Earnings Preview: Brinker International

| About: Brinker International, (EAT)

Brinker International (NYSE:EAT) is expected to report Q1 earnings Tuesday Oct. 21 before market open, with a conference call scheduled for 10:00 am ET.


Analysts are looking for a profit of 22c on revenue of $851.4M. The consensus range is 19c to 34c for EPS, and revenue of $811.3M to $885.06M, according to First Call.

Analyst Views

On October 10, Brinker slashed its Q1 guidance to 19c to 21c due to rising commodity costs and and the lap of the successful Honey Chipotle Chicken Crispers promotion. CEO Doug Brooks, who reduced FY09 EPS guidance to down 15% to 25% vs. prior guidance of up 10%, said "we did not foresee the sequential pressure on the consumer as the quarter unfolded."

On the reduced guidance, Stifel Nicolaus analyst Steve West noted that "the proverbial 'other shoe' has finally dropped" and believes Brinker's current stock price is now appropriate given the weak operating environment for casual dining chains. West, who says consumer are choosing to either eat at home or buy fast food due to the weak economy, believes shares of casual dining companies will, for at least another year, continue to underperform compared with fast food chains.

Additionally, given the crisis in the credit markets, Stephens analyst Greg Ruedy is concerned about whether Brinker's agreement with Golden Gate for its Macaroni Grill concept will continue to hold.

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