Brinker International’s Revenues Rise 5.4%
Brinker International: Investors Casually Dine On 2Q15 Earnings (Part 6 of 11)
Revenue sources
Brinker International (EAT) reported 5.4% year-over-year revenue growth to $742 million in the second quarter ending December 2014. Revenue was $704 million in the same quarter last year.
The company reports its revenues from these sources:
company-owned restaurants
franchised restaurants
It’s a revenue mix that’s similar to other restaurant chains like Yum! Brands (YUM) and McDonald’s (MCD). YUM operates restaurants under a combination of the above two business models. There are, however, restaurants like Chipotle Mexican Grill (CMG) that don’t franchise their restaurants.
Company-owned sales
Brinker International’s reported company-owned revenues of $717 million, up 4.8% from $684 million in the same quarter last year.
Almost 96% of Brinker International’s revenues come from company-owned restaurant locations. Of its 1,634 restaurants, the company owns 826 Chili’s restaurants in the US. Only 440 restaurants are franchises . The company has 319 restaurants internationally. Brinker also owns all of its 49 Maggiano’s Little Italy restaurants. Overall, the company owns 53% of its total unit count.
Brinker International stated that company-owned revenues were driven by a same-store sales increase of 3.7% that was driven by a 2% increase in traffic.
If you want to invest in a diversified restaurant portfolio, you might consider the Consumer Discretionary Select Sector SPDR Fund (XLY). This ETF holds about 37% of retail stocks including restaurants, making it a good alternative to individual stocks.
Franchise sales
Franchise and other revenues grew 25% to $25.1 million, from $20 million in the same quarter last year.
About 4% of remaining revenues came from franchised locations. When the quarter ended on December 2014, the company had 47% of its restaurants franchised.
In the next part of this series, we’ll discuss Brinker International’s cost of doing business.
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