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The call conveyed broad operational momentum and top‑line strength—Chili's delivered sustained same‑store growth, market share gains, a highly encouraging chicken sandwich launch, EPS upside and active capital deployment—while also acknowledging tangible near‑term headwinds from commodity inflation, repair & maintenance catch‑up, margin pressure, and an underperforming Maggiano's that requires continued turnaround work. Management emphasized continued investments (reimages, technology, staffing optimization) to drive sustainable traffic and margin expansion.
Brinker updated fiscal 2026 guidance to annual revenues of $5.78–$5.82 billion and adjusted diluted EPS of $10.60–$10.85, with capital expenditures of $240–$250 million and a weighted average share count of 44.7–45.0 million; management assumes wage and commodity inflation in the low single digits and a tax rate of ~19%. They expect average annual unit volumes to approach $5.0 million, forecast year-over-year margin expansion of roughly 30–40 basis points, plan to complete another 8–10 Chili’s reimages this fiscal year (60–80 in FY27) en route to a 10% annual reimage cadence by 2028, and aim to ramp new-unit growth to a run rate by FY29; liquidity actions include repurchasing $108 million of stock in Q3 and the planned early call of the $350 million 8.25% bonds in FY27 using a $1 billion revolver.
20th consecutive quarter of same‑store sales growth; consolidated comparable restaurant sales +3.3% in Q3 and Chili's same‑store sales +4.0% for the quarter. Chili's achieved mid‑single‑digit comps in February and March (5.9% each) and started April with continued mid‑single‑digit sales and positive traffic.
Total revenues of $1.47 billion in Q3, up 3.2% year‑over‑year; adjusted diluted EPS $2.90 versus $2.66 a year ago; adjusted EBITDA of $223.7 million, up 1.4% year‑over‑year.
Chili's outperformed the casual dining industry by ~420 basis points in Q3, with outperformance accelerating into April to ~560 basis points vs. the industry.
Chili's named Ad Age Brand of the Year for the second straight year; ranked #2 casual dining brand for sales and #1 casual dining traffic brand on the top 500 list for 2025.
New chicken sandwich platform launched April 14; platform is selling 161% more sandwiches vs. prelaunch in first two weeks and significantly outpaced in‑market tests. Internal tests showed the Big Crispy filet was >80% bigger than leading fast‑food premium chicken sandwich filet.
Operational metrics improved: Guests With A Problem (GWAP) declined to 1.9%, food grade at 75%, and intent to return reached an all‑time best of 79%, supporting confidence in durable traffic gains and cohort retention.
Repurchased $108 million of common stock in Q3; plan to call $350 million 8.25% bonds early in fiscal 2027 to save interest expense; maintained strong free cash flow to support investments and shareholder returns.
Completed first four Chili's reimages with positive early sales lifts; plan to complete another 8–10 reimages this fiscal year and 60–80 in fiscal 2027, targeting a 10% annual reimage cadence beginning in 2028. Expect average annual unit volumes to approach $5.0M for the year.
Good day, and welcome to the Brinker International's Q3 F '26 Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Kim Sanders, Vice President of Investor Relations. Ma'am, the floor is yours.
Thank you, Holly, and good morning, everyone, and thank you for joining us on today's call. Here with me today are Kevin Hochman, Chief Executive Officer and President of Brinker International and President of Chili's; and Mika Ware, Chief Financial Officer. Results for our third quarter were released earlier this morning and are available on our website at brinker.com. As usual, Kevin and Mika will first make prepared comments related to our strategic initiatives and operating performance. Then we will open the call for your questions. Before beginning our comments, I would like to remind everyone of our safe harbor regarding forward-looking statements. During our call, management may discuss certain items, which are not based entirely on historical facts. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
All such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include factors more completely described in this morning's press release and the company's filings with the SEC. And of course, on the call, we may refer to certain non-GAAP financial measures that management uses in its review of the business and believes will provide insight into th...