• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Stock

TikTok and fast-food rivalry fuel Chili’s sales as parent Brinker says turnaround is taking hold

by August 17, 2024
written by August 17, 2024

An ad campaign targeting fast-food chains and a TikTok-viral appetizer helped Chili’s same-store sales climb nearly 15% in its latest quarter.

But Kevin Hochman, CEO of parent company Brinker International, told CNBC that the chain’s strong performance is just a sign that customers are finally catching onto the chain’s two-year turnaround.

Shares of Brinker have climbed 53% this year, bringing its market value up to $2.99 billion. However, the stock closed 10.7% lower Wednesday after the company disappointed analysts with weaker-than-expected earnings and a conservative outlook for its fiscal 2025.

Shares were up 7% in afternoon trading on Thursday, rebounding from what BMO Capital Markets called an “overreaction” from investors. KeyBanc Capital Markets also upgraded the stock on Thursday, saying that its quarterly results were misunderstood.

Forecast aside, Chili’s made even StreetAccount’s same-store sales estimates of 8.6% growth look cautious. Its 14.8% same-store sales growth puts it in rare company, joining Chipotle and Wingstop as the few public restaurants reporting strong traffic and same-store sales growth at a time when many consumers are pulling back their spending, putting pressure on the industry. Chili’s casual-dining rivals like Applebee’s, owned by Dine Brands, and Bloomin’ Brands’ Outback Steakhouse, reported same-store sales declines for their latest quarters.

“This is just a whole ’nother step change in the business,” Hochman said. “I think sky’s the limit for this brand.”

About 60% of Chili’s growth in its latest quarter came from its $10.99 Big Smasher meal, according to Hochman. The chain promoted the deal by taking aim at fast-food rivals in TV ads.

“We had tapped into this insight that we were seeing in social media months prior, that customers were upset about where fast-food prices were going,” Hochman said. “The advertising clearly touched a nerve on that.”

Another successful menu item for Chili’s this quarter was its Triple Dipper, which lets diners select three appetizers and dips. The item went viral on TikTok in May. Hochman estimates that the Triple Dipper accounted for about 40% of the chain’s sales growth.

But the popularity of both the Triple Dipper and the Big Smasher created new problems for Chili’s. Its restaurants have to be prepared to serve the influx of customers, many of whom were trying Chili’s for the first time or returning after a long time away. Hochman said Chili’s has been investing in labor for the last two years — from hiring bussers to adding more cooks — but those steps pressured its bottom line this quarter.

Chili’s turnaround has touched more than just its workforce, according to Hochman.

Under his leadership, the company has spent the last two years trying to grow sales profitably. Chili’s has culled its menu, shedding about 22% of items.

Brinker has also ended some less profitable strategies to attract customers. Chili’s doesn’t offer as many coupons as it once did, and Brinker pulled the plug on its Maggiano’s Italian Classics virtual brand.

At the same time, Chili’s also leaned into value ahead of the competition, who are now rolling out their own deals. But Hochman is confident that Chili’s can hold onto its lead — and the new customers that TikTok and TV ads have brought.

“We’ve been advertising our value for almost 18 months, and a lot of folks are coming late to the game, and sometimes it’s more aggressive value, and they just don’t have the awareness that we have, because we’ve been at it a while,” he said.

But as Brinker heads into a new fiscal year, holding onto its new customers could prove to be difficult. A plethora of restaurants, from McDonald’s to Outback Steakhouse, have unveiled value meals meant to appeal to diners seeking discounts. And customers could keep cutting back their restaurant visits to save money. Prices for food away from home, which have risen 4.1% over the last 12 months, have stayed relatively sticky.

For Brinker’s fiscal 2025, which kicked off in July, the company is anticipating earnings per share of $4.35 to $4.75 and revenue growth of 3% to 4.6%. Investors were expecting a stronger outlook for growth, given Chili’s recent success. But Brinker is playing it safe in case the economy worsens.

“It’s important for our team to set goals that we think are achievable,” Hochman said.

″[The economy] certainly has taken a turn for the worse in the past three to four months,” he added.

This post appeared first on NBC NEWS
0 comment
0
FacebookTwitterPinterestEmail

previous post
Former Afghan prosecutors hunted down, killed by Taliban 3 years after US withdrawal
next post
Minority groups in Bangladesh detail violence, mistreatment following government’s collapse: ‘scapegoats’

related articles

Boeing delivers most airplanes since late 2023 after...

July 9, 2025

Waymo offers teen accounts for driverless rides

July 8, 2025

Is a Chinese chain’s blood orange cold brew...

July 7, 2025

Essence Fest leads a summer of events for...

July 4, 2025

Tariffs and weaker beer demand are weighing on...

July 3, 2025

Microsoft laying off about 9,000 employees in latest...

July 3, 2025

Apple sues former Vision Pro employee for allegedly...

July 2, 2025

As his feud with Trump reignites, Musk’s business...

July 2, 2025

Lululemon sues Costco over selling alleged dupes

July 1, 2025

Clean energy stocks fall as Trump bill would...

July 1, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Gold and Silver: Gold remains stable in the $2420 zone

    March 20, 2025
  • Bain Capital to acquire Envestnet in $4.5 billion deal backed by BlackRock and Fidelity

    July 11, 2024
  • Foreign policy experts rip Tim Walz’s claim that China has ‘moral authority’ in Middle East conflict

    June 20, 2025
  • USAID instructions for fired employees gives them 15 minutes to gather belongings from shuttered DC building

    February 26, 2025
  • EARN Stock Price Forecast: Is It Worth Buying?

    September 23, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,288)
  • Investing (634)
  • Stock (835)

Latest Posts

  • Trump to make Iran decision ‘within the next two weeks’ given ‘chance’ of negotiations, Leavitt says

    June 19, 2025
  • House leaders move quickly to consolidate power in show of confidence for Republican majority

    November 7, 2024
  • GOP rebels go to war over Biden’s mammoth $98B disaster aid request

    December 5, 2024

Recent Posts

  • Amazon surpasses Walmart in revenue for the first time

    February 21, 2025
  • Disgraced ex-Sen. Bob Menendez sentenced to 11 years in bribery case

    January 29, 2025
  • How to watch the Fox News – CBS News Vice Presidential Debate Simulcast

    September 30, 2024

Editor’s Pick

  • Biden has signed just 2 executive orders since dropping out of 2024 race, trailing past presidents

    September 9, 2024
  • Harris asked how she’s ‘feeling’ 48 hours from election, tells reporters Trump ‘lost’ in 2020

    November 3, 2024
  • House GOP channels ‘Nighthawks’ as they try to pass Trump’s ‘big, beautiful bill’

    May 20, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock