DALLAS, April 2, 2020 /PRNewswire/ -- Brinker
International, Inc. (NYSE: EAT) and its brands, Chili's®
Grill & Bar and Maggiano's Little Italy®, have
adapted their business model to take-out and delivery to deliver a
safe and quality experience for team members and guests during the
coronavirus (COVID-19) pandemic. Brinker's strategic decision to
enhance its off-premise business over the last few years including
online ordering, mobile app, curbside service and third-party
delivery, has enabled its brands to conveniently serve a
significant increase in off-premise guests during this
pandemic.
COMPARABLE RESTAURANT SALES
The table below presents the percentage change in company-owned
comparable restaurant sales for the third quarter before the
COVID-19 impact and for the entire third quarter:
|
Comparable
Restaurant Sales(1)
|
|
|
Q3: 20 vs
19
thru
3/8
|
|
Q3: 20 vs
19
QTR
end
|
|
|
Company-owned
|
2.9
|
%
|
|
(5.9)
|
%
|
|
Chili's
|
3.3
|
%
|
|
(5.3)
|
%
|
|
Maggiano's
|
0.6
|
%
|
|
(9.9)
|
%
|
|
|
|
(1)
|
Comparable Restaurant
Sales include all restaurants that have been in operation for more
than 18 months, except restaurants acquired by the company from
franchisees are not included until they have been company-owned for
more than 12 months. Amounts are calculated based on comparable
current period versus same period a year ago.
|
OPERATIONAL PERSPECTIVE
As Chili's and Maggiano's operate in an off-premise only model,
below are some initial results related to company owned
restaurants:
- Off-premise sales have more than doubled year-over-year and are
capturing 30-35 percent of prior year company sales
- In the most recent week for which industry data is reported,
Chili's comparable restaurant sales gapped the industry by more
than 10 percent
- Delivery is now approaching 20 percent of total sales. Online
ordering at Chili's accounted for 69 percent of all off-premise
orders
- Virtually all restaurants remain open for to go and delivery,
with closures totaling less than 10
"I'm proud of our restaurant operators and support teams who
quickly adapted our business to a safe and efficient off-premise
only model. Our focus remains delivering quality food to our guests
and maintaining a safe work environment for our team members," said
Wyman Roberts, chief executive
officer of Brinker International. "Our hearts go out to those
impacted by the pandemic, including our team members. In response,
we've provided them support through an emergency relief fund."
The company and its board of directors have also taken the
following proactive measures to provide enhanced financial
flexibility during the COVID-19 pandemic:
- Amended the revolving credit facility to obtain financial
flexibility and liquidity. Initial borrowing capacity under the new
amendment is $800 million
- Significantly reduced capital expenditures, including
suspending the Chili's re-image program and delaying construction
of new restaurants
- Reduced salaries, led by the executive team including a 50
percent reduction for Chief Executive Officer
- Reduced marketing spend, general and administrative spend and
other restaurant expenses to support the off-premise only business
model
- Suspended the quarterly cash dividend and all share repurchase
activity
Given these current sales levels and reductions in
expenses, Brinker anticipates a cash burn level of less than
$10 million per week. 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 is withdrawing its financial guidance for fiscal
2020 as a result of conditions arising from COVID-19.
ABOUT BRINKER
Brinker International, Inc. is one of the world's leading casual
dining restaurant companies. Based in Dallas, Texas, as of March 25, 2020, Brinker owned, operated, or
franchised 1,676 restaurants under the names Chili's®
Grill & Bar (1,623 restaurants) and Maggiano's Little
Italy® (53 restaurants).
FORWARD-LOOKING STATEMENTS
The statements contained in this release that are not historical
facts are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The forward-looking statements in this
release, including future financial targets, are based on
information available to us as of the date any such statements are
made and we assume no obligation to update these forward-looking
statements except as required by law. Forward-looking statements
are based on our current plans and expectations and involve risks
and uncertainties which could cause actual results to differ
materially from our historical results or from those projected in
forward-looking statements. These risks and uncertainties are, in
many instances, beyond our control. Such risks and uncertainties
include, among other things, the impact of competition, changes in
consumer preferences, consumer perception of food safety, reduced
disposable income, unfavorable publicity, increased minimum wages,
governmental regulations, the impact of mergers, acquisitions,
divestitures and other strategic transactions, the Company's
ability to meet its business strategy plan, third party delivery
risks, loss of key management personnel, failure to hire and retain
high-quality restaurant management, the impact of social media,
failure to protect the security of data of our guests and team
members, product availability, regional business and economic
conditions, litigation, franchisee success, downgrades in our
credit ratings, inflation, changes in the retail industry,
technology failures, failure to protect our intellectual property,
outsourcing, impairment of goodwill or assets, failure to maintain
effective internal control over financial reporting, actions of
activist shareholders, adverse weather conditions, terrorist acts,
health epidemics or pandemics, and tax reform, as well as the risks
described under the caption "Risk Factors" in our Annual Report on
Form 10-K and future filings with the Securities and Exchange
Commission.
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SOURCE Brinker International, Inc.