Brinker International (EAT) stock is down nearly 13% Wednesday afternoon. The selloff comes after the parent company of Chili's and Maggiano's Little Italy came up short of earnings expectations for its fiscal fourth quarter and issued a weak earnings outlook for its new fiscal year.
In the thirteen weeks ended June 26, Brinker's revenue increased 12.3% year-over-year to $1.2 billion, driven by same-restaurant sales rising 13.5%. Comparable sales at Chili's were up an impressive 14.8%. The company also said its earnings per share (EPS) rose 15.8% from the year-ago period to $1.61 and that operating expenses were up 11.7% to $1.14 billion.
"We achieved another quarter of solid progress against our strategy to deliver profitable, sustainable growth," said Brinker CEO Kevin Hochman in a statement. "We significantly outperformed the industry in both sales and traffic during the quarter, while maintaining record high guest metrics."
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $1.16 billion and earnings of $1.72 per share, according to Yahoo Finance.
Sentiment worsened toward Brinker after the company provided its outlook for fiscal 2025. Brinker anticipates EPS to arrive between $4.35 to $4.75. The midpoint of this range, $4.55, is well short of the consensus analyst estimate of $4.78.
On a positive note, Brinker anticipates revenue in the range of $4.55 billion to $4.62 billion in fiscal 2025, which is ahead of the $4.53 billion in revenue analysts are anticipating.
Is Brinker stock a buy, sell or hold?
Heading into today's trading, Brinker was up an impressive 63% for the year to date. Yet, Wall Street is on the sidelines when it comes to the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for EAT stock is $66.78, representing implied upside of more than 8% to current levels. Meanwhile, the consensus recommendation is Hold.
