Brinker's Traffic Strategy Takes Center Stage: Can It Drive Growth?

Brinker International, Inc. EAT is leaning into a volume-driven growth model at a time when much of the restaurant industry is still reliant on pricing to offset cost pressures. In third-quarter fiscal 2025, Chili’s delivered an impressive 20.9% traffic increase, helping fuel a 31.6% same-restaurant sales gain. This outsized growth was achieved without any significant pricing tailwind, underscoring the brand’s renewed focus on traffic as the primary growth lever.Brinker’s focus on attracting and retaining guests through better service and kitchen execution is clear. Initiatives like menu simplification, upgraded cooking systems and enhanced training have improved throughput and consistency across its restaurants. The company also invested in its teams, particularly in high-turnover roles like dishwashers, to support the higher volume. These changes helped support a restaurant-level operating margin of 18.9%, a 470 basis-point increase year over year.Importantly, Brinker is keeping a close eye on macro pressures, including potential tariffs on imported goods like tequila and avocados. Management noted that over 80% of its supply chain is domestically sourced, and it has the flexibility to mitigate any remaining risks through supplier adjustments. With food and beverage costs representing over $1 billion annually, the company believes any tariff-related impact can be absorbed within its existing pricing strategy.Moving ahead, Brinker isn’t planning to shift gears. Pricing is expected to moderate to 2-3% in the fiscal fourth quarter, with longer-term increases likely staying within a 3-5% range. By prioritizing value and experience over price, the company believes it can continue to grow its share in a cautious consumer environment. With momentum in both traffic and margins, Brinker’s volume-first approach positions it well to maintain long-term growth without overreliance on pricing.Key Competitors Building Brand BuzzChipotle Mexican Grill, Inc. CMG continues to execute a multi-layered marketing strategy anchored in menu innovation, digital targeting and cultural relevance. In the first quarter of 2025, Chipotle launched Honey Chicken and reported strong performance regarding the same. To sustain momentum, the company is ramping up summer marketing spend across digital and social channels while using its rewards platform to engage distinct customer cohorts. While transaction growth has faced near-term macro headwinds, Chipotle’s marketing flywheel — driven by brand equity, speed and affordability — remains central to its guest acquisition and retention playbook.BJ’s Restaurants, Inc. BJRI is building on organic brand moments, using social media virality to spark demand. Its Pizookie Platter — a jumbo dessert combining four full-sized Pizookies — gained traction on TikTok early in the fiscal first quarter and quickly translated into tangible sales, with over 24,000 units sold and more than 57 million organic impressions. The brand moved swiftly to capitalize on the trend, integrating it into its broader guest engagement strategy. Simultaneously, BJ’s Restaurants has introduced new LTOs like the Snickers Pizookie and rolled out two new wing sauces to strengthen menu relevance. While BJ’s Restaurants operates with less national scale, its nimble marketing execution and loyalty to core brand equities are helping it enhance brand relevance and guest frequency.The Zacks Rundown for EAT StockBrinker shares have gained 18.5% in the past three months against the industry’s fall of 0.7%.EAT Three-Month Price PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, EAT trades at a forward price-to-sales ratio of 1.53, significantly below the industry’s average of 4.15.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for EAT’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 114.4% and 9.6%, respectively. The estimate for fiscal 2025 has been northbound in the past 30 days.Image Source: Zacks Investment ResearchEAT stock currently carries a Zacks Rank #3 (Hold). 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(BJRI): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks