A social media campaign on TikTok is paying off for the parent company of Chili's and bringing in younger customers who tend to spend more money at the half-century-old eatery with Texas roots.
Brinker International said sales at Chili's grew around 31% last quarter, driven by an influx of new and returning customers who are visiting the chain's restaurants more often. The company, with 1,624 total restaurants around the world at quarter's end, expects to open between 31 and 37 more this fiscal year as sales rise; it's also renovating its headquarters building.
Restaurant-goers seemed to resonate with the company's "better than fast food" advertising and its Triple Dipper social media campaign where guests can pick three appetizers and sauces, executives said on Brinker's earnings call this week.
"Chili's turnaround has taken hold, and it is sustainable," Brinker's President and CEO Kevin Hochman said on the call. "Our growth continues to be well-balanced, driven by the introduction of a new generation to the Chili's brand and by existing guests coming more often."
Sales at Brinker, which is also the parent company of Italian restaurant Maggiano's, were nearly $1.35 billion for the quarter that ended Dec. 25, compared with $1.06 billion the same period last year, the company said. Overall, comparable restaurant sales grew 27.4% with an increase of 31.4% for Chili's and 1.8% for Maggiano's.
The sales growth at Chili's was driven by a 19.9% increase in traffic generated by investments in advertising with operational upgrades also luring guests back to restaurants, company officials said.
Those improvements include slimming down the menu and technology initiatives.
"What's happening is young people are coming in and they see this on TikTok and they're like, 'wow, this experience is really good,' and it becomes a part of the rotation," Hochman added. "We do believe that our strategy is working and that the frequency and the repeat rates are in a place where this is a sustainable long-term business for us."
HQ renovation
Meanwhile, Brinker is investing millions of dollars into its Dallas-area headquarters. The company filed a state work permit this week to renovate the top floor of the four-story, 216,000-square-foot office building at 3000 Olympus Blvd. in Coppell, Texas, within the Cypress Waters mixed-use development.
Brinker expects to spend at least $8.2 million to renovate more than 47,000 square feet of office space on the fourth floor of its headquarters, according to the permit.
Brinker declined to comment on its headquarters renovation to CoStar News. According to the permit, Dallas-based HKS is the project architect. Billingsley, the building's landlord, did not immediately respond to a request for comment from CoStar News.
"In short, Chili's is broadly relevant again and delivering a guest experience that has restored its leadership position in casual dining," Hochman said on the call.