Sales Increase at Maggiano's and Chili's in Last Quarter of 2014
Brinker International, Inc. today announced results for the fiscal second quarter ended Dec. 24, 2014.
Brinker International company sales increased 4.9 percent to $717.8 million and comparable restaurant sales at company-owned restaurants increased 3.7 percent, including the positive impact to each brand of approximately 1.1 percent from Christmas Day moving to the third quarter.
Chili's company-owned comparable restaurant sales increased 4 percent and traffic increased 2.1 percent.
Maggiano's comparable restaurant sales increased 2.3 percent, representing the 20th consecutive quarterly increase, and traffic increased 1.6 percent.
Chili's franchise comparable restaurant sales increase of 3.2 percent includes a 4.9 percent increase for U.S. franchise restaurants, partially offset by a 0.5 percent decrease for international franchise restaurants.
"Brinker delivered another solid quarter of double digit EPS growth," says Wyman Roberts, CEO and president. "We've seen our sales and traffic driving strategies take hold, which gives us a great deal of optimism about continuing our positive momentum."
Quarterly Operating Performance
Chili's second-quarter company sales increased 4.4 percent to $602 million from $576.7 million in the prior year primarily due to increases in comparable restaurant sales and restaurant capacity. As compared to the prior year, Chili's restaurant operating margin improved.
Restaurant labor, as a percent of company sales, was favorably impacted by leverage related to higher company sales coupled with lower health insurance expenses, partially offset by increased wage rates.
Cost of sales, as a percent of company sales, was favorably impacted by menu pricing, menu item changes, and efficiency gains related to new fryer equipment, partially offset by unfavorable commodity pricing primarily related to burger meat, cheese, and avocados, which are market-based, as well as unfavorable pricing related to salmon.
Restaurant expenses, as a percent of company sales, increased due to higher credit card fees, equipment charges associated with tabletop devices, and new restaurant development, partially offset by leverage related to higher company sales.
Maggiano's second quarter company sales increased 7.5 percent to $115.8 million from $107.7 million primarily due to increases in comparable restaurant sales and restaurant capacity. As compared to the prior year, Maggiano's restaurant operating margin improved.
Restaurant expenses, as a percent of company sales, were positively impacted by lower supplies expense coupled with leverage related to higher company sales, partially offset by higher utilities expense and new restaurant development. Restaurant labor, as a percent of company sales, was favorably impacted by leverage related to higher company sales, partially offset by higher performance-based compensation.
Cost of sales, as a percent of company sales, was negatively impacted by commodity pricing on beef, seafood, cheese, and produce, partially offset by increased menu pricing and menu item changes.
Franchise and other revenues increased 18.1 percent to $25.1 million for the second quarter compared to $21.3 million in the prior year driven primarily by the revenues associated with tabletop devices, royalty revenues related to Chili's new retail food products, and higher royalty income driven by an increase in U.S. franchise comparable restaurant sales as well as international franchise restaurant openings.
U.S. franchise comparable restaurant sales increased 4.9 percent, while international comparable restaurant sales decreased 0.5 percent. Brinker franchisees generated approximately $406 million in sales3 for the second quarter of fiscal 2015.