Brinker International, Inc. announced Thursday results for the fiscal fourth quarter, which ended June 24.
- Earnings per diluted share, excluding special items, increased 10.6 percent to $0.94 compared to$0.85 for the fourth quarter of fiscal 2014. Earnings per diluted share, excluding special items, increased 14 percent to $3.09 compared to $2.71 for the full year fiscal 2014 (see non-GAAP reconciliation below)
- On a GAAP basis, earnings per diluted share increased 114 percent to $0.92 compared to $0.43 for the fourth quarter of fiscal 2014 driven primarily by pre-tax charges of $39.5 million recorded in the prior year related to litigation reserves. On a GAAP basis, earnings per diluted share increased to $3.05, compared to $2.26 for the full year fiscal 2014
- Brinker International company sales increased 0.5 percent to $738.4 million
- Chili's company-owned comparable restaurant sales decreased 0.8 percent
- Maggiano's comparable restaurant sales decreased 0.1 percent
- Chili's franchise comparable restaurant sales increased 1.9 percent, which includes a 2.1 percent increase for U.S. franchise restaurants and a 1.2 percent increase for international franchise restaurants
- Restaurant operating margin,as a percent of company sales, improved around 80 basis points to 18.5 percent compared to 17.7 percent for the fourth quarter of fiscal 2014
- For fiscal 2015, cash flows provided by operating activities were $368.6 million and capital expenditures totaled $140.3 million. Free cash flow was around $228.3 million
- The company repurchased around 1.5 million shares of its common stock for $89.2 million in the fourth quarter and a total of around 5.4 million shares for $306.3 million year-to-date
- The company paid a dividend of 28 cents per share in the fourth quarter, an increase of 17 percent over the prior year fourth quarter, and declared a dividend of 28 cents per share to be paid in the first quarter of fiscal 2016
"We delivered solid sales and earnings performance for fiscal 2015, and we improved margins for both the fourth quarter and fiscal year," says Wyman Roberts, chief executive officer and president. "We experienced some comp sales challenges during the quarter, which we're already taking steps to address.”
"Looking ahead to fiscal 2016, we're excited about our new My Chili's Rewards program and have signed up 2.6 million members in just over two months since the national launch,” he adds. “We're also focused on implementing our differentiated culinary point of view and enhancing our digital guest experience, which are key components of our plan to drive fiscal 2016 sales and traffic. We remain confident in our long-term strategy to deliver top line growth and increased shareholder value.”
Chili’s fourth quarter company sales decreased 0.3 percent to $638.2 million from $639.8 million in the prior year primarily due to decreases in comparable restaurant sales, partially offset by increases in restaurant capacity.
As compared to the prior year, Chili's restaurant operating margin improved. Cost of sales, as a percent of company sales, was positively impacted by favorable menu pricing and commodity pricing related to cheese, avocados, limes and oil, partially offset by unfavorable menu item mix and commodity pricing primarily related to fajita meat.
Restaurant expenses, as a percent of company sales, decreased slightly due to lower asset retirements, favorable utilities and the timing of restaurant opening expenses, partially offset by expenses associated with the launch of My Chili's Rewards. Restaurant labor, as a percent of company sales, was flat compared to the prior year, as the benefit of lower employee health insurance expense was offset by higher wage rates.
Maggiano’s fourth quarter company sales increased 5.3 percent to $100.2 million from $95.2 million in the prior year primarily due to increases in restaurant capacity.
As compared to the prior year, Maggiano's restaurant operating margin improved. Cost of sales, as a percent of company sales, was positively impacted by menu item changes and increased menu pricing, partially offset by unfavorable commodity pricing on beef and seafood.
Restaurant expenses, as a percent of company sales, were positively impacted by leverage related to higher company sales, the timing of restaurant opening expenses, and favorable utilities and workers' compensation insurance expense, partially offset by higher advertising costs. Restaurant labor, as a percent of company sales, was flat.
Franchise and other revenues increased 3.5 percent to $25.8 million for the fourth quarter compared to $24.9 million in the prior year driven primarily by royalty revenues related to Chili's new retail food products, higher revenues associated with tabletop devices, and higher royalty income primarily driven by international franchise restaurant openings. U.S. franchise comparable restaurant sales increased 2.1 percent and international comparable restaurant sales increased 1.2 percent. Brinker franchisees generated approximately $426 million in sales for the fourth quarter of fiscal 2015.