(Rewrites first paragraph; adds analyst comment; updates stock
action; changes dateline from DETROIT)

LOS ANGELES (Reuters) - Brinker International Inc
<EAT.N>, owner of the Chili's Grill & Bar chain, forecast
higher fiscal-year operating margins as it benefits from a
simpler menu that requires less labor, sending its shares up
nearly 5 percent.

The company said it expected profit of $1.30 to $1.42 per
share for the fiscal year that began on July 1, compared with
Wall Street's average estimate of $1.38.

That outlook assumes an improvement of 70 to 100 basis
points in operating margin, with sales at restaurants open at
least 18 months flat to down 2 percent.

"Guidance looks realistic," JPMorgan analyst John Ivankoe
said in a client note. Ivankoe was looking for 2011 operating
margins to improve 10 basis points.

Shares of Brinker rose 4.7 percent to $15.59 in morning New
York Stock Exchange trading.

Brinker said Thursday that overall sales at restaurants
open at least 18 months fell 3.4 percent during its fiscal
fourth quarter. In June, it sold its On the Border Mexican
Grill business to a unit of private equity firm Golden Gate
Capital.

Same-restaurant sales fell 4.1 percent at Chili's, which
accounts for about 85 percent of Brinker's sales.

The bar and grill segment where Chili's operates -- and is
working to revive its appeal -- is crowded and fiercely
competitive. Rivals include Ruby Tuesday Inc, DineEquity
Inc's Applebee's and newer entrant Buffalo Wild Wings
Inc.

Ruby Tuesday shares were down 2.9 percent, DineEquity fell
0.3 percent and Buffalo Wild Wings was off 1.1 percent.

Net income at Dallas-based Brinker rose to $63.6 million,
or 62 cents per share, in the fourth quarter ended June 30 from
$42.1 million, or 41 cents a share, a year earlier.

Excluding discontinued operations, the company earned 44
cents a share, 2 cents below the analysts' average forecast,
according to Thomson Reuters I/B/E/S.

Sales rose slightly to $743.1 million, helped by an extra
week in the fiscal year, but below the $762.4 million analysts
had expected. Brinker's smaller Maggiano's Little Italy chain
saw same-store sales rise 1.3 percent.
(Reporting by Lisa Baertlein and Ben Klayman, editing by Dave
Zimmerman and Lisa Von Ahn)