Brinker Provides Business Update Amid Coronavirus Pandemic

Brinker International, Inc. EAT recently provided business update in the light of the coronavirus pandemic. The company announced that more than 82% of Chili's and Maggiano's restaurants have reopened dining rooms across the United States. As of Jun 8, 873 Chili's restaurants with dining rooms have been reopened.

Comparable Restaurant Sales

Brinker is witnessing comparable restaurant sales improvement at Chilli’s and company-owned restaurants. Comps at Chili's for the week ended Apr 29, May 6, May 13, May 20, May 27 and Jun 3 declined 42.1%, 31.6%, 28.5%, 25.2%, 22.5% and 18.9% compared with the same period in the prior-year week, respectively.

Comps at Maggiano's for the week ended Apr 29, May 6, May 13, May 20, May 27 and Jun 3 decreased 72.1%, 73.8%, 61.4%, 70.8%, 66.4% and 69.9%, respectively. Moreover, comps at company-owned were down 45.9%, 37.1%, 33.4%, 31.7%, 28.3% and 25.6%, for the week ended Apr 29, May 6, May 13, May 20, May 27 and Jun 3, respectively.

Maggiano's is benefiting from robust digitalization. In the first half of fiscal 2020, Maggiano’s started testing electronic check presenters that facilitate pay at the table option. This initiative will not only provides convenience and efficiency to guests but also increases digital guest engagement. Maggiano’s also entered into an exclusive partnership with DoorDash to create a more affordable rate structure, making third party delivery more sustainable and efficient for the brand to operate. During fiscal second quarter, guests were provided the option of online ordering directly through Maggiano’s website apart from the DoorDash platforms.

Liquidity Updates

The company stated that due to rise in sales and disciplined expense management, it is now generating average weekly positive cash flow. As of Jun 3, 2020, cash on hand is nearly $113 million and revolver availability is $429 million, resulting in available liquidity of $542 million.

Shares of this Zacks Rank #2 (Buy) company have surged 38.6% in the past three months, compared with the industry’s rally of 16.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks to Consider

Some other top-ranked stocks in the same space includes Cracker Barrel Old Country Store, Inc. CBRL, Domino's Pizza, Inc. DPZ and Papa John's International, Inc. PZZA. Al these stocks have the same rank as Brinker.

In the past one month, shares of Cracker Barrel have gained 40.3%.

Domino's and Papa John's have an impressive long-term earnings growth rate of 12.8% and 8%, respectively.

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