DALLAS — Although top-line performance is not yet where the company’s executives want it to be, Brinker International Inc. turned in sequential improvement during the second quarter of fiscal 2016. Wyman Roberts, president and chief executive officer, said the company’s business model remains strong due to three major drivers: progress on mix, commitment to cost management and a favorable commodity market.
For the second quarter ended Dec. 23, Brinker had net income of $47,694,000, equal to 81c per share on the common stock, up 15% from $41,306,000, or 65c per share, for the prior-year period. Revenues totaled $788,610,000, up 6% from year-ago revenues of $742,898,000.
In a Jan. 20 conference call with analysts, Mr. Roberts said Brinker has achieved all the objectives set in its strategic “Plan to Win.” As a result, the company is shifting its focus to a new strategy: Vision 2020. The new strategy includes a commitment to achieving long-term earnings-per-share growth of 10% to 15%.
Mr. Roberts said Vision 2020 “builds even more aggressively on our plans to innovate across Chili’s food service and atmosphere to differentiate our brand and take the market share to deliver that earnings growth target.”
|Wyman Roberts, president and c.e.o. of Brinker|
“It starts with culinary and our focus on renovating the core products we’re known for today to make them even better, like burgers, ribs and fajitas,” he said. “At the same time, we’ll continue to innovate across our menu by introducing new products that strengthen our Fresh Tex, Fresh Mex positioning.”
As an example, Mr. Roberts pointed to the roll-out this week of a new Sizzling Steak.
“It’s the start of a whole new line of steaks that renovates our existing steak platform, adds innovative new products that strengthen our Fresh Tex position, and brings value to the consumer in a platform not usually known for value,” he said. The Sizzling Steak platform will be offered as a two for $20 deal.
Chili’s is in the midst of a successful limited-time offering of Endless Enchiladas. As part of the program, Chili’s is offering unlimited enchiladas for $9.99. The enchiladas are available in four varieties: sour cream chicken, green chili chicken, ancho beef and three cheese.
“We created a more moderate value offering using an existing product with strong margins and high guest ratings to minimize operational complexity and deliver a greater experience at great value,” Mr. Roberts said.
In terms of atmosphere, Mr. Roberts said Brinker is turning its attention to the bar area. He said the company is looking at every aspect of the business — from design to product offerings — to find a way to return Chili’s to its roots as a fun, casual hangout with a fresh, modern twist.
Mr. Roberts said Brinker’s other brand, Maggiano’s, had a great holiday season, with delivery “being the star of the show.” He said banquets were again a boost to the business, but Maggiano’s delivery business grew nearly 10% over the prior year.“We’ve got some work ahead of us, but we have the utmost confidence in our brands,” Mr. Roberts said. “We’ve proven time and time again that these brands are powerful and that they can deliver the kind of results that we have in the past, and that we’re projecting to deliver in the future, specifically our new target with our Vision 2020 of 10% to 15% earnings-per-share growth through the next few years.”