Chili’s traffic grows as margins widen

Chili’s company-owned restaurants recorded 10.1% same-store sales growth in the 13 weeks ended September 23, 2026, with traffic contributing 6.4%, menu pricing 3.7% and mix flat, according to Brinker International’s October 28 results.

Their restaurant operating margin rose to 18.7% of sales from 17.3% a year earlier. Brinker attributed the improvement to sales leverage, despite higher commodity, hourly labor and other costs. The non-GAAP measure excludes depreciation and amortization, administrative expenses and other gains and charges.

In the quarter ended June 24, 2026, Chili’s company-owned same-store sales grew 5.6%. Traffic contributed 1.5%, pricing 4.3% and mix declined 0.2%. These are year-over-year comparisons for each quarter. Brinker’s comparable base covers restaurants operating over 18 full months, excluding temporary closures lasting at least 14 days.

The operating approach described in Brinker’s fiscal 2026 annual filing pairs a simpler workload with more staff per shift. The company said it had eliminated unnecessary tasks and narrowed its menu around core items so teams could prepare them more consistently. It also described handheld ordering devices intended to get orders to the kitchen faster.

That filing describes a pricing strategy with several levels: the “3 for Me” drink, appetizer and selected entrée offer started at $10.99, while Brinker raised prices elsewhere and improved offerings to encourage higher-priced purchases.

The annual cost figures show how sales growth can reduce a cost ratio even as spending rises. Chili’s labor expense increased to about $1.66 billion from $1.56 billion in fiscal 2026, but its share of company sales fell to 31.4% from 32.3%. Brinker attributed 1.7 percentage points of benefit in labor’s sales ratio to sales leverage, partly offset by higher hourly labor, manager salaries and health insurance.

Brinker now forecasts fiscal 2027 revenue of $6.23 billion to $6.33 billion, up from $6.15 billion to $6.27 billion. Both outlooks include a 53rd operating week, estimated to add about 2% to annual revenue.