DALLAS — Discounting declined and prices rose at Chili’s Grill & Bar in the second quarter ended Dec. 28, 2022, but a $10.99 deal will stick around. Chili’s comparable store sales increased 8% in the quarter, and revenues rose 9% to $879 million from $808 million.
“We executed incremental pricing actions in the quarter, both on the menu and in third-party delivery channels, resulting in year-over-year pricing of 10%,” said Joseph G. Taylor, chief financial officer for parent company Brinker International, Inc., in a Feb. 1 earnings call. “Even with this more elevated price structure, we feel comfortable with our overall price and value positioning relative to the competition.”
Chili’s in the first half of the fiscal year reset pricing strategy, reduced the number of checks on deal, and reduced the frequency and depth of couponing, said Kevin D. Hochman, president and chief executive officer for Brinker International.
“This quarter, we'll start reinvesting some of our dollars we saved from less discounting to get back on TV with a ‘3 for me’ value platform,” he said.
The platform includes a $10.99 meal that features a full-sized entree, unlimited chips, unlimited salsa and a soft drink.
“I will say we are adamant about protecting an opening price point for the guests that would otherwise not be able to afford Chili's or casual dining, which is why we protected $10.99,” Mr. Hochman said. “And that's why we're going to be advertising that later this quarter and really shout the abundant value as well as the quality of the food that you get, and when you think about $10.99 price point for a complete meal with the unlimited chips and salsa, a full-size entree and a bottomless drink and compare that to even fast-food at QSR, that's pretty unbeatable.”
Dallas-based Brinker International in the quarter had net income of $27.9 million, or 63¢ per share on the common stock, which was up 1.1% from $27.6 million, or 61¢ per share, in the previous year’s second quarter. Revenues of $1.01 billion were up 10% from $926 million in the previous year’s second quarter.
Brinker International now expects revenues for the fiscal year in a range of $4.05 billion to $4.15 billion, up from a previous range of $3.9 billion to $4 billion. Net income per share is expected in a range of $2.60 to $2.90, up from a previous range of $2.45 to $2.85.
Brinker International also owns Maggiano’s Little Italy, which had revenues of $140 million in the second quarter, up 19% from $118 million in the previous year’s second quarter. Comparable store sales increased 21%. Off-premises sales were up 82% from pre-pandemic levels, Mr. Hochman said, and now make up 27% of total sales.Over the first six months of the fiscal year, Brinker International had a loss of $2.3 million, which compared with net income of $40.8 million, or 90¢ per share on the common stock, in the same time of previous fiscal year. Six-month revenues were $1.97 billion, up 10% from $1.80 billion.