Brinker International Inc. (EAT) stock prices were up by 1.25% as of the market closing on October 19th, 2021. This brought the price per share down to USD$48.96. Subsequent after-hours trading saw the stock dip by 12.16%, bringing it down to USD$43.00.
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Resisting Headwinds
October 19th, 2021 saw EAT stock announce selected business results for the first quarter of fiscal 2022. The company concurrently provided a business updated for the second quarter of fiscal 2022 ahead up of the Brinker International Investor Day that will commence on October 20th, 2021. The first quarter of fiscal 2022 delivered positive sales that continued to substantially beat out competitors in the industry in terms of traffic generated. The promising results come despite the surge of Covid-19 that took place in August, further exacerbating the existing industry-wide labor and commodity challenges. Resultingly, margins and the company’s bottom line were adversely impacted more than it had forecasted.
Adapting to Adverse Conditions
EAT stock is continuing to respond and adapt to the headwinds related to the Covid-19 resurgence. This is facilitated by an increased focus on hiring and retention efforts, as well as continued collaborations with the company’s partners. These partnerships aim to motivate increased stabilization of the supply chain environment. Furthermore, the company has taken immediate incremental pricing actions, raising its full-year target to a range of 3% to 3.5%. This move is aimed to offset inflationary costs and protect the company’s margins moving forward.
Promising Financial Report
Sales for the first quarter of fiscal 2022 were reported at USD$859.6 million by EAT stock. This is comparable to USD$728.2 million in the first quarter of the prior year. The company reported operating income for the first quarter of fiscal 2022 in the amount of USD$25.6 million. This is comparable to the USD$24.4 million in the prior year quarter. Operating income as a percentage of total revenues were down to 2.9% for Q1 2022, as compared to 3.3% in the first quarter of fiscal 2021. Restaurant operating margin as a percentage of company sales were down to 10.4% for Q1 2022, as compared to 11.6% in Q1 2021.
Future Outlook for EAT Stock
The company is keen to maintain the momentum generated in the first quarter of fiscal 2021 through the upcoming quarters. EAT stock is poised to capitalize on the opportunities afforded to it as a result of the gradual return of the global economy to normal, pre-pandemic levels. Current and potential investors are hopeful that management will be able to leverage the resources at their disposal. This is hoped to facilitate significant and sustained increases in shareholder value over the long term.
