Brinker International (EAT) shares jumped Wednesday after the company provided an upbeat fiscal 2027 financial guidance at the midpoint, confident that its Chili's brand will sustain the growth momentum that drove strong fourth-quarter results.
The parent of Chili's Grill & Bar and Maggiano's Little Italy expects full-year non-GAAP earnings of $12.60 to $13.40 a share, which at the midpoint is ahead of the FactSet-polled consensus of $12.61. The company reported non-GAAP EPS of $10.74 for the just-concluded fiscal year, up from the $8.90 logged for 2025.
Brinker expects fiscal 2027 revenue between $6.15 billion and $6.27 billion, while Wall Street is looking for $6.16 billion. Last year's top-line grew to $5.81 billion from $5.38 billion sequentially.
Chili's fourth-quarter revenue rose to $1.42 billion from $1.34 billion a year earlier.
"Chili's continues to gain momentum through its strong, everyday value platform, led by the success of the Big Smasher, the Big QP and now the big crispy chicken sandwich," Brinker Chief Financial Officer Mika Ware said during an earnings call, according to a FactSet transcript, referring to Chili's popular menu offerings. "July sales and traffic have significantly accelerated versus the fourth quarter, further widening our lead over the casual dining industry."
The company's shares were up 11% in afternoon trade, bringing its year-to-date gains to about 71%.
For the quarter ended June 24, Brinker reported non-GAAP EPS of $3.07, compared with $2.49 a year earlier, while analysts expected $3.09. Revenue rose to $1.54 billion from $1.46 billion, topping the Street's $1.53 billion estimate.
Consolidated comparable restaurant sales grew 5%, in line with analysts' projections. Comparable sales at Chili's increased 5.6%, driven by menu pricing and higher traffic, offsetting a 2.5% decline at Maggiano's.
"Third-party syndicated data confirms Chili's continues to be ranked in the top-tier across key measures like value, quality, service and overall experience," Chief Executive Kevin Hochman said on the call. "We still have room to improve, but our progress gives us confidence that we will sustain traffic gains and repeat business."
UBS Securities expected Brinker to post another "solid" quarter. The brokerage saw Chili's well positioned for robust growth into fiscal 2027, with sales momentum supported by "industry-leading value and ongoing enhancements to food, service/atmosphere and marketing," it said in a note to clients earlier this week.
Brinker's board authorized a total of $750 million under its current share repurchase program, effective Aug. 10, it said Wednesday.
Last week, Restaurant Brands International (QSR) reported better-than-expected second-quarter earnings amid strong comparable sales growth at Burger King across domestic and international markets. McDonald's (MCD) second-quarter revenue fell short of market expectations, as comparable sales growth in the US slowed on a yearly basis amid a challenging consumer environment.
Price: $242.86, Change: $+21.48, Percent Change: +9.70%
