Brinker International, Inc. Q1 FY2026 earnings call

• Chili's Success: Strong same-store sales and traffic for 18 consecutive quarters. World-class marketing and brand building driving guests in. Hospitality initiatives improving guest experience scores. Tokenized data shows stable guest frequency.
• Maggiano's Turnaround: 4 pillars for stabilization including classic recipes, service improvement, guest-facing repairs, and ownership pride. Annual conference with positive response.
• Financials: Total revenues $1.35B, +18.5% y-o-y. Consolidated comp sales +18.8%. Chili's comps +21.4%, Maggiano's -6.4%. Restaurant operating margin 16.2%, +270 basis points y-o-y.

Chili's: Q1 same-store sales were +21.4%, driven by 13% traffic increase. Ribs sales up 35% with 29% improved profitability. Frozen Patrón Margaritas sell 2x units of old platform. New items contribute to sales and food grade scores. Revenue contribution significant. Maggiano's: Q1 comp sales negative 6.4%. Turnaround plan with 4 pillars: classic recipes, service improvement, guest-facing repairs, ownership pride.

• Chili's on track to beat original goals, but Maggiano's softness and investments offset gains.
• Higher commodity tariffs and inflation in workers' comp/health insurance. Guidance remains unchanged with Chili's same-store sales normalizing to mid-single digits for the balance of fiscal year.

• Commodity tariffs pose a risk.
• Inflation in workers' comp and health insurance.
• Softness at Maggiano's impacting overall results.

Q: Chris O'Cull asked about leveraging tokenized consumer data for Chili's growth.

A: Kevin Hochman said they'll track monthly cohorts to understand guest frequency and impact of investments.

Q: David Palmer asked about young consumers and menu renovation.

A: Kevin Hochman said young consumers are repeating as often as others, and menu renovation includes bringing back Skillet Queso and planning for chicken sandwiches and other items.

Q: John Ivankoe asked about kitchen equipment and reimaging.

A: Kevin Hochman discussed the reimage program to return to original Chili's vibe and a team looking at kitchen equipment for future growth.

Q: Jeffrey Farmer asked about traffic and price.

A: Mika Ware said traffic assumptions are similar, price expected to be around 4% for Chili's, and mix in a neutral zone.

Q: Dennis Geiger asked about traffic and price.

A: Mika Ware said traffic assumptions are similar, price around 4%, and mix in neutral.

Q: Christine Cho asked about new queso feedback and North of 6.

A: Kevin Hochman discussed queso feedback and North of 6 initiatives progress.

Q: Sara Senatore asked about Maggiano's turnaround.

A: Kevin Hochman said Maggiano's turnaround has similar challenges, smaller size, but focus on classic recipes and service.

Q: Andrew Strelzik asked about pricing strategy and unit growth.

A: Mika Ware discussed layered pricing strategy and unit growth team ramping up.

Q: Brian Vaccaro asked about Maggiano's impact on EPS and R&M costs.

A: Mika Ware said Maggiano's could impact Q2 EPS by 6-8%, and R&M costs are favorable for Chili's.

Q: Jon Tower asked about guest cohorts and advertising spend.

A: Kevin Hochman said they're learning about guest entry points, and Mika Ware discussed advertising spend with Q2 increase.

Q: Brian Harbour asked about tariffs and pricing.

A: Mika Ware discussed tariff impact on beef and pricing taken in October and planned for January.

Q: Jeffrey Bernstein asked about consumer slowdown and margin.

A: Kevin Hochman said no evidence of slowdown at Chili's, and Mika Ware discussed margin compression potential.

Q: Alex Slagle asked about people pipeline.

A: Kevin Hochman said better talent pool and focus on ownership training for teams.

Q: Margaret-May Binstock asked about value messaging.

A: Kevin Hochman discussed shift back to value messaging.

Q: James Sanderson asked about unit growth and ribs.

A: Mika Ware said focusing on dine-in format, and ribs sales up 35% in Q1 with continued growth expected.