Brinker income down 37% in quarter
October 21, 2008
by FoodBusinessNews.net Staff
DALLAS — For the first quarter ended Sept. 24, Brinker International, Inc. posted net income of $23,781,000, equal to 23c per share, down 37% from $37,600,000, or 35c per share, during the same quarter of the previous year. Total revenue for the quarter was $984,407,000, down 7% from $1,054,686,000 during the same quarter of the previous year.
"While we anticipated difficult year-over-year comparisons for the quarter, operating performance was worse than expected," said Chuck Sonsteby, chief financial officer. "The sequential pressures on our guests as the quarter unfolded further reduced revenues to an extent that could not be offset through cost efficiencies. Our management team remains focused on strategies that we are confident will strengthen our brands’ positioning, allowing Brinker to sustain above-industry sales performance and strong free cash flow for the short term and accelerating profitability over the long term."
Overall, the company had a 4% decline in comparable restaurant sales in the first quarter as a result of decreases across all brands. In addition, revenue was negatively impacted by a net decline in capacity as the result of the sale of 76 restaurants to franchisees and 49 restaurant closings since the first quarter of fiscal 2008.
In August, the company also announced it entered an agreement to sell Ramano’s Macaroni Grill for $131.5 million in cash but will maintain a 19.9% continuing ownership interest. The transaction is expected to close by the end of the calendar year.
For the fiscal year 2009, Brinker expects earnings per share to decline between 15% and 25% compared with fiscal 2008.