Brinker Up As It Cooks Up Cost Savings To Beat On 2Q
2009年1月23日 - 12:36AM
Dow Jones News
Brinker International Inc.'s (EAT) fiscal second-quarter
earnings showed a continuing miserable environment for sit-down
restaurants with no relief in sight, but the company surprised the
Street by showing signs it was able to reign in costs.
The news sent Brinker shares up 26% in recent trading to $10.48,
making up gains after losing more than 10% in the two days leading
up to their earnings.
The operator of Chili's Grill & Bar and other casual
restaurant chains swung to a fiscal second-quarter net loss of
$21.8 million, or 21 cents a share, compared to year earlier net
income of $54.5 million, or 52 cents a share, in the prior year
period.
Same-store sales continue to drop, falling 4.5% at Brinker's
Chili's, Maggiano's and On The Border Mexican Grill restaurants.
The restaurant operator also took a loss on the sale of its stake
in Romano's Macaroni Grill and a charge related to restaurant
closings.
Excluding charges, though, earnings at continuing operations
came in at 27 cents a share, beating analyst expectations of 18
cents a share, according to Thomson Reuters.
The results were bolstered as Brinker curtailed costs better
than analysts expected, as benefits from opening fewer news stores
bore fruit in lower pre-opening expenses and the company also
shuttered underperforming locations, according to SMH Capital
restaurant analyst William Hamilton.
But that doesn't leave the company out of the woods yet as
same-store sales continue to be pressured as consumers eat out less
and trade out of casual-dining chains to cheaper eats from
fast-food chains and supermarkets.
"The sales environment still remains challenging and will likely
remain so for the next few quarters, but it appears that some of
the costs may be easing," Hamilton said.
Translating the cost-savings into earnings growth with such weak
sales was particularly impressive, KeyBanc Capital Markets Inc.
restaurant analyst Lynne Collier said, although top-line sales need
to at least stabilize before signs of a recovery can emerge.
"While we're encouraged with their cost containment, we would
look for better same-store sales first before we become more
positive on the stock," Collier said.
Brinker's revenue slumped 7.8% to $949.4 million from the
year-ago period, although that also beat analyst expectations of
$839 million.
Shares of another casual-dining giant, Darden Restaurants Inc.
(DRI), also rose Thursday, adding 3.6% in recent trading, as the
operator of Olive Garden, Red Lobster and other restaurants
reaffirmed its fiscal 2009 guidance ahead of an investor
meeting.
-By Paul Ziobro, Dow Jones Newswires; 201-938-2046;
paul.ziobro@dowjones.com
(Shirleen Dorman contributed to this report.)
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