Market reaction and the new targets
By 1:10 p.m. in New York, the Dallas-based operator's stock was up 14%, after spiking as much as 18% earlier. Shares have climbed 56% year to date. For the quarter, adjusted EPS was $2.77, beating the $2.45 consensus.
What is driving Chili's outperformance
Chili's has leaned into value and social media-friendly menu items to keep guests coming, even as a broader pullback in spending weighs on peers. Same-store sales - revenue from locations open at least a year - rose 10% in the quarter, beating estimates.
Executives said foot traffic is still increasing, though cash-strapped diners are ordering fewer alcoholic drinks and desserts. One example of the traffic playbook: "We launched the chicken sandwich at $10.99 as a traffic driving strategy," Chief Executive Officer Kevin Hochman said. He added, "The stronger are going to get stronger and the weaker are going to get weaker. That's what you're seeing with us - growing market share driven by traffic."
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Where the growth expands next
Leadership said they plan to push into regions where they have less presence - for example, the US Pacific Northwest - while simultaneously ramping activity in faster-growing markets such as North and South Carolina.
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