What happened?

Shares of Brinker International (NYSE:EAT), a leading casual dining restaurant company with restaurants that include Chili's Grill & Bar and Maggiano's Little Italy, are down 11% as of 3 p.m. EST Tuesday after releasing fiscal second-quarter results. 

So what

Total revenue increased 3.2% to $790.7 million compared to the prior year, which managed to top analysts' estimates calling for $780.8 million. Same-store sales growth checked in at 1.8%, also ahead of estimates calling for a 1.4% increase. Excluding one-time items, Brinker's adjusted earnings-per-share checked in at $0.89, right in line with analysts' estimates.

Chili's appetizer of sliders, wings, and wraps.

Chili's triple dipper. Image source: Brinker International media gallery.

"Brinker delivered our fifth consecutive quarter of sequential sales improvement, posting positive sales and industry leading traffic," said Wyman Roberts, chief executive officer and president, in a press release. "Our sustained momentum is being driven by several key factors including operational execution, takeout, and value."

Now what

Investors wondering why the stock is down 11% after beating top-line estimates and matching on the bottom line can probably look toward margins for their answer. Operating income as a percentage of total revenues checked in at 6.3% during the second quarter, down 80 basis points from the prior year's 7.1%. Restaurant operating margin as a percentage of company sales also declined from the prior year's 14.9% down to 12.4%. Despite disappointing margins, management had enough confidence in its outlook to raise full-year revenue growth to a range between 2% and 2.75%, compared to prior guidance between 1% to 2.25%. Management also bumped its adjusted earnings per share from $3.70 to $3.90 per share up to $3.75 to $3.95 per share.

Check out the latest Brinker International earnings call transcript.