DALLAS — Following a year of strong growth in takeout, parent company Brinker International is ready to expand Chili’s off-premise business.
Concerns over profitability and food quality for years kept the restaurant from expanding into delivery. This summer, however, Brinker announced it will offer the service nationwide through an exclusive deal with third-party platform DoorDash.
Sales in the fourth quarter ended June 26 increased 2 percent to $701.9 million from $688.2 million in the same period last year, driven by strong comparable restaurant sales, which were bolstered by an increase in to-go sales.
“Through our e-commerce platform, guests can order Chili’s takeout easier and faster than anyone else in the category,” said Wyman T. Roberts, CEO and president of Brinker International, during an Aug. 13 call with analysts. “And that technology has supported growth of our takeout business in the solid teens throughout fiscal ‘19.”
Value proposition and improved operational execution also are points of focus for the company. Chili’s launched its 3 for $10 offer this year. Roberts said the offer is more flexible than the previous 2 for $20 deal and easier for operators to execute consistently. The platform, which allows customers to choose a non-alcoholic beverage, an appetizer and an entree for $10, works well across both dayparts.
“It is an offer that works well for both dining in and to-go,” added Joseph G. Taylor, senior vice president and chief financial officer at Brinker International. “It’s helping drive both of those businesses. As we see more and more commentary around the off-premise preferences of our guests, having a value platform that plays well on that side of the equation is playing right into the strengths of where we see the consumer going.”
The 3 for $10 offer will not be available through Chili’s delivery service, which will appeal to a different, less value-driven customer, said Roberts.
“The to-go customer has a higher preference for value, which I think basically equates the fact that if I’m a value-oriented guest looking for that strong of an offer, there’s probably some willingness to get it on a to-go basis,” he said. “I think playing to delivery is probably playing to a less value-oriented customer, which we have significant numbers of. I think there’s a lot of responsiveness to the ability to get that from a delivery and less sensitivity to some of those charges that go with it.”
For the fiscal year ended June 26, net income at Brinker was $154.9 million, equal to $3.96 per share on the common stock, up 19 percent from $125.9 million, or $2.72 per share, last year. Revenues totaled $3,217,900,000, up from $3,135,400,000.
Fourth-quarter net income was $46.7 million, or $1.22 per share, up 6% from $43.8 million, or $1.01 per share, in the same period last year. Total revenues of $834.1 million were up 2 percent from $817.1 million.