Brinker International reported higher sales, operating income and cash generation in the first quarter of fiscal 2027, led by continued comparable-sales growth at Chili’s. The company also updated its full-year fiscal 2027 guidance, though the revised targets are not included in the supplied release text.
The quarter also featured significant capital-allocation moves: Brinker repurchased $125 million of its shares and redeemed $350 million of 8.25% notes, using its revolving credit facility to fund the debt repayment.
Key details
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Sales and revenue rose about 9% year over year. Brinker’s company sales were $1.46 billion, up from $1.34 billion a year earlier. Total revenue was $1.48 billion, compared with $1.35 billion.
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Comparable sales increased 9.1% across the company. Chili’s comparable sales rose 10.1%, with the brand posting positive traffic and continuing to outperform the casual-dining industry. CEO Kevin Hochman said Chili’s had recorded 22 consecutive quarters of comparable-sales growth. The latest quarter’s increase followed gains of 21% a year earlier and 14% in the comparable quarter of 2024, for a three-year cumulative increase of 52%.
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Operating profitability improved. Operating income increased to $151.0 million from $117.9 million. Operating income equaled 10.2% of total revenue, up from 8.7%. Brinker’s non-GAAP restaurant operating margin rose to $258.0 million, or 17.7% of company sales, from $215.8 million, or 16.2%.
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Net income was $113.3 million, compared with $99.5 million in the prior-year quarter. Adjusted EBITDA was $209.1 million; the supplied release text does not include a year-ago comparison for that measure.
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Cash generation strengthened. Cash provided by operating activities was $169.1 million, up from $120.8 million. Non-GAAP free cash flow increased to $105.7 million from $62.2 million.
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Brinker returned capital and refinanced debt. The company used operational cash flow to repurchase $125.0 million of common stock. It also redeemed its outstanding $350.0 million of 8.25% notes with borrowings from its revolving credit facility; Brinker said the move lowered its cost of capital.
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The company pointed to menu and operating initiatives behind the sales results. Brinker cited ongoing efforts to improve the guest experience and the launch of Chili’s Big Crispy chicken sandwich.
Plain-English implications
Brinker’s results show stronger sales and restaurant margins alongside improved cash generation. The share repurchases returned cash to shareholders, while replacing the 8.25% notes with revolving-credit borrowings changed the source of the company’s debt. The release also announced updated fiscal 2027 guidance, but the revised numerical targets are not available in the supplied text.