Chili's profit miss, slowing sales, hit shares
(Reuters) - Chili's Grill & Bar parent Brinker International Inc (EAT.N) reported quarterly profit that missed Wall Street's view and said closely watched sales at established restaurants, while better than expected, slowed throughout the quarter.
Shares in the company, which also owns the Maggiano's Little Italy chain, were down almost 10 percent in trading on Wednesday.
While the company made efficiency gains, the earnings miss and cooling sales disappointed, said Bernstein Research analyst Sara Senatore in a client note.
Net income rose 18 percent to $27.9 million, or 36 cents per share, for the fiscal first quarter that ended September 26.
Excluding a gain related to royalty revenues, the company earned 37 cents per share, missing Wall Street's average estimate by 1 cent per share, according to Thomson Reuters I/B/E/S.
Revenue rose just over 2 percent to $683.5 million.
Sales at restaurants open at least 18 months rose 2.8 percent at Chili's and 0.9 percent at Maggiano's during the quarter.
Restaurant operating margins improved by about 150 basis points to 14.6 percent from 13.1 percent a year earlier, helped by projects that have streamlined staffing and upgraded kitchen and point of sale systems.
Brinker's shares were down $3.21 to $30.23 in late morning trading on the New York Stock Exchange.
(Reporting by Siddharth Cavale in Bangalore; Editing by Supriya Kurane and Tim Dobbyn)