Brinker International, Inc. EAT has skyrocketed 90.4% in just six months, significantly outpacing its retail restaurant industry’s dip of 0.1% and the S&P 500's 0.7% decline.

The company is benefiting from increased menu pricing, effective marketing strategies and traffic-driving initiatives. Also, the focus on menu adjustments bodes well. To drive growth, EAT intends to balance value offerings with margin expansion and adaptability to changing consumer preferences.

EAT Trades 33% Below Its 52-Week High

Despite this impressive rally, the stock closed at $144.81 on Friday, still well below its 52-week high of $192.22 but far above its 52-week low of $43.37 — a remarkable rebound. Moreover, EAT has outpaced other industry players like Wingstop Inc. WING, Shake Shack Inc. SHAK and CAVA Group, Inc. CAVA.

EAT Stock Price Performance

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Robust Fundamentals to Drive Brinker Stock

The company is committed to driving traffic and revenue growth through a range of strategic initiatives. The company is focusing on menu innovation, value-driven offerings, enhanced food presentation, targeted advertising, kitchen system upgrades and improved service platforms to strengthen its brand appeal.

In the second quarter of fiscal 2025, EAT saw increased traffic and guest counts due to the success of its marketing campaigns, including the Better Than Fast-Food TV campaign and the Triple Dipper social media campaign. Sales at Chili’s rose 31.4% and traffic increased 19.9% year over year. As operations improve, the company is seeing higher returns on marketing investments through more frequent guest visits. 

The company is focused on driving traffic through its five-to-drive strategy, which aims to foster innovation and boost sales growth. The 3 for Me campaign, which offers better value than fast food, is currently the primary traffic driver. It attracts guests from various demographics who seek high-quality and great experiences. Guests who take advantage of this offer tend to return more frequently than those who do not.

Expansion continues to be a priority for Brinker. The company is actively growing Chili’s international footprint through new and existing franchise partnerships while leveraging virtual brands to enhance sales. In fiscal 2024, nine Chili’s locations were opened. In fiscal 2025, the company plans to open 9-11 domestic locations and 21-25 international outlets.

Brinker has also ramped up its remodeling efforts to revamp its brand image and improve the guest experience. The company is investing in a brand-wide reimaging program, which is expected to drive traffic and comparable sales over the next three years. Meanwhile, kitchen innovation remains a focus, with new equipment being tested to enhance efficiency and increase order volumes.

In fiscal 2025 and beyond, Brinker is set to accelerate growth by expanding its restaurant pipeline, enhancing convenience and elevating the guest experience. The company remains committed to aggressive investments aimed at strengthening its market position and delivering long-term value.

Brinker’s Bottom Line Improves

EAT’s earnings trajectory is on a sharp upward trend, with projections signaling substantial growth ahead. The company is expected to deliver earnings of $8.30 per share in fiscal 2025, marking an astonishing 102.4% year-over-year surge. The momentum is set to carry into fiscal 2026, with earnings forecast to climb up 12.6% to $9.35 per share.

This impressive earnings expansion highlights Brinker’s strong upside potential and reinforces confidence in its long-term growth story, positioning the company for sustained success in the years ahead.

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EAT Trades at a Discount

Brinker is trading at a discount on a forward 12-month price-to-earnings (P/E) ratio basis. EAT’s forward 12-month P/E ratio stands at 15.98X, lower than the industry.

EAT P/E Ratio (Forward 12 Months)

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Brinker’s Investment Strategy

EAT’s strong stock performance, strategic initiatives and solid fundamentals make it a compelling investment opportunity. The company has effectively driven traffic and revenue growth through menu innovation, targeted marketing and value-driven offerings, strengthening its competitive position.

Expansion efforts, both domestically and internationally, along with remodeling initiatives, are enhancing the guest experience and long-term brand appeal. Brinker's focus on balancing value with profitability ensures adaptability to shifting consumer preferences, while its improving earnings trajectory signals strong growth potential.

Despite its impressive rally, the stock still trades at a discount relative to industry peers, offering investors an attractive entry point with significant upside potential. The company currently sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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