With shares of Brinker International (NYSE:EAT) trading at around $33.37, is EAT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Q2 EPS was in-line with estimates at $0.50. Q2 revenue came in at $689.80 million versus an expectation of $693.21 million. Revenue increased 1.2 percent on a YoY basis. For the seventh consecutive quarter, Chili’s same-restaurant sales increased. The increase was 1 percent. For the twelfth consecutive quarter, Maggiano’s same-restaurant sales increased. The increase was 0.6 percent.
Overall, positives included increased menu pricing, favorable commodity pricing on produce and poultry, and improved productivity from the installation of kitchen equipment. Negatives included unfavorable commodity prices for beef and pork, an increase in employee health insurance claims, and increased overtime due to the installation of aforementioned kitchen equipment. In regards to the latter, this is a short-term expense that should pay off long-term.
Now let’s take a look at some important numbers for Brinker International…