Who said consumers are cutting back? Brinker International posted a 14.8% gain in same-store sales on a 5.9% jump in traffic for the fourth quarter, attributing the exceptional gains for a casual-dining chain to acting more like a quick-service brand.
The results were not enough to please Wall Street. The company's stock price plunged 13% as profits fell short of analyst expectations. Investors were also disappointed by the company's guidance for the company's upcoming fiscal year.
Still, Chili's big sales and traffic driver was its Big Smasher burger and supporting advertising that showcased the selection as a bargain-priced step up from what quick-service fans would find at a McDonald’s or a Burger King. Many of the customers drawn by the value play were first-time guests, according to Brinker CEO Kevin Hochman.
He noted that the traffic gain for Chili’s, a figure largely unmatched for the most recent calendar quarter by other public restaurant companies, was actually tempered by 2.3 percentage points by the chain’s move away from its virtual wings brand.
The figures for Chili’s, largely a burger and margaritas concept, were in marked contrast to the results posted by most other public restaurant companies for their most recent quarter. The pattern they set was reporting a slight change in same-store sales and a slump in traffic of low to mid-single digits.
Gains for Brinker’s second brand, Maggiano’s, were more moderate but still positive. The Italian casual chain posted a same-store sales increase of 2.5%. The company did not initially break out a traffic figure for that secondary brand, but executives later said guest counts had fallen 8.9%, and that the rise in sales reflected a pricing increase of 9.2%.
Overall, the company reported a net income for the quarter of $57.3 million on revenues of $1.2 billion.
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