Brinker's Q1 Net Income Soars 158% on Robust Revenue Growth

TL;DR

**EAT's Q1 earnings are a blowout, showing strong operational leverage and a clear path to continued growth despite rising debt – buy the dip!**

AI Summary

Brinker International, Inc. (EAT) reported a significant increase in financial performance for the thirteen-week period ended September 24, 2025, with total revenues climbing to $1,349.2 million, a 18.5% increase from $1,139.0 million in the prior year. Net income surged by 158.4% to $99.5 million, up from $38.5 million in the same period last year. This translated to diluted net income per share of $2.17, a substantial rise from $0.84. Operating income more than doubled, reaching $117.9 million compared to $56.4 million in the previous year, driven by higher company sales of $1,335.4 million. The company also saw an increase in cash and cash equivalents to $33.6 million from $18.9 million at the beginning of the period, largely due to $120.8 million in net cash provided by operating activities. Long-term debt increased to $525.8 million from $426.0 million, primarily due to net borrowings of $90.0 million on its revolving credit facility. Shareholder equity decreased to $343.9 million from $370.9 million, influenced by $134.5 million in treasury stock purchases.

Why It Matters

This strong performance from Brinker International, driven by its Chili's and Maggiano's brands, signals a robust recovery and effective operational strategies in the competitive casual dining sector. For investors, the significant jump in net income and diluted EPS suggests improved profitability and potential for future shareholder returns, despite increased debt. Employees may see enhanced job security and potential for growth as the company expands and optimizes operations. Customers could benefit from continued investment in restaurant experiences and menu innovation. In the broader market, Brinker's success could put pressure on competitors to innovate and improve their own financial health, potentially leading to a more dynamic and competitive restaurant landscape.

Risk Assessment

Risk Level: medium — While Brinker reported strong financial results, the company's long-term debt increased to $525.8 million as of September 24, 2025, up from $426.0 million on June 25, 2025, primarily due to $90.0 million in net borrowings on its revolving credit facility. Additionally, the company purchased $134.5 million of treasury stock, which, while potentially boosting EPS, also reduced shareholder equity from $370.9 million to $343.9 million, indicating a more leveraged balance sheet.

Analyst Insight

Investors should consider Brinker's strong revenue and net income growth as a positive indicator of operational efficiency and market demand. However, closely monitor the increasing long-term debt and treasury stock purchases, as these could impact future financial flexibility. A balanced approach would be to hold existing positions while watching for sustained debt management and continued profitability.

Financial Highlights

debt To Equity

1.53

revenue

$1,349.2M

operating Margin

8.7%

total Assets

$2,712.0M

total Debt

$525.8M

net Income

$99.5M

eps

$2.17

gross Margin

74.4%

cash Position

$33.6M

revenue Growth

+18.5%

Revenue Breakdown

Key Numbers

• $1,349.2M — Total Revenues (Increased 18.5% from $1,139.0M in Q1 2024)
• $99.5M — Net Income (Increased 158.4% from $38.5M in Q1 2024)
• $2.17 — Diluted Net Income Per Share (Increased from $0.84 in Q1 2024)
• $117.9M — Operating Income (Increased 109.0% from $56.4M in Q1 2024)
• $33.6M — Cash and Cash Equivalents (Increased from $18.9M at June 25, 2025)
• $525.8M — Long-term Debt (Increased from $426.0M at June 25, 2025)
• $134.5M — Treasury Stock Purchases (Increased from $74.8M in Q1 2024)
• 1,630 — Total Restaurants (As of September 24, 2025, including 1,161 Company-owned and 469 franchised)
• 18.5% — Revenue Growth (Year-over-year increase in total revenues)
• 158.4% — Net Income Growth (Year-over-year increase in net income)

Key Players & Entities

• BRINKER INTERNATIONAL, INC. (company) — registrant
• Chili's Grill & Bar (company) — restaurant brand
• Maggiano's Little Italy (company) — restaurant brand
• SEC (regulator) — Securities and Exchange Commission
• $1,349.2 million (dollar_amount) — total revenues for Q1 2025
• $99.5 million (dollar_amount) — net income for Q1 2025
• $2.17 (dollar_amount) — diluted net income per share for Q1 2025
• $525.8 million (dollar_amount) — long-term debt as of September 24, 2025
• $134.5 million (dollar_amount) — purchases of treasury stock
• FASB (regulator) — Financial Accounting Standards Board

FAQ

Risk Factors

• Labor and Supply Chain Disruptions [high — operational]: The company faces ongoing risks related to labor availability and retention, as well as supply chain disruptions impacting food and beverage costs. For the thirteen-week period ended September 24, 2025, food and beverage costs increased to $344.6 million from $284.3 million in the prior year, and restaurant labor costs rose to $431.0 million from $377.4 million.
• Changing Consumer Preferences [medium — market]: Shifts in consumer dining habits and preferences, including a potential move towards off-premise dining or alternative food service models, could negatively impact Brinker's performance. The company operates 1,630 restaurants, and failure to adapt to evolving consumer demands poses a significant risk.
• Increased Indebtedness [medium — financial]: Brinker's long-term debt increased to $525.8 million from $426.0 million, primarily due to $90.0 million in net borrowings on its revolving credit facility. This increased leverage could heighten financial risk, especially in a rising interest rate environment.
• Food Safety and Health Regulations [medium — regulatory]: Compliance with evolving food safety standards, health regulations, and potential mandates related to public health crises is critical. Any failure to adhere to these regulations could result in fines, reputational damage, and operational disruptions.
• Dependence on Key Brands [medium — operational]: The company's performance is heavily reliant on the success of its Chili's and Maggiano's brands. A significant decline in the popularity or profitability of either brand could materially impact overall financial results.

Industry Context

The restaurant industry continues to navigate evolving consumer preferences, with a growing emphasis on digital ordering, delivery, and value. Brinker International, operating major brands like Chili's and Maggiano's, faces competition from a wide range of casual dining, fast-casual, and quick-service restaurants. Key trends include managing labor costs, supply chain volatility, and adapting menus to meet health-conscious and convenience-driven demands.

Regulatory Implications

Brinker International must adhere to stringent food safety regulations, labor laws, and health mandates across its numerous locations. Compliance failures can lead to significant fines, operational shutdowns, and reputational damage. The company's disclosure of 'Commitments and contingencies' suggests potential ongoing legal or regulatory matters that require careful monitoring.

What Investors Should Do

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Key Dates

• 2025-09-24: End of Thirteen-Week Period — Reporting period for the current 10-Q, showing significant revenue and net income growth.
• 2025-06-25: End of Prior Fiscal Year — Balance sheet comparison date, showing changes in cash, debt, and equity.
• 2024-09-25: End of Prior Year Thirteen-Week Period — Comparative period for income statement, highlighting substantial year-over-year improvements.

Glossary

Comprehensive Income

The change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes net income plus other comprehensive income (loss). (Reported as $99.4 million for the period, slightly lower than net income due to a foreign currency translation adjustment.)

Operating Lease Assets

Assets recognized on the balance sheet representing the right to use an underlying asset for a period of time, typically for leased property. (Totaled $1,166.4 million as of September 24, 2025, indicating a significant portion of the company's asset base is related to leased locations.)

Treasury Stock

Stock that a company has repurchased from the open market. (The company spent $134.5 million on treasury stock purchases, reducing shareholder equity but potentially signaling confidence in its valuation.)

Diluted Net Income Per Share

Net income per share calculated after accounting for all potential dilutive common shares, such as stock options and convertible securities. (Increased significantly to $2.17 from $0.84, reflecting improved profitability on a per-share basis.)

Franchise Revenues

Revenue generated from fees paid by franchisees for the right to operate under the company's brand names. (Contributed $13.8 million to total revenues, showing a modest increase from the prior year.)

General and Administrative Expenses

Costs incurred for the overall management and administration of the business, not directly tied to production or sales. (Increased to $57.2 million from $51.8 million, likely reflecting increased operational scale and support for higher revenues.)

Year-Over-Year Comparison

Brinker International reported a substantial improvement in performance compared to the prior year's comparable period. Total revenues increased by 18.5% to $1,349.2 million, while net income saw a dramatic surge of 158.4% to $99.5 million, leading to a significant rise in diluted EPS to $2.17 from $0.84. Operating income more than doubled, indicating strong operational leverage. However, long-term debt increased by $99.8 million, and shareholder equity decreased due to aggressive share repurchases, signaling a shift in capital allocation strategy.

Key Financial Figures

• $0.10 — nge on which registered Common Stock, $0.10 par value EAT NYSE Indicate by chec
• $1.0 billion — ance with our covenants pursuant to the $1.0 billion revolving credit facility and under the

Filing Documents

• eat-20250924.htm (10-Q) — 910KB
• fy26q1ex-10110xqfiscal2026.htm (EX-10.1) — 55KB
• fy26q1ex-10210xqfiscal2026.htm (EX-10.2) — 104KB
• fy26q1ex-31a10xq.htm (EX-31.A) — 11KB
• fy26q1ex-31b10xq.htm (EX-31.B) — 10KB
• fy26q1ex-32a10xq.htm (EX-32.A) — 5KB
• fy26q1ex-32b10xq.htm (EX-32.B) — 4KB
• eat-20250924_g1.jpg (GRAPHIC) — 107KB
• 0000703351-25-000046.txt ( ) — 5382KB
• eat-20250924.xsd (EX-101.SCH) — 37KB
• eat-20250924_cal.xml (EX-101.CAL) — 69KB
• eat-20250924_def.xml (EX-101.DEF) — 218KB
• eat-20250924_lab.xml (EX-101.LAB) — 489KB
• eat-20250924_pre.xml (EX-101.PRE) — 323KB
• eat-20250924_htm.xml (XML) — 555KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements 3 Consolidated Statements of Comprehensive Income (Unaudited) - Thirteen Week Period Ended September 24, 2025 and September 25, 2024 3 Consolidated Balance Sheets - September 24, 2025 (Unaudited) and June 25, 2025 4 Consolidated Statements of Cash Flows (Unaudited) - Thirteen Week Period Ended September 24, 2025 and September 25, 2024 5 Consolidated Statements of Shareholders' Equity (Unaudited) - Thirteen Week Period Ended September 24, 2025 and September 25, 2024 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 17

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 26

Controls and Procedures

Item 4. Controls and Procedures 26

OTHER INFORMATION

PART II. OTHER INFORMATION 28

Legal Proceedings

Item 1. Legal Proceedings 28

Risk Factors

Item 1A. Risk Factors 28

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28

Other Information

Item 5. Other Information 28

Exhibits

Item 6. Exhibits 29

SIGNATURES

SIGNATURES 30 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS BRINKER INTERNATIONAL, INC. Consolidated Statements of Comprehensive Income (Unaudited) (In millions, except per share amounts) Thirteen Week Periods Ended September 24, 2025 September 25, 2024 Revenues Company sales $ 1,335.4 $ 1,127.3 Franchise revenues 13.8 11.7 Total revenues 1,349.2 1,139.0 Operating costs and expenses Food and beverage costs 344.6 284.3 Restaurant labor 431.0 377.4 Restaurant expenses 344.0 313.9 Depreciation and amortization 53.6 46.3 General and administrative 57.2 51.8 Other (gains) and charges 0.9 8.9 Total operating costs and expenses 1,231.3 1,082.6 Operating income 117.9 56.4 Interest expenses 10.5 14.3 Other income, net ( 0.2 ) ( 0.2 ) Income before income taxes 107.6 42.3 Provision for income taxes 8.1 3.8 Net income $ 99.5 $ 38.5 Basic net income per share $ 2.23 $ 0.86 Diluted net income per share $ 2.17 $ 0.84 Basic weighted average shares outstanding 44.7 44.9 Diluted weighted average shares outstanding 45.8 45.9 Other comprehensive income (loss) Foreign currency translation adjustment $ ( 0.1 ) $ 0.1 Comprehensive income $ 99.4 $ 38.6 See accompanying Notes to Consolidated Financial Statements (Unaudited) 3 Table of Contents BRINKER INTERNATIONAL, INC. Consolidated Balance Sheets (In millions, except per share amounts) Unaudited September 24, 2025 June 25, 2025 ASSETS Current assets Cash and cash equivalents $ 33.6 $ 18.9 Accounts receivable, net 61.6 73.4 Inventories 34.4 35.2 Restaurant supplies 54.5 54.9 Prepaid expenses 30.4 24.6 Total current assets 214.5 207.0 Property and equipment, at cost Land 44.8 44.9 Buildings and leasehold improvements 1,772.9 1,755.2 Furniture and equipment 885.0 845.3 Construction-in-progress 53.7 71.8 2,756.4 2,717.2 Less accumulated depreciation and amortization ( 1,789.7 ) ( 1,764.5 ) Net property and equipment 966.7 952.7 Other assets Operating lease assets 1,166.4 1,149.1 Goodwill 194.7 194.7 De

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Footnote Index Note # Description Page Note 1 Basis of Presentation 8 Note 2 Revenue Recognition 9 Note 3 Fair Value Measurements 10 Note 4 Accrued Liabilities 11 Note 5 Leases 11 Note 6 Debt 12 Note 7 Commitments and Contingencies 12 Note 8 Income Taxes 13 Note 9 Shareholders' Equity 13 Note 10 Net Income Per Share 14 Note 11 Other Gains and Charges 15 Note 12 Segment Information 15 7 Table of Contents Footnote Index 1. BASIS OF PRESENTATION References to "Brinker," the "Company," "we," "us," and "our" in this Form 10-Q refer to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our Consolidated Financial Statements (Unaudited) as of September 24, 2025 and June 25, 2025, and for the thirteen week periods ended September 24, 2025 and September 25, 2024, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). We own, develop, operate and franchise the Chili's Grill & Bar ("Chili's") and Maggiano's Little Italy ("Maggiano's") restaurant brands. As of September 24, 2025, we owned, operated or franchised 1,630 restaurants, consisting of 1,161 Company-owned restaurants and 469 franchised restaurants, located in the United States, 28 other countries and two United States territories. Our restaurant brands, Chili's and Maggiano's, are both operating segments and reporting units. Use of Estimates The preparation of the Consolidated Financial Statements (Unaudited) is in conformity with generally accepted accounting principles in the United States ("GAAP") and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements (Unaudited), and the reported amounts of revenues and costs and expenses in the re

Legal Proceedings

Legal Proceedings Evaluating contingencies related to litigation is a process involving judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements (Unaudited). We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations. 8. INCOME TAXES Thirteen Week Periods Ended September 24, 2025 September 25, 2024 Effective income tax rate 7.5 % 9.0 % The federal statutory tax rate was 21.0 % for the thirteen week periods ended September 24, 2025 and September 25, 2024. The change in the effective income tax rate in the thirteen week period ended September 24, 2025 to the thirteen week period ended September 25, 2024 is primarily due to excess tax benefits from stock based compensation of $ 11.7 million in fiscal 2026, which were significantly higher in the current year. 9. SHAREHOLDERS' EQUITY Share Repurchases Our Board of Directors approved a $ 400.0 million increase in our share repurchase program in August 2025 allowing for a total available authority of $ 507.0 million. Our share repurchase program is used to return capital to shareholders and to minimize the dilution to our shares outstanding that results from equity compensation grants. We evaluate potential share repurchases