What happened

Brinker International (EAT -0.11%) is trailing a declining market this week. Shares were down by 10% through early Friday trading, according to data provided by S&P Global Market Intelligence. The S&P 500 dropped by roughly 4% in that time.

That decline, however, wasn't enough to push the casual dining restaurant chain operator below the wider market for the year. It's down 17% thus far in 2022, compared to a 22% drop in the S&P 500.

This week's slide was sparked by the third-quarter earnings report the company delivered Wednesday, which was poorly received by investors.

So what

 Brinker International owns a pair of popular restaurant chains: Chili's Grill and Bar, and Maggiano's Little Italy. In Q3, its sales grew as consumers continued to prioritize dining out. Comparable-store sales were up 18% at Maggiano's and up 4% at Chili's. "I'm encouraged by our quick progress to grow topline sales and simplify operations," CEO Kevin Hochman said in a press release.

However, those simplification efforts haven't yielded sustainable profits yet. Brinker reported a 2% operating loss in the period compared to a 3% operating profit a year ago. This slump reflected the company's challenges in passing along higher prices to consumers as costs spiked for key ingredients like chicken and beef. Investors had been hoping to see more resilience in this area, so they were somewhat disappointed by Brinker's pricing struggles.

Now what

Some peers in the restaurant space are having more success, especially by stressing value-focused meals. McDonald's just reported strong customer traffic in Q3 despite increased menu prices, for example.

Brinker aims to replicate that type of progress over the next few quarters, in part by making its menu more attractive to casual dining, to-go, and delivery fans. The restaurant chain operator might achieve a quick return to profitability, in fact, given that it's operating at close to break-even today. Still, there are more attractive growth stocks in the space right now, including McDonald's, which is highly profitable.