Step Away From the Brinker
The following analysis was published earlier today on Street Insight , and is being republished here as a bonus for TheStreet.com readers.
There was little to like from Brinker International (EAT) today when you consider that:
EPS and revenue missed targets;
same-store sales are lousy across the board for all of its four concepts; poor marketing decisions hurt the company in the quarter; cost pressures are going to hurt margins; and, the company has lightened up on new unit-growth plans for fiscal year 2008.
Some Cheer in the International MarketEAT added 55 new units systemwide (company and franchised) during the quarter and added to key locations such as Houston, Atlanta and Southern California. The majority of the new restaurants are Chili's brand. EAT is working to rebalance its company/franchise mix from 80/20 to 70/30 by the end of the year. Franchise success is evident with the Macaroni Grill, and On The Border concepts are generating faster growth than Chili's franchises. Momentum is building in international markets such as the Middle East and Latin America, having added seven new restaurants with a total of nine by year-end, bringing the total international count to 155 in 23 countries. Per the company's press release, a total of 1,756 restaurants were open as of the end of the quarter.
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