DOW JONES NEWSWIRES
Brinker International Inc. (EAT) swung to a fiscal
fourth-quarter profit as a year-earlier charge masked lower revenue
amid declining same-store sales at the company's three restaurant
chains.
The company also projected results below expectations. It sees
continued same-store sales declines for its new year - 2% to 4% -
and forecast earnings down 10% to 20% from the latest year's $1.44
a share. Brinker also predicted a first-quarter profit of 12 cents
to 14 cents. Analysts polled by Thomson Reuters projected $1.59 and
29 cents, respectively.
Shares were down 11.4% to $16.25 in recent premarket trading.
The stock through Wednesday was up 74% in 2009.
Restaurant chains have been discounting heavily to lure
customers, but analysts are skeptical the deals have paid off, and
same-store sales continued their drop across the industry. On top
of traffic woes, inflation is expected to return to normal levels
in 2010, meaning restaurants would pay more for ingredients and
energy, making it hard to continue an aggressive stream of coupons
and other promotions.
For the quarter ended June 24, the operator of Chili's and other
restaurant chains reported earnings of $42.1 million, or 41 cents a
share, compared with a year-earlier loss of $1.5 million, or 2
cents a share. Excluding write-downs and other impacts, earnings
rose to 52 cents from 42 cents.
Revenue slid 23% to $829.4 million amid restaurant closures and
the sale of 198 others, most of which were Macaroni Grill
locations, which Brinker sold a majority stake in.
Analysts projected per-share earnings of 48 cents on revenue of
$853 million.
Same-store sales fell 9%, including a 9.4% drop at Chili's. The
declines were far less at fellow restaurant operators Darden
Restaurants Inc. (DRI) - owner of the Olive Garden, Red Lobster and
LongHorn Steakhouse chains - and DineEquity Inc. (DIN), which owns
the IHOP and Applebee's chains.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com