These are not salad days for casual dining. From March 2006 to June 2007, Brinker International (NYSE:EAT) posted 16 straight month-to-month declines in same-store sales, including 15 straight at its flagship Chili's chain. People are just not coming through the doors the way they used to.

As bad as that is, it's worse at Brinker's 230-unit Macaroni Grill chain, which has been suffering weak comps since 2004. In August, Brinker announced it would look for a buyer for the chain, and earlier today, the company said that it expects to close a deal by the end of the fiscal year next June. 

No end in sight
But in the meantime, the troubles likely will continue. With housing difficulties weighing heavily on a slowing economy, consumers are staying home more, or trading down to cheaper options like fast food. Comps for the U.S. market rose 5.1% in the latest quarter at McDonald's (NYSE:MCD), for example, and comps for the U.S. and Canada were 4.8% higher at Burger King (NYSE:BKC). 

The decline in traffic at Brinker's chains has not been drastic enough to hit systemwide sales yet. Today, the company reported a 3% rise in revenue for the first quarter, but this came largely from a net expansion. 

Income from continuing operations fell almost 4%, because of higher commodity prices and labor costs. But on a per-share basis, it rose to $0.35 from $0.32 due to share buybacks.  

Brinker isn't alone in its woes. Ruby Tuesday (NYSE:RT) and Applebee's (NYSE:APPB) have also reported sliding comps. And with the economy looking increasingly sluggish, investors should not expect Brinker to turn things around right away. The company expects comps to rise 2% to 2.5% in fiscal 2008, but that might be ambitious if the economy continues to slow down. 

Brinker management said it's making efforts to capitalize on the Chili's brand by offering catering services, better take-out operations, and even grocery items, but I'd wait before sampling any of these shares.

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