Brinker Q1 Fiscal 2027 Earnings: Chili’s Growth Lifts Revenue and Margins

Brinker International (NYSE: EAT) reported fiscal Q1 2027 total revenue of $1.4756 billion, up about 9.4% from $1.3492 billion a year earlier, while diluted EPS increased to $2.64 from $2.17. Chili’s 10.1% comparable-sales growth and positive traffic drove the quarter, lifting operating margins and cash flow, while Maggiano’s sales remained under pressure. The 13-week quarter ended September 23, 2026.

Core Earnings Data

Revenue growth translated into faster operating-income growth as restaurant-level leverage improved. GAAP net income rose more slowly because interest expense included a $17.6 million loss tied to the early redemption of Brinker’s 8.25% notes.

Adjusted EPS increased more sharply than GAAP EPS, while operating cash flow and free cash flow benefited primarily from higher operating income.

Business and Segment Performance

Chili’s remained the company’s primary growth engine. Company sales increased about 10.5% to $1.3665 billion, while comparable restaurant sales rose 10.1%. The comparable-sales gain included a 6.4% positive traffic contribution and 3.7% from pricing, with no contribution from mix shift.

Chili’s GAAP operating income rose to $205.0 million from $169.0 million, and its operating margin expanded to 14.8% from 13.5%. Non-GAAP restaurant operating margin reached 18.7%, up from 17.3%. Management attributed the sales performance to positive traffic, pricing, ongoing guest-experience initiatives and the launch of the Big Crispy chicken sandwich. The brand recorded its 22nd consecutive quarter of comparable-sales growth.

Maggiano’s moved in the opposite direction. Company sales declined about 4.5% to $94.7 million, and comparable restaurant sales fell 3.4%. Traffic decreased 5.1%, more than offsetting a 2.0% pricing contribution. The segment remained unprofitable on a GAAP basis, although its operating loss narrowed to $3.6 million from $4.1 million and its restaurant operating margin improved to 3.1% from 2.4%.

Profitability, Cash Flow, and Balance Sheet

Brinker’s non-GAAP restaurant operating margin expanded 150 basis points to 17.7% of company sales. At Chili’s, sales leverage more than offset higher commodity costs, hourly labor, advertising, repairs and maintenance, insurance, delivery fees and other restaurant expenses.

Cash generation improved alongside operating income. Capital expenditures increased to $63.4 million from $58.6 million, but the larger increase in operating cash flow drove free cash flow higher. Brinker said it used operating cash flow to repurchase $125.0 million of common stock and redeemed $350.0 million of 8.25% notes using its revolving credit facility. The company also paid $27.1 million to acquire franchise restaurants, an investing outflow not deducted in its non-GAAP free-cash-flow calculation.

Cash and equivalents declined to $30.7 million from $110.0 million at the June 2026 fiscal year-end. Long-term debt and finance leases, excluding current installments, increased to $451.0 million from $419.7 million following the refinancing and other capital uses.

Debt Redemption Tempered GAAP Profit Growth While Fewer Shares Lifted EPS

The difference among operating-income, net-income and EPS growth is a key feature of the quarter. Operating income increased about 28.1%, but net income rose about 13.9% as interest expense climbed to $24.6 million from $10.5 million, including the $17.6 million debt-extinguishment loss. A GAAP effective tax rate of 10.8%, helped by the FICA tip credit and stock-compensation tax benefits, provided a partial offset.

Excluding special items, net income increased to $119.1 million from $88.5 million. The decline in diluted weighted-average shares to 43.0 million from 45.8 million also helped diluted EPS grow faster than GAAP net income.

Fiscal 2027 Guidance

Brinker raised both its total-revenue and adjusted-EPS ranges for fiscal 2027. The outlook includes a 53rd operating week in the fourth quarter, which the company estimates will add approximately 2.0% to total revenue and $0.70 to adjusted diluted EPS.

Because the additional week contributes materially to the updated ranges, comparisons of the outlook with a standard 52-week year should separate the calendar benefit from underlying operating performance.

Recent Insider Transactions

The supplied six-month insider summary shows 285,556 shares purchased across 36 transactions and 180,040 shares sold across 19 transactions, producing net purchases of 105,516 shares. The latest ten listed transactions included four sales and six stock-award grants; all were reported as direct ownership transactions.

The zero values are the reported transaction values for the stock awards at a grant price of $0.00; they do not indicate that the awards have no economic value. These transactions alone do not establish insiders’ views of Brinker’s outlook.

Risks Investors Should Monitor

• Dependence on Chili’s: Chili’s generated most of Brinker’s sales and operating profit. A slowdown in its traffic or pricing contribution would reduce companywide growth and restaurant-level leverage.
• Maggiano’s traffic pressure: Comparable sales remained negative because lower traffic outweighed pricing, and the segment continued to report a GAAP operating loss.
• Restaurant cost inflation: Commodity costs, hourly labor, advertising, maintenance, insurance and delivery-related expenses remained headwinds even though sales leverage offset them this quarter.
• Cash use and financing: Share repurchases, restaurant acquisitions and debt refinancing contributed to lower cash and higher reported long-term debt and finance leases compared with fiscal year-end.
• Calendar contribution to guidance: The 53rd week is expected to provide about 2.0% of revenue and $0.70 of adjusted EPS, making it important to distinguish calendar-driven growth from the underlying run rate.

Conclusion

Brinker’s fiscal Q1 2027 performance was driven by Chili’s positive traffic, pricing and operating leverage, which outweighed continued weakness at Maggiano’s and lifted cash generation. The debt-redemption charge limited GAAP net-income growth, while adjusted earnings and a lower share count supported stronger per-share gains. The raised fiscal 2027 guidance is constructive, but investors should account for the additional operating week and continue monitoring Chili’s traffic, restaurant costs, Maggiano’s performance and balance-sheet changes.