EAT — Brinker International, Inc.

Summary of Brinker International's Q3 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $1.47 billion, up 3.2% year-over-year.
• Consolidated Comparable Sales: +3.3%.
• Chili's Same-Store Sales: +4%, marking 20 consecutive quarters of growth, with a 2-year cumulative comp of 37%.
• Adjusted Diluted EPS: $2.90, an increase from $2.66 last year.
• Restaurant Operating Margins: 18.4%, down from 18.9% the previous year, impacted by higher food and beverage costs.
• Capital Expenditures: $51.2 million, primarily for maintenance.
• Adjusted EBITDA: $223.7 million, a 1.4% increase from the prior year.

2. Strategic Updates and Business Highlights

• Chili's Performance: Continued momentum attributed to improvements in food service and atmosphere, alongside a new chicken sandwich platform launched on April 14, which has seen strong early sales.
• Maggiano's Turnaround: Sequential improvement noted, with a focus on enhancing food quality and service. Maggiano's accounts for 8% of company sales.
• Marketing Recognition: Chili's named "Brand of the Year" by Ad Age for the second consecutive year.
• North of 6 Initiative: Aimed at increasing restaurant capacity and improving operational efficiency, focusing on reducing cycle times and enhancing throughput.

3. Forward Guidance and Outlook

• Fiscal 2026 Revenue Guidance: Expected in the range of $5.78 billion to $5.82 billion.
• Adjusted Diluted EPS Guidance: Projected between $10.60 and $10.85.
• Capital Expenditures for FY 2026: Anticipated between $240 million and $250 million.
• Sales Growth Outlook: Mid-single-digit same-store sales growth expected to continue, with positive traffic trends.

4. Bad News, Challenges, or Points of Concern

• Maggiano's Performance: Reported a decline in comparable sales (-4.6%) and traffic (-10.4%), indicating ongoing challenges despite some improvements.
• Check Management: Noted slight softness in mix, particularly in desserts and alcohol, suggesting potential consumer sensitivity to pricing.
• Inflationary Pressures: Continued commodity inflation expected, particularly in beef, which may impact margins.
• Operational Challenges: Need for ongoing improvements in service and operational efficiency to maintain growth momentum.

5. Notable Q&A Insights

• Chicken Sandwich Performance: Initial sales have exceeded expectations, with a 161% increase compared to pre-launch sales. However, long-term sustainability of this growth remains to be seen.
• Labor Investments: Discussions around the need for strategic labor investments to support increased traffic and operational efficiency, particularly in high-volume restaurants.
• Marketing Strategy for Maggiano's: Focus on enhancing guest experience and service quality, with an emphasis on empathy in marketing efforts.
• Future Growth: Management expressed caution about pursuing additional brands until the turnaround of Maggiano's is fully realized, emphasizing the importance of stabilizing existing operations first.

This summary encapsulates the key financial metrics, strategic initiatives, and outlook for Brinker International, while also highlighting challenges and insights from the Q&A segment of the earnings call.