Brinker Int’l Reiterates 2017 Forecast, Increases Buybacks as Q4 Earnings Beat Estimates

brinker-eat-logoRestaurant operator Brinker International, Inc.(NYSE:EAT) this morning repoted fiscal Q4 earnings that beat Wall Street’s view and announced a larger share buyback program.

The Dallas-based operator of Chili’s and Maggiano’s fast casual restaurants posted fiscal fourth quarter net income of $1.24 per share, beating estimates for $1.23. Revenue rose 15.4% from last year to 881.7 million, which was in-line with analyst expectations.

Looking ahead, EAT backed its previously-announced full-year fiscal 2017 outlook for adjusted earnings ranging from $3.40 to $3.50 per share. Analysts are looking for $3.43 per share for the year.

From the press release:

“We ended the fiscal year with improving trends and have returned to gaining share in the industry,” said Wyman Roberts, chief executive officer and president. “We are also encouraged by the early results of our fiscal year 2017 initiatives. The strong cash flow generation of our business model gives us confidence to increase our leverage and return additional capital to shareholders.”

The additional capital Roberts referred to is an additional $150 million in share buybacks, bringing the total available authority to $455 million. To complete the buybacks, the company will increase leverage in the range of $250 to $300 million in the near term.

Additional notes from the report included:

  • Chili’s Q4 company-owned comparable restaurant sales fell 1.8%.
  • Maggiano’s Q4 comparable restaurant sales fell 1.7%.
  • Chili’s franchise Q4 comparable restaurant sales fell 3.4% (2.1% in U.S., 5.5% internationally).
  • Restaurant operating margin, as a percent of company sales, declined ~20 basis points to 18.3% from 18.5% last year.

Brinker shares rose $2.03 (+4.32%) in premarket trading Thursday to $49.00. Prior to today’s report, EAT had fallen 2% year-to-date, compared with a 7% gain the benchmark S&P 500 index during the same period.


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