DALLAS — A conscious decision to stay true to the strategy it has been working on for more than two years — delivering on digital, off-premises, value and scale — helped Brinker International, Inc. weather the impact of the coronavirus (COVID-19) pandemic during fiscal 2020. A new wings concept also looks promising.
“We didn't have to scramble when the pandemic hit,” Wyman T. Roberts, president and chief executive officer, said during an Aug. 12 conference call with analysts. “We walked into it with seven solid quarters of performance. All we had to do is stay focused and push the accelerator a little harder. As a result, we set the bar in casual dining, landing the top spot in sales and traffic for three straight months according to KNAPP-TRACK, and we're poised for continued future success.”
Even so, the pandemic hit Brinker hard.
Net income in the year ended June 24 was $24.4 million, equal to 64¢ per share on the common stock, down 84% from $154.9 million, or $4.04 per share, in fiscal 2019. Net sales fell 4.4% to $3.079 billion from $3.218 billion.
Despite the hit to financials, Brinker said it has seen positive signs in results generated by its Chili’s restaurant chain recently, and a new concept has the company excited about the year ahead.
Using its existing strengths in the digital space and off-premises, Brinker during the last week of fiscal 2020 accomplished something that Mr. Roberts claims “no other restaurant company has ever done” — launch a virtual brand in all its outlets across the United States in a single day.
Developed over the course of six months and launched overnight with minimal investment in a consumer channel where demand is growing by more than 100% annually, It’s Just Wings leverages existing Chili’s and Maggiano’s kitchens and cooks to sell chicken wings (smoked, fried and boneless) featuring a variety of sauces. It’s Just Wings operates exclusively through a partnership with DoorDash.
“Sales continue to build every week, and we clearly see the potential to exceed $150 million in the brand's first year, which would secure It's Just Wings a spot in the top 200 restaurant brands,” Mr. Roberts said. “Over the years, casual dining has been deemed for being overbuilt. We believe this is our opportunity to prove that maybe it isn't overbuilt, it's just underutilized. It's Just Wings leverages existing buildings, equipment and labor. Even after aggressive pricing and marketing, buying quality ingredients and packaging and paying our last-mile logistics partner, we're generating strong flow through.”
Mr. Roberts said It’s Just Wings guests are highly incremental to Brinker’s concepts, and feedback has been “extremely positive.”
“Taking into account our scale, the capacity of our kitchens, our exclusive partnership with DoorDash, we believe our ability to win in this space is unmatched,” he said. “So we're testing additional virtual concepts and learning how to drive visibility among the millions of DoorDash guests looking for food delivery options. And how to continually improve our operations to meet consumer demand for speed, food quality and value. We are pleased to have not one but two brands that rank among the most popular on the DoorDash platform, and we're excited about the potential that lies ahead.”