Chili's parent stock tumbles 11% after labor challenges and higher food costs hit earnings

Asia's Tech News Daily

Hiring sign at Chili's bar and grill with plenty of incentives.UCG | Universal Images Group | Getty Images

Shares of Chili's parent Brinker International fell about 11% in premarket trading Wednesday after the restaurant company released preliminary earnings ahead of its investor day that showed higher labor and food costs ate into its profit margins.

“Brinker's first quarter delivered positive sales and continued to significantly outpace the industry in traffic,” Brinker CEO Wyman Roberts said in a statement. “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.”

Brinker said it earned 34 cents per share, excluding items. That's about half of the average analyst estimates of 69 cents per share from a Refinitiv survey.

The company's revenue and traffic came in as analysts were forecasting, but weren't strong enough to offset the higher costs. Brinker reported net sales of $876.4 million, in line with Wall Street's estimates. Same-store sales for Chili's and Maggiano's Little Italy also met analysts' expectations, although they dipped in August before recovering in September.

Other restaurant companies that are also dealing with industry-wide labor issues haven't been so lucky. Domino's Pizza's quarterly U.S. same-store sales growth turned negative for the first time in more than a decade in its latest quarter. CEO Ritch Allison blamed the labor environment, saying that the shortage of workers put pressure on the number of orders restaurants could receive. Some locations even shortened hours. 

It's likely a theme that will pop up again in other restaurants' earnings reports, and it weighed on a few of the stocks of Brinker's rivals Wednesday. Shares of Darden Restaurants fell 2%, while Cheesecake Factory's stock dropped by 3%.

Brinker said it is raising prices to fight the higher labor and commodity costs, with a target of 3% to 3.5% for its fiscal year, above its prior range of 2% to 2.5%. According to Raymond James analyst Brian Vaccaro, this action follows several years, before the pandemic, of having lower menu prices than the competition. While hiking prices helps Brinker protect its margins, it also runs the risk that customers will trade down to cheaper restaurants or opt to eat at home instead.

Brinker's stock has fallen 22% this year, dragging its market value down to $2.02 billion. The company is expected to report its full fiscal first-quarter results Nov. 3.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Rosatom: Sibir nuclear-powered icebreaker expected in Kara Sea in January

The Sibir nuclear-powered icebreaker is the second vessel of Project 22220, built by the Baltic Shipyard Read more »

Dutch mass case against pharmaceutical company Allergan because of dangerous breast implants

litigate American style. The Bureau Clara Wichmann foundation is sending pharmaceutical company Allergan this week a notice of liability on behalf of many tens of thousands of Dutch women with ... Read more »

Apple slumps on Wall Street on iPhone concerns

Photo: ANP Apple was under pressure on the stock exchanges in New York on Thursday after reports that the technology group is struggling with declining demand for iPhones. Investors continued ... Read more »

PE major Apollo Global Management puts BPO firm IGT Solutions on the block; seeks $400 mn-$500 million

Representative image Nearly three years after buying InterGlobe Technologies (now IGT Solutions) from Indigo Airlines owner InterGlobe Enterprises, private equity giant Apollo Global Management has put the leading BPO and ... Read more »

Rothermere raises offer for Daily Mail owner after investor backlash

The deal increases the value of the take-private bid to £871m after a previous proposal failed to convince a number of key shareholders. Read more »

Scientists identify reaction that may cause rare blood clots after AstraZeneca Covid vaccine

A paramedic prepares doses of AstraZeneca vaccine for patients at a walk-in COVID-19 clinic inside a Buddhist temple in the Smithfield suburb of Sydney on August 4, 2021.Saeed Khan | ... Read more »

From shy grandson of poor immigrant to department store billionaire: this man wants the Bijenkorf

Premium The best of De Telegraaf Through Annelie Langerak 16 min ago in FINANCIAL Tos Chirathivat (small photo) will most likely become the new owner of the Bijenkorf. ⓒ ANP/HH/Bloomberg/De ... Read more »

KLM wants clarity from crew due to vaccination obligation countries

Photo: ANP KLM airline has urged crew members this week to notify them if they do not want or cannot fly to certain destinations, for example because they have not ... Read more »

Demand for iPhone 13 lineup plummets ahead of holidays: report

Apple has told suppliers it’s seeing weakening demand for new iPhones, according to a report. Bloomberg via Getty Images Apple has told suppliers that demand for its new iPhone 13 ... Read more »

Owner Tinder settles with founders for hundreds of millions

Photo: ANP The current owner of Tinder is going to pay 441 million dollars (390 million euros) to the founders of the dating app. This puts an end to a ... Read more »

Staff of German factories Airbus will lay down work

Photo: ANP The employees of the German factories of aircraft manufacturer Airbus are going on strike. The work stoppages start on Thursday, which in some cases last until Sunday. The ... Read more »

Divorce of founders and owner Tinder is complete: more than $400 million

The founders claimed that Match Group, the current owner of Tinder, and its then parent company InterActiveCorp (IAC) underestimated Tinder based on wrong numbers. Match and IAC estimate the app’s ... Read more »

Budget Energie and NLE will adjust rates every month from now on

Photo: ANP Energy companies Budget Energie and NLE will adjust the variable rates every month instead of once every six months. The companies do this because of the rapidly rising ... Read more »

Teacher and civil servant can whistle for indexation again

Although pension funds across the board have been in better shape in the past six months, this is still insufficient for ABP, the largest fund in the Netherlands. The pension ... Read more »

Bloomberg: the Bijenkorf comes into Thai hands

Photo: ANP De Bijenkorf, together with other department stores from the British Selfridges Group, will be in Thai hands. An insider confirms this to Bloomberg news agency after reports in ... Read more »

Bharat Dynamics sign Rs 471.41-crore contract with Indian Army

Representative image (Image: Reuters) Bharat Dynamics Limited (BDL) on December 2 said it had signed a Rs 471.41-crore contract with the Indian Army for the refurbishment of IGLA-1M missiles. The ... Read more »

Largest pension fund in the Netherlands leaves premium unchanged

Photo: ANP People and companies affiliated with the ABP pension fund will no longer have to pay contributions next year. But an increase in pensions is not in it. The ... Read more »

Billionaire family hands Bijenkorf to Thai retail giant Financial

The Canadian billionaire family Weston has long wanted to get rid of the retail business and is said to have reached an agreement with the Thai conglomerate Central Group. In ... Read more »

IKEA Worli City Store spread across 80,000 sq ft to open in Worli on December 9

Consumers will be able to shop the entire IKEA range based on a well-integrated digital and physical shopping experience, the company said in a statement. Swedish home furnishings retailer IKEA, ... Read more »

Rising demand for convenience food boosts value addition in Indian seafood exports

Representative image Indian seafood exporters are churning out more value-added products to cater to the rising demand for convenience foods in overseas markets, particularly the US, after the outbreak of ... Read more »

PhonePe starts Rs 999 health insurance aimed at young first-time buyers

Digital payments and financial services company PhonePe said on December 2 that it has introduced a new health insurance plan that starts at Rs 999 to cater to young first-time health ... Read more »

MYRE Capital helps investors to acquire Rs 31 crore office space in Mumbai; its AUM crosses Rs 100 crore

Representative image MYRE Capital, which facilitates investors to have fractional ownership of commercial properties, has raised Rs 31 crore from high net-worth individuals for the purchase of nearly 18,000 square ... Read more »

Besi, ASML and ASMI at the bottom of the red AEX, Shell in the lead

The Dutch chip companies Besi, ASML and ASMI were hit hard on the Amsterdam stock exchange on Thursday. Investors were shocked by reports that the large American tech group Apple ... Read more »

Canara Bank raises Rs 1,500 crore via Basel-III compliant bond

State-owned Canara Bank on Thursday said it has raised Rs 1,500 crore by issuing Basel-III compliant bonds. “Our bank came out with issuance of Rs 1,500 crore of additional tier ... Read more »

Supermarkets: plastic food packaging still difficult to recycle

Photo: ANP Supermarkets are not yet meeting the industry targets for recycling plastic packaging. This is partly because this is technically difficult. As a result, only a small part of ... Read more »

No compensation for inflation at ABP

Participants of the ABP civil servants’ fund will not receive a higher supplementary pension next year to compensate for price increases, despite the rising inflation of currently more than 5 ... Read more »

Wealth First Po Standalone September 2021 Net Sales at Rs 7.59 crore, up 33.69% Y-o-Y

Reported Standalone quarterly numbers for Wealth First Portfolio Managers are: Net Sales at Rs 7.59 crore in September 2021 up 33.69% from Rs. 5.68 crore in September 2020. Quarterly Net ... Read more »

Shrenik Standalone September 2021 Net Sales at Rs 9.27 crore, down 94.74% Y-o-Y

Reported Standalone quarterly numbers for Shrenik are: Net Sales at Rs 9.27 crore in September 2021 down 94.74% from Rs. 176.16 crore in September 2020. Quarterly Net Loss at Rs. ... Read more »

Rocket Lab gives first look at plans for bigger, reusable Neutron rocket as it takes on SpaceX

Rocket Lab Rocket Lab on Thursday revealed more about the larger, more powerful Neutron rocket it is developing. “This is Neutron. It is an absolute beast,” Rocket Lab CEO Peter ... Read more »

Globe Textiles Standalone September 2021 Net Sales at Rs 84.60 crore, up 27.92% Y-o-Y

Reported Standalone quarterly numbers for Globe Textiles India are: Net Sales at Rs 84.60 crore in September 2021 up 27.92% from Rs. 66.14 crore in September 2020. Quarterly Net Profit ... Read more »

Libas Consumer Standalone September 2021 Net Sales at Rs 10.64 crore, up 12.6% Y-o-Y

Reported Standalone quarterly numbers for Libas Consumer Products are: Net Sales at Rs 10.64 crore in September 2021 up 12.6% from Rs. 9.45 crore in September 2020. Quarterly Net Profit ... Read more »

Bombay Super Standalone September 2021 Net Sales at Rs 17.18 crore, down 2.56% Y-o-Y

Reported Standalone quarterly numbers for Bombay Super Hybrid Seeds are: Net Sales at Rs 17.18 crore in September 2021 down 2.56% from Rs. 17.63 crore in September 2020. Quarterly Net ... Read more »

Mask Investment Standalone September 2021 Net Sales at Rs 0.02 crore, down 15.81% Y-o-Y

Reported Standalone quarterly numbers for Mask Investments are: Net Sales at Rs 0.02 crore in September 2021 down 15.81% from Rs. 0.03 crore in September 2020. Quarterly Net Profit at ... Read more »

Sundaram Standalone September 2021 Net Sales at Rs 27.47 crore, up 181.13% Y-o-Y

Reported Standalone quarterly numbers for Sundaram Finance Holdings are: Net Sales at Rs 27.47 crore in September 2021 up 181.13% from Rs. 9.77 crore in September 2020. Quarterly Net Profit ... Read more »

Libas Consumer Consolidated September 2021 Net Sales at Rs 19.70 crore, up 37.12% Y-o-Y

Reported Consolidated quarterly numbers for Libas Consumer Products are: Net Sales at Rs 19.70 crore in September 2021 up 37.12% from Rs. 14.37 crore in September 2020. Quarterly Net Profit ... Read more »

OPEC+ ministers discussing base plan of oil production recovery

OPEC+ member-states are restoring oil production at the pace of 400,000 barrels per day since August and this plan is the base one Read more »

Wealth First Po Consolidated September 2021 Net Sales at Rs 7.59 crore, up 32.34% Y-o-Y

Reported Consolidated quarterly numbers for Wealth First Portfolio Managers are: Net Sales at Rs 7.59 crore in September 2021 up 32.34% from Rs. 5.74 crore in September 2020. Quarterly Net ... Read more »

Sundaram Consolidated September 2021 Net Sales at Rs 14.41 crore, up 14.09% Y-o-Y

Reported Consolidated quarterly numbers for Sundaram Finance Holdings are: Net Sales at Rs 14.41 crore in September 2021 up 14.09% from Rs. 12.63 crore in September 2020. Quarterly Net Profit ... Read more »

Tesla unveils all-electric children's ‘Cyberquad' — starting at $1,900

Franz von Holzhausen, Tesla’s design chief, tweeted out a video of his children trying out the new product. Twitter / Franz von Holzhausen Elon Musk’s electric car company Tesla quietly ... Read more »

Cabinet sees no need for further compensation for inflation

Photo: ANP The caretaker government does not intend to do more to compensate households for the rapidly rising inflation. Various parties had asked State Secretary Dennis Wiersma (Social Affairs) for ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic