DALLAS - Oct. 21, 2014 // PRNewswire // - Brinker International, Inc. (NYSE: EAT) today announced results for the fiscal first quarter ended Sept. 24, 2014.
Highlights include the following:
"Brinker delivered positive comp sales and traffic during the quarter and we continue to take market share," said Wyman Roberts, Chief Executive Officer and President. "The key to our successful results is our ability to drive relevance and differentiation while maintaining a strong business model."
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Quarterly Operating Performance
CHILI'S first quarter company sales increased to $600.1 million from $581.6 million in the prior year primarily due to increases in comparable restaurant sales and restaurant capacity. As compared to the prior year, Chili's restaurant operating margin1,2 improved. Cost of sales, as a percent of company sales, was favorably impacted by menu pricing, menu item changes, efficiency gains related to new fryer equipment, and improved waste control, partially offset by unfavorable pricing primarily related to burger meat, cheese and avocados which are market based, as well as unfavorable pricing related to seafood. Restaurant expenses, as a percent of company sales, increased due to equipment charges associated with tabletop devices2 and higher credit card fees, partially offset by leverage related to higher company sales. Restaurant labor, as a percent of company sales, was negatively impacted by higher restaurant manager bonuses and increased wage and payroll tax rates, partially offset by favorable health insurance expenses coupled with leverage related to higher company sales.
MAGGIANO'S first quarter company sales of $86.8 million increased 4.7 percent primarily driven by increases in restaurant capacity, menu pricing and traffic. As compared to the prior year, Maggiano's restaurant operating margin was negatively impacted by new restaurant development and higher supplies and utilities expenses. Cost of sales, as a percent of company sales, was negatively impacted by commodity pricing on seafood, butter and cheese, coupled with menu item changes, partially offset by increased menu pricing and favorable commodity pricing on oils. Restaurant labor, as a percent of company sales, remained flat compared to the prior year.
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FRANCHISE AND OTHER revenues totaled $24.2 million for the first quarter, an increase of 19.8 percent compared to $20.2 million in the prior year driven primarily by the revenues associated with tabletop devices, royalty revenues related to Chili's new retail food products, and higher international royalty income due to international franchise restaurant openings. U.S. franchise comparable restaurant sales increased 1.7 percent, while international comparable restaurant sales decreased 0.5 percent. Brinker franchisees generated approximately $397 million in sales3 for the first quarter of fiscal 2015.
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Depreciation and amortization expense increased $2.4 million for the quarter primarily due to investments in the Chili's reimage program, fryer equipment and new restaurant openings, partially offset by an increase in fully depreciated assets.
General and administrative expense decreased $1.8 million primarily due to a special stock-based compensation grant in the prior year and lower professional fees related to litigation.
On a GAAP basis, the effective income tax rate increased to 31.5 percent in the current quarter from 31.4 percent in the prior year quarter primarily due to increased earnings, partially offset by a net increase in Federal credits. Excluding the impact of special items, the effective income tax rate increased to 31.7 percent in the current quarter compared to 31.6 percent in the prior year primarily due to increased earnings, partially offset by a net increase in Federal credits.
Brinker believes excluding special items from its financial results provides investors with a clearer perspective of the company's ongoing operating performance and a more relevant comparison to prior period results. Special items in the first quarter of fiscal 2015 consist primarily of charges associated with closed restaurants.
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Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, and other key line items in the comprehensive income statement and will only provide updates if there is a material change versus the original guidance. Consistent with prior practice, management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.
Investors and interested parties are invited to listen to today's conference call, as management will provide further details of the quarter. The call will broadcast live on the Brinker website (www.brinker.com) at 9 a.m. CDT today (Oct. 21). For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on the Brinker website until the end of the day Nov. 25, 2014.
Additional financial information, including statements of income which detail operations excluding special items, franchise and other revenues, and comparable restaurant sales trends by brand, is also available on the Brinker website under the Financial Information section of the Investor tab.
- SEC Form 10-Q for first quarter fiscal 2015 filing on or before Nov. 3, 2014; and
- Second quarter earnings release, before market opens, Jan. 28, 2015.
Brinker International, Inc. is one of the world's leading casual dining restaurant companies. Founded in 1975 and based in Dallas, Texas, as of Sept. 24, 2014, Brinker owned, operated, or franchised 1,622 restaurants under the names Chili's® Grill & Bar (1,574 restaurants) and Maggiano's Little Italy® (48 restaurants).
The statements contained in this release that are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by general business and economic conditions, financial and credit market conditions, credit availability, reduced disposable income, the impact of competition, the impact of mergers, acquisitions, divestitures and other strategic transactions, franchisee success, the seasonality of the company's business, increased minimum wages, increased health care costs, adverse weather conditions, future commodity prices, product availability, fuel and utility costs and availability, terrorist acts, consumer perception of food safety, changes in consumer taste, health epidemics or pandemics, changes in demographic trends, availability of employees, unfavorable publicity, the company's ability to meet its business strategy plan, acts of God, governmental regulations and inflation.
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SOURCE Brinker International
Greg Artkop
Media Relations
(800) 775-7290
Jill Cuthbertson
Investor Relations
(972) 980-9917
Brinker International, Inc. is one of the world's leading casual dining restaurant companies.