Brinker's strategy pays off in strong quarterly results

by Eric Schroeder
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DALLAS — Net income at Brinker International, Inc. rose 11% in the first quarter of fiscal 2015, demonstrating the casual dining chain operator’s strategy “to grow sales and traffic through initiatives that drive relevance and differentiation is working,” said Wyman Roberts, president and chief executive officer.

In an Oct. 21 conference call with analysts to discuss first-quarter results, Mr. Roberts indicated that both the company’s brands — Chili’s and Maggiano’s — as well as its franchisees contributed to the company’s growth during the quarter.

Net income in the first quarter ended Sept. 24 was $32,738,000, equal to 51c per share on the common stock, up from $29,212,000, or 44c per share, in the same period a year ago. Total revenues also were higher, climbing nearly 4% to $711,018,000 from $684,660,000.

Comparable restaurant sales at Chili’s company-owned outlets increased 2.6% during the first quarter, while traffic rose 0.1%.

“We have been innovating and renovating our menu,” Mr. Roberts said of Brinker’s strategy with Chili’s. “With innovation we launched our Fresh Mex platform last year with the introduction of Fresh Mex bowls, new mix-and-match fajitas and tableside guacamole. In the first quarter we continued to innovate on the Fresh Mex platform by introducing Top-Shelf enchiladas, which are proving very popular with our guests. In fact, we’ve grown the category to the point that almost one out of every four Chili’s guest is eating a Fresh Mex entrée. And that number would be higher if we included guacamole, margaritas and chips and salsa. Fresh Mex is an important platform for Chili’s because it differentiates us from our casual dining and bar and grill competitors and helps improve our margins.”

Meanwhile, at Maggiano’s comparable restaurant sales increased 0.6% in the first quarter. In September, Maggiano’s launched a new Lighter Take menu, which features new preparations of classic Italian dishes with one-third less calories.

“Around 18% of our guests are now eating a Lighter Take entrée,” Mr. Roberts said. “And we are optimistic about the potential these dishes have to grow traffic as awareness of Lighter Take increases.”
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