Sales Rise at Chili's, Maggiano's
Brinker International, Inc. today announced results for the fiscal fourth quarter ended June 25, 2014.
Brinker International company sales increased 3.7 percent to $735 million and comparable restaurant sales at company-owned restaurants increased 2.3 percent. Chili's company-owned comparable restaurant sales increased 2.5 percent and Maggiano's comparable restaurant sales increased 0.9 percent, representing the 18th consecutive quarterly increase.
Chili's franchise comparable restaurant sales increase of 1.2 percent includes a 1.4 percent increase for U.S. franchise restaurants and a 0.8 percent increase for international franchise restaurants, representing the 18th consecutive quarterly increase for international franchise restaurant.
Quarterly Operating Performance
Chili's fourth quarter company sales increased to $639.8 million from $615.7 million in the prior year, primarily due to increases in comparable restaurant sales, the acquisition of 11 restaurants in Canada at the end of the prior fiscal year, and increases in restaurant capacity.
As compared to the prior year, the Chili's operating margin metric was negatively impacted by the classification of revenues and expenses associated with Ziosk. The revenues associated with Ziosk are included in Franchise and other revenues while the associated expense is included in Restaurant expenses, a component of the margin calculation. Restaurant expenses, as a percent of company sales, increased due to Ziosk equipment charges, new restaurant development, and higher advertising, partially offset by leverage related to higher revenue.
Restaurant labor, as a percent of company sales, was negatively impacted by increased overtime and training, partially offset by leverage related to higher revenue. Cost of sales, as a percent of company sales, was favorably impacted by menu pricing, menu item changes, improved waste control, and efficiency gains related to new fryer equipment, partially offset by unfavorable pricing primarily related to cheese, avocados and limes which are market based.
Maggiano's fourth quarter company sales of $95.2 million increased 1.9 percent primarily driven by increases in restaurant capacity, menu pricing, and traffic. As compared to the prior year, Maggiano's restaurant operating margin was negatively impacted by higher facilities costs and new restaurant development.
Cost of sales, as a percent of company sales, was negatively impacted by unfavorable mix changes and commodity pricing on seafood, partially offset by increased menu pricing and favorable commodity pricing on bread and other items. Restaurant labor, as a percent of company sales, was positively impacted by lower performance based compensation.
Franchise and other revenues totaled $23.7 million for the fourth quarter, an increase of 13.4 percent compared to $20.9 million in the prior year driven primarily by the revenues associated with Ziosk. U.S. franchise comparable restaurant sales increased 1.4 percent and international comparable restaurant sales increased 0.8 percent. Brinker franchisees generated approximately $423 million in sales1 for the fourth quarter of fiscal 2014.