DALLAS — Increased off-premises sales, particularly for It’s Just Wings, helped Chili’s return to sales growth in the third quarter ended March 24. The quick-service restaurant chain, continuing to rebound from COVID-19 dining restrictions, rang up sales of $749 million in the quarter, which marked an increase of 0.3% from $748.7 million in the previous year’s third quarter.
Now, executives of Brinker International, Inc., the Dallas-based parent company of Chili’s, are considering different avenues to grow It’s Just Wings, an online-only chicken wings brand. Two possibilities are takeout and tying in with sporting events.
“It's Just Wings continues to perform well, and we're on track to hit that $150 million target we set at the beginning of the year,” said Wyman T. Roberts, chief executive officer and president of Brinker. “Almost all of our domestic franchise partners jumped on the opportunity, and globally, several of our partners have already picked it up. Wings is now in 9 countries and 160 locations outside the US, making it a formidable brand in just its first year.”
It’s just Wings leverages existing Chili’s and Maggiano’s kitchens and cooks to sell chicken wings. It’s Just Wings began by operating through an exclusive partnership with DoorDash. Brinker International in March announced it had integrated with Google so that consumers could order pickup for the wings on Google Search and Google Maps.
“We believe takeout holds a lot of potential for us, and now that we've invested in the technology and infrastructure to support it, we're working to increase awareness levels outside the delivery channel,” Mr. Roberts said. “We've learned a lot this year with the launch of It's Just Wings that will leverage when we're ready for our next virtual brand.”
A return to a more normal college football season next fall could present opportunities for the brand, he said.
“It's been a really great year of learning around the virtual brands, It's Just Wings and others, around how to market them effectively, about how they play to different audiences and who the target is,” Mr. Roberts said.
Brinker International in the third quarter posted net income of $33.9 million, or 74¢ per share on the common stock, which was up 10% from $30.8 million, or 83¢ per share, in the previous year’s third quarter. Third-quarter revenues of $828.4 million were down 3.7% from $860 million. The winter storm Uri that hit in February resulted in an estimated $10.5 million in lost revenues, said Joseph G. Taylor, executive vice president and chief financial officer for Brinker.
Brinker International projects fourth-quarter revenues in a range of $950 million to $1 billion.
“With the rollout of vaccines in full swing and restrictions lifting across the country, our guests' pent-up demand for a dine-in experience is being released as well,” Mr. Roberts said. “People are finally starting to feel safer to venture out and spend more — spend some of the money they've been saving over the past year.”
Through the first three quarters of the fiscal year, Brinker International posted net income of $56.6 million, or $1.25 per share on the common stock, which was down 33% from $73.6 million, or $1.97 per share, in the same time of the previous year. Total revenues over three quarters were $2.33 billion, which was down 7% from $2.52 billion.
Going forward, Brinker expects to face rising costs for labor. Inflation in labor typically is in a range of 3% to 5%, Mr. Taylor said, adding in the short run the level will be at the high end of that range.
“But we’re very comfortable,” he said. “We have all the tools in place to manage through this short term.”