Key Takeaways
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Brinker shares jumped 13% after Chili's same-store sales rose 10.1% in the fiscal first quarter and the company raised its full-year outlook.
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More guests are coming to Chili's, not just paying higher prices, which makes the turnaround look durable.
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Brinker's new fiscal 2027 EPS midpoint is above what analysts expected, but the year includes an extra week worth about $0.70 per share that won't repeat.
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The next test is whether Chili's can keep traffic growing as it laps last year's big gains.
Brinker International ( EAT:NYSE )stock is up 13% today after Chili's did something casual dining isn't supposed to do anymore: get more people through the door.
What exactly happened
Brinker reported results for its fiscal first quarter, which ended Sept. 23, before the open:
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Chili's same-store sales rose 10.1%, its 22nd straight quarter of growth, on top of 21.4% a year ago.
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Chili's traffic rose 6.4%, with price adding 3.7%.
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Adjusted EPS jumped to $2.77 from $1.93.
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Restaurant operating margin widened to 17.7% from 16.2%.
Brinker also raised its fiscal 2027 outlook. It now expects $13.30 to $13.90 of adjusted EPS, up from $12.60 to $13.40, and $6.23 billion to $6.33 billion of revenue, up from $6.15 billion to $6.27 billion.
President and CEO Kevin Hochman said the Chili's "flywheel of sustainable growth and market share gains keeps spinning." He credited "industry leading value, world class marketing, and continued investments in operations."
Traffic is the tell
Chili's same-store sales are up 52% over three years. Most of this quarter's gain came from more guests: traffic rose 6.4%, on top of 13.1% a year ago. Brinker credits its value pitch and its new Big Crispy chicken sandwich, a launch it called "highly successful."
The soft spot is Maggiano's, where same-store sales fell 3.4% on 5.1% less traffic. It's small, though: $95 million of the quarter's $1.46 billion in company sales.
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Guidance just topped the Street
The new $13.60 midpoint is above the $13.28 analysts expected for fiscal 2027 before the report. One catch: fiscal 2027 has a 53rd week, worth about $0.70 per share and 2% of revenue, and it won't repeat.
That's part of why analysts expect revenue growth to slow to about 3% in fiscal 2028 (the year to June 2028)…
A 10% comp with traffic still growing suggests those estimates could go up.
Paying up for Chili's
Before today, Brinker traded at 15x forward earnings, above its 13x five-year average…
After the jump, it's closer to 17x. That's more than it has usually traded at, but well short of the nearly 25x it reached in January 2025.
My take: Chili's is growing because more people are coming in, and that earns the higher multiple. Of course, it has to keep traffic positive against last year's huge gains, and the next report, due early next year, is the first test.
So what is Brinker stock actually worth?
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