Brinker International is the IBD Stock Of The Day for Friday. EAT stock is closing in on a buy point as shares work back toward record highs.
Brinker International is the parent company behind Chili's Grill & Bar and Maggiano's Little Italy. The Dallas-based company owns, operates or franchises more than 1,600 restaurants in the U.S. and 28 other countries.
During its Q3 results from late April, Brinker served up earnings growth of 115% to $2.66 per share. Sales jumped 27% to over $1.42 billion. The results topped FactSet expectations for earnings of $2.57 per share on $1.39 billion in revenue.
Brinker has now averaged 179% earnings growth over the past three quarters.
Overall comparable restaurant sales jumped 28.2% for the quarter, driven by a 31.6% spike in same-store sales at Chili's. Maggiano's comparable sales ticked up 0.4%.
Chili's traffic surged 21%, while a favorable menu mix and pricing also contributed to the sales jump.
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Brinker has seen Chili's successfully eat into McDonald's market share for burgers, with an attractively-priced offering that stacks up well against the increasingly expensive Big Mac meal.
McDonald's for its quarterly results in May noted that global comparable sales declined 1%. U.S. comparable sales declined 3.6%, primarily driven by a slip in guest count.
Brinker International also lifted its 2025 guidance on results. The restaurateur expects revenue to range from $5.33 billion to $5.35 billion, up from its prior forecast for $5.15 billion to $5.25 billion.
Brinker lifted its adjusted earnings outlook to range from $8.50 to $8.75 per share. It previously guided for earnings between $7.50 and $8 per share.
Analysts polled by FactSet expect full-year earnings of $8.79 per share adjusted on $5.34 billion in sales.
Brinker International Stock
Brinker International is a member of the IBD Leaderboard Watchlist and was added to this month's list of new buys by the best mutual funds.
EAT stock eased slightly Friday, with shares holding above their 10-day moving average.
Brinker International is trading in a cup-with-handle base with a 177.91 buy point.
Shares on Feb. 4 hit a record high of 192.22 before retreating to a 2025 low of 122.07 in early April.
EAT stock rallied almost 29% in May and rebounded above its 50-day line during the month.
Brinker International has a 21-day average true range ratio of 4.04%.
The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
Shares have rallied almost 32% so far this year.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
