Brinker suffers $38.8 million loss in Q3

by Eric Schroeder
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DALLAS — Brinker International, the parent company of Chili’s, On The Border and Maggiano’s, sustained a loss of $38,818,000 in the third quarter ended March 26. This compared with net income of $54,571,000, equal to 45c per share, in the same period a year ago.

Excluding discontinued operations, the company posted income from continuing operations of $17,232,000, or 17c per share, which compared with $47,099,000, or 39c per share, for continuing operations a year ago. Brinker included the results of its Romano’s Macaroni Grill chain as discontinued operations because it plans to sell the brand.

Revenue fell 4% to $907,664,000, which compared with $944,028,000 during the same quarter of the previous year. The revenue decline was attributed to a decline in capacity of 6.7% due to sales of restaurants to franchisees and restaurant closings outpacing growth in company-owned restaurants during the past year. The decline more than offset a 1.1% gain in comparable restaurant sales.

During the quarter, the company opened 36 restaurants — 24 company-owned and 12 franchised. The company also closed 40 restaurants, including 23 Macaroni Grill stores.

Brinker said total capital expenditures for fiscal 2008 are expected to be approximately $265 million, with $150 million relating to new restaurants.

Looking ahead, the company plans to open 75 to 85 franchise restaurants in fiscal 2009, while domestic company-owned growth is expected to slow to about 15 restaurants.

For the nine months ended March 26, net income fell to $53,262,000, or 51c per share, from $146,402,000, or $1.19 per share. Sales fell narrowly to $2,670,956,000 from $2,712,882,000.

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