close
close

first Drop

Com TW NOw News 2024

Chili’s shares ‘remarkable’ growth thanks to cheap dishes
news

Chili’s shares ‘remarkable’ growth thanks to cheap dishes

Chili’s Bar & Grill said it bounced back from business woes earlier this year by introducing new, lower-priced menu items that compete directly with fast-food restaurants.

The 49-year-old Dallas-based restaurant chain — known for its baby back ribs and sizzling fajita dishes — on Wednesday reported a whopping 14% increase in same-store sales and 6.5% growth in customer traffic in the latest quarter.

The company said the growth is mainly driven by three items: a $10.99 Big Smasher burger, a $6 margarita and the $17 Triple Dipper appetizer.

Chili’s burgers are going viral after Big Smasher was introduced in April. Christopher Sadowski

The Big Smasher “Brings in more new guests from all demographics,” Chile’s President Kevin Hochman said during an earnings call this week. “It turns out that all households, regardless of income, want unbeatable value.”

JPMorgan Chase analyst John Ivankoe described Chile’s earnings results as “truly remarkable,” adding that the chain — which made headlines last year and earlier this year for closing stores — “is in a league very, very few are… in a difficult situation. category.”

Shares of Chile’s parent company Brinker International rose 7% on Wednesday, hitting a 52-week intraday high of $107.15. Shares recently traded at $103.30 on Thursday.

Brinker’s shares are up 150% this year.

The Big Smasher made its debut in April as fast-food chains, including McDonald’s, turned away customers across the country due to increases in menu prices.

Customers flocked to Chili’s 1,500 restaurants after the campaign proclaimed that Big Smasher burgers have “twice the beef of a Big Mac and flavors fast food lovers will recognize.”

The Big Smasher burger is advertised as having “twice the beef of a Big Mac.” Chilis
Wall Street analysts described the 49-year-old restaurant chain’s growth as “remarkable.” Christopher Sadowski

The meal also includes chips and salsa and a non-alcoholic drink.

The Triple Dipper appetizer accounts for 11% of Chili’s sales, while orders for the calorie-hungry meal, which includes a choice of three items and dips, rose 70% in the last quarter.

Chile’s gains come partly at the expense of McDonald’s, which is struggling with slowing growth and an E. Coli outbreak caused by chopped onions in the Quarter Pounders.

McDonald’s has been plagued this month by slowing growth and an E.Coli outbreak. Ming – stock.adobe.com

McDonald’s U.S. same-store sales fell short of expectations as customers continued to scale back their spending, executives said during an earnings call this week.

“Consumers, especially those with low incomes, more often chose to eat at home. This trend continued in the third quarter,” CEO Chris Kempczinski said on the call. “Our performance so far this year has fallen short of our expectations.”

Some fast-food chains have expressed concern — especially in California, where the minimum wage for fast-food workers rose to $20 an hour this year — that they will soon find themselves competing for customers with casual restaurants like Chili’s.

Six-dollar margaritas are drawing customers to Chile’s restaurants. SARA DIGGINS / AMERICAN-STATESMAN / USA TODAY NETWORK

Nearly 100% of fast-food chains in California have increased menu prices to cover higher labor costs, according to a survey by the Employment Policies Institute.

Casual restaurants are exempt from the wage hike in California, where many fast-food restaurants have closed since the wage law took effect in April.