Brinker International Reports Double-Digit Earnings Growth for 3Q15 (Part 4 of 5)
Management initiatives in 3Q15
During 3Q15, Brinker International (EAT) introduced Ancho-Chile Salmon and Grilled Avocado Steak to its menu. These additions are an extension of a lighter, or lower-calorie, menu the company introduced earlier in 2014. The company also introduced White Spinach Queso as an extension to its Fresh Mex platform and new chicken and pork tacos as an extension to its Top Shelf Taco platform.
Brinker finally introduced a loyalty program called My Chili’s Reward. It’s positioned to use the Ziosk, a tabletop ordering device; the website; and the mobile platform. This loyalty program will enable customers to redeem their points on any item on the menu and split checks down according to the items ordered. To keep the points valid, customers must dine once every four months, according to the company.
Starbucks (SBUX), which is also held by the consumer discretionary sector ETF (XLY), has one of the most successful loyalty programs. Dunkin’ Brands (DNKN) also has a loyalty program for its customers, but it has yet to make its mark. XLY also holds 4% of McDonald’s (MCD), which does not have any loyalty programs.
Management initiatives for the future
Brinker International’s management initiatives include plans to enroll customers in its loyalty program in 4Q15 using its customer database. The company will also launch a capability on its mobile app (application) where customers can track their wait time at a Chili’s restaurant.
The company also plans to launch a partnership with American Express where customers can pay their bills at EAT’s restaurant using American Express reward points.
Brinker International will increase prices by 1% in the middle of the fourth quarter. This should help elevate same-store sales growth if traffic remains constant.
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