Brinker International Reports Strong Earnings Growth and Chili's Turnaround Strategy
Brinker International's recent earnings reports exhibit strong growth primarily driven by improvements in the Chili's chain, highlighting successful advertising and plans for refurbishing locations.
Brinker International CEO Kevin Hochman discussed the company's recent earnings beat in an interview with CNBC's Jim Cramer, which resulted in share prices soaring over 16%.
Hochman highlighted the improvements made to the Chili's chain, attributing the success to new advertising strategies that have attracted customers and revitalized the brand's image. "Progressively, every quarter, our results are getting better and better, now they're being fueled by 19% traffic growth, and, quite frankly, we think the sky's the limit," he stated. "We don't think this is the end, we think this is just the beginning of the Chili's turnaround."
The company reported $1.35 billion in sales for the latest quarter, compared to $1.06 billion during the same period last year. Hochman emphasized the sustainability of Chili's growth, mentioning the retention of new customers as a key factor. He also noted that some believe Brinker spends more on advertising than it actually does, praising his marketing team's ability to choose effective platforms, including live sports.
As part of the turnaround strategy, Brinker plans to redesign some Chili's locations, targeting "200 of our 1200 restaurant estate that...need some love." A new design is under development, with renovations expected to start next year. Hochman stressed the importance of atmosphere in the post-Covid era, as consumers seek a "third place to come together." He reassured customers that the chain will maintain its affordability, stating, "We're always going to be there with that $6 margarita."
