Brinker soars 7.4% as Chili's drives earnings beat, forecast lifted
Casual dining chain raises full-year guidance after Q2 EPS beats expectations by $0.24
Brinker International shares surged as much as 7.4% in Wednesday trading after the casual dining operator reported second-quarter earnings that topped analyst expectations and lifted its full-year outlook, powered by continued strength at its flagship Chili's chain.
The Dallas-based company posted adjusted earnings per share of $2.87 for the fiscal second quarter ended December 25, 2025, surpassing the average analyst estimate of $2.63, according to company data. Revenue reached $1.45 billion, exceeding Wall Street projections by 2.8%.
The performance prompted management to raise its fiscal 2026 guidance despite a $0.15 per share headwind from Winter Storm Fern. Brinker now expects total revenue between $5.76 billion and $5.83 billion for the full year, with adjusted EPS projected at $10.45 to $10.85, up from previous guidance of $9.90 to $10.50.
Chili's continued its remarkable turnaround streak, delivering an 8.6% increase in comparable restaurant sales. This marked the 19th consecutive quarter of same-store sales growth for the chain, which has undergone a significant menu and operational revitalization under chief executive Kevin Hochman. The performance demonstrates that casual dining brands can successfully compete in an increasingly competitive restaurant landscape by focusing on value and operational efficiency.
Analysts have noted that Brinker's momentum comes amid broader challenges for the restaurant sector, including elevated food costs and cautious consumer spending. The company's ability to grow traffic while managing inflation has distinguished it from peers.
Brinker returned capital to shareholders through a $100 million stock repurchase program during the quarter, signaling confidence in the business's trajectory. The company's strong balance sheet and cash flow generation have enabled consistent returns to shareholders even as it invests in store remodels and digital capabilities.
The stock's rally on Wednesday pushed shares toward analyst consensus price targets of $183.68, according to market data, suggesting further upside potential if the company can maintain its current momentum. The stock now trades at approximately 16 times trailing earnings, a premium that investors appear willing to pay given the consistency of Chili's performance and the improved outlook.
Looking ahead, investors will focus on whether Brinker can sustain Chili's growth streak in the face of tougher year-over-year comparisons and potential economic headwinds. The raised guidance suggests management confidence that the brand's value proposition—particularly its popular "3 for Me" and "Guetos" offerings—will continue resonating with consumers seeking affordable dining options.
The strong results also highlight broader trends in the restaurant industry, where established chains with strong digital capabilities and clear value propositions have been gaining share from independent operators and newer concepts. Brinker's performance suggests that casual dining, when executed effectively with modern operations and marketing, remains a viable and attractive segment for both consumers and investors.