Thesis
Brinker International (NYSE:EAT) is looking to capitalize on the strong recovery from Q1 2021 with a sharp focus now on the introduction of more virtual brands and improvement of comparative restaurant margins through increased drive-throughs post-pandemic. Further, the company has a stable development plan that looks to weather the storm. Restrictions caused by the Covid-19 pandemic have negatively affected various restaurant chains around the world. Finally, with promising news streaming in on vaccines, we expect positive returns for EAT in the long run.
Business and Marketing
Restaurant stocks have rallied during this pandemic, with the S&P 400 Restaurant Index up 33.04% in one year. The 52-week range is at a significant margin of 313.52-734.87. Brinker International has gained 33.04% in the same period. This change is phenomenal since companies like Ruby Tuesday and NPC International - owned by Wendy's Company (WEN) - are deep in bankruptcy.
Since March 2020, Brinker's stock has grown by more than 585% owing to its strong pandemic response.
Source: Seeking Alpha
The roll-out of the "It's Just Wings" brand to more than 1,000 EAT restaurants has proven to be game-changer for the company. For starters, the dynamics in the restaurant business means companies have to adapt to meet the shifting demands for novel carryout alternatives. Options such as offline delivery and curbside pickups have become increasingly popular in swelling the drive-throughs in the wake of the pandemic.
Brinker International has not put effort into strengthening its social media brand. Irregular updates on the "It's Just Wings" Facebook (FB) page has meant that its posts are mostly belated. The same trend is with leading brands like McDonald's (MCD) that boasts of almost 81 million followers. Failure to take advantage of social media marketing means that the restaurant chains will miss out on
