DOW JONES NEWSWIRES
Brinker International Inc.'s (EAT) fiscal third-quarter earnings
rose 14% on prior-year restructuring costs as the casual-dining
company saw revenue decline and same-store sales drop.
The sector has been trying to wean diners off last year's deep
discounts and promotions that hurt margins. Deep cost-cutting has
helped shore up earnings, though analysts have questioned how much
longer the strategy will work without an increase in sales.
Still, Brinker last month boosted its fiscal third-quarter
earnings estimate. Amid the growing optimism, the company also
plans to double its per-share earnings over the next five years at
its Chili's Grill & Bar brand with new kitchen technology and
by doubling its international locations, as well as boost its
higher-end Maggiano's restaurants by a third. Brinker will soon be
down to just two brands after agreeing last month to sell its On
The Border Mexican chain.
Brinker reported a profit of $40 million, or 39 cents a share,
up from $35 million, or 34 cents a share, a year earlier. Earnings
excluding downsizing and other charges fell to 42 cents from 45
cents a share. The company last month projected 41 cents to 44
cents, above analysts' then-views.
Revenue decreased 7.8% to $713.4 million while same-store sales
dropped 4.2%.
Analysts polled by Thomson Reuters recently expected $791
million.
Cost of sales as a percentage of revenue rose to 28.5% from
28.2%.
Shares closed Monday at $20.33 and were inactive premarket. The
stock is up 36% this year.
-By Tess Stynes and Nathan Becker, Dow Jones Newswires;
212-416-2481; Tess.Stynes@dowjones.com