John Gordon

Brinker International, Inc. F1Q10 (Qtr End 09/23/09) Earnings Call Transcript

Just a few observations on Brinker's Q1 2010 earnings:

We wonder if the reason why the Chili's 3 Course Promotion (3 for $20) was paused in September (and where some momentum seemingly was lost) was due to the marketing calendar and related ad agency/ad time buying issues. Last quarter, EAT did a nice job of ditching the 10 for $7 promo quickly, but there must have been a resulting hole they couldn't fill.

It's very ominous that EAT didn't talk to October sales or any kind of guidance, other than cost of goods sold percentage. This is another example of likely weak October sales.

The downside to too long product contracting was noted--EAT locked in chicken but with recent commodity declines, they are now above market, and hoping for its expiration.

And finally, we were in a Chili's test unit Monday and saw (and liked) the new test salads, sandwiches and taco test items, all priced at or under $10. If successful, these will give Chili's additional sales platforms, but new menu awareness builds slowly.

John A. Gordon
Chain Restaurant Earnings and Economics Experts
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