The ink has not even dried on fiscal 2004, and Brinker
Brinker's fourth-quarter net income jumped to $64.5 million, or $0.67, from $40.2 million, on sales that rose 16.2% to $1.02 billion. Excluding a $3.9 million charge related to store closings, and an even larger charge from last year's fourth quarter, net earnings rose 27% to $0.71, in line with estimates. Results were aided in part by an extra operating week this year (14 vs. 13).
Same-store sales grew 5.6% at On the Border, 2.5% at Maggiano's, and 1.7% at Chili's, but those at Macaroni Grill fell by 1.7%. Rival Darden
Lately, overall same-store sales at multichain companies such as Darden and Brinker have been watered down compared with those that can focus on a single concept, such as Applebee's
On the positive side, Brinker's fourth-quarter operating margins improved substantially to 9.5%, although they fell for the year to 6.8%. Furthermore, the company has an active stock buyback program in place, picking up 6 million shares in the fourth quarter alone. However, management's pessimistic projections are troubling, and it is hard to get excited about Brinker's prospects until sales at Chili's -- which represent the bulk of the firm's total earnings -- show signs of improvement.
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Fool contributor Nathan Slaughter prefers On the Border's salsa to Chili's. He owns none of the companies mentioned.