Brinker’s Profit Rises, but Chili’s Remains Weak
Brinker International Inc.’s fiscal third-quarter earnings rose, but same-restaurant sales at the company’s flagship Chili’s Grill & Bar fell as it’s trying to wean customers off discounts.
Chili’s is struggling as it tries to transition from a discount-reliant bar-and-grill chain to a casual-dining restaurant that can attract customers on the strength of items like its signature ribs and new items like tacos.
The restaurant is becoming more of a focal component for Brinker, especially after the company last month agreed to sell its On the Border chain to a private-equity firm for $180 million.
For the fiscal third quarter ended March 24, Chili’s same-restaurant sales fell 5%, highlighting the brand’s struggles. In addition, the costs of the restaurant’s new fare are weighing on margins. Chili’s remaining promotions—like an entree and appetizer for $9.99—are designed to attract customers and get them to try a revamped menu.
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