Brinker Worldwide Inc. inventory sank practically 10% on Wednesday after the Chili’s father or mother preannounced fiscal first-quarter outcomes that present labor, provide chain and commodity challenges are taking a toll.
Earnings per share are anticipated to be 28 cents per share, up from 23 cents final yr. Adjusted EPS is anticipated to be 34 cents, under the FactSet consensus for 68 cents.
Income totaled $876.4 million, up from $740.1 million final yr and slightly below the FactSet consensus for $876.8 million.
Comparable gross sales rose 17% with Chili’s up 13.4% and Maggiano’s up 62.6%.
“[T]he COVID surge beginning in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and backside line greater than we anticipated,” stated Wyman Roberts, chief govt of Brinker
in an announcement.
Brinker is internet hosting its investor day occasion on Wednesday.
“We’re responding to those COVID headwinds with elevated concentrate on hiring and retention efforts, and dealing with our companions to achieve additional stabilization of the availability chain atmosphere. As well as, we now have taken quick incremental pricing actions, growing our full yr goal to three% to three.5%, to offset inflationary prices and defend margins as we transfer ahead.”
KeyBanc Capital Markets says Brinker shares are “undervalued” in contrast with different informal eating chains, and the Chili’s chain most likely gained share through the quarter. Analysts price Brinker inventory obese with a $58 value goal.
“Given the magnitude of Brinker’s F1Q22 earnings shortfall, the burden will probably be on the corporate to persuade traders that margins could be managed extra successfully by means of the tip of the yr,” analysts stated.
“It was not way back when high-teens restaurant margins appeared like a practical chance within the subsequent few years. However we consider will probably be extra essential for Brinker to reset near-term expectations to a extra achievable stage—the place traders can really feel comfy proudly owning a high-quality informal eating inventory at a reduced valuation relative to its historic self.”
Stifel charges Brinker inventory maintain with a $55 value goal.
“Whereas we had been pleasantly shocked with the power of the comparable gross sales outcomes for the quarter and into the early weeks of F2Q, issues about margin strain may result in near-term downward revisions in FY22 earnings estimates,” wrote Stifel analysts.
“The corporate has launched two digital restaurant ideas, It’s Simply Wings and
Maggiano’s Italian Classics, that are serving to drive gross sales and elevated profitability at current areas, nonetheless, we consider the restoration of the core Chili’s enterprise could show extended in gentle of elevated COVID issues.”
Brinker inventory has tumbled 22% for the yr so far whereas the S&P 500 index
has gained 20.7% for the interval.
https://www.marketwatch.com/story/chilis-parent-to-boost-prices-higher-than-expected-as-supply-chain-and-labor-costs-take-a-toll-11634749055?rss=1&siteid=rss | Chili’s father or mother to spice up costs increased than anticipated as provide chain and labor prices take a toll