Chili's drove Brinker's profit higher, pushing company to lift its annual forecast

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Adjusted earnings came to $2.77 a share, up from $1.93 a year earlier, while Maggiano's comparable sales fell 3.4%

Brinker International, the owner of Chili's Grill & Bar and Maggiano's Little Italy, raised its fiscal 2027 revenue and adjusted earnings forecasts on Wednesday after stronger Chili's sales lifted first-quarter profit.

Net income for the quarter ended Sept. 23 totaled $113.3 million, or $2.64 per diluted share, compared with $99.5 million, or $2.17 per share, in the prior-year period. Excluding special items, earnings were $2.77 a share, compared with $1.93 a year earlier. Total revenues were $1.48 billion, up from $1.35 billion.

The adjusted figure beat the $2.45 a share that analysts were expecting on average, according to The Wall Street Journal. Revenue also came in above the $1.46 billion that analysts had been aiming for on average, according to The Wall Street Journal.

Brinker now expects fiscal 2027 total revenues of $6.23 billion to $6.33 billion, up from a prior range of $6.15 billion to $6.27 billion. It expects adjusted earnings of $13.30 to $13.90 a share, compared with the earlier $12.60 to $13.40. The company said the guidance includes a 53rd operating week in the fourth quarter, which it estimates adds about 2.0% to total revenues and $0.70 to adjusted earnings per share. Capital expenditure and diluted share count guidance did not change.

Chili's comparable restaurant sales rose 10.1%, with traffic up 6.4% and menu pricing adding 3.7%. Chili's operating income was $205.0 million, up from $169.0 million. Brinker said the brand's sales growth came from higher traffic and menu pricing, and cited the launch of its Big Crispy chicken sandwich as a contributor.

Maggiano's comparable sales fell 3.4%, with traffic down 5.1%. The chain posted an operating loss of $3.6 million, compared with a loss of $4.1 million a year earlier.

"Chili's delivered its 22nd consecutive quarter of same-store sales growth, up +10%, lapping a +21% from last year and a +14% from 2024 for a 3 year cumulative comp of +52%," President and CEO Kevin Hochman said in a statement.

Companywide comparable restaurant sales increased 9.1%. Net cash provided by operating activities was $169.1 million, compared with $120.8 million a year earlier. Free cash flow was $105.7 million, up from $62.2 million.

During the quarter, Brinker repurchased $125.0 million of its common stock. It also redeemed its outstanding $350.0 million of 8.25% notes using its revolving credit facility. Interest expenses included a $17.6 million loss on debt extinguishment from the July 15 redemption.

Management is scheduled to discuss the results on a conference call at 10 a.m. CDT on Wednesday.

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