Brinker International Releases Preliminary Earnings Stating Increasing Food and Labor Costs
Oct 20, 2021 By MarketDepth
Brinker International (NYSE: EAT), Chili’s parent company, tumbled 11% during premarket trading Wednesday after reporting preliminary earnings that highlighted increasing labor and food costs as well as their impact on profit margins. The announcement was presented in advance of the company’s Investor Day to be held on October 20,2021.
“Brinker’s first quarter delivered positive sales and continued to significantly outpace the industry in traffic. But the COVID surge starting in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and bottom line more than we anticipated. We are responding to these COVID headwinds with increased focus on hiring and retention efforts, and working with our partners to gain further stabilization of the supply chain environment. In addition, we have taken immediate incremental pricing actions, increasing our full year target to 3% – 3.5%, to offset inflationary costs and protect margins as we move forward.”Wyman Roberts, Chief Executive Officer and President
Brinker reported earnings USD0.34 per share, not including items. The total is less than half of analysts estimated USD0.69 per share.
Rising Costs Impacted Results
Despite revenue and traffic meeting analysts expectations, the unexpecting high costs ultimately impacted the results. The American multinational company disclosed net sales of USD876.4 Million, which were also up to par with Wall Street analyst estimates.
Stock Down 22% on the Year
Brinker’s stock plummeted 22% throughout the year and has a current market value of USD2 Billion.