Chili's parent Brinker International is creating a recipe for store expansion it wants to serve up in U.S. markets in coming years.
The Dallas-based company, with over 1,600 Chili's and Maggiano's Little Italy restaurants, slightly raised its full-year profit outlook to $5.78 billion on the low end of its range from $5.76 billion on the heels of Chili's seeing a 4% increase in same-store sales in its fiscal third quarter ending March 25 — marking 20 straight quarters of growth for Chili's. This comes as Chili's is optimizing its real estate through revamps and plans to open new restaurants in the United States.
"We're very, very bullish about the continued sustained growth of this business," Brinker International CEO and President Kevin Hochman told investors and analysts during the company's earnings call on Wednesday where he outlined plans to revamp existing eateries and add new restaurants.
Hochman highlighted the company's initiative called North of 6 to build on Chili's momentum to investors. The initiative has Brinker studying top-performing restaurants with average unit volumes surpassing $6 million in hopes of replicating that success. These eateries serve an average of 20% to 80% more guests than a typical Chili's restaurant, he said.
"The dramatic business simplification has been a huge enabler for our restaurants, and the direction we are getting from the managers of [top performing] restaurants is, 'we need more simplification,'" Hochman added.
The guidance from top-performing restaurants was also used by Chili's executives in the redesign of four test restaurants in the Dallas area to set the tone for Chili's expansion in the United States. Chili's plans to complete another eight to 10 redesigns of restaurants during the remainder of this fiscal year.
Hochman said Brinker plans to tackle another 60 to 80 redesigns during fiscal 2027 before getting to a cadence of 10% of the fleet every year starting in 2028. Chili's has more than 1,200 restaurants in the United States.
"[For] new unit growth plans, our goal is to continue to ramp up to a new run rate by fiscal 2029," Hochman said, adding he plans to share additional details at the company's investor day scheduled in September.
Chief Financial Officer Mika Ware said Brinker is finalizing what the company wants to spend money on with the new restaurants.
"Primarily in the past, we've really stuck to some of our biggest states that we always have done a great job in, California, Texas, Florida," Ware said.
"We'll still build there, but there's a lot more opportunity across the United States for us to build in different markets," she added. "It seems like Chili's is everywhere, Chili's is not everywhere."