DALLAS, Jan. 31,
2024 /PRNewswire/ -- Brinker International, Inc.
(NYSE: EAT) today announced its financial results for the second
quarter ended December 27, 2023.
Second Quarter Fiscal 2024 Financial
Highlights
Brinker International reported net income per diluted share of
$0.94, in the second quarter of
fiscal 2024, a 51.6% increase compared to the second quarter of
fiscal 2023. Net income per diluted share, excluding special items
(non-GAAP), was $0.99 in the second
quarter of fiscal 2024, a 30.3% increase compared to the second
quarter of fiscal 2023.
Our results for the second quarter of fiscal 2024 were primarily
driven by effective marketing and pricing strategies. Guest traffic
improved sequentially in the second quarter despite the headwind
created by our decision to de-emphasize virtual brands. Comparable
restaurant sales increased 5.2%, with an increase in comparable
restaurant sales of 5.0% for Chili's and 6.7% for Maggiano's. The
increase in Company sales resulted in operating income margin
increasing to 5.8% and restaurant operating margin (non-GAAP)
increasing to 13.1% for the second quarter.
"Our second quarter marked another quarter of year over year
growth with continued margin improvement, driven by our strategy to
simplify operations, improve our food, service, and atmosphere, and
deploy an effective marketing plan," said Kevin Hochman, Chief Executive Officer and
President of Brinker International. "We're pleased with our
progress, which has allowed us to improve our traffic trends and
now outpace the industry."
Second Quarter Financial Results
|
Second
Quarter
|
|
2024
|
|
2023
|
|
Variance
|
Company
sales
|
$ 1,063.7
|
|
$ 1,009.4
|
|
$ 54.3
|
Total
revenues
|
$ 1,074.1
|
|
$ 1,019.0
|
|
$ 55.1
|
|
|
|
|
|
|
Operating
income
|
$ 62.4
|
|
$ 40.7
|
|
$ 21.7
|
Operating income as a %
of Total revenues
|
5.8 %
|
|
4.0 %
|
|
1.8 %
|
Restaurant operating
margin, non-GAAP(1)
|
$
139.8
|
|
$
117.0
|
|
$ 22.8
|
Restaurant operating
margin as a % of Company sales, non-GAAP(1)
|
13.1 %
|
|
11.6 %
|
|
1.5 %
|
Net income
|
$ 42.1
|
|
$ 27.9
|
|
$ 14.2
|
Adjusted EBITDA,
non-GAAP(1)
|
$
107.0
|
|
$ 91.0
|
|
$ 16.0
|
|
|
|
|
|
|
Net income per diluted
share
|
$ 0.94
|
|
$ 0.62
|
|
$ 0.32
|
Net income per diluted
share, excluding special items, non-GAAP(1)
|
$ 0.99
|
|
$ 0.76
|
|
$ 0.23
|
Comparable Restaurant Sales(2)
|
Q2:24 vs
23
|
Brinker
|
5.2 %
|
Chili's
|
5.0 %
|
Maggiano's
|
6.7 %
|
|
|
(1)
|
See Non-GAAP
Information and Reconciliations section below for more
details.
|
|
|
(2)
|
Comparable Restaurant
Sales include restaurants that have been in operation for more than
18 full months. Restaurants temporarily closed for 14 days or more
are excluded from comparable restaurant sales. Percentage amounts
are calculated based on the comparable periods
year-over-year.
|
Updates to Full Year Fiscal 2024 Guidance
We are providing the following updates to our full year fiscal
2024 guidance:
- Net income per diluted share, excluding special items,
non-GAAP, is expected to be in the range of $3.45 - $3.70;
and
- Total revenues are expected to be in the range of $4.30 billion - $4.35
billion.
We are reiterating the following full year fiscal 2024
guidance:
- Weighted average shares are expected to be in the range of 45
million - 46 million; and
- Capital expenditures are expected to be in the range of
$175 million - $195 million.
The potential for changes in macroeconomic conditions, among
other risks, could cause actual results to differ materially from
those projected. We are unable to reliably forecast special items
without unreasonable effort. As such, we do not present a
reconciliation of forecasted non-GAAP measures to the corresponding
GAAP measures.
Second Quarter of Fiscal 2024 Operating
Performance
Segment Performance
The table below presents selected financial information (in
millions, except as noted) related to our segments' operational
performance for the thirteen week periods ended December 27, 2023 and December 28, 2022:
|
Chili's
|
|
Maggiano's
|
|
Second
Quarter
|
|
Variance
|
|
Second
Quarter
|
|
Variance
|
|
2024
|
|
2023
|
|
|
2024
|
|
2023
|
|
Company
sales
|
$ 916.9
|
|
$ 869.3
|
|
$ 47.6
|
|
$ 146.8
|
|
$ 140.1
|
|
$
6.7
|
Franchise
revenues
|
10.3
|
|
9.4
|
|
0.9
|
|
0.1
|
|
0.2
|
|
(0.1)
|
Total
revenues
|
$ 927.2
|
|
$ 878.7
|
|
$ 48.5
|
|
$ 146.9
|
|
$ 140.3
|
|
$
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant
expenses(1)
|
$ 810.5
|
|
$ 780.1
|
|
$ 30.4
|
|
$ 113.2
|
|
$ 112.2
|
|
$
1.0
|
Company restaurant
expenses as a % of Company sales
|
88.4 %
|
|
89.7 %
|
|
(1.3) %
|
|
77.1 %
|
|
80.1 %
|
|
(3.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$ 70.1
|
|
$ 48.4
|
|
$ 21.7
|
|
$ 28.2
|
|
$ 23.0
|
|
$
5.2
|
Operating income as a %
of Total revenues
|
7.6 %
|
|
5.5 %
|
|
2.1 %
|
|
19.2 %
|
|
16.4 %
|
|
2.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating
margin, non-GAAP(2)
|
$ 106.4
|
|
$ 89.2
|
|
$ 17.2
|
|
$ 33.6
|
|
$ 27.9
|
|
$
5.7
|
Restaurant operating
margin as a % of Company sales, non-GAAP(2)
|
11.6 %
|
|
10.3 %
|
|
1.3 %
|
|
22.9 %
|
|
19.9 %
|
|
3.0 %
|
|
|
(1)
|
Company restaurant
expenses includes Food and beverage costs, Restaurant labor and
Restaurant expenses, and excludes Depreciation and amortization,
General and administrative and Other (gains) and
charges.
|
(2)
|
See Non-GAAP
Information and Reconciliations section below for more
details.
|
Chili's
- Chili's Company sales increased primarily due to favorable
comparable restaurant sales driven by increased menu pricing,
partially offset by unfavorable menu item mix and lower
traffic.
- Chili's Company restaurant expenses, as a percentage of Company
sales, decreased primarily due to sales leverage, menu pricing,
favorable commodity costs, and lower delivery fees & to-go
supplies, partially offset by increased advertising, hourly labor,
and other restaurant expenses.
- Chili's franchisees generated sales of approximately
$216.9 million for the second quarter
of fiscal 2024 compared to $213.4
million for the second quarter of fiscal 2023.
Maggiano's
- Maggiano's Company sales increased primarily due to favorable
comparable restaurant sales driven by increased menu pricing and
favorable menu item mix, partially offset by lower traffic.
- Maggiano's Company restaurant expenses, as a percentage of
Company sales, decreased primarily due to sales leverage, menu
pricing, and favorable commodity costs, partially offset by
increased restaurant expenses and hourly labor.
Income Taxes
- On a GAAP basis, the effective income tax rate was 8.1% in the
second quarter of fiscal 2024. The effective income tax rate is
lower than the statutory rate of 21% due primarily to leverage of
the FICA tip credit. Excluding the impact of special items, the
effective income tax rate was an expense of 9.1% in the second
quarter of fiscal 2024.
Webcast Information
Investors and interested parties are invited to listen to
today's conference call, as management will provide further details
of the quarter and business updates. The call will be broadcast
live on Brinker's website today, January 31, 2024 at
9 a.m. CDT:
https://investors.brinker.com/events/event-details/q2-2024-brinker-international-earnings-conference-call
For those who are unable to listen to the live broadcast, a
replay of the call will be available shortly thereafter and will
remain on Brinker's website until at least the end of the day
January 31, 2025.
Additional financial information, including statements of income
which detail operations excluding special items, and comparable
restaurant sales trends by brand, is also available on Brinker's
website under the Financial Information and Events &
Presentations sections of the Investor tab.
Forward Calendar
- SEC Form 10-Q for the second quarter of fiscal 2024 filing on
or before February 5, 2024
- Earnings release call for the third quarter of fiscal 2024 on
April 30, 2024
Non-GAAP Measures
Brinker management uses certain non-GAAP measures in analyzing
operating performance and believes that the presentation of these
measures in this release provides investors with information that
is beneficial to gaining an understanding of the Company's
financial results. Non-GAAP disclosures should not be viewed as a
substitute for financial results determined in accordance with
GAAP, nor are they necessarily comparable to non-GAAP performance
measures that may be presented by other companies. Reconciliations
of these non-GAAP measures are included in the tables below.
About Brinker
Brinker International, Inc. is one of the world's leading
casual dining restaurant companies and home of Chili's®
Grill & Bar, Maggiano's Little Italy,® and the It's
Just Wings® virtual
brand. Founded in 1975 in Dallas,
Texas, we've ventured far from home, but stayed true to our
roots. Brinker owns, operates or franchises more than 1,600
restaurants in the United States
and 29 other countries and two U.S. territories. Our passion is
making everyone feel special, and we hope you feel that passion
each time you visit one of our restaurants or invite us into your
home through takeout or delivery. Learn more about Brinker and its
brands at brinker.com.
Forward-Looking Statements
The statements and tables contained in this release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. We intend all forward-looking
statements to be covered by the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All
forward-looking statements are made only based on our current plans
and expectations as of the date such statements are made, and we
undertake no obligation to update forward-looking statements to
reflect events or circumstances arising after the date such
statements are made. Forward-looking statements are neither
predictions nor guarantees of future events or performance and are
subject to risks and uncertainties which could cause actual results
to differ materially from our historical results or from those
projected in forward-looking statements. Such risks and
uncertainties include, among other things, the impact of general
economic conditions, including inflation, on economic activity and
on our operations; disruptions on our business including consumer
demand, costs, product mix, our strategic initiatives, our
partners' supply chains, operations, technology and assets, and our
financial performance; the impact of competition; changes in
consumer preferences; consumer perception of food safety; reduced
consumer discretionary spending; unfavorable publicity;
governmental regulations; the Company's ability to meet its
business strategy plan; loss of key management personnel; failure
to hire and retain high-quality restaurant management and team
members; increasing regulation surrounding wage inflation and
competitive labor markets; the impact of social media or other
unfavorable publicity; reliance on technology and third party
delivery providers; failure to protect the security of data of our
guests and team members; product availability and supply chain
disruptions; regional business and economic conditions; volatility
in consumer, commodity, transportation, labor, currency and capital
markets; litigation; franchisee success; technology failures;
failure to protect our intellectual property; outsourcing;
impairment of goodwill or assets; failure to maintain effective
internal control over financial reporting; downgrades in credit
ratings; changes in estimates regarding our assets; actions of
activist shareholders; failure to comply with new environmental,
social and governance ("ESG") requirements; failure to achieve any
goals, targets or objectives with respect to ESG matters; adverse
weather conditions; terrorist acts; health epidemics or pandemics;
tax reform; inadequate insurance coverage and limitations imposed
by our credit agreements as well as the risks and uncertainties
described in "Risk Factors" in our Annual Report on Form 10-K and
future filings with the Securities and Exchange Commission.
BRINKER
INTERNATIONAL, INC.
Consolidated
Statements of Comprehensive Income (Loss)
(Unaudited)
(In millions, except
per share amounts)
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
December 27,
2023
|
|
December 28,
2022
|
|
December 27,
2023
|
|
December 28,
2022
|
Revenues
|
|
|
|
|
|
|
|
Company
sales
|
$
1,063.7
|
|
$
1,009.4
|
|
$
2,065.7
|
|
$
1,955.5
|
Franchise
revenues
|
10.4
|
|
9.6
|
|
20.9
|
|
19.0
|
Total
revenues
|
1,074.1
|
|
1,019.0
|
|
2,086.6
|
|
1,974.5
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Food and beverage
costs
|
273.1
|
|
289.4
|
|
531.9
|
|
578.9
|
Restaurant
labor
|
356.1
|
|
334.6
|
|
704.2
|
|
665.2
|
Restaurant
expenses
|
294.7
|
|
268.4
|
|
585.5
|
|
537.2
|
Depreciation and
amortization
|
41.3
|
|
41.8
|
|
83.2
|
|
83.7
|
General and
administrative
|
43.2
|
|
35.6
|
|
85.6
|
|
75.1
|
Other (gains) and
charges(1)
|
3.3
|
|
8.5
|
|
9.6
|
|
13.5
|
Total operating costs
and expenses
|
1,011.7
|
|
978.3
|
|
2,000.0
|
|
1,953.6
|
Operating
income
|
62.4
|
|
40.7
|
|
86.6
|
|
20.9
|
Interest
expenses
|
16.7
|
|
13.9
|
|
33.7
|
|
26.2
|
Other income,
net
|
(0.1)
|
|
(0.3)
|
|
(0.1)
|
|
(0.7)
|
Income (loss) before
income taxes
|
45.8
|
|
27.1
|
|
53.0
|
|
(4.6)
|
Provision (benefit) for
income taxes
|
3.7
|
|
(0.8)
|
|
3.7
|
|
(2.3)
|
Net income
(loss)
|
$
42.1
|
|
$
27.9
|
|
$
49.3
|
|
$
(2.3)
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
$
0.95
|
|
$
0.63
|
|
$
1.11
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$
0.94
|
|
$
0.62
|
|
$
1.09
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding
|
44.2
|
|
44.0
|
|
44.4
|
|
44.0
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
44.9
|
|
44.8
|
|
45.1
|
|
44.0
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
$
0.2
|
|
$
0.1
|
|
$
—
|
|
$
(0.9)
|
Comprehensive income
(loss)
|
$
42.3
|
|
$
28.0
|
|
$
49.3
|
|
$
(3.2)
|
|
|
(1)
|
Other (gains) and
charges included in the Consolidated Statements of Comprehensive
Income (Loss) (Unaudited) included (in millions):
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
December 27,
2023
|
|
December 28,
2022
|
|
December 27,
2023
|
|
December 28,
2022
|
Enterprise system
implementation costs
|
$
2.1
|
|
$
1.0
|
|
$
4.1
|
|
$
2.0
|
Litigation &
claims, net
|
1.0
|
|
0.3
|
|
3.2
|
|
0.8
|
Restaurant closure
asset write-offs and charges
|
0.2
|
|
3.3
|
|
0.8
|
|
4.8
|
Lease
contingencies
|
—
|
|
—
|
|
0.5
|
|
—
|
Remodel-related asset
write-offs
|
0.1
|
|
0.2
|
|
0.3
|
|
1.0
|
Gain on the disposition
of restaurants
|
(0.4)
|
|
—
|
|
(0.4)
|
|
—
|
Loss from natural
disasters, net of (insurance recoveries)
|
(0.6)
|
|
1.1
|
|
(0.4)
|
|
0.9
|
Other
|
0.9
|
|
2.6
|
|
1.5
|
|
4.0
|
Total other (gains) and
charges
|
$
3.3
|
|
$
8.5
|
|
$
9.6
|
|
$
13.5
|
BRINKER
INTERNATIONAL, INC.
Condensed
Consolidated Balance Sheets (Unaudited)
(In
millions)
|
|
|
December 27,
2023
|
|
June 28,
2023
|
ASSETS
|
|
|
|
Total current
assets
|
$
211.3
|
|
$
183.3
|
Net property and
equipment
|
818.8
|
|
808.3
|
Operating lease
assets
|
1,099.9
|
|
1,134.9
|
Deferred income taxes,
net
|
101.7
|
|
93.4
|
Other
assets
|
279.0
|
|
267.1
|
Total
assets
|
$
2,510.7
|
|
$
2,487.0
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
Total current
liabilities
|
$
590.0
|
|
$
535.9
|
Long-term debt and
finance leases, less current installments
|
882.4
|
|
912.2
|
Long-term operating
lease liabilities, less current portion
|
1,087.6
|
|
1,125.8
|
Other
liabilities
|
60.2
|
|
57.4
|
Total shareholders'
deficit
|
(109.5)
|
|
(144.3)
|
Total liabilities and
shareholders' deficit
|
$
2,510.7
|
|
$
2,487.0
|
BRINKER
INTERNATIONAL, INC.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
millions)
|
|
|
Twenty-Six Week
Periods Ended
|
|
December 27,
2023
|
|
December 28,
2022
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
49.3
|
|
$
(2.3)
|
Adjustments to
reconcile Net income (loss) to Net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
83.2
|
|
83.7
|
Deferred income taxes,
net
|
(8.4)
|
|
(10.3)
|
Stock-based
compensation
|
10.1
|
|
5.9
|
Non-cash other (gains)
and charges
|
4.3
|
|
7.2
|
Net loss on disposal
of assets
|
1.5
|
|
2.1
|
Other
|
1.3
|
|
0.9
|
Changes in assets and
liabilities
|
9.0
|
|
(19.2)
|
Net cash provided by
operating activities
|
150.3
|
|
68.0
|
Cash flows from
investing activities
|
|
|
|
Payments for property
and equipment
|
(89.5)
|
|
(95.3)
|
Proceeds from note
receivable
|
1.3
|
|
2.1
|
Proceeds from sale of
assets
|
0.7
|
|
—
|
Insurance
recoveries
|
0.7
|
|
—
|
Net cash used in
investing activities
|
(86.8)
|
|
(93.2)
|
Cash flows from
financing activities
|
|
|
|
Borrowings on
revolving credit facility
|
199.0
|
|
280.0
|
Payments on revolving
credit facility
|
(224.0)
|
|
(240.0)
|
Payments on long-term
debt
|
(5.6)
|
|
(11.3)
|
Purchases of treasury
stock
|
(25.1)
|
|
(2.1)
|
Proceeds from issuance
of treasury stock
|
0.5
|
|
—
|
Payments for debt
issuance costs
|
(0.7)
|
|
—
|
Payments of
dividends
|
—
|
|
(0.2)
|
Net cash (used in)
provided by financing activities
|
(55.9)
|
|
26.4
|
Net change in cash and
cash equivalents
|
7.6
|
|
1.2
|
Cash and cash
equivalents at beginning of period
|
15.1
|
|
13.5
|
Cash and cash
equivalents at end of period
|
$
22.7
|
|
$
14.7
|
BRINKER
INTERNATIONAL, INC.
Restaurant
Summary
|
|
|
|
|
|
|
Fiscal 2024 New
Openings
|
|
Total
Restaurants
Open at
December 27, 2023
|
|
Total
Restaurants
Open at
December 28, 2022
|
|
Second Quarter
Openings
|
|
Fiscal Year
Openings
|
|
Full Year
Projected
Openings
|
Company-owned
restaurants
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,130
|
|
1,126
|
|
5
|
|
5
|
|
10
|
Chili's
international
|
4
|
|
5
|
|
—
|
|
—
|
|
—
|
Maggiano's
domestic
|
50
|
|
51
|
|
—
|
|
—
|
|
—
|
Total
Company-owned
|
1,184
|
|
1,182
|
|
5
|
|
5
|
|
10
|
Franchise
restaurants
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
100
|
|
101
|
|
—
|
|
—
|
|
0-1
|
Chili's
international
|
372
|
|
363
|
|
11
|
|
14
|
|
19-24
|
Maggiano's
domestic
|
2
|
|
2
|
|
—
|
|
—
|
|
—
|
Total
franchise
|
474
|
|
466
|
|
11
|
|
14
|
|
19-25
|
Total Company-owned and
franchise
|
|
|
|
|
|
|
|
|
|
Chili's
domestic
|
1,230
|
|
1,227
|
|
5
|
|
5
|
|
10-11
|
Chili's
international
|
376
|
|
368
|
|
11
|
|
14
|
|
19-24
|
Maggiano's
domestic
|
52
|
|
53
|
|
—
|
|
—
|
|
—
|
Total
|
1,658
|
|
1,648
|
|
16
|
|
19
|
|
29-35
|
NON-GAAP INFORMATION
AND RECONCILIATIONS
Comparable
Restaurant Sales
|
|
|
Comparable
Restaurant
Sales(1)
|
|
Price
Impact
|
|
Mix-Shift(2)
|
|
Traffic
|
|
Q2:24 vs
23
|
|
Q2:23 vs
22
|
|
Q2:24 vs
23
|
|
Q2:23 vs
22
|
|
Q2:24 vs
23
|
|
Q2:23 vs
22
|
|
Q2:24 vs
23
|
|
Q2:23 vs
22
|
Company-owned
|
5.2 %
|
|
9.7 %
|
|
7.1 %
|
|
9.7 %
|
|
(0.8) %
|
|
5.5 %
|
|
(1.1) %
|
|
(5.5) %
|
Chili's
|
5.0 %
|
|
8.0 %
|
|
6.6 %
|
|
10.0 %
|
|
(1.0) %
|
|
5.6 %
|
|
(0.6) %
|
|
(7.6) %
|
Maggiano's
|
6.7 %
|
|
21.2 %
|
|
10.5 %
|
|
7.7 %
|
|
0.4 %
|
|
5.1 %
|
|
(4.2) %
|
|
8.4 %
|
Franchise(3)
|
0.3 %
|
|
6.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
6.4 %
|
|
4.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
(2.7) %
|
|
7.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Chili's
domestic(4)
|
5.1 %
|
|
7.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide(5)
|
4.4 %
|
|
9.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Comparable Restaurant
Sales include all restaurants that have been in operation for more
than 18 full months. Restaurants temporarily closed 14 days or more
are excluded from Comparable Restaurant Sales. Percentage amounts
are calculated based on the comparable periods
year-over-year.
|
|
|
(2)
|
Mix-Shift is calculated
as the year-over-year percentage change in Company sales resulting
from the change in menu items ordered by guests.
|
|
|
(3)
|
Franchise sales
generated by franchisees are not included in Total revenues in the
Consolidated Statements of Comprehensive Income (Loss) (Unaudited);
however, we generate royalty revenues and advertising fees based on
franchisee revenues, where applicable. We believe presenting
Franchise Comparable Restaurant Sales provides investors relevant
information regarding total brand performance.
|
|
|
(4)
|
Chili's domestic
Comparable Restaurant Sales percentages are derived from sales
generated by Company-owned and franchise-operated Chili's
restaurants in the United States.
|
|
|
(5)
|
System-wide Comparable
Restaurant Sales are derived from sales generated by Chili's and
Maggiano's Company-owned and franchise-operated
restaurants.
|
Reconciliation of Net Income Excluding Special Items (in
millions, except per share amounts)
Brinker believes excluding special items from its financial
results provides investors with a clearer perspective of the
Company's ongoing operating performance and a more relevant
comparison to prior period results.
|
Second
Quarter
|
|
Q2 24
|
|
EPS Q2
24
|
|
Q2 23
|
|
EPS Q2
23
|
Net income,
GAAP
|
$ 42.1
|
|
$ 0.94
|
|
$ 27.9
|
|
$ 0.62
|
Special items - Other
(gains) and charges(1)
|
3.3
|
|
0.07
|
|
8.5
|
|
0.19
|
Special items -
Depreciation
|
0.0
|
|
—
|
|
0.1
|
|
—
|
Income tax effect
related to special items(2)
|
(0.8)
|
|
(0.02)
|
|
(2.1)
|
|
(0.04)
|
Special items, net of
taxes
|
2.5
|
|
0.05
|
|
6.5
|
|
0.15
|
Adjustment for special
tax items
|
0.1
|
|
0.00
|
|
(0.3)
|
|
(0.01)
|
Net income, excluding
special items, non-GAAP
|
$ 44.7
|
|
$ 0.99
|
|
$ 34.1
|
|
$ 0.76
|
|
|
(1)
|
See footnote (1) to the
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
for additional details on the composition of Other (gains) and
charges.
|
|
|
(2)
|
Income tax effect
related to special items is based on the statutory tax rate in
effect at the end of each period.
|
Reconciliation of
Restaurant Operating Margin (in millions, except
percentages)
Q2
24
|
|
|
Chili's
|
|
Maggiano's
|
|
Brinker
|
|
Q2 24
|
|
Q2 23
|
|
Q2 24
|
|
Q2 23
|
|
Q2 24
|
|
Q2 23
|
Operating income,
GAAP
|
$
70.1
|
|
$
48.4
|
|
$
28.2
|
|
$
23.0
|
|
$
62.4
|
|
$
40.7
|
Operating income as a %
of Total revenues
|
7.6 %
|
|
5.5 %
|
|
19.2 %
|
|
16.4 %
|
|
5.8 %
|
|
4.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income,
GAAP
|
$
70.1
|
|
$
48.4
|
|
$
28.2
|
|
$
23.0
|
|
$
62.4
|
|
$
40.7
|
Less: Franchise
revenues
|
(10.3)
|
|
(9.4)
|
|
(0.1)
|
|
(0.2)
|
|
(10.4)
|
|
(9.6)
|
Plus:
Depreciation and amortization
|
35.5
|
|
36.0
|
|
3.2
|
|
3.3
|
|
41.3
|
|
41.8
|
General and
administrative
|
10.2
|
|
8.5
|
|
2.1
|
|
1.5
|
|
43.2
|
|
35.6
|
Other (gains) and
charges
|
0.9
|
|
5.7
|
|
0.2
|
|
0.3
|
|
3.3
|
|
8.5
|
Restaurant operating
margin, non-GAAP
|
$ 106.4
|
|
$
89.2
|
|
$
33.6
|
|
$
27.9
|
|
$ 139.8
|
|
$ 117.0
|
Restaurant operating
margin as a % of Company sales, non-GAAP
|
11.6 %
|
|
10.3 %
|
|
22.9 %
|
|
19.9 %
|
|
13.1 %
|
|
11.6 %
|
Restaurant operating margin is not a measurement determined in
accordance with GAAP and should not be considered in isolation, or
as an alternative to operating income as an indicator of financial
performance. Restaurant operating margin is widely regarded in the
restaurant industry as a useful metric by which to evaluate
restaurant-level operating efficiency and performance of ongoing
restaurant-level operations. This non-GAAP measure is not
indicative of overall Company performance and profitability because
this measure does not directly accrue benefit to the shareholders
due to the nature of costs excluded.
We define Restaurant operating margin as Company sales less Food
and beverage costs, Restaurant labor and Restaurant expenses. We
believe this metric provides a more useful comparison between
periods and enables investors to focus on the performance of
restaurant-level operations by excluding revenues not related to
food and beverage sales at Company-owned restaurants, corporate
General and administrative expenses, Depreciation and amortization,
and Other (gains) and charges. Restaurant operating margin as
presented may not be comparable to other similarly titled measures
of other companies in our industry.
Reconciliation of Adjusted EBITDA (in millions)
Adjusted EBITDA is not a measurement determined in accordance
with GAAP and should not be considered in isolation, or as an
alternative to net income as an indicator of financial performance.
Brinker believes presenting Adjusted EBITDA provides a useful
measure of our operating performance, excluding the impacts of
financing costs, capital expenditures and special items. We define
Adjusted EBITDA as Net income (loss) before Provision (benefit) for
income taxes, Other income, net, Interest expenses, Depreciation
and amortization and Other (gains) and charges.
|
Second
Quarter
|
|
YTD
|
|
Q2 24
|
|
Q2 23
|
|
Q2 24
|
|
Q2 23
|
Net income,
GAAP
|
$
42.1
|
|
$
27.9
|
|
$
49.3
|
|
$
(2.3)
|
Provision (benefit)
for income taxes
|
3.7
|
|
(0.8)
|
|
3.7
|
|
(2.3)
|
Other income,
net
|
(0.1)
|
|
(0.3)
|
|
(0.1)
|
|
(0.7)
|
Interest
expenses
|
16.7
|
|
13.9
|
|
33.7
|
|
26.2
|
Depreciation and
amortization
|
41.3
|
|
41.8
|
|
83.2
|
|
83.7
|
Other (gains) and
charges
|
3.3
|
|
8.5
|
|
9.6
|
|
13.5
|
Adjusted EBITDA,
non-GAAP
|
$
107.0
|
|
$
91.0
|
|
$
179.4
|
|
$
118.1
|
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SOURCE Brinker International Payroll Company, L.P.