In terms of labor, staffing shortages cost Brinker 3–4 percent in sales during the first quarter. But matters are improving on that front; Roberts said labor has returned to pre-pandemic levels on average, with some hot spots, specifically in the Midwest and California. Through October, the company added an average of 1,000 employees per week.
Because of the greater than normal influx of new team members, Brinker experienced outsized costs in training and overtime. Taylor said the company considers these costs above normal operating levels, and he expects them to stay that way in the near-term. Brinker is working to remove these transitory costs from the system by the back half of the fiscal year.
“We are absolutely seeing better response to recruiting back into the restaurant,” Roberts said. “ … Now we’re in that process of just getting them trained up and proficient at the work.”
Looking ahead to the holiday season, he said traffic at Chili’s is historically elevated, but not in an extreme manner, so Roberts feels confident about the chain’s staffing levels supporting higher guest counts.
However, he added Maggiano’s could present a bigger issue if consumer demand rises above what’s been typically seen in the past.
“They’re working aggressively to staff up,” Roberts said. “That may be a little bit more of a headwind, but I think they’re going to be fully staffed to be able to handle business that we expect. Now if the environment is overheated, we may not be able to take all of the potential business that we could have gotten if it just becomes a really gangbuster holiday season.”
The Italian chain’s same-store sales decreased 0.2 percent in Q1 compared to 2019, and slipped 0.9 percent in October. Traffic rose 39 percent year-over-year, but sank 28.9 percent versus two years ago. Taylor said Maggiano’s will evaluate its pricing after the holiday season.
Chili’s ended the period with 1,234 domestic restaurants and 362 stores around the world. Maggiano’s has 54 units in the U.S.
Brinker earned $876.4 million in total revenues in Q1, up from $740.1 million last year and $786 million two years ago. Adjusted EBITDA was $69.4 million, compared to $65.6 million in fiscal 2021 and $68.4 million in fiscal 2020.