In the bakery/restaurant segment, Panera Bread
Over the past two years, Brinker has jettisoned the Big Bowl Asian Kitchen, EatZi, and Cozymel's Costal Grill concepts. The company has also taken a $14.1 million charge to fully impair the investment and notes receivable for Rockfish Seafood Grill, of which it owns 43%. All of this downsizing allows the company to focus its resources on its remaining brands: Romano's Macaroni Grill, On The Border Mexican Grill & Cantina, and Maggiano's Little Italy.
That's not to mention Chili's restaurants, which account for 68% of the company's total locations and 74% of the profit contribution. It's the cash cow, and there is still plenty of opportunity to grow the brand. So why fiddle with the Corner Bakery (or any of the other businesses that have been sold) when you have a winner on your hand?
About a year ago, Applebee's
But despite all the good news on Chili's, I wouldn't suggest getting your wallet out to buy Brinker shares just yet. Look at the strong same-store sales at Darden Restaurants
Also worth considering as it relates to the investment case (or lack thereof), Brinker has 8.7 million options outstanding. That's 10% of its outstanding shares. That's a lot.
Still, Brinker sees 15% annual earnings growth ahead. Maybe analysts will raise their annual-growth estimates of 13% now that the company is better focused. Is it worth it? You've got the menu -- it's your call.
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