Brinker International Reports Second Quarter Results

DALLAS, Jan. 30, 2018

Highlights include the following:

• On a GAAP basis, earnings per diluted share were $0.54 for the second quarter of fiscal 2018 representing a 21.7 percent decrease from $0.69 in the second quarter of fiscal 2017
• Earnings per diluted share, excluding special items, were $0.87 for the second quarter of fiscal 2018 representing a 22.5 percent increase from $0.71 in the second quarter of fiscal 2017 (see non-GAAP reconciliation below) 
• The Tax Cuts and Jobs Act of 2017 (the "Tax Act") negatively impacted GAAP net income by $3.9 million or $0.08 per diluted share, consisting of $8.7 million or $0.18 per diluted share for the revaluation of the Company's net deferred tax assets, partially offset by the impact from the decrease in the statutory tax rate of $4.8 million or $0.10 per diluted share for the second quarter of 2017 
• Brinker International's total revenues were $766.4 million in the second quarter of fiscal 2018 decreasing 0.6 percent compared to the second quarter of fiscal 2017, and company sales were $742.7 million in the second quarter of fiscal 2018 decreasing 0.8 percent compared to the second quarter of fiscal 2017
• Chili's company-owned comparable restaurant sales decreased 1.5 percent in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. Chili's U.S. franchise comparable restaurant sales decreased 1.7 percent in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017
• Chili's international franchise comparable restaurant sales increased 0.1 percent in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017
• Maggiano's comparable restaurant sales increased 1.8 percent in the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017 
• Operating income,  as a percent of total revenues, was 7.1 percent for the second quarter of fiscal 2018 compared to 8.0 percent for the second quarter of fiscal 2017 representing a decrease of approximately 90 basis points 
• Restaurant operating margin,  as a percent of company sales, was 14.9 percent for the second quarter of fiscal 2018 compared to 15.1 percent for the second quarter of fiscal 2017 representing a decrease of approximately 20 basis points (see non-GAAP reconciliation below)
• For the first six months of fiscal 2018, cash flows provided by operating activities were $119.7 million and capital expenditures totaled $48.6 million. Free cash flow was $71.1 million (see non-GAAP reconciliation below)
• The Company is updating its fiscal 2018 outlook and now estimates earnings per diluted share, excluding special items and the revaluation of the Company's deferred tax accounts, to be in the range of $3.42 to $3.52 for fiscal 2018

"Brinker saw performance improve across the business during the second quarter, especially related to our initiatives to change traffic trends at Chili's," said Wyman Roberts, chief executive officer and president.  "With this foundational strategy in place, we will focus on targeted segments of the business we believe will enhance the guest experience and drive traffic."

Table 1: Q2 comparable restaurant sales1
Company-owned, reported brands and franchise; percentage
	Q2 18			Q2 17 ARIVA.DE Börsen-Geflüster Kurse Brinker International -   0,00%
Brinker International	(1.0)			(2.9)
Chili's Company-Owned
Comparable Restaurant Sales	(1.5)			(3.3)
Pricing Impact	2.3			1.8
Mix-Shift2	0.6			1.4
Traffic	(4.4)			(6.5)
Maggiano's
Comparable Restaurant Sales	1.8			(0.8)
Pricing Impact	1.1			2.6
Mix-Shift2	1.1			(0.9)
Traffic	(0.4)			(2.5)
Chili's Franchise3	(1.0)			(3.5)
U.S. Comparable Restaurant Sales	(1.7)			(3.0)
International Comparable Restaurant Sales	0.1			(4.2)
Chili's Domestic4	(1.6)			(3.2)
System-wide5	(1.0)			(3.1)

Quarterly Operating Performance

CHILI'S second quarter company sales decreased 1.3 percent to $623.6 million from $632.1 million in the prior year primarily due to a decline in comparable restaurant sales. As compared to the prior year, Chili's restaurant operating margin¹ declined. Restaurant labor, as a percent of company sales, increased compared to the prior year due to higher wage rates, partially offset by lower employee health insurance costs and incentive bonuses. Cost of sales, as a percent of company sales, increased slightly compared to the prior year due to unfavorable product mix on beef, ribs and chicken and unfavorable commodity pricing on produce, partially offset by increased menu pricing and favorable commodity pricing on beef. Restaurant expenses, as a percent of company sales, decreased due to lower advertising and repairs and maintenance expenses, partially offset by sales deleverage.

MAGGIANO'S second quarter company sales increased 2.1 percent to $119.1 million from $116.6 million in the prior year primarily due to an increase in comparable restaurant sales. As compared to the prior year, Maggiano's restaurant operating margin¹ improved. Restaurant expenses, as a percent of company sales, decreased primarily due to sales leverage and lower property taxes, preopening and workers' compensation insurance expenses. Restaurant labor, as a percent of company sales, decreased compared to the prior year due to sales leverage and lower incentive bonuses, partially offset by higher wage rates. Cost of sales, as a percent of company sales, was negatively impacted by unfavorable commodity pricing, partially offset by increased menu pricing.

¹Restaurant operating margin is defined as Company sales less Cost of sales, Restaurant labor and Restaurant expenses and excludes Depreciation and amortization expenses. (See non-GAAP reconciliation below)

FRANCHISE AND OTHER revenues increased 6.3 percent to $23.7 million for the second quarter of fiscal 2018 compared to $22.3 million in the prior year second quarter primarily due to higher gift card-related revenues. Brinker franchisees generated approximately $324 million in sales² for the second quarter of fiscal 2018.

²Royalty revenues are recognized based on the sales generated and reported to the Company by franchisees.

Other

Depreciation and amortization expense decreased $1.7 million for the current quarter compared to the second quarter of fiscal 2017 primarily due to an increase in fully-depreciated assets and restaurant closures, partially offset by depreciation on asset replacements and new restaurant openings.

General and administrative expense decreased $0.5 million for the current quarter compared to the second quarter of fiscal 2017 primarily due to lower compensation-related expenses.

Income Taxes

The Tax Act was enacted on December 22, 2017 with an effective date of January 1, 2018. The enactment date occurred prior to the end of the second quarter of fiscal 2018 and therefore the federal statutory tax rate changes stipulated by the Tax Act were reflected in the current quarter. The Tax Act lowered the federal statutory tax rate from 35 percent to 21 percent effective January 1, 2018. Brinker's federal statutory tax rate for fiscal 2018 is now 28 percent, representing a blended tax rate for the current fiscal year based on the number of days in the fiscal year before and after the effective date. For subsequent years, our federal statutory tax rate will be 21%. We were also required to revalue our deferred tax accounts using the new federal statutory tax rate in the period in which the Tax Act was enacted. The Company's deferred tax position is a net asset and as a result, the reduction in the federal statutory tax rate resulted in a one-time non-cash adjustment to our net deferred tax balance of $8.7 million with a corresponding increase to the provision for income taxes in the second quarter of fiscal 2018.

On a GAAP basis, the effective income tax rate increased to 38.3 percent in the second quarter of fiscal 2018 from 28.2 percent in the second quarter of fiscal 2017.  This increase was driven by the revaluation of the Company's deferred tax accounts pursuant to the Tax Act, partially offset by the positive impact of lowering the federal statutory tax rate and lower profits. Excluding the impact of special items and the revaluation of the Company's deferred tax accounts, the effective income tax rate decreased to 19.5 percent in the second quarter of fiscal 2018 compared to 28.1 percent in the second quarter of fiscal 2017 primarily due to the lower corporate tax rate and lower profits.

Fiscal 2018 Outlook Update

The Tax Act will have a material impact on the Company's effective tax rate for fiscal 2018.   The Company estimates adjusted earnings per diluted share, excluding special items and the revaluation of the Company's deferred tax accounts, for fiscal 2018 will be in the range of $3.42 to $3.52 including the effective rate impact of the Tax Act.  Previously, the Company expected the effective income tax rate excluding the impact of special items to be approximately 27 to 29 percent for fiscal 2018.  The Company's effective tax rate excluding the impact of special items and the revaluation of the deferred tax accounts is now expected to be approximately 20 to 22 percent.  The Company believes providing estimated fiscal 2018 earnings per diluted share guidance provides investors the appropriate insight into the Company's ongoing operating performance.

Guidance Policy

Brinker provides annual guidance as it relates to comparable restaurant sales, earnings per diluted share, excluding special items, and other key line items in the statements of comprehensive income and will only provide updates if there is a material change versus the original guidance. We are unable to reliably forecast special items such as restaurant impairments, restaurant closures, reorganization charges and legal settlements without unreasonable effort.  As such, we do not present a reconciliation of forecasted non-GAAP measures to the corresponding GAAP measures.  If special items are reported in the remainder of fiscal 2018, reconciliations to the appropriate GAAP measures will be provided.

Non-GAAP Measures

Brinker management uses certain non-GAAP measures in analyzing operating performance and believes that the presentation of these measures in this release provides investors with information that is beneficial to gaining an understanding of the Company's financial results. Non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Reconciliations of these non-GAAP measures are included in the tables below.

Table 2: Reconciliation of net income excluding special items
Q2 18 and Q2 17; $ millions and $ per diluted share
Brinker believes excluding special items from its financial results provides investors with a clearer perspective of the Company's ongoing operating performance and a more relevant comparison to prior period results.
		Q2 18				EPS Q2 18				Q2 17				EPS Q2 17
Net Income		$	25.4			$	0.54			$	34.6			$	0.69
Special items1		9.3				0.20 Werbung Mehr Nachrichten zur Brinker International Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 10:07 - PR Newswire Premier Miton Global Renewables Trust Plc - Dividend Declaration 08:56 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Gresham Technologies Plc 08:56 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Accrol Group Holdings plc SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59