Brinker International Shares Hit New 52-Week High: More Room to Run?

Brinker International, Inc. EAT shares hit a fresh 52-week high of $144.10 yesterday, before retracing slightly to close the session at $143.19.Shares of Brinker have gained approximately 57.6% in the past three months, significantly outperforming the Zacks Retail - Restaurants industry’s fall of 5.6%. The company's focus on strategic menu innovation, customer-centric promotions and operational efficiency improvements has been instrumental in driving this momentum. Additionally, favorable consumer trends and improved traffic trends have strengthened investor confidence.Let’s take a closer look at the factors fueling Brinker’s strong market performance and whether there’s more room for growth.What’s Driving the Stock?Core Menu Focus and Value Innovation: Chili’s continues to streamline its offerings with a core menu strategy now known as the “five to drive.” This initiative emphasizes five key items — burgers, crispers, fajitas, margaritas and the Triple Dipper — that collectively represent 58% of total sales. The addition of the Triple Dipper has been a game changer. It resonates particularly well with younger guests who prefer variety and customization. The company is optimistic and anticipates product expansion to sustain traffic growth and boost average check sizes in the upcoming periods.Brinker’s value-driven 3 for Me bundle has also proven highly effective. The initiatives, alongside tiered pricing, have attracted value-conscious and higher-spending customers, contributing to robust profitability. Despite competitors offering steeper discounts, Chili’s success underscores the importance of balancing price and quality to enhance customer perception.Image Source: Zacks Investment ResearchPremium Offerings and Barbell Strategy: Brinker’s barbell pricing strategy for margaritas is effectively driving revenues and margins by offering options across the price spectrum. The introduction of the super-premium Don Julio margarita, priced above $10, has met expectations and appeals to customers seeking high-quality beverages. Meanwhile, the $6 Margarita of the Month, such as the October "Witches Brew," has achieved record-breaking sales, catering to value-conscious consumers. The company’s focus on maintaining a balance between value and quality has proven highly effective in meeting diverse guest preferences while maintaining profitability.Social Media Buzz and Digital Engagement: Brinker has effectively leveraged social media to boost brand engagement. Campaigns around the Triple Dipper have amplified brand awareness and increased foot traffic. The recent addition of Nashville Hot Mozzarella Sticks to the Triple Dipper menu has driven incremental sales, reflecting the appeal of variety and customization.Room for Further Gains?Brinker is applying lessons from Chili’s success to revitalize Maggiano’s brand. Efforts include menu simplifications, the introduction of new signature dishes and innovative cocktails like the smoking-box Old Fashioned. The company emphasizes eliminating non-profitable offerings, such as $6 take-home pasta, to focus on improving the overall guest experience.Brinker’s strategic initiatives position it well for continued success. While inflationary pressures on food and labor costs remain headwinds, the company’s focus on operational efficiency and its strong pricing strategy are likely to mitigate margin risks. Moreover, continued investments in data analytics to personalize marketing and menu innovation are additional growth levers.With solid fundamentals, a differentiated value proposition and effective marketing, Brinker appears poised for further upside. Earnings estimates for EAT have been going up over the past 30 days. The Zacks Consensus Estimate for fiscal 2025 has increased by 5.7% in the said time frame. The consensus estimate for fiscal 2026 has also been revised 8.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.EAT’s Zacks Rank & Other Key PicksBrinker currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks in the Zacks Retail-Wholesale sector are:Shake Shack Inc. SHAK presently sports a Zacks Rank #1 (Strong Buy). SHAK has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has gained 82.1% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.The Zacks Consensus Estimate for SHAK’s 2025 sales and earnings per share (EPS) indicates a rise of 14.9% and 43.9%, respectively, from the year-ago period’s levels.Chipotle Mexican Grill, Inc. CMG presently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 9.8%, on average. The stock has surged 23.3% in the past year.The consensus estimate for CMG’s 2025 sales and EPS indicates growth of 12.9% and 18.4%, respectively, from the year-ago period’s levels.Darden Restaurants, Inc. DRI presently carries a Zacks Rank #2. DRI has a trailing four-quarter negative earnings surprise of 0.9%, on average. The stock has gained 15.8% in the past year.The consensus estimate for DRI’s fiscal 2025 sales and EPS indicates growth of 6.3% and 7.2%, respectively, from the year-ago period’s levels.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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