(Adds details, analysts' comparisons, updates shares)
Jan 22 Brinker International Inc
reported a better-than-expected 7 percent rise in quarterly
profit as same-restaurant sales at its Chili's chain rose for
the first time in a year.
Brinker shares rose nearly 9 percent in early trading to
Full-service U.S. restaurants such as Chili's and Darden
Restaurant Inc's Olive Garden have been struggling to
compete with chains such as Chipotle Mexican Grill Inc
and Panera Bread Co, which offer frugal diners
high-quality meals at lower prices.
The full-service restaurant category, also known as casual
dining, has been aggressively promoting deals to lure diners but
success has been limited.
Sales at company-owned Chili's restaurants open for at least
18 months rose 0.7 percent during the quarter, compared with a
0.3 percent decline estimated by analysts' polled by Consensus
Susquehanna International Group analyst Rachael Rothman had
expected Chili's same-store sales to decline 0.7 percent in the
quarter, hurt by a drop in traffic and average checks.
Wells Fargo analyst Jeff Farmer had expected Chili's
same-restaurant sales to be flat.
Brinker's same-restaurant sales rose, helped by new menu
items, increased restaurant capacity and higher prices.
The company launched a new Southwestern menu, Pretzel Roll
sandwiches and a "Holiday Favourites" menu.
Chili's recently introduced eight menu items, including
enchiladas, fresh Mex bowls, tostada and crispy tacos.
"We believe these new items will appeal to the core Chili's
consumer better than the pizza platform that launched about a
year ago," KeyBanc analyst Christopher O'Cull said.
Net income rose 7 percent to $39.7 million, or 58 cents per
share, in the second quarter ended Dec. 25, from $37.2 million,
or 50 cents per share, a year earlier.
Excluding items, Brinker earned 59 cents per share.
Total revenue rose 2 percent to $704.4 million in the second
quarter ended Dec. 25.
Analysts on average were expecting the company to earn 58
cents per share on revenue of $699.2 million, according to
Thomson Reuters I/B/E/S.
Dallas-based Brinker's shares were up 6.6 percent at $49.75
after touching a high of $50.74 on the New York Stock Exchange
early on Wednesday morning.
(Reporting by Devika Krishna Kumar and Siddharth Cavale in
Bangalore and Lisa Baertlein in Los Angeles; Editing by Joyjeet