Brinker International (NYSE: EAT), the casual dining giant behind Chili’s, delivered a robust second-quarter performance for CY2025, surpassing Wall Street’s expectations on key metrics. The company reported a significant 21% year-on-year increase in sales, reaching $1.46 billion and signaling strong consumer demand for its brands.
Despite the positive results, the company’s stock saw an immediate dip, trading down 4.3% to $148.39 following the announcement. This reaction suggests that while the quarter was impressive, investors may be looking closely at future growth prospects and overall market valuation.
Brinker International Q2 CY2025 Financial Highlights
The quarterly results painted a picture of solid operational and financial health, with Brinker outperforming analyst consensus across the board.
Revenue: $1.46 billion, a 1.6% beat against analyst estimates of $1.44 billion. This represents a 21% year-on-year growth.
Adjusted EPS: $2.49 per share, slightly above the $2.47 consensus estimate.
Adjusted EBITDA: $212.4 million, beating estimates of $208.9 million.
Operating Margin: Expanded significantly to 9.8%, up from 6.1% in the same quarter last year.
Same-Store Sales: Rose by an exceptional 19.8% year on year.
Full-Year Guidance: The company expects full-year revenue of around $5.65 billion. It also issued strong adjusted EPS guidance for the upcoming fiscal year 2026 of $10.20 at the midpoint, beating analyst estimates by 2.9%.
“Chili’s delivered another strong quarter with sales +24% driven by traffic of +16%,” said Kevin Hochman, President & CEO of Brinker International. “We now have delivered a Q4 2-year sales growth of +39% and 3-year of +45%.”
Dissecting the Growth Story
With $5.38 billion in revenue over the last 12 months, Brinker International stands as a major player in the restaurant industry. An analysis of its performance shows a consistent growth trajectory, with a compounded annual growth rate of 9% over the last six years (using 2019 as a pre-COVID baseline).
This growth is particularly noteworthy because it hasn’t been driven by aggressive expansion. The company’s restaurant count has remained relatively flat, increasing by only 14 locations over the past year to 1,628. This indicates that the revenue gains are primarily coming from improved performance at existing restaurants.
The Power of Same-Store Sales
The most telling metric from the report is the phenomenal growth in same-store sales, which measures the revenue generated by locations that have been open for at least a year. Brinker reported a 19.8% year-on-year increase in this area, an acceleration from its already impressive historical average.
This figure is crucial as it reflects a combination of two key factors:
Increased Traffic: More customers are visiting Chili’s and Maggiano’s.
Higher Ticket Averages: Customers are spending more per visit.
Achieving such strong same-store sales growth while maintaining a stable number of locations suggests that Brinker’s focus on operational efficiency and enhancing the customer experience at its established restaurants is paying off handsomely.
Key Takeaways and a Look Ahead
Brinker International’s Q2 results were undeniably strong. The company successfully beat analyst expectations on revenue, profit, and, most impressively, same-store sales. Furthermore, its optimistic earnings guidance for the next fiscal year provides a confident outlook from management.
However, sell-side analysts project a slowdown in revenue growth to 4.6% over the next 12 months, which may be tempering investor enthusiasm. The immediate drop in share price suggests the market had high expectations and is now weighing the company’s stellar recent performance against these more moderate future forecasts.
For investors, the quarter presents a classic dilemma: balancing spectacular short-term results and operational excellence against questions of long-term growth sustainability and the stock’s current valuation.
