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Market Update

Brinker Earnings Remain Strong

Favorable economy and improving sales keep restauranteur cooking.


With a favorable economy and improving sales at its largest restaurant chains, Brinker International (EAT) maintains its strong growth in earnings.

Brinker International announced today that it served up its 11th consecutive quarter of earnings growth greater than 15%. It reported that earnings for its fiscal second quarter ended December 23 grew by 44% to $25.4 million, from $17.6 million a year ago. Earnings per share increased by 46% to $0.38, beating Wall Street estimates by $0.04.

Brinker's strong sales growth pushed up profits, as the company boosted sales 17% for the quarter. The company's three largest chains were the drivers, as each contributed decent same-store sales growth (growth at stores open at least a year--a key measure of each store's success). Chili’s had same-store sales growth of 5.4%, Macaroni Grill's was 4.5%, and On The Border's was 4.4%. The combined same-store sales growth for all nine of Brinker's chains was 5.2%.

As long as the economy remains strong, wages rise at a manageable pace, and same-store sales grow at a decent rate, Brinker shouldn’t have a lot of trouble delivering its 12th consecutive quarter of solid earnings growth.

Corey McElveen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.