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What:Shares ofBrinker International, Inc.(NYSE: EAT) were surging today after the Chili's parent posted better-than-expected results in its fourth-quarter earnings report. The stock closed up 12.2% after gaining as much as 16% earlier in the session.
So what:The restaurant chain, which also owns Maggiano's Little Italy, has been struggling of late as the company, which is heavily concentrated in Texas, has seen low oil prices soak its customers. Comparable sales continued to decline, falling 1.8% at company-owned Chili's, and 3.4% at franchised locations. Comps dipped 1.7% at company-owned Maggiano's.
However, the company's overall performance benefited from the acquisition of 103 restaurants from a franchisee, and an extra operating week in the calendar. Adjusted earnings per share increased from $0.94 to $1.24, topping estimates at $1.22. Revenue improved 15%, to $881.7 million, ahead of the consensus at $877.7 million.
CEO Wyman Roberts said, "We ended the fiscal year with improving trends and have returned to gaining share in the industry."
Now what:Roberts also said he was pleased with the early results of the 2017 initiatives. The company maintained guidance for the current fiscal year at EPS of $3.40-$3.50, though the current year includes one fewer operating week. Revenue is expected to increase 1%-2.5% adjusted for the extra week, with comparable sales up 1.5%-2%.
The projections were in line with estimates. Investors should be encouraged by the company's expected return to comparable-sales growth, but I wouldn't expect any fireworks in the midst of a broader slowdown in the restaurant industry.
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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.