Analysis EAT
Chili's is raising prices and still drawing more diners
Parent company Brinker has raised its annual earnings target. Stronger restaurant sales are producing more operating profit and cash, although its smaller brand is still struggling.
Chili's is attracting more diners on top of an already strong year. Traffic at its comparable company-owned restaurants rose 6.4% in the first quarter of fiscal 2027, after a 13.1% increase a year earlier.
Higher prices played a part too. Menu pricing added 3.7%, helping sales at those restaurants grow 10.1%. That combination matters: the chain is getting more business from guests as well as charging higher prices.
Parent company Brinker International, which also owns Maggiano's Little Italy, reported the results for the quarter ended September 23, 2026. Chief Executive Officer Kevin Hochman credited value, marketing and restaurant operations, alongside the launch of a crispy chicken sandwich, for the continuing momentum.
More visits are reaching the bottom line
Brinker's operating profit rose to $151 million from $117.9 million, growing faster than revenue. The company kept 10.2% of revenue as operating profit, against 8.7% a year earlier, despite pressure from food, labor and other restaurant costs.
Reported net income increased to $113.3 million from $99.5 million. Cash from operations rose to $169.1 million from $120.8 million.
The progress is uneven across the two brands. Maggiano's comparable sales fell 3.4%, with fewer visits outweighing higher prices. Chili's is doing the heavy lifting.
A higher target with the same extra week
Brinker now expects fiscal 2027 adjusted earnings of $13.30 to $13.90 a share, up from the $12.60 to $13.40 range set in August. This measure removes selected costs and tax items from reported earnings, including the cost of an early debt refinancing in the latest quarter.
The year includes an extra operating week in the fourth quarter. Both the old and new annual forecasts already allowed for that week, so it does not explain the latest increase. The completed quarter itself contained the usual 13 weeks.
Stronger cash generation has supported investment and share repurchases, but July's redemption of $350 million of notes was a refinancing funded with bank borrowing. It was not a matching reduction in total debt.
The Brinker company profile follows the longer sales trend, the updated targets and the completed purchase of 12 franchised Chili's restaurants.