In business update, parent Brinker says ‘virtually all’ restaurants in off-premise mode, closes fewer than 10 units
Brinker International Inc., parent to the Chili’s Grill & Bar and Maggiano’s Little Italy brands, is capturing 30% to 35% of its prior-year sales as it shifts to off-premise-only platforms in the wake of coronavirus pandemic, the company said Thursday.
The Dallas-based casual-dining company provided a business update in the wake of COVID-19’s impact, saying it had moved to take-out and delivery in its restaurants.
“Delivery is now approaching 20% of total sales,” the company said in a statement. “Online ordering at Chili's accounted for 69% of all off-premise orders.”
Brinker said same-store sales for its third quarter were down 5.9% at company-owned restaurants, declining 5.3% at Chili’s and 9.9% at Maggiano’s. Same-store sales through March 8, before states and cities had begun restricting in-restaurant dining to stem the spread of the coronavirus, had been up a blended 2.9% at company-owned locations, with Chili’s up 3.3% and Maggiano’s up 0.6%, the company said.
"I'm proud of our restaurant operators and support teams who quickly adapted our business to a safe and efficient off-premise only model,” said Wyman Roberts, Brinker CEO, in a statement. “Our focus remains delivering quality food to our guests and maintaining a safe work environment for our team members.”
The company said it had amended its revolving credit facility to increase initial borrowing capacity to $800 million. It was also suspending the Chili’s reimaging program and delaying construction of new restaurants to reduce capital expenditures.
Brinker also said it was reducing salaries, including a 50% cut for the CEO, and cutting its marketing spend and other general and administrative expenses.
“Given these current sales levels and reductions in expenses, Brinker anticipates a cash burn level of less than $10 million per week,” the company said in its update. “Total cash on the balance sheet on March 31, 2020, was $137 million and total liquidity was $237 million. We believe we have ample liquidity with our current capital position and will continue to evaluate all financing alternatives, including funds available under the CARES Act, as we navigate through this evolving situation.”
The company also withdrew earlier financial guidance for the year because of the pandemic.
For the second quarter ended Dec. 25, Brinker’s income, with special charges, was $27.9 million, or 73 cents a share, down from $32 million, or 83 cents a share, in the same period last year. Revenues rose to $869.3 million from $790.7 million in the prior-year quarter.
As of March 25, Brinker owned, operated or franchised 1,676 restaurants, including 1,623 Chili’s and 53 Maggiano’s.
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