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Brinker International, Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 29 April 2026: press release. Guidance figures: 1 raised, 3 lowered. The quarter’s numbers.

Key takeaways

  • Chili's comparable sales up 4.0%: Chili's comparable restaurant sales rose 4.0% in the quarter, the main driver of the company's comparable growth. Source
  • Diluted EPS rose to $2.87: Diluted EPS was $2.87 against $2.56. Excluding special items, non-GAAP diluted EPS was $2.90 against $2.66. Source
  • Maggiano's operating income fell: Maggiano's operating income was $4.6 million against $10.7 million, or 4.3% of total revenues against 8.8%. Source
  • January hit by storm and holiday shift: Chili's January comparable sales were 0.6%, hurt by Winter Storm Fern and one fewer operating day from a holiday shift. Source
  • Chili's expense ratio rose: Chili's company restaurant expenses were 80.9% of company sales against 80.6%, driven by commodity costs, menu mix and manager salaries, partly offset by sales leverage. Source
  • Adjusted EPS guidance low end raised: Full-year net income per diluted share excluding special items is now $10.60 to $10.85, against $10.45 to $10.85 previously. Source
  • Revolver repaid, $108 million buyback: In the quarter, operating cash flow paid down the outstanding revolver balance, and the company repurchased $108.0 million of common stock. Source

“Chili’s delivered its 20 th consecutive quarter of same-store sales growth, up 4%, lapping a 31% increase a year ago,”

Kevin Hochman, President and CEO of Brinker International

Guidance

AreaPeriodFigureAgainst last quarter
Total revenues SourceFiscal 2026 full year$5.78 billion - $5.82 billion
Net income per diluted share, excluding special items, non-GAAP SourceFiscal 2026 full year$10.60 - $10.85Raised from $10.45 - $10.85
Capital expenditures SourceFiscal 2026 full year$240.0 million - $250.0 millionLowered from $250.0 million - $260.0 million
Diluted weighted average shares SourceFiscal 2026 full year44.7 million - 45.0 millionLowered from 44.7 million - 45.2 million
Total Company-owned and franchise restaurant openings SourceFiscal 2026 full year projected33-36
Chili's international restaurant openings SourceFiscal 2026 full year projected24-27Lowered from 24-28
Franchise restaurant openings SourceFiscal 2026 full year projected27-30

What changed from last quarter

  • Guidance raised: Net income per diluted share excluding special items guidance low end raised from $10.45 to $10.60; high end kept at $10.85. Source
  • Guidance lowered: Capital expenditures guidance lowered to $240.0 million - $250.0 million from $250.0 million - $260.0 million. Source
  • Guidance lowered: Diluted weighted average shares guidance high end lowered to 45.0 million from 45.2 million; low end unchanged at 44.7 million. Source

Quarter results and growth

  • Company sales up $42.5 million: Company sales were $1,455.5 million against $1,413.0 million a year earlier. Total revenues were $1,470.2 million against $1,425.1 million. Source
  • Chili's comparable sales up 4.0%: Chili's comparable restaurant sales rose 4.0% in the quarter, the main driver of the company's comparable growth. Source
  • Diluted EPS rose to $2.87: Diluted EPS was $2.87 against $2.56. Excluding special items, non-GAAP diluted EPS was $2.90 against $2.66. Source
  • Operating and net income higher: Operating income was $166.6 million against $156.9 million, or 11.3% of total revenues against 11.0%. Net income was $127.9 million against $119.1 million. Source
  • Adjusted EBITDA up $3.1 million: Adjusted EBITDA, non-GAAP, was $223.7 million against $220.6 million in the prior-year quarter. Source

Chili's and Maggiano's results

  • Chili's operating income rose: Chili's operating income was $209.4 million against $197.7 million, or 15.4% of total revenues against 15.2%. Chili's total revenues were $1,362.6 million. Source
  • Chili's franchise sales rose: Chili's franchisees generated about $274.1 million of sales, against $237.4 million a year earlier. Chili's franchise revenues were $14.5 million. Source
  • Maggiano's sales fell on traffic: Maggiano's company sales were $107.4 million, down $13.4 million, on lower traffic and restaurant closures, partly offset by menu pricing. Source
  • Maggiano's operating income fell: Maggiano's operating income was $4.6 million against $10.7 million, or 4.3% of total revenues against 8.8%. Source

“Guest demand remained strong in the quarter, recovering quickly after significant weather headwinds in January, driven by continuous improvements in food, service, and atmosphere, along with unmatched everyday value.”

Kevin Hochman, President and CEO of Brinker International

Traffic, pricing and January weather

  • Price drove Chili's comparable sales: Chili's comparable sales rose 4.0% with price contributing 4.6% and mix 0.6%, while traffic was down 1.2% for the quarter. Source
  • February and March traffic positive: Chili's February and March comparable sales each rose 5.9%, with positive traffic in those two months. Source
  • January hit by storm and holiday shift: Chili's January comparable sales were 0.6%, hurt by Winter Storm Fern and one fewer operating day from a holiday shift. Source
  • Maggiano's traffic fell 10.4%: Maggiano's comparable sales were down 4.6%, with traffic down 10.4% and price impact of 5.2%. Source

Restaurant costs, margins and tax

  • Chili's expense ratio rose: Chili's company restaurant expenses were 80.9% of company sales against 80.6%, driven by commodity costs, menu mix and manager salaries, partly offset by sales leverage. Source
  • Chili's restaurant margin slipped: Chili's restaurant operating margin was $257.5 million, or 19.1% of company sales, against $250.1 million and 19.4%. Source
  • Maggiano's margin fell to 9.6%: Maggiano's restaurant operating margin was 9.6% against 14.3%. Restaurant expenses were 90.4% of company sales against 85.7%. Source
  • Lower labor and bonus at Maggiano's: Maggiano's hourly labor, manager bonus, and workers' compensation and general liability insurance costs were lower, partly offsetting the expense increase. Source
  • Other charges fell to $2.1 million: Other gains and charges were $2.1 million against $9.0 million in the prior-year quarter, after litigation and claims of $0.9 million. Source
  • Tax rate 18.4% on FICA tip credit: The GAAP effective tax rate was 18.4%, or 18.7% excluding special items, below the 21.0% statutory rate due to the FICA tip credit. Source

Fiscal 2026 guidance update

  • Adjusted EPS guidance low end raised: Full-year net income per diluted share excluding special items is now $10.60 to $10.85, against $10.45 to $10.85 previously. Source
  • Capital expenditure guidance lowered: Full-year capital expenditures are now $240.0 million to $250.0 million, against $250.0 million to $260.0 million previously. Source
  • Revenue guidance range narrowed: Full-year total revenues are $5.78 billion to $5.82 billion, with the low end higher and the high end lower than the prior range. Source
  • Diluted share count range lowered: Full-year diluted weighted average shares are now 44.7 million to 45.0 million, against 44.7 million to 45.2 million previously. Source

Capital, cash and share repurchases

  • Revolver repaid, $108 million buyback: In the quarter, operating cash flow paid down the outstanding revolver balance, and the company repurchased $108.0 million of common stock. Source
  • Operating cash flow higher for 39 weeks: Net cash from operating activities was $571.8 million for the 39 weeks, against $493.0 million. Capital expenditure payments were $173.5 million against $185.4 million. Source
  • Share purchases rose for 39 weeks: Treasury stock purchases were $343.4 million for the 39 weeks, against $86.3 million. Long-term debt payments were $18.1 million against $366.3 million. Source
  • Cash rose and debt was stable: Cash and equivalents were $57.1 million at period end against $17.5 million a year earlier. Long-term debt and finance leases were $424.4 million, against $426.0 million at June 25, 2025. Source

Restaurant openings and strategy

  • Twelve restaurants opened in quarter: The company opened 12 restaurants in the quarter, 2 company-owned and 10 franchise, bringing fiscal year-to-date openings to 25 and total restaurants to 1,632. Source
  • Chili's strategy centers on fundamentals: Management said Chili's performance is driven by a disciplined strategy focused on improving food, service and atmosphere. Source
  • Advertising aimed at new guests: Management described media and advertising as reinforcing the value proposition, driving trial among new guests and strengthening loyalty. Source

Coming up, as management said on 29 April 2026

  • Form 10-Q filing due by May 4: The company said its SEC Form 10-Q for the third quarter of fiscal 2026 would be filed on or before May 4, 2026. Source
  • Fourth quarter results call August 12: The company listed its earnings release call for the fourth quarter of fiscal 2026 for August 12, 2026. Source
  • Remaining fiscal 2026 openings planned: Full-year projected openings total 33 to 36 restaurants, company-owned and franchise combined. Source

Figures management reported

FigureReported
Comparable restaurant sales SourceBrinker 3.3%; Chili's 4.0%; Maggiano's (4.6)%
System-wide comparable restaurant sales Source3.6%
Traffic SourceCompany-owned (2.0)%; Chili's (1.2)%; Maggiano's (10.4)%
Price impact on comparable sales SourceChili's 4.6%; Maggiano's 5.2%
Store openings Source12 in quarter (2 company-owned, 10 franchise); 25 fiscal year to date

Risks management discussed

  • External: Winter Storm Fern led to closures and reduced operating hours in January, and one fewer operating day from a holiday shift also reduced January sales. Source
  • Operational: Maggiano's sales declined partly due to restaurant closures, and restaurant expenses rose on higher delivery fees and to-go supplies. Source
  • Regulatory: The effective tax rate depends on the FICA tip credit, which lowers the rate below the statutory 21.0%. Source

Earlier plans management reported on

  • Not stated: Management repeated its full-year projected openings in the restaurant summary table. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.