Have you observed any signs of consumer check management or softness in lower-income spending, given recent volatility in sentiment?

The company is seeing 'a little bit of check management' in desserts and alcohol, but alcohol sales are still up. Management emphasizes focusing on controllable factors like food quality, service, and atmosphere, and maintaining industry-leading value to continue winning market share regardless of macro headwinds. “The answer is we're seeing a little bit of check management. So as we've seen traffic accelerate behind Chicken Sando launch, we've seen a little bit of check management in desserts and in alcohol.”

Can you discuss the new unit growth strategy, including changes in unit design, cost, and return requirements, and the total addressable market for Chili's? Also, with Maggiano's turnaround, is there interest in adding a third, larger brand to the portfolio?

The new unit growth strategy involves building in existing strong states (CA, TX, FL) and expanding into new markets, with a ramp-up to a new run rate by FY29. New units will incorporate reimage elements and be designed for optimal throughput. Regarding a third brand, management wants to prove the ability to turn around a smaller brand (Maggiano's) first, which also involves unifying systems (e.g., KDS) to be ready for future expansion. No plans for a third brand until Maggiano's is successfully turned around. “So it seems like Chili's is everywhere, but Chili's is not everywhere. So again, we'll kind of spell that out and give more detail on how and why we think we have a much larger addressable market, but we are going to be able to ramp up our unit growth.”

EAT

Brinker International (EAT) Q3 FY26 earnings call: guidance and Q&A

Q: Beyond sales momentum, what dynamics will contribute to the 30-40 basis point margin growth for FY26 and beyond? How are you thinking about menu pricing for FY27?

The 30-40 bps margin growth refers to FY26 guidance. Future margin growth will primarily come from sales leverage. As the turnaround stabilizes and talent improves, there will be opportunities for greater efficiency in spending (e.g., R&M). For FY27 pricing, the priority is protecting the value proposition, especially the $10.99 '3 for Me'. Pricing will aim to cover inflation but will be on the lower end of the stated range to balance value for guests. “But I do think that we will be able to grow margins over time. And it will primarily be from sales leverage because that's our strategy is to grow the top line.”

Earnings call· Mar 2026 (Q3 FY26)· Consumer Discretionary· Apr 29, 2026

Source: earnings call transcript

Executive summary

Brinker International Q3 FY26 — Chili's Sustains Strong Momentum with Chicken Sandwich Launch

Brinker International delivered another strong quarter, driven by Chili's sustained momentum and the successful launch of its new chicken sandwich platform, which is attracting new guests and accelerating market share gains. While Maggiano's continues its turnaround, the company remains focused on improving food service, atmosphere, and value leadership across its brands. Strategic investments in restaurant remodels, operational efficiency, and new unit growth are expected to drive continued top-line expansion and margin improvement, despite ongoing inflationary pressures and consumer check management.

Highlights

Chili's same-store sales grew +4%, marking the 20th consecutive quarter of growth and outpacing the casual dining industry by 420 basis points.
Chili's is now the #2 casual dining brand for sales and #1 for traffic, with sales growth accelerating to 560 basis points above the industry in April.
The new chicken sandwich platform launched on April 14, selling 161% more sandwiches than pre-launch and significantly outpacing test market numbers.
Adjusted diluted EPS for the quarter was $2.90, up from $2.66 last year.
The company repurchased $108 million of common stock in Q3 and plans to call $350 million in bonds early FY27 for interest expense savings.

Concerns

Maggiano's reported comp sales of -4.6% with -10.4% traffic, negatively impacted by weather and a holiday shift by approximately 2.1%.
Restaurant operating margins for Brinker were 18.4%, down from 18.9% in the prior year, due to higher food and beverage costs and restaurant expenses.
Food and beverage costs were unfavorable by 60 basis points year-over-year due to unfavorable menu mix and 4.6% commodity inflation, mainly from beef.
Restaurant expenses were unfavorable 50 basis points year-over-year due to higher repair and maintenance costs and general inflation.
The company is observing some check management by consumers, particularly in desserts and alcohol, amidst broader macro headwinds.

Guidance & targets

Category	Target	Timeline	Confidence
Annual Revenues	$5.78 billion to $5.82 billion high materiality	FY26	High
Adjusted Diluted EPS	$10.60 to $10.85 high materiality	FY26	High
Capital Expenditures	$240 million to $250 million medium materiality	FY26	High
Weighted Average Shares	44.7 million to 45 million low materiality	FY26	High
Wage and Commodity Inflation	low single digits medium materiality	FY26	High
Tax Rate	approximately 19% low materiality	FY26	High
Chili's Sales Growth	mid-single-digit sales growth high materiality	Q4 · FY26	High
Chili's Traffic	positive traffic high materiality	Q4 · FY26	High
Chili's Reimage Program	60 to 80 reimages medium materiality	FY27	High
Chili's Reimage Program	10% of the fleet every year medium materiality	starting FY28	High
New Unit Growth Run Rate	new run rate medium materiality	by FY29	Medium
Restaurant Operating Margins	grow our margins year-over-year at 30 to 40 basis points high materiality	FY26	High
Commodity Inflation	mid-single digits medium materiality	Q4 · FY26	High
Commodity Inflation	mid-single digits medium materiality	FY27	Medium
Advertising Expense	$5 million to $6 million low materiality	Q4 · FY26	High
Advertising Expense as % of Sales	similar percent of sales low materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Brinker International (Consolidated) Total revenues increased 3.2% over prior year, with consolidated comp sales of +3.3%. Restaurant operating margins were 18.4% compared to 18.9% in the prior year, due to higher food and beverage costs and restaurant expenses, partially offset by sales leverage.	$1.47 billion	3.2%	—	18.4%
Chili's Chili's achieved its 20th consecutive quarter of same-store sales growth, significantly outpacing the casual dining industry. Sales growth was driven by price and positive mix, offset by negative traffic, with weather and holiday shifts impacting results. Operational improvements led to declines in Guests With A Problem (GWAP) and improved food grade and intent to return scores. April saw accelerated sales outperformance and positive traffic. Same-store sales: +4%Industry outperformance: 420 basis points2-year cumulative comp: 37%Sales growth in April: mid-single-digitTraffic in April: positiveIndustry outperformance in April: 560 basis pointsPrice: 4.6%Mix: 0.6%Traffic: -1.2%Negative impact from weather/holiday shift: 2.1% on sales and trafficDine and GWAP: 1.9%Food grade: 75%Intent to return: 79%	—	—	—	—
Maggiano's Maggiano's comp sales and traffic were negative, partially due to weather and a holiday shift. The 'Back to Maggiano's' strategy is underway, focusing on improving value, service, and atmosphere, with sequential progress noted in value scores. Maggiano's represents a small portion of overall company sales and profit. Comp sales: -4.6%Traffic: -10.4%Mix: 0.6%Price: 5.2%Negative impact from weather/holiday shift: 2.1% on sales and trafficPercentage of company sales: 8%Percentage of profit contribution: low single-digit	—	—	—	—

Product announcements

Product	Type	Timeline	Details
Chicken Sandwich Platform	launch	April 14

Risks & headwinds

Macro Headwinds and Consumer Check Management current

Some check management observed in desserts and alcohol sales.

Mitigation:Focus on improving food, service, atmosphere, and maintaining industry-leading value to win market share regardless of external factors.

Maggiano's Turnaround Time ongoing

Maggiano's is only 8% of company sales and low single-digit percentage of profit contribution.

Mitigation:Sequential progress is being made on food, service, and atmosphere; unifying systems (e.g., KDS) to improve efficiency and prepare for potential future brand additions.

Commodity Inflation Q4 FY26 and FY27

4.6% commodity inflation in Q3 FY26, mainly due to beef. Mid-single-digit inflation anticipated for Q4 FY26 and FY27.

Mitigation:Menu pricing strategy aims to cover inflation while protecting the value proposition, especially the $10.99 '3 for Me' offering.

Restaurant Operating Margin Compression Q3 FY26

Consolidated restaurant operating margins decreased to 18.4% from 18.9% year-over-year.

Mitigation:Invest to Grow strategy, focusing on top-line sales leverage, and future efficiencies from stabilized teams and optimized spending (e.g., R&M).

What to watch in Q4 FY26

Chili's Sales Growth and Traffic

Q4 FY26

Current mid-single-digit sales growth and positive traffic in April

Target mid-single-digit sales and positive traffic

Why it matters

Verifies the sustained momentum and market share gains for Chili's, which is the primary growth driver for the company.

we remain confident we will lap the fourth quarter with mid-single-digit sales and positive traffic at Chili's.

Find out whether EAT delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide more specifics on the chicken sandwich launch performance, including mix, sales lift, and customer satisfaction? Also, how will Chili's sustain growth to reach $6M-$7M AUVs, beyond the current initiatives?

Initial chicken sandwich performance is encouraging, with 161% more sandwiches sold than pre-launch, outpacing test markets. It's too early for repeat rates or full customer satisfaction data, but anecdotal feedback is positive regarding size and value. Future growth will continue to focus on improving food, service (e.g., cycle time reduction from 'north of 6' restaurants), and atmosphere (reimages), supported by marketing. The goal is to improve throughput and retain new guests.

“So far, the overall platform is selling 161% more sandwiches than prelaunch and is significantly outpacing the numbers we saw in the 200 test locations.”

asked by David Palmer · answered by Kevin Hochman

3 min read 6 chapters

Detailed narrative

Chili's Chicken Sandwich Platform Launch

Chili's launched its new chicken sandwich platform on April 14, featuring two sandwiches at the $10.99 '3 for Me' price point, along with other flavored options. The launch is supported by a 'Better Than Fast Food' campaign, highlighting generous portions in response to consumer 'shrinkflation' frustrations.

Initial results are encouraging, with the platform selling 161% more sandwiches than pre-launch and significantly outpacing test market performance. The new Big Crispy filet was over 80% bigger than leading fast-food competitors' premium chicken sandwiches.

North of 6 Initiative and Cycle Time Improvement

The 'north of 6' initiative focuses on improving throughput in high-volume restaurants. Management noted that average traffic is back to 2013 levels, but still 20% below peak. Key learnings include the need for further business simplification and speeding up 'cycle time' across the entire dining experience, from host stand to kitchen ticket times and table resetting.

This involves studying bottlenecks and potentially adjusting labor deployment or leveraging technology to reduce wait times and improve guest experience, with a host stand rollout planned for Q2 next fiscal year.

Maggiano's Turnaround Progress

Maggiano's, representing 8% of company sales and low single-digit profit, is making sequential progress in its turnaround. Adjusting for Christmas Day and January weather, traffic and comp sales showed improvement. Efforts include more abundant portions, generous family-style offerings, and the return of classic dishes, leading to improved value scores.

The focus remains on enhancing service and atmosphere, with a long-term goal of returning the business to growth and potentially serving as a model for future brand additions.

Restaurant Reimage and New Unit Growth Strategy

The company completed its first four Chili's reimages, with learnings informing a long-term strategy. Another 8-10 reimages are planned for the remainder of FY26, followed by 60-80 in FY27, and a cadence of 10% of the fleet annually starting in FY28.

The goal for new unit growth is to ramp up to a new run rate by FY29, with more details to be shared at the Investor Day. The reimages are currently focused on aesthetics, but the company is also exploring equipment upgrades for the heart of the house to improve throughput.

Operational and Service Enhancements

Beyond menu innovation, Brinker is heavily investing in operational and service improvements. This includes technology initiatives like upgrading the Kitchen Display System (KDS), a complete back-office redo to connect antiquated systems, and rolling out improved team member handheld devices. The 'Supermarket Simple' initiative aims to reduce friction at payment with Ziosk.

These efforts are designed to enhance throughput, reduce ticket times, and improve overall guest and team member experience, contributing to long-term sustainable traffic growth.

Value Proposition and Pricing Strategy

Chili's maintains its value leadership with a per-person average guest check $3-$4 below competitors. The company prioritizes protecting its value proposition, especially the $10.99 '3 for Me' offering. While menu pricing will continue to address inflation, the strategy will lean towards the lower end of the stated pricing range to balance inflation with maintaining value for guests.

The focus is on creating 'wow value' across the entire menu, renovating categories like salads and steaks after successful improvements in burgers, fajitas, and ribs.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.