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Operations

Sales at Chili’s drop to a third of usual volume

Delivery and takeout business has more than doubled, but off-premise is generating only about 30%-35% of former sales levels.
chili's storefront
Photograph: Shutterstock

Off-premise sales have more than doubled for Chili’s Grill & Bar and Maggiano’s Little Italy, but units that have suspended dine-in service are still generating only about a third of their year-ago revenues, according to parent company Brinker International.

In an update released today by the casual-dining giant, Brinker revealed it had been generating standout results for its third quarter before the COVID-19 crisis erupted. Through March 8, Chili’s same-store sales were running 3.3% above the year-ago tally, and Maggiano’s comps were up about 0.6%. The brands finished the quarter with negative comps of 5.3% and 9.9%, respectively.

Brinker said only about 10 company-operated units have completely shut down because of the coronavirus. It did not say how many franchised restaurants might have closed.

Virtually all of the others have limited their operations to takeout and delivery, the company said. Off-premise sales account for 30% to 35% of year-ago sales levels, it noted.  

Delivery accounts for most of that business, at a sales mix of 20%.

"I'm proud of our restaurant operators and support teams who quickly adapted our business to a safe and efficient off-premise-only model,” CEO Wyman Roberts said in a statement. “Our focus remains delivering quality food to our guests and maintaining a safe work environment for our team members.”

He said Brinker has created an emergency relief fund for workers who lost their jobs or had their hours cut. Details were not disclosed.

Brinker is striving to maximize its cash flow by temporarily reducing management salaries by 50% and cutting most capital expenditures, including a reimaging program for Chili’s. Quarterly dividends and share repurchase programs have been suspended.

It did not mention any employees being furloughed.

Brinker said it has amended its revolving credit facility to raise its borrowing capacity to $800 million. It had $137 million in cash on hand as of March 31, with a total liquidity of $237 million. It estimated its cash burn rate at $10 million a week.

The company operates or franchises 1,623 Chili’s restaurants and 53 Maggiano’s units.

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