On October 19th, Brinker International (EAT) reported on the first quarter of fiscal 2022. For the period, net earnings were $13.2 million on revenue of $859.6 million with an EPS of $0.28. Comparable values for Q1 of the previous fiscal year were net earnings of $10.7 million on revenue of $728.2 million with an EPS of $0.23. Brinker International reported a 17 percent increase in same store sales for Q1 2022 compared to Q1 2021. Chili’s gained 13 percent and Maggiano’s 63 percent. The company cited increased labor costs and inflation in food inputs as reasons for a decline in operating margin.
The market responded negatively to the release with EAT falling 10.6 percent from the close on October 19th at $48.70 to $44.21, down 9.7 percent at the close on Wednesday October 20th. Over a 52-week period, EAT has ranged from $40.73 to $78.33 with a 50-day moving average of $50.58.
On a trailing 12-month basis, the company generated an operating margin of 6.5 percent and a profit margin of 3.9 percent with a 5.8 percent return on assets. Wyman Roberts, CEO noted, “The COVID surge starting August exacerbated the industry-wide labor and commodity challenge and impacted our margins and bottom-line more than we anticipated.” He added, “We have taken immediate incremental pricing actions, increasing our full year target to 3 percent to 3.5 percent to offset inflationary costs and protect margins as we move forward.”