repurchased $92 million of common stock under its share repurchase program, supporting its disciplined capital allocation strategy [20] - The adjusted tax rate for the quarter increased to 18.5%, driven by higher sales [19] Q&A Session Summary Question: How does Chili's plan to leverage tokenized consumer data to enhance engagement? - Management plans to track monthly cohorts of new guests to understand their repeat behavior and the impact of menu initiatives on guest frequency [26][27] Question: How is the value platform performing against expectations? - The value platform is performing well, with the $10.99 burger deal remaining relevant and expected to be refreshed with new innovations in Q3 and Q4 [30][32] Question: What insights can be shared about younger consumers? - Younger consumers are returning as frequently as other guests, and marketing efforts are focused on maintaining relevance with Gen Z [39][40] Question: What is the status of the food renovation journey? - The company is progressing with food renovations, including a chicken sandwich platform and plans to bring back the old skillet queso due to customer demand [42][43] Question: How is the North of Six initiative progressing? - The initiative is yielding positive results, with improvements in scheduling and operational efficiency being implemented across the system [71][74] Question: What are the expectations for Maggiano's turnaround? - The turnaround is expected to be slower than Chili's due to its smaller size and less national marketing presence, but management is optimistic about stabilizing and growing the brand [80][83]

Financial Data and Key Metrics Changes - For Q1 fiscal year 2026, total revenues reached $1.35 billion, an increase of 18.5% year-over-year, with consolidated comp sales up 18.8% [16] - Adjusted diluted EPS for the quarter was $1.93, up from $0.95 last year [16] - Restaurant operating margin improved to 16.2%, a 270 basis points increase year-over-year, primarily driven by sales leverage [17] - Adjusted EBITDA for the first quarter was approximately $172.4 million, a 54.4% increase from the prior year [19] Business Line Data and Key Metrics Changes - Chili's reported same-store sales growth of 21.4%, driven by a 13.1% increase in traffic, a 4.3% positive mix, and a 4% price increase [16] - Maggiano's experienced a decline in comp sales of -6.4% for the quarter [17] Market Data and Key Metrics Changes - Chili's outperformed the casual dining industry by 1,650 basis points in same-store sales growth [5] - The customer base for Chili's is growing across all income levels, with the fastest growth seen in households earning under $60,000 [9] Company Strategy and Development Direction - The company is focusing on stabilizing and improving Maggiano's through the "Back to Maggiano's" strategy, which emphasizes classic recipes, improved service, and guest-facing repairs [12][14] - Chili's is ramping up its reimage program and expects to complete four remodel pilot restaurants by the end of the quarter [20] - The company aims to return to positive net new unit growth for Chili's and stabilize Maggiano's performance [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain strong sales growth despite economic uncertainties and anticipated higher commodity inflation [22] - The first quarter is expected to be the strongest year-over-year, with more moderate gains anticipated in subsequent quarters [23] - Management remains focused on long-term growth and strategic investments, despite challenges in the macroeconomic environment [24] Other Important Information - The company repurchased $92 million of common stock under its share repurchase program [20] - The adjusted tax rate for the quarter increased to 18.5%, driven by higher sales [19] Q&A Session Summary Question: How does Chili's plan to leverage tokenized consumer data to enhance engagement? - Management plans to track monthly cohorts of new guests to understand their repeat visitation and the impact of menu initiatives on guest frequency [26][28] Question: How is the value platform performing against expectations? - The value platform is performing well, with significant lifts observed from recent advertising campaigns, particularly the $10.99 burger deal [30][31] Question: What insights can be shared regarding younger consumers? - Younger consumers are returning as frequently as other guests, and marketing efforts are focused on maintaining relevance with this demographic [39][40] Question: What is the status of the food renovation journey? - The company is progressing with food renovations, including a chicken sandwich platform and plans to bring back the old skillet queso due to customer demand [42][43] Question: How is the North of Six initiative progressing? - The initiative is yielding positive results, with improvements in scheduling and operational efficiency being implemented across the system [71][74] Question: What are the expectations for Maggiano's turnaround compared to Chili's? - The turnaround for Maggiano's is expected to be slower due to its smaller size and less national marketing presence, but management is optimistic about stabilizing and growing the brand [80][83]

Financial Data and Key Metrics Changes - For Q1 fiscal year 2026, total revenues reached $1.35 billion, marking an 18.5% increase year-over-year, with consolidated comp sales up 18.8% [14][16] - Adjusted diluted EPS for the quarter was $1.93, a significant rise from $0.95 in the previous year [14] - Restaurant operating margin improved to 16.2%, reflecting a 270 basis points increase year-over-year, primarily driven by sales leverage [16][18] Business Line Data and Key Metrics Changes - Chili's reported same-store sales growth of 21.4%, driven by a 13.1% increase in traffic, a 4.3% positive mix, and a 4% price increase [15][16] - Maggiano's experienced a decline in comp sales of -6.4%, with a focus on stabilizing and improving the brand through the "Back to Maggiano's" strategy [16][19] Market Data and Key Metrics Changes - Chili's has outperformed the casual dining industry by 1,650 basis points in same-store sales growth [4] - The customer base for Chili's is growing across all income levels, particularly among households earning under $60,000, indicating a shift in market dynamics [8][9] Company Strategy and Development Direction - The company is ramping up its reimage program for Chili's, with four remodel pilot restaurants expected to be completed by the end of the quarter [6][19] - The "Back to Maggiano's" plan focuses on improving service levels, restoring classic recipes, and enhancing guest experience [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong sales growth despite anticipated challenges such as higher commodity inflation and economic uncertainty [20][21] - The company expects Q2 to be strong but anticipates that same-store sales will normalize to mid-single-digit growth for the remainder of the fiscal year [21][22] Other Important Information - The company repurchased $92 million of common stock under its share repurchase program, reflecting a disciplined capital allocation strategy [19] - The adjusted tax rate for the quarter increased to 18.5%, driven by accelerated sales growth [18] Q&A Session Summary Question: How does Chili's plan to leverage tokenized consumer data to enhance engagement? - Management indicated that they are learning to use tokenized data to track guest frequency and understand the impact of menu initiatives on customer retention [23][24] Question: What is the performance of the value platform? - The value platform is performing well, with the $10.99 message driving significant market share for Chili's [25][26] Question: What is the outlook for younger consumers? - Management noted that younger consumers are returning as frequently as other guests, and marketing efforts are focused on maintaining relevance with this demographic [30][31] Question: What is the status of the menu renovation? - The company is progressing with menu renovations, including a chicken sandwich platform and plans to bring back the old skillet queso due to customer demand [34][35] Question: How is the North of Six initiative progressing? - The initiative is ongoing, with improvements in scheduling and equipment being implemented to enhance restaurant performance [59][61] Question: What is the impact of commodity inflation on margins? - Management indicated that commodity inflation may lead to flat to slightly positive margins, with ongoing adjustments to pricing strategies [47][49]

Sales Performance - Brinker's same store sales increased by 13% in Q1 F25 and 18.8% in Q1 F26[6] - Chili's same store sales increased by 14.1% in Q1 F25 and 21.4% in Q1 F26[6] - Maggiano's same store sales increased by 4.2% in Q1 F25 but decreased by 6.4% in Q1 F26[6] - Domestic franchise same store sales increased by 12.3% in Q1 F25 and 23.1% in Q1 F26[6] - International franchise same store sales increased by 3.7% in Q1 F25 and 16.5% in Q1 F26[6] - Chili's company sales were $1.019 billion in Q1 F25 and $1.197 billion in Q1 F26[8] - Maggiano's company sales were $108 million in Q1 F25 and $149 million in Q1 F26[8] - Total company sales were $1.127 billion in Q1 F25 and $1.346 billion in Q1 F26[10] - Total revenues were $1.139 billion in Q1 F25 and $1.358 billion in Q1 F26[11] Cost Management - Food cost increased by 120 bps due to unfavorable menu mix, offset by commodity inflation (40 bps) and menu price (-100 bps)[13] - Labor cost decreased by 150 bps due to sales leverage, offset by hourly labor (60 bps), manager salaries (10 bps), and other (340 bps)[15] - Restaurant expense decreased significantly by 310 bps due to sales leverage[16, 17]

Core Insights - Brinker International (EAT) reported quarterly earnings of $1.93 per share, exceeding the Zacks Consensus Estimate of $1.76 per share, and showing significant growth from $0.95 per share a year ago [1] - The company achieved revenues of $1.35 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.21% and increasing from $1.14 billion year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +9.66%, and the company has consistently surpassed consensus EPS estimates over the last four quarters [2] - In the previous quarter, Brinker International reported earnings of $2.49 per share against an expectation of $2.43, resulting in a surprise of +2.47% [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.60 on revenues of $1.4 billion, while the estimate for the current fiscal year is $10.34 on revenues of $5.7 billion [8] - The estimate revisions trend for Brinker International was mixed prior to the earnings release, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Retail - Restaurants industry, to which Brinker International belongs, is currently ranked in the bottom 11% of over 250 Zacks industries, suggesting potential challenges ahead [9] - The performance of Brinker International's stock may be influenced by the overall industry outlook, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance - Brinker International reported first quarter sales of $1,335.4 million, a 21% increase compared to $1,127.3 million in the same period last year[3]. - Operating income for the first quarter was $117.9 million, up from $56.4 million, representing an increase of 61.5 million[3]. - Net income for the quarter was $99.5 million, compared to $38.5 million in the prior year, marking a 61.0 million increase[3]. - Total revenues for the thirteen-week period ended September 24, 2025, increased to $1,349.2 million, up 18.4% from $1,139.0 million for the same period in 2024[21]. - Net income for the same period rose to $99.5 million, compared to $38.5 million in the prior year, representing an increase of 158.2%[21]. - Basic net income per share increased to $2.23, up from $0.86, reflecting a growth of 159.1% year-over-year[21]. - Brinker reported a total operating income of $117.9 million in Q1 26, compared to $56.4 million in Q1 25, reflecting a growth of 108.5%[34]. - Net income for Q1 26 was $99.5 million, compared to $38.5 million in Q1 25, representing an increase of 158.2%[38]. Sales Performance - Comparable restaurant sales increased by 18.8%, with Chili's achieving a 21.4% increase, while Maggiano's experienced a decline of 6.4%[4]. - Chili's franchisees generated sales of approximately $269.5 million, an increase from $225.7 million in the prior year[15]. - Company-owned restaurant sales increased by 18.8% compared to the previous year, with Chili's domestic sales growing by 21.4%[30]. Guidance and Projections - Full year fiscal 2026 guidance includes total revenues expected to be between $5.60 billion and $5.70 billion[9]. - Net income per diluted share, excluding special items, is projected to be in the range of $9.90 to $10.50[9]. - Capital expenditures for fiscal 2026 are expected to be between $270.0 million and $290.0 million[9]. Tax and Financial Management - The effective income tax rate for the first quarter was 7.5%, lower than the statutory rate of 21.0% due to tax credits and benefits[11]. - Interest expenses decreased to $10.5 million from $14.3 million, indicating improved financial management[21]. - Interest expenses decreased to $10.5 million in Q1 26 from $14.3 million in Q1 25, a reduction of 26.6%[38]. Operating Costs and Expenses - The company recorded total operating costs and expenses of $1,231.3 million, up from $1,082.6 million, reflecting a 13.8% increase[21]. - Depreciation and amortization increased to $53.6 million in Q1 26 from $46.3 million in Q1 25, an increase of 15.7%[38]. Restaurant Operations - The company plans to open 32-38 new restaurants in fiscal 2026, with 7 openings in the first quarter[29]. - The company reported a total of 1,630 restaurants as of September 24, 2025, compared to 1,625 a year earlier[29]. - The non-GAAP restaurant operating margin for Chili's was 17.3% in Q1 26, up from 13.5% in Q1 25, an increase of 3.8 percentage points[34]. - Adjusted EBITDA for Q1 26 was $172.4 million, significantly higher than $111.6 million in Q1 25, marking a growth of 54.5%[38]. - Provision for income taxes in Q1 26 was $8.1 million, up from $3.8 million in Q1 25, indicating a rise of 113.2%[38]. - Maggiano's operating income for Q1 26 was a loss of $4.1 million, compared to a profit of $7.8 million in Q1 25, indicating a decline of 152.6%[34].

Core Insights - Brinker International reported strong financial results for the first quarter of fiscal 2026, with Chili's leading the way with a 21.4% increase in comparable restaurant sales, while overall company comparable restaurant sales rose by 18.8% [2][4]. Financial Performance - Company sales for Q1 fiscal 2026 reached $1,335.4 million, up from $1,127.3 million in Q1 fiscal 2025, representing a variance of $208.1 million [3]. - Total revenues increased to $1,349.2 million from $1,139.0 million, a rise of $210.2 million [3]. - Operating income was reported at $117.9 million, compared to $56.4 million in the previous year, with an operating income margin of 8.7% [3][10]. - Net income for the quarter was $99.5 million, significantly higher than $38.5 million in Q1 fiscal 2025 [3][18]. Segment Performance - Chili's generated sales of $1,236.2 million, up from $1,018.9 million, while Maggiano's saw a decline in traffic, impacting its sales [7][16]. - Chili's restaurant operating margin improved to 17.3%, up from 13.5% in the previous year, while Maggiano's experienced a decrease in its operating margin [9][29]. Comparable Restaurant Sales - Comparable restaurant sales for Brinker increased by 18.8%, with Chili's achieving a 21.4% increase, while Maggiano's faced a decline of 6.4% [4][21]. - The increase in comparable sales was attributed to higher traffic and menu pricing strategies [16][21]. Stock Repurchase and Investments - The company repurchased $92.0 million of its common stock during the quarter, reflecting confidence in its financial position [2][3]. Guidance for Fiscal 2026 - Brinker reiterated its full-year fiscal 2026 guidance, expecting total revenues between $5.60 billion and $5.70 billion, and net income per diluted share, excluding special items, in the range of $9.90 to $10.50 [5][8]. Restaurant Operations - As of September 24, 2025, Brinker operated a total of 1,630 restaurants, with 1,161 company-owned and 469 franchise locations [20]. - The company plans to open 32 to 38 new restaurants in fiscal 2026 [20]. Tax and Financial Metrics - The effective income tax rate for Q1 fiscal 2026 was 7.5%, lower than the statutory rate due to tax credits and benefits from stock-based compensation [10][18]. - Adjusted EBITDA for the quarter was $172.4 million, up from $111.6 million in the prior year [3][31].

Market Overview - Futures are trading higher, driven by positive news regarding a potential trade agreement with China and the TikTok issue resolution [1] - Wall Street is anticipating a significant number of earnings reports this week, particularly from technology giants in the Magnificent 7 [1] - Strong retail participation and new overseas investments are contributing to the momentum towards the S&P 500 reaching 7000 [1] Treasury Yields - Yields are mixed, with shorter maturities trading modestly lower and longer maturities, such as the 30-year and 20-year bonds, showing small gains [2] - The Treasury Market and Wall Street are pricing in a near 100% chance of a 25-basis-point cut this week [2] Oil & Gas - West Texas Intermediate (WTI) and Brent Crude started the week slightly lower after a rally that pushed WTI above $60 [3] - OPEC+ production increases are identified as the main reason for recent pricing dislocation [3] - Analysts expect a jump in gasoline demand as prices drop nationwide heading into the holidays [3] - Natural Gas prices increased over 4%, closing at $3.44 [3] Gold Market - Gold prices fell below $4,000 per ounce after a significant rally, with analysts noting improved risk appetite and profit-taking [4] - A potential correction in Gold prices could last for months, although Central Bank buying may provide support [4] - Some analysts are projecting Gold prices to reach $5,000 and Silver to $60 [4] Analyst Ratings - CrowdStrike Holdings (CRWD) upgraded to Buy with a target price of $706 [5] - Southern Copper (SCCO) target price raised from $89 to $115, but maintains a Sell rating [5] - DTE Energy (DTE) initiated with an Overweight rating and a $157 target price [6] - McDonald's Corporation (MCD) started with a Neutral rating and a target price of $300 [6] - Starbucks Corporation (SBUX) initiated with a Neutral rating and a target price of $84 [6] - Constellation Energy (CEG) initiated with an Overweight rating and a $478 target price [6] - Fox Corporation (FOXA) upgraded to Buy with a target price of $97 [6] - BioMarin Pharmaceutical (BMRN) target price lowered from $90 to $80 while maintaining a Buy rating [6] - Dow Inc. (DOW) target price raised from $24 to $27 while keeping a Neutral rating [6] - Brinker International (EAT) initiated with an Outperform rating and a target price of $155 [6]