Brinker shares drop as guidance falls short despite strong Q1

Investing.com -- Brinker International Inc (NYSE: EAT) shares fell 4.5% on Wednesday after the restaurant operator’s fiscal 2026 guidance disappointed investors despite reporting better-than-expected first quarter results.

The parent company of Chili’s Grill & Bar and Maggiano’s Little Italy posted adjusted earnings of $1.93 per share for its fiscal first quarter, exceeding analyst estimates of $1.74. Revenue reached $1.35 billion, surpassing the consensus forecast of $1.32 billion.

Chili’s was the standout performer with comparable restaurant sales surging 21.4% YoY, driven by 13.1% traffic growth. However, Maggiano’s struggled with a 6.4% decline in comparable sales as traffic fell 12.8%.

"Chili’s continues to deliver industry leading results with first quarter sales of +21% and traffic of +13%, against a tough macro environment," said Kevin Hochman, President & CEO of Brinker International.

Despite the strong quarterly performance, investors appeared concerned about the company’s outlook. Brinker reiterated its full-year fiscal 2026 guidance, projecting earnings of $9.90 to $10.50 per share on revenue of $5.6 billion to $5.7 billion. The midpoint of the revenue guidance falls below the analyst consensus of $5.71 billion.

The company’s restaurant operating margin improved to 16.2% of company sales in the first quarter, up from 13.5% in the same period last year. Brinker also repurchased $92 million of its common stock during the quarter.

While Chili’s exceeded expectations, management acknowledged challenges at Maggiano’s, noting several initiatives are underway as part of its "Back to Maggiano’s strategy" to improve performance at the Italian restaurant chain.

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