• Total Revenue: $1,425 million for the third quarter.
• Consolidated Comp Sales: Positive 28.2%.
• Adjusted Diluted EPS: $2.66, up from $1.24 last year.
• Chili's Same Restaurant Sales: Up 31.6%.
• Chili's Traffic: Increased by 20.9%.
• Restaurant Operating Margin: 18.9% for the quarter.
• Maggiano's Comp Sales: Positive 0.4%.
• Adjusted EBITDA: Approximately $221 million, an 80% increase from prior year.
• Capital Expenditures: Approximately $80 million for the quarter.
• Debt Repayment: Approximately $125 million repaid during the quarter.
• Lease Adjusted Leverage Ratio: 1.9 times.
• Fiscal 2025 Revenue Guidance: $5.33 billion to $5.35 billion.
• Fiscal 2025 Adjusted Diluted EPS Guidance: $8.50 to $8.75.
• Fiscal 2025 Capital Expenditures Guidance: $265 million to $275 million.

• Warning! GuruFocus has detected 3 Warning Signs with EAT.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chili's delivered a strong quarter with same restaurant sales up 31.6% and traffic up 21%, significantly outpacing the industry.
• Restaurant operating margin improved to 18.9%, driven by sales leverage and operational simplification.
• The Big QP launch was successful, generating more media impressions than previous campaigns and boosting sales.
• Operational improvements, such as menu simplification and enhanced kitchen systems, have streamlined operations and improved efficiency.
• Brinker International Inc (NYSE:EAT) reported total revenues of $1,425 million with consolidated comp sales of positive 28.2%.

Negative Points

• Maggiano's reported only a 0.4% increase in comp sales, with traffic down 8.2%, indicating challenges in its turnaround strategy.
• The company faces macroeconomic headwinds, including consumer economic uncertainty and competitive promotional offers.
• There is concern about sustaining same-store sales growth as comparisons become tougher in upcoming quarters.
• Increased advertising spend and capital expenditures could pressure margins if not managed effectively.
• The company is still in the early stages of its turnaround strategy for Maggiano's, which may lead to traffic choppiness in the near term.

Q & A Highlights

Q: With tougher comparisons coming up, how confident are you in sustaining same-store sales growth? A: Kevin Hochman, President and CEO, emphasized their focus on improving the fundamentals of casual diningfood, service, and atmosphere. He expressed confidence in continuing to grow comps by maintaining these improvements, despite the challenges of tougher comparisons.

Q: Are there any notable shifts in the contributors to your recent momentum, such as 3 for Me utilization or marketing benefits? A: Mika Ware, CFO, noted that momentum has been sustainable moving from Q3 into Q4. While they will roll off some price and mix, traffic remains strong year over year, indicating consistent momentum.

Q: Can you clarify the CapEx guidance increase and what it entails? A: Mika Ware explained that the increase is primarily due to the installation of new TurboChef ovens and general equipment maintenance. This investment is part of their strategy to maintain updated assets and support elevated sales.

Q: How do you plan to maintain or grow restaurant-level margins into FY26? A: Mika Ware expressed confidence in maintaining or growing margins by continuing to invest in the business, leveraging pricing power, and improving productivity as teams adapt to higher traffic levels.

Q: How are you managing potential tariff impacts on costs, particularly for items like Tequila and avocados? A: Mika Ware stated that over 80% of their supply chain is domestically sourced, minimizing tariff impacts. They have flexibility to adjust their supply chain and believe their current pricing strategy can absorb any potential tariffs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.