DALLAS, April 30, 2024 /PRNewswire/ -- Brinker International, Inc. (NYSE:EAT) today reported financial results for the third quarter ended March 27, 2024. Third Quarter Fiscal 2024 Financial Highlights Company sales were $1,108.9 million in the third quarter of fiscal 2024 compared to $1,072.9 million in the third quarter of fiscal 2023. Comparable restaurant sales increased 3.3%, with an increase in comparable restaurant sales of 3.5% for Chili's and 1.7% for Maggiano's. The comparable restaurant sales increase at Chili's was primarily due to increased menu pricing and favorable dine-in traffic. The overall traffic decline of 1.8% includes a negative impact of approximately 2.5% from our strategic decision to de-emphasize virtual brands. Higher Company sales resulted in operating income margin increasing to 6.2% and restaurant operating margin (non-GAAP) increasing to 14.2% for the third quarter. Net income and diluted net income per share were $48.7 million and $1.08, respectively, in the third quarter of fiscal 2024. Diluted net income per share, excluding special items (non-GAAP), was $1.24 in the third quarter of fiscal 2024, compared to $1.23 in the third quarter of fiscal 2023. "Our strong third quarter results were driven by the continued progress on guest experience, team member experience, and traffic driving initiatives," said Kevin Hochman, Chief Executive Officer and President of Brinker International. "Those initiatives are allowing us to significantly outperform the industry on sales and traffic as well as continue to improve our restaurant four wall economics." Third Quarter Financial Results Third Quarter 2024 2023 Variance Company sales $ 1,108.9 $ 1,072.9 $      36.0 Total revenues $ 1,120.3 $ 1,083.2 $      37.1 Operating income $      69.9 $      64.2 $        5.7 Operating income as a % of Total revenues 6.2 % 5.9 % 0.3 % Restaurant operating margin, non-GAAP(1) $    157.1 $    143.3 $      13.8 Restaurant operating margin as a % of Company sales, non-GAAP(1) 14.2 % 13.4 % 0.8 % Net income $      48.7 $      50.7 $       (2.0) Adjusted EBITDA, non-GAAP(1) $    122.4 $    113.0 $        9.4 Net income per diluted share $      1.08 $      1.12 $    (0.04) Net income per diluted share, excluding special items, non-GAAP(1) $      1.24 $      1.23 $      0.01 Comparable Restaurant Sales(2) Q3:24 vs 23 Brinker 3.3 % Chili's 3.5 % Maggiano's 1.7 %   (1) See Non-GAAP Information and Reconciliations section below for more details. (2) Comparable Restaurant Sales include restaurants that have been in operation for more than 18 full months. Restaurants temporarily closed for 14 days or more are excluded from comparable restaurant sales. Percentage amounts are calculated based on the comparable periods year-over-year. Updates to Full Year Fiscal 2024 Guidance We are providing the following updates to our full year fiscal 2024 guidance: Net income per diluted share, excluding special items, non-GAAP, is expected to be in the range of $3.80 - $4.00; Total revenues are expected to be in the range of $4.33 billion - $4.35 billion; and Capital expenditures are expected to be in the range of $185 million - $195 million. We are reiterating the following full year fiscal 2024 guidance: Weighted average shares are expected to be in the range of 45 million - 46 million. The potential for changes in macroeconomic conditions, among other risks, could cause actual results to differ materially from those projected. We are unable to reliably forecast special items without unreasonable effort. As such, we do not present a reconciliation of forecasted non-GAAP measures to the corresponding GAAP measures. Third Quarter of Fiscal 2024 Operating Performance Segment Performance The table below presents selected financial information (in millions, except as noted) related to our segments' operational performance for the thirteen week periods ended March 27, 2024 and March 29, 2023: Chili's Maggiano's Third Quarter Variance Third Quarter Variance 2024 2023 2024 2023 Company sales $     988.4 $     953.2 $       35.2 $     120.5 $     119.7 $         0.8 Franchise revenues 11.2 10.2 1.0 0.2 0.1 0.1 Total revenues $     999.6 $     963.4 $       36.2 $     120.7 $     119.8 $         0.9 Company restaurant expenses(1) $     849.3 $     827.4 $       21.9 $     102.4 $     101.9 $         0.5 Company restaurant expenses as a % of Company sales 85.9 % 86.8 % (0.9) % 85.0 % 85.1 % (0.1) % Operating income $       97.2 $       88.3 $         8.9 $       12.3 $       12.2 $         0.1 Operating income as a % of Total revenues 9.7 % 9.2 % 0.5 % 10.2 % 10.2 % — % Restaurant operating margin, non-GAAP(2) $     139.1 $     125.8 $       13.3 $       18.1 $       17.8 $         0.3 Restaurant operating margin as a % of Company sales, non-GAAP(2) 14.1 % 13.2 % 0.9 % 15.0 % 14.9 % 0.1 %   (1) Company restaurant expenses includes Food and beverage costs, Restaurant labor and Restaurant expenses, and excludes Depreciation and amortization, General and administrative and Other (gains) and charges. (2) See Non-GAAP Information and Reconciliations section below for more details. Chili's Chili's Company sales increased primarily due to favorable comparable restaurant sales driven by increased menu pricing, partially offset by lower traffic driven by our strategic decision to de-emphasize our virtual brands and unfavorable menu item mix. Chili's Company restaurant expenses, as a percentage of Company sales, decreased primarily due to sales leverage, menu pricing, and lower delivery fees & to-go supplies, partially offset by increased advertising, hourly labor, and other restaurant expenses. Chili's franchisees generated sales of $216.2 million for the third quarter of fiscal 2024 compared to $213.6 million for the third quarter of fiscal 2023. Maggiano's Maggiano's Company sales increased primarily due to favorable comparable restaurant sales driven by increased menu pricing and favorable menu item mix, partially offset by lower traffic. Maggiano's Company restaurant expenses, as a percentage of Company sales, decreased slightly, primarily due to menu pricing, partially offset by increased repairs and maintenance and other restaurant expenses. Corporate General and administrative expenses increased $5.5 million in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023, as stronger expected operating performance drove higher incentive compensation. On a GAAP basis, the effective income tax rate was 9.6% in the third quarter of fiscal 2024. The effective income tax rate is lower than the statutory rate of 21% due primarily to leverage of the FICA tip credit. Excluding the impact of special items, the effective income tax rate was an expense of 12.4% in the third quarter of fiscal 2024. Webcast Information Investors and interested parties are invited to listen to today's conference call, as management will provide further details of the quarter and business updates. The call will be broadcast live on Brinker's website today, April 30, 2024 at 9 a.m. CDT: https://investors.brinker.com/events/event-details/q3-2024-brinker-international-earnings-conference-call For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on Brinker's website until at least the end of the day April 30, 2025. Additional financial information, including statements of income which detail operations excluding special items, and comparable restaurant sales trends by brand, is also available on Brinker's website under the Financial Information and Events & Presentations sections of the Investor tab. Forward Calendar SEC Form 10-Q for the third quarter of fiscal 2024 filing on or before May 6, 2024 Earnings release call for the fourth quarter of fiscal 2024 on August 14, 2024 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. About Brinker Brinker International, Inc. is one of the world's leading casual dining restaurant companies and home of Chili's® Grill & Bar, Maggiano's Little Italy,® and the It's Just Wings® virtual brand. Founded in 1975 in Dallas, Texas, we've ventured far from home, but stayed true to our roots. Brinker owns, operates or franchises more than 1,600 restaurants in the United States and 27 other countries and two U.S. territories. Our passion is making everyone feel special, and we hope you feel that passion each time you visit one of our restaurants or invite us into your home through takeout or delivery. Learn more about Brinker and its brands at brinker.com. Forward-Looking Statements The statements and tables contained in this release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made only based on our current plans and expectations as of the date such statements are made, and we undertake no obligation to update forward-looking statements to reflect events or circumstances arising after the date such statements are made. Forward-looking statements are neither predictions nor guarantees of future events or performance and are subject to risks and uncertainties which could cause actual results to differ materially from our historical results or from those projected in forward-looking statements. Such risks and uncertainties include, among other things, the impact of general economic conditions, including inflation, on economic activity and on our operations; disruptions on our business including consumer demand, costs, product mix, our strategic initiatives, our partners' supply chains, operations, technology and assets, and our financial performance; the impact of competition; changes in consumer preferences; consumer perception of food safety; reduced consumer discretionary spending; unfavorable publicity; governmental regulations; the Company's ability to meet its business strategy plan; loss of key management personnel; failure to hire and retain high-quality restaurant management and team members; increasing regulation surrounding wage inflation and competitive labor markets; the impact of social media or other unfavorable publicity; reliance on technology and third party delivery providers; failure to protect the security of data of our guests and team members; product availability and supply chain disruptions; regional business and economic conditions; volatility in consumer, commodity, transportation, labor, currency and capital markets; litigation; franchisee success; technology failures; failure to protect our intellectual property; outsourcing; impairment of goodwill or assets; failure to maintain effective internal control over financial reporting; downgrades in credit ratings; changes in estimates regarding our assets; actions of activist shareholders; failure to comply with new environmental, social and governance ("ESG") requirements; failure to achieve any goals, targets or objectives with respect to ESG matters; adverse weather conditions; terrorist acts; health epidemics or pandemics; tax reform; inadequate insurance coverage and limitations imposed by our credit agreements as well as the risks and uncertainties described in "Risk Factors" in our Annual Report on Form 10-K and future filings with the Securities and Exchange Commission. BRINKER INTERNATIONAL, INC. Consolidated Statements of Comprehensive Income (Unaudited)  (In millions, except per share amounts) Thirteen Week Periods Ended Thirty-Nine Week Periods Ended March 27, 2024 March 29, 2023 March 27, 2024 March 29, 2023 Revenues Company sales $            1,108.9 $            1,072.9