Brinker International is Wednesday's IBD Stock Of The Day, as the Chili's operator rallied along with other restaurant stocks. Brinker flashed a buy signal Wednesday amid its nearly 80% rally this year.
The Dallas-based casual dining company operates Chili's and Maggiano's Little Italy. It is coming off historically strong revenue in the fiscal fourth quarter, reported on Aug. 14. Both earnings and revenue came in well above analyst predictions last quarter, with profit growing 16% to $1.61 per share and sales totaling $1.21 billion, up 12% vs. a year ago.
However, weak guidance for 2025 sent EAT shares down 10.7% on Aug. 14. Brinker International projected full-year EPS of $4.35-$4.75, up from $4.10 in fiscal 2024. Brinker expects fiscal 2025 revenue of $4.55 billion to $4.62 billion after sales came in at $4.41 billion in fiscal 2024.
While EAT stock tumbled on Aug. 14, hitting an intraday low of 58.85, shares have roared back 30% since then.
Overall, the analysts' view on Brinker heading into fiscal 2025 is that while Chili's same-store sales growth is sustaining high single-digit levels, incremental investments and reluctance to raise menu prices are limiting EPS upside.
Brinker has averaged 16% earnings growth over the past three quarters, but the consensus sees fiscal Q1 profit ballooning 118% vs. a year ago.
More broadly, the 54 stocks in the IBD-tracked Retail-Restaurants industry group have collectively gained around 19% in 2024.
Brinker International Stock Is Part Of Restaurant Revival
EAT shares advanced 1.9% to 76.60 during Wednesday's market action, trading in a buy zone after breaking out above an official entry on Tuesday.
Brinker International has formed a cup-with-handle base with a 73.68 buy point, according to MarketSurge chart analysis. EAT has jumped 78% in 2024 and has more than doubled since hitting year lows of 37.25 on Jan. 16.
Several other restaurant stocks are flashing buy signals.
Darden Restaurants traded in a buy zone Wednesday from a 160.64 entry. Its fiscal first-quarter 2025 earnings and revenue are due early Thursday.
Dow Jones giant McDonald's has also roared back in recent weeks, advancing 20% since it hit a low of 243.53 in early July. Now, MCD stock is slightly above a 292.21 buy point from a saucer-with-handle base. On Tuesday, the Dow stock closed at 293.75, about 1% above that official entry.
Chicken-wing chain Wingstop is also actionable after breaking a downward trendline and advancing back above its 50-day moving average in recent days.
Cava Group also continues its strong 2024, surging around 190% on the year. Shares hit all-time highs of 128.18 on Aug. 26 but has now retreated about 3% below that level.
EAT shares have a 68 Composite Rating. The stock also has a 97 Relative Strength Rating and a 66 EPS Rating.
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