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    Earnings call· Jun 2026(Q4 FY26)

    BRINKER INTERNATIONAL Q4 FY26 earnings call EAT

    Aug 12, 2026 Source

    Executive summary

    Brinker International Q4 FY26 — Chili's Sustains Traffic Growth and Margin Expansion

    Brinker International delivered a strong Q4 FY26, driven by Chili's sustained traffic growth and margin expansion, marking its 21st consecutive quarter of same-store sales growth. The company's focus on value leadership and guest experience continues to drive performance, with the Big Crispy chicken sandwich significantly boosting sales. While Maggiano's turnaround remains mixed, the company is poised for continued profitable growth in FY27, with strategic investments in restaurant reimages and a disciplined capital allocation approach.

    Highlights

    5

    • Chili's same-store sales increased 5.6% in Q4 FY26, marking the 21st consecutive quarter of growth and a 50% 3-year cumulative comp.

    • Adjusted diluted EPS for Q4 FY26 rose 23% to $3.07, up from $2.49 last year.

    • Restaurant operating margin improved 20 basis points year-over-year to 18% in Q4 FY26.

    • Sales of the Big Crispy chicken sandwich increased 175% to 55 per restaurant per day by the end of Q4 FY26.

    • The company repurchased $100 million of common stock in Q4 FY26, bringing the FY26 total to almost $400 million, with $750 million remaining authorization.

    Concerns

    3

    • Maggiano's comp sales were negative 2.5% in Q4 FY26, with traffic down 5.3%, and its turnaround is slower than planned.

    • Food and beverage costs increased 80 basis points in Q4 FY26, driven by 4.4% commodity inflation, primarily from higher beef costs and a temporary spike in tomato prices.

    • FY27 restaurant operating margin improvement is projected to moderate to 20-40 basis points (52-week basis), or up to 50 basis points (53-week basis).

    Guidance & targets

    13
    CategoryTargetConfidence
    Annual Revenues
    $6.15 billion to $6.27 billion
    high materiality
    High
    Adjusted Diluted EPS
    $12.60 to $13.40
    high materiality
    High
    Weighted Average Shares
    42 million to 43 million
    medium materiality
    High
    Capital Expenditures
    $265 million to $285 million
    medium materiality
    High
    Commodity and Wage Inflation
    low-single digits
    medium materiality
    High
    Tax Rate
    ~19%
    medium materiality
    High
    Net New Company-Owned Restaurant Openings
    3
    medium materiality
    High
    Chili's Same-Store Sales
    mid-single digit
    high materiality
    High
    Chili's Traffic
    positive
    high materiality
    High
    Restaurant Level Margin Improvement (52-week basis)
    20 to 40 basis points
    medium materiality
    High
    Restaurant Level Margin Improvement (with 53rd week)
    up to 50 basis points
    medium materiality
    High
    Maggiano's Revenues
    flat
    low materiality
    High
    Maggiano's Profits
    flat
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Chili's
    21st consecutive quarter of same-store sales growth, significantly outpacing the industry. Driven by price and positive traffic, partially offset by negative mix. July sales and traffic significantly accelerated.
    Price: 4.3%Traffic: 1.5%Mix: -0.2%
    		—5.6%——
    Maggiano's
    Comp sales were negative, primarily due to negative traffic and mix, partially offset by price. Turnaround has been mixed and slower than planned.
    Traffic: -5.3%Mix: -0.1%Price: 2.9%
    		—-2.5%——
    Brinker (Consolidated)
    Total revenues of $1.536 billion with consolidated comp sales of positive 5%. Restaurant operating margins improved 20 basis points year-over-year, driven by sales leverage, partially offset by unfavorable food and beverage costs and higher advertising/insurance.
    Restaurant operating margin improvement: 20 bps YoY
    		$1.536 billion5%—18%

    Operational metrics

    34
    Total Revenue Growth
    7.9%YoY
    FY26
    Restaurant Operating Margin Improvement
    30
    FY26
    Adjusted EPS Growth
    20.6%
    FY26
    Adjusted Diluted EPS
    $3.07up from $2.49 last year, 23% increase
    Q4 FY26
    Chili's Average Annual Unit Volumes
    $5 millionup from $4.5 million last FY
    FY26
    Big Crispy Chicken Sandwich Sales
    55up 175% from 20 per restaurant per day pre-launch
    Q4 FY26
    Manager Time Freed Up (Shift Line Checks)
    30
    Q4 FY26

    Equivalent to 22 years of manager time freed up annually across the system.

    GMs Earning Over $100,000
    almost 80%
    past fiscal

    This number continues to grow annually.

    Manager Turnover
    well ahead of the industry
    years
    Hourly Turnover
    moved ahead of the industry
    recently
    Food and Beverage Costs
    80increased
    Q4 FY26

    Tomato costs have since normalized and will not impact Q1.

    Labor Costs
    90favorable YoY
    Q4 FY26

    Sales growth offset 3.1% wage rate inflation, additional investments in labor, and higher health insurance costs.

    Restaurant Expenses
    10favorable YoY
    Q4 FY26

    Driven by sales leverage and lower repairs and maintenance costs, partially offset by higher advertising costs and general inflation (utilities, rent, to-go supplies, delivery fees).

    Advertising Expenses
    3%increased 20 bps YoY
    Q4 FY26

    To help support the rollout of the Big Crispy Chicken Sandwich campaign.

    G&A
    3.9%10 bps favorable to prior year
    Q4 FY26

    Due to sales leverage and lower performance bonus accruals, partially offset by an increase in restaurant center support resources.

    Depreciation and Amortization
    3.6%decreased 40 bps YoY
    Q4 FY26

    Due to sales leverage and the lapping of accelerated depreciation from the prior year due to the retirement of CTX and Impinger ovens.

    Adjusted EBITDA
    $228 million7.1% increase from prior year
    Q4 FY26
    Adjusted Tax Rate
    17.6%declined from 19.5% YoY
    Q4 FY26

    Primarily due to a benefit from state income tax filing adjustments and a higher benefit from the FICA tip credit.

    Capital Expenditures
    $58.3 million
    Q4 FY26

    Driven by capital maintenance spend and the Chili's reimage program.

    Chili's Reimage Program
    11
    FY26

    Plan to complete another 60 to 80 during FY27, then a planned cadence of 10% of the fleet annually in FY28.

    Share Repurchase
    $100 million
    Q4 FY26

    Under current share repurchase program.

    Share Repurchase (FY26 Total)
    almost $400 million
    FY26
    Share Repurchase Authorization Remaining
    $750 million
    August

    Authorized by Brinker Board of Directors.

    Debt Redemption
    $350 million
    subsequent to year-end

    Redeemed 8.25% bonds using liquidity on $1 billion revolver, expected to provide interest expense savings in FY27.

    53rd Operating Week Impact
    ~2%increase in total revenues
    FY27

    Expected impact of the additional operating week in Q4 FY27.

    Maggiano's Sales % of Total
    8%
    Q4 FY26
    Chili's International Profit Contribution
    4%
    FY27

    Expected to surpass Maggiano's profit contribution.

    3 For Me Mix
    just over 21%very stable (just under 21% in Q3)
    Q4 FY26

    Continues to be very stable, with new guests utilizing the menu similarly to existing guests.

    Chili's Pricing Strategy
    just over 3%lower end of 3-5%
    FY27

    Conservative pricing to protect value proposition and drive long-term traffic.

    Chili's Mix Impact
    flattish
    FY27

    Focus on driving traffic with items like the chicken sandwich, while other categories remain stable.

    FY27 Commodity Inflation Cadence
    Q1: 4%, Q2: 3%, Q3: 2%, Q4: 1%
    FY27

    Modeling for commodity inflation to be higher in the first quarter before moderating.

    Chili's Restaurant Capacity
    80%
    current

    80% of historical guest count, indicating plenty of capacity to continue to grow traffic.

    Average Guest Wait Time
    15 to 20 minutes
    current

    Focus on managing host stand better to improve guest experience during waits.

    To-Go Business % of Total
    25%
    current

    Significant opportunity to improve friction, pickup experience, and pack-outs.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps5.6%%
    Net unit growth development pipeline3units

    Product announcements

    6
    ProductTypeDetails
    Kids Menu Revampupdate
    Pasta Platform Renovationupdate
    Skillet Cookies Upgradeupdate
    Cheesecakelaunch
    Saladsroadmap
    Steaks and Guiltless Grillroadmap

    Deals & partnerships

    1
    Valente (implied)Acquisition of 12 Chili's franchise restaurants (including real estate for 6 locations) in Alabama and Mississippi.

    The acquired restaurants are lower performing than the brand average. The company secured a great price for the acquisition.

    Risks & headwinds

    5
    Macro headwindscurrent

    null

    Mitigation: Chili's is positioned to continue winning with improvements in food service and atmosphere, coupled with industry-leading value.

    Maggiano's turnaround slower than plannedQ4 FY26 and ongoing

    Maggiano's comp sales negative 2.5% with negative 5.3% traffic in Q4 FY26.

    Mitigation: Focused efforts on delivering important changes; FY27 guidance assumes flat revenues and profits to reduce pressure and allow for focused improvement.

    Commodity inflationQ4 FY26, Q1-Q4 FY27

    4.4% commodity inflation in Q4 FY26, leading to 80 bps increase in food and beverage costs. FY27 commodity inflation modeled at Q1: 4%, Q2: 3%, Q3: 2%, Q4: 1%.

    Mitigation: Built into conservative pricing strategy; tomato costs have since normalized.

    Higher advertising and insurance costsQ4 FY26 and ongoing

    Advertising expenses increased 20 bps YoY to 3% of sales in Q4 FY26.

    Mitigation: Partially offset by sales leverage; built into conservative pricing strategy.

    Alcohol category pressurecurrent

    null

    Mitigation: Margarita of the Month program is driving traffic and incidents despite broader macro trends against alcohol attachment.

    What to watch in Q1 FY27

    5

    Chili's Same-Store Sales & Traffic

    Q1 FY27
    CurrentQ4 comp +5.6%, traffic +1.5%; Q1 YTD significantly accelerated
    TargetContinued mid-single-digit comp and positive traffic

    Why it matters

    Sustained traffic growth is the core of Chili's strategy and key to margin expansion.

    if Chili's was 6% in Q4, that means it's higher than that in Q1. So I'm happy to talk about all of that when the quarter ends, won't go over all of the results in quarter 1, but we're just really, really pleased with the strong start to the year and the traffic drivers.

    Q&A highlights

    5

    Seeking more specifics on Chili's same-store sales assumptions for FY27 and details on margin and earnings flow-through, considering reinvestment opportunities.

    Mika stated FY27 guidance assumes mid-single-digit same-store sales and positive traffic for Chili's, with potential upside. For margins, 20-40 bps improvement is expected on a 52-week basis, up to 50 bps with the 53rd week. Inflation (commodities, labor, rent, advertising, insurance) is built in, but pricing is conservative to protect value and drive long-term traffic.

    “what we've done and what's implied in this guidance is we built in a little bit of upside for July. But basically, for the remainder of the year, we have assumed mid-single digit same-store sales and positive traffic for Chili's.”

    asked by Dennis Geiger · answered by Mika Ware

    2 min read6 chapters

    Detailed Narrative

    01

    Chili's Turnaround and Value Leadership

    Chili's achieved its 21st consecutive quarter of same-store sales growth, significantly outpacing the industry with a 3-year cumulative comp of 50%. This success is attributed to a focus on long-term sustainable growth, improving food service, atmosphere, and team member experience, coupled with value leadership ($3-$4 below competition). The brand is recognized for value, quality, service, and overall experience, driving a flywheel of traffic, sales growth, and margin expansion.

    02

    Big Crispy Chicken Sandwich Success

    The Big Crispy launch was a major success, increasing chicken sandwich sales by 175% to 55 per restaurant per day by the end of Q4. This performance surpassed previous successful launches like the Big Smasher and Big QP, positioning the Big Crispy as a signature sandwich and reinforcing Chili's "Better Than Fast Food" strategy. Customer reviews have been highly positive regarding size, price, value, and taste.

    03

    Operational Efficiency Initiatives

    Chili's is implementing initiatives to remove friction and improve restaurant throughput. This includes simplifying shift line checks from 8 pages to 1, freeing up 30 minutes of manager time daily (22 years annually across the system), and upgrading scheduling tools. VPs of operations are now focused on traffic and profit improvement, with profits being a larger percentage of their bonus structure to enhance ownership of restaurant expenses.

    04

    Guest Experience and Cycle Time Improvements

    A new initiative aims to speed up restaurant cycle time by attacking bottlenecks in kitchen prep and dining experience. The first rollout, "Supermarket simple" loyalty reward redemption via Ziosk, automatically applies discounts and informs guests of savings, reducing manager time, speeding table turns, and improving guest satisfaction. Future efforts will focus on host stand management, order time, drink refills, and dessert bottlenecks.

    05

    Maggiano's Performance and Strategy

    Maggiano's, representing only 8% of sales, has shown mixed turnaround results. While operational and culinary improvements have been made, these have been offset by losses with core guests. The company believes it's on the right strategy but needs more focused execution. FY27 guidance assumes flat revenues and profits for Maggiano's to allow for focused improvement without pressure.

    06

    Employee Engagement and Retention

    The company's commitment to making GM jobs more fun, easier, and rewarding has led to almost 80% of GMs earning over $100,000 annually. Manager turnover has consistently been ahead of the industry, and hourly turnover recently surpassed industry averages, indicating successful employee engagement strategies.

    AI-generated summary of the company’s earnings call. Not investment advice.