Dive Brief:
- Chili’s same store sales grew by 13.5% due to price increases and an increase in traffic, parent company Brinker International said in its FY2024 fourth quarter earnings release.
- The company attributed higher sales success to the launch of the Big Smashers burger and to advertising underscoring Chili’s value — including social media personalities who have compared the casual dining brand’s prices to fast food.
- CEO Kevin Hochman said the chain outperformed industry benchmarks. In response to strong traffic at Chili’s, the company “quickly accelerated investments in labor and the facilities to ensure a great experience,” Hochman said.
Dive Insight:
Chili’s was able to capitalize on consumers’ value-consciousness through its Big Smasher Burger. Priced at $10.99, the menu item included the burger, a side of fries, plus bottomless non-alcoholic beverages and chips and salsa.
Chili’s explicitly compared the cost of its Smasher meal to that of fast food combos, as consumers trade down to QSRs. Chili's may have even taken some traffic from leading burger joints as Burger King, McDonald’s and Jack in the Box all saw traffic tumble in the quarter. Other brands in the full-service sector saw their sales slide in the spring of 2024. Both of Dine’s brands suffered sales shortfalls, while Denny’s same-store sales dropped 0.6%. Same-store sales at Olive Garden, one of Darden’s brands, slid 1.5% in the most recent quarter.
Chili’s 5.9% traffic growth more than made up for the 2.3% hit the chain took for deemphasizing its virtual brands last year.
Total sales for the quarter were $1.19 billion, about $130 million greater than the same period in fiscal 2023. The company reported year-end results on Wednesday, with sales at $4.37 billion, up about $275 million compared to fiscal 2023.
While Chili’s expenses increased in the quarter, from $821 million in Q4 of 2023 to $910 million, they decreased as a proportion of the brand’s revenue because of its strong sales growth. Brinker’s smaller brand, Maggiano’s, saw costs increase in absolute and proportional terms, from $100 million in the year-ago-period to $103.8 million.
Maggiano’s sales increased modestly due to pricing, though the brand’s traffic fell year-over year.
