Chili’s Sales Momentum and Strong FY27 Outlook Drive Brinker to a Record High

Chili’s Turnaround Gains Credibility as Brinker Looks to Fiscal 2027

Brinker International (EAT) surged after its fiscal fourth-quarter report showed continued strength at Chili’s and management issued a stronger-than-expected fiscal 2027 outlook. Fourth-quarter revenue reached approximately $1.54 billion, up 5.1% year over year, while adjusted earnings per share increased to $3.07 from $2.49 a year earlier.

The market reaction centered less on the headline quarterly results and more on the operating trends underneath them. Chili’s comparable restaurant sales increased 5.6%, including a 1.5% increase in traffic, while management said momentum accelerated further in July. Brinker also projected fiscal 2027 revenue of $6.15 billion to $6.27 billion and adjusted EPS of $12.60 to $13.40.

Key Points

• Chili’s comparable restaurant sales rose 5.6% in the fourth quarter, supported by 4.3% pricing and 1.5% positive traffic, while Brinker said Chili’s momentum accelerated in July.
• Brinker guided fiscal 2027 revenue to $6.15 billion to $6.27 billion and adjusted EPS to $12.60 to $13.40, with both midpoints above the analyst expectations provided in the content input.
• Chili’s continued to outperform Maggiano’s, where comparable sales declined 2.5% and company sales fell 7.8% year over year.

Chili’s Traffic and Value Strategy Drive the Turnaround

The core driver behind EAT stock’s move was another quarter of evidence that Chili’s turnaround is holding.

Chili’s company sales increased to $1.41 billion from $1.33 billion a year earlier, while comparable restaurant sales rose 5.6%. Importantly, the gain was not driven by pricing alone. Menu pricing contributed 4.3%, while traffic increased 1.5%.

That traffic growth stands out because Chili’s was comparing against a particularly strong period a year earlier, when comparable sales had increased 23.7%. For the full fiscal year, Chili’s comparable restaurant sales rose 9.2%, following a 25.3% increase in fiscal 2025.

CEO Kevin Hochman said the fourth quarter completed five consecutive years of same-store sales growth at Chili’s, producing a cumulative increase of 71% over that period. Management attributed the performance to brand relevance, value positioning, streamlined operations, restaurant investment and continued menu innovation.

One of the newest contributors is the Big Crispy Chicken platform. The content input says sandwich sales increased from roughly 20 per restaurant per day before the launch to about 55 by the end of the quarter.

Management also continued emphasizing everyday value through products including the Big Smasher, Big QP and Big Crispy Chicken. That strategy has allowed Chili’s to combine positive traffic with menu pricing rather than relying only on discounts to drive visits.

Why Did Brinker Stock Hit an All-Time High Despite a Mixed Quarter?

The quarter itself was solid but not uniformly stronger than expectations.

Revenue of roughly $1.54 billion was essentially in line with analyst forecasts, while adjusted EPS of $3.07 was slightly below one consensus estimate of $3.09. Adjusted EBITDA of $227.6 million was also below the $232.5 million estimate included in the content input.

Yet the stock climbed sharply because investors focused on forward-looking indicators.

Company-wide comparable restaurant sales accelerated to 5.0% from 3.3% in the prior quarter. Chili’s delivered 5.6% comparable sales growth and positive traffic, while management reported that July sales and traffic accelerated significantly from fourth-quarter levels.

Operating performance also improved. Brinker’s operating margin rose to 10.9% from 9.8% a year earlier, while restaurant operating margin increased to 18.0% from 17.8%. At Chili’s specifically, restaurant operating margin reached 18.6%, up from 18.2%.

Net income increased to $131.1 million from $107.0 million, while adjusted EBITDA rose to $227.6 million from $212.4 million.

The divergence between Chili’s and Maggiano’s remains notable. Maggiano’s comparable restaurant sales declined 2.5%, including a 5.3% traffic decline, while company sales fell to $112.6 million from $122.1 million.

However, the content input notes that Maggiano’s represents only about 8% of Brinker’s overall sales, making Chili’s performance considerably more important to the company’s consolidated results.

Strong FY27 Guidance Shifts Attention to the Next Growth Phase

Brinker’s initial fiscal 2027 guidance became one of the strongest catalysts in the report.

Management expects total revenue between $6.15 billion and $6.27 billion. At the midpoint, that was above the analyst estimate provided in the content input.

Adjusted EPS is projected between $12.60 and $13.40, giving a midpoint of $13.00. That compares with analyst expectations ranging from approximately $10.76 to $12.50 across the supplied sources.

Fiscal 2027 will include a 53rd operating week. Brinker estimates that the extra week will add approximately 2% to annual revenue and about $0.70 to adjusted EPS.

Capital expenditures are expected to range from $265 million to $285 million.

Brinker is also increasing its capacity to return capital. The company repurchased $400 million of common stock during fiscal 2026, and its board authorized a total of $750 million under the existing share repurchase program effective August 10.

The restaurant operator generated $789.4 million in operating cash flow during fiscal 2026, up from $679.0 million a year earlier.

What It Means for Investors

The key market signal from Brinker’s results is that investors appear to be treating Chili’s recent performance as more than a short-lived recovery.

Comparable sales remain positive despite difficult year-over-year comparisons, and traffic growth has continued alongside pricing. July acceleration adds another data point suggesting that the momentum seen in the fourth quarter extended into the new fiscal year.

The composition of that growth matters. Chili’s Q4 comparable sales included 1.5% positive traffic rather than relying entirely on menu pricing, while management’s everyday-value strategy and menu launches continue to generate customer engagement.

At the same time, the business is not uniformly strong. Maggiano’s remains under pressure, with declining traffic, lower sales and weaker restaurant-level profitability. Input costs also remain a factor. Chili’s food and beverage expenses were affected by higher beef costs and temporary produce inflation related to a late freeze in Florida.

The fiscal 2027 outlook therefore becomes the next benchmark. Brinker is forecasting significantly higher adjusted earnings while expecting continued revenue growth, and investors will be watching whether Chili’s can sustain traffic growth and margins as comparisons remain demanding.

Conclusion

Brinker International’s latest earnings reaction reflects a shift in investor focus from proving that Chili’s can recover to determining how durable that recovery can become.

The fourth-quarter headline numbers were not exceptional relative to expectations, but the underlying business trends were stronger. Chili’s delivered 5.6% comparable sales growth, generated positive traffic and continued to expand operating margins, while management reported further acceleration in July.

Fiscal 2027 guidance added to that momentum, with Brinker projecting revenue of $6.15 billion to $6.27 billion and adjusted EPS of $12.60 to $13.40.

For EAT stock, the market’s response suggests that the combination of Chili’s traffic growth, menu innovation, everyday value and stronger forward earnings expectations is carrying more weight than the modest fourth-quarter earnings miss.

FAQs

Why did Brinker International stock rise after earnings?

Brinker International stock rose because investors focused on strong Chili’s comparable sales, positive traffic, accelerating July trends and fiscal 2027 revenue and earnings guidance that came in above expectations, rather than the modest fourth-quarter adjusted EPS miss.

How did Chili’s perform in the fourth quarter?

Chili’s comparable restaurant sales increased 5.6% in the fourth quarter, including a 4.3% contribution from pricing and a 1.5% increase in traffic. Chili’s company sales increased to $1.41 billion from $1.33 billion a year earlier.

What is Brinker International’s fiscal 2027 guidance?

Brinker expects fiscal 2027 total revenue of $6.15 billion to $6.27 billion and adjusted earnings per share of $12.60 to $13.40. Fiscal 2027 includes a 53rd operating week, which the company estimates will add approximately 2% to revenue and $0.70 to adjusted EPS.

How is Maggiano’s performing compared with Chili’s?

Maggiano’s continued to underperform Chili’s. Fourth-quarter comparable restaurant sales declined 2.5%, including a 5.3% decline in traffic, while company sales fell to $112.6 million from $122.1 million a year earlier.

How much stock is Brinker authorized to repurchase?

Brinker repurchased $400 million of common stock during fiscal 2026. Effective August 10, 2026, the company’s board authorized a total of $750 million under its existing share repurchase program.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

Go Beyond the Market Brief with Market Edge

Follow SharperTrades’ complete approach to trading and investing, combining active trade opportunities through Block Orders, long-term research through Stock Investor, and structured market education through the Swing Trading Masterclass. Try Market Edge for $19 your first month →

Explore Research with Stock Investor

Stock Investor is SharperTrades’ platform for long-term investing research and portfolio management. Members receive research reports, portfolio updates, conviction tracking, and in-depth analysis designed to support disciplined investment decisions.

Explore Active Trading & Income Strategies

Block Orders tracks institutional activity and highlights active trade setups and price behavior across long and short opportunities.

For options-focused traders, Essential Option Income provides a structured approach to options income strategies, while Pro Option Trader offers a broader range of options strategies and trade opportunities.

Think More Clearly with SteadyCapital

SteadyCapital is SharperTrades’ decision-support system for long-term investors, built around the SteadyCapital Method™. Review investment ideas, challenge assumptions, evaluate valuation and risk, compare companies, and think through important buy, hold, add, trim, or sell decisions before you act.

Risk Disclosure

All content is provided for educational purposes only and does not constitute investment advice. Trading involves risk, and past performance is not indicative of future results. Please review our full Risk Disclosure for additional information.