Brinker International — First Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenues increased to $1,475.6 million in Q1 FY2027 from $1,349.2 million in Q1 FY2026.
• Company sales rose to $1,461.2 million from $1,335.4 million, driven by a 9.1% increase in comparable restaurant sales.
• Operating income grew to $151.0 million from $117.9 million; operating margin as a percentage of total revenues improved to 10.2% from 8.7%.
• Net income increased to $113.3 million from $99.5 million; diluted net income per share rose to $2.64 from $2.17.
• Non-GAAP diluted net income per share excluding special items was $2.77, up from $1.93.
• Adjusted EBITDA, non-GAAP, reached $209.1 million compared to $172.4 million.
• Net cash provided by operating activities was $169.1 million, up from $120.8 million.
• Non-GAAP free cash flow was $105.7 million, compared to $62.2 million.
• Restaurant operating margin, non-GAAP, was $258.0 million (17.7% of company sales), up from $215.8 million (16.2%).

Guidance and Future Outlook:

• Updated full-year fiscal 2027 total revenue guidance raised to $6.23–$6.33 billion from $6.15–$6.27 billion, reflecting the impact of a 53rd operating week in Q4.
• Updated full-year fiscal 2027 non-GAAP diluted net income per share guidance raised to $13.30–$13.90 from $12.60–$13.40.
• Capital expenditures guidance remains unchanged at $265.0–$285.0 million.
• Diluted weighted average shares guidance remains unchanged at 42.0–43.0 million.
• Full-year projected new openings: 30–36 total restaurants (4 company-owned, 26–32 franchise).

Business Segments and Product Lines:

• Chili's Company sales increased $130.3 million to $1,366.5 million, driven by 10.1% comparable restaurant sales growth.
• Chili's franchisees generated approximately $296.7 million in sales, up from $269.5 million.
• Chili's restaurant operating margin, non-GAAP, was 18.7% of company sales, up from 17.3%.
• Maggiano's Company sales decreased $4.5 million to $94.7 million, with comparable restaurant sales down 3.4%.
• Maggiano's restaurant operating margin, non-GAAP, was 3.1% of company sales, up from 2.4%.
• The Big Crispy® chicken sandwich launch contributed to positive traffic and brand outperformance.
• Acquired 12 Chili's domestic restaurants previously owned by a franchisee during the quarter.

Market and Competitive Landscape:

• Chili's achieved its 22nd consecutive quarter of same-store sales growth.
• The company reported a 3-year cumulative same-store sales comp of +52% for Chili's.
• Chili's outperformed the casual dining industry through positive traffic and menu pricing.
• Chili's domestic franchise sales grew 10.4% year-over-year.
• International franchise sales grew 4.8% year-over-year.

Risks and Challenges:

• Chili's restaurant expenses as a percentage of sales were impacted by unfavorable commodity costs, higher hourly labor, advertising, repairs, maintenance, insurance, delivery fees, and to-go supplies.
• Maggiano's expenses were impacted by sales deleverage and higher rent and manager salaries.
• Forward-looking statements are subject to risks including inflation, consumer demand, competition, labor markets, supply chain disruptions, and regulatory changes.

Management Commentary and Tone:

• Kevin Hochman, President and CEO, stated the "Chili's flywheel of sustainable growth and market share gains keeps spinning."
• Management highlighted industry-leading value, world-class marketing, and operational investments as key drivers.
• The tone emphasized continued success of brand initiatives to improve the guest experience.

Other Key Points:

• The company repurchased $125.0 million of common stock during the quarter.
• The company redeemed $350.0 million of outstanding 8.25% notes, utilizing funding from the revolving credit facility.
• A $17.6 million loss on debt extinguishment was recorded due to the early redemption of the 8.25% notes.
• The effective income tax rate was 10.8% on a GAAP basis, lower than the statutory 21.0% due to FICA tip credit leverage and stock-based compensation benefits.
• Total restaurants open at September 23, 2026, were 1,641 (1,174 company-owned, 467 franchise).
• Interest expenses were $24.6 million, up from $10.5 million, primarily due to the debt extinguishment loss.