What Happened?
Shares of casual restaurant chain Brinker International (NYSE:EAT) jumped 8.8% in the afternoon session after the company reported third-quarter earnings that blew past analysts' EBITDA expectations. Its revenue also outperformed Wall Street's estimates as restaurant visits and pricing improved. Management added, "Chili's advertising and social media campaigns continued to drive new guests and increased frequency in the first quarter." Zooming out, we think this was a strong quarter.
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What The Market Is Telling Us
Brinker International’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 16.4% on the news that the company reported second-quarter earnings results. Brinker's EPS missed. Its full-year earnings forecast missed analysts' expectations as well, suggesting expectations were high heading ahead of earnings.
On the other hand, revenue came in ahead of consensus. Zooming out, we think this was a mixed quarter, but the outlook is weighing on shares.
Brinker International is up 151% since the beginning of the year, and at $105.60 per share, has set a new 52-week high. Investors who bought $1,000 worth of Brinker International’s shares 5 years ago would now be looking at an investment worth $2,269.
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