Brinker International, Inc. EAT is entering its next phase of Chili’s growth from a stronger unit-economics base. Average annual unit volumes (AUVs) climbed from just over $4.5 million at the end of fiscal 2025 to about $5 million in fiscal 2026, supported by a second consecutive year of traffic gains and five straight years of same-store sales growth. Management views this combination of higher volumes and sustained traffic as evidence that its focus on food, service, value and restaurant operations is gaining traction.
Importantly, the $5 million AUV level may not represent the ceiling. Chili’s comparable sales increased 9.2% in fiscal 2026, including a 3.6% traffic contribution. In the fiscal fourth quarter, comps advanced 5.6%, with traffic remaining positive at 1.5% despite comparison with a 16.3% traffic increase in the prior-year period. Chili’s company sales also reached about $1.41 billion in the fiscal fourth quarter, up from roughly $1.33 billion a year earlier.
Brinker is looking to build on these volumes through continued reinvestment rather than relying solely on pricing. Its strategy centers on strengthening Chili’s everyday value proposition, improving food and service, and using menu innovation to generate incremental visits. The Big Smasher, Big QP and Big Crispy Chicken Sandwich have supported this approach, with management noting that sales and traffic accelerated further in July following the Big Crispy rollout.
Higher AUVs also provide more flexibility to reinvest. Brinker plans 60-80 Chili’s reimages in fiscal 2027 and expects to begin reimaging about 10% of the fleet annually in fiscal 2028. With additional traffic capacity, improving throughput and continued restaurant reinvestment, the $5 million AUV level could become an important foundation for Chili’s next stage of growth.
AUV Growth Highlights Competitive Restaurant Productivity
Brinker’s Chili’s concept has pushed average annual unit volumes to about $5 million, up from just over $4.5 million a year earlier, giving the brand a stronger base for traffic growth, margin leverage and future development. Peers Chipotle Mexican Grill, Inc. CMG and Shake Shack Inc. SHAK are also emphasizing restaurant productivity and unit economics as important growth drivers.
Chipotle continues to focus on increasing restaurant productivity through higher throughput, menu innovation and digital engagement. CMG’s high-efficiency equipment package has been installed in more than 1,000 restaurants, with those locations producing two to three more entrees during peak 15-minute periods and generating hundreds of basis points of comparable-sales improvement. Management also views menu innovation as a multiyear lever for increasing AUVs over time.
Shake Shack is similarly relying on high AUVs and restaurant-level productivity to support expansion. Management said strong cash-on-cash returns are being driven by low build costs, healthy margins and high AUVs, while newer Shacks continue to track toward targeted returns. SHAK generated roughly $78,000 in average weekly sales in the second quarter and remains focused on maintaining strong unit volumes as it expands its footprint.
EAT’s Price Performance, Valuation and Estimates
Brinker’s shares have gained 33.9% over the past six months against the industry’s 13.5% decline.
EAT Stock’s Six-Month Price Performance
Image Source: Zacks Investment Research
In terms of its forward 12-month price-to-earnings ratio, EAT is trading at 14.84, down from the industry average of 20.51.
EAT’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past 30 days, the Zacks Consensus Estimate for EAT’s fiscal 2026 earnings per share has decreased, as shown in the chart. However, the estimate for EAT’s fiscal 2026 earnings per share implies a year-over-year uptick of 21%.
Image Source: Zacks Investment Research
EAT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).