Brinker International Inc. (EAT) reversed a prior-year loss in
its fiscal second quarter caused by restaurant-closing charges and
a loss from selling 80% of Romano's Macaroni Grill, while
same-store sales continued to decline but at a slower pace than in
recent quarters.
Results topped analysts' expectations, and shares recently
gained 6.5% premarket to $16.30.
The casual-dining segment focused on discounts and promotions
last year to bring in customers, though deep discounting that hurt
margins appears to have eased. Rival Darden Restaurants Inc. (DRI)
raised hopes that sector sales trends were improving last
month.
Brinker chain Chili's planned to set itself apart from its
rivals by adding menu items, marketing, equipment and training as
it tries to attract diners and wean them away from margin-eating
discounts.
For the quarter ended Dec. 23, Brinker reported a profit of
$18.3 million, or 18 cents a share, compared with a prior-year loss
of $21.8 million, or 21 cents. Excluding items, such as the
restaurant-closing-related costs, earnings from continuing
operations rose to 29 cents from 27 cents.
Revenue decreased to $781.9 million from $949.4 million amid
restaurant closures and the sale of the Romano's Macaroni Grill
locations. Same-store sales fell 3.1%, a smaller drop than earlier
in 2009.
Analysts polled by Thomson Reuters most recently forecast
earnings of 22 cents on revenue of $774 million.
Cost of sales as a percent of revenue rose to 28.9% from 28.2%
on promotions and higher commodity prices, mostly for chicken and
dairy.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;