Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 27, 2023 | Oct. 27, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 27, 2023 | |
Entity File Number | 1-10275 | |
Entity Registrant Name | BRINKER INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-1914582 | |
Entity Address, Address Line One | 3000 Olympus Blvd | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75019 | |
City Area Code | (972) | |
Local Phone Number | 980-9917 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | EAT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000703351 | |
Current Fiscal Year End Date | --06-26 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 44,203,103 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Revenues | ||
Total revenues | $ 1,012.5 | $ 955.5 |
Operating costs and expenses | ||
Food and beverage costs | 258.8 | 289.5 |
Restaurant labor | 348.1 | 330.6 |
Restaurant expenses | 290.8 | 268.8 |
Depreciation and amortization | 41.9 | 41.9 |
General and administrative | 42.4 | 39.5 |
Other (gains) and charges | 6.3 | 5 |
Total operating costs and expenses | 988.3 | 975.3 |
Operating income (loss) | 24.2 | (19.8) |
Interest expenses | 17 | 12.3 |
Other income, net | 0 | (0.4) |
Income (loss) before income taxes | 7.2 | (31.7) |
Provision (benefit) for income taxes | 0 | (1.5) |
Net income (loss) | $ 7.2 | $ (30.2) |
Basic net income per share | $ 0.16 | $ (0.69) |
Diluted net income per share | $ 0.16 | $ (0.69) |
Basic weighted average shares outstanding | 44.6 | 43.9 |
Diluted weighted average shares outstanding | 45.4 | 43.9 |
Other comprehensive loss | ||
Foreign currency translation adjustment | $ (0.2) | $ (1) |
Other comprehensive loss | (0.2) | (1) |
Comprehensive income (loss) | 7 | (31.2) |
Company sales [Member] | ||
Revenues | ||
Revenues | 1,002 | 946.1 |
Franchise revenues [Member] | ||
Revenues | ||
Revenues | $ 10.5 | $ 9.4 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Millions, $ in Millions | Sep. 27, 2023 | Jun. 28, 2023 |
Current assets | ||
Cash and cash equivalents | $ 14.4 | $ 15.1 |
Accounts receivable, net | 49.2 | 60.9 |
Inventories | 32.5 | 34.5 |
Restaurant supplies | 55.1 | 55.6 |
Prepaid expenses | 24.2 | 17.2 |
Income taxes receivable | 1.7 | 0 |
Total current assets | 177.1 | 183.3 |
Property and equipment, at cost | ||
Land | 42.4 | 42.4 |
Buildings and leasehold improvements | 1,649.8 | 1,635.7 |
Furniture and equipment | 749.1 | 765.8 |
Construction-in-progress | 35.5 | 30.1 |
Gross property and equipment | 2,476.8 | 2,474 |
Less accumulated depreciation and amortization | (1,660.9) | (1,665.7) |
Net property and equipment | 815.9 | 808.3 |
Other assets | ||
Operating lease assets | 1,115.9 | 1,134.9 |
Goodwill | 194.8 | 195 |
Deferred income taxes, net | 95.4 | 93.4 |
Intangibles, net | 23 | 23.9 |
Other | 52.7 | 48.2 |
Total other assets | 1,481.8 | 1,495.4 |
Total assets | 2,474.8 | 2,487 |
Current liabilities | ||
Accounts payable | 141.7 | 125.7 |
Gift card liability | 64.9 | 73 |
Accrued payroll | 84.2 | 106.1 |
Operating lease liabilities | 112.9 | 112.4 |
Other accrued liabilities | 134.9 | 116.3 |
Income taxes payable | 3 | 2.4 |
Total current liabilities | 541.6 | 535.9 |
Long-term debt and finance leases, less current installments | 923.9 | 912.2 |
Long-term operating lease liabilities, less current portion | 1,104.9 | 1,125.8 |
Other liabilities | 60.7 | 57.4 |
Commitments and contingencies (Note 7) | ||
Shareholders’ deficit | ||
Common stock, shares authorized | 250 | 250 |
Common stock, par value per share | $ 0.10 | $ 0.10 |
Common stock, shares issued | 60.3 | 60.3 |
Common stock, shares outstanding | 44.2 | 44.6 |
Common stock (250.0 million authorized shares; $0.10 par value; 60.3 million shares issued; and 44.2 million shares outstanding at September 27, 2023 and 44.6 million shares outstanding at June 28, 2023) | $ 6 | $ 6 |
Additional paid-in capital | 683.8 | 690 |
Accumulated other comprehensive loss | (6.2) | (6) |
Accumulated deficit | $ (344.7) | $ (351.9) |
Treasury stock, shares | 16.1 | 15.7 |
Treasury stock, at cost (16.1 million shares at September 27, 2023, and 15.7 million shares at June 28, 2023) | $ (495.2) | $ (482.4) |
Total shareholders’ deficit | (156.3) | (144.3) |
Total liabilities and shareholders’ deficit | $ 2,474.8 | $ 2,487 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ 7.2 | $ (30.2) |
Adjustments to reconcile Net income (loss) to Net cash provided by operating activities: | ||
Depreciation and amortization | 41.9 | 41.9 |
Stock-based compensation | 5.7 | 4.7 |
Deferred income taxes, net | (2) | (4.1) |
Non-cash other (gains) and charges | 4.3 | 2.4 |
Net loss on disposal of assets | 1.7 | 1.5 |
Other | 0.6 | 0.4 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 9.7 | 6.1 |
Inventories | 1.9 | (1.1) |
Restaurant supplies | (0.1) | 0 |
Prepaid expenses | (11.6) | (9.7) |
Income taxes | (1.1) | 1.4 |
Operating lease assets, net of liabilities | (1.3) | (0.9) |
Accounts payable | 12.8 | 7.1 |
Increase (decrease) in gift card liability | (8.1) | (8.9) |
Accrued payroll | (22) | (5) |
Other accrued liabilities | 17.5 | 18.7 |
Other liabilities | 2 | 0.3 |
Net cash provided by operating activities | 59.1 | 24.6 |
Cash flows from investing activities | ||
Payments for property and equipment | (46.9) | (46.7) |
Proceeds from note receivable | 1.3 | 1.1 |
Net cash used in investing activities | (45.6) | (45.6) |
Cash flows from financing activities | ||
Borrowings on revolving credit facility | 129 | 135 |
Payments on revolving credit facility | (115) | (100) |
Purchases of treasury stock | (24.7) | (2) |
Payments on long-term debt | (2.8) | (5.8) |
Payments for debt issuance costs | (0.7) | 0 |
Payments of dividends | 0 | (0.2) |
Net cash (used in) provided by financing activities | (14.2) | 27 |
Net change in cash and cash equivalents | (0.7) | 6 |
Cash and cash equivalents at beginning of period | 15.1 | 13.5 |
Cash and cash equivalents at end of period | 14.4 | 19.5 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid, net | 3.2 | 1.1 |
Interest paid, net of amounts capitalized | 5.6 | 3.9 |
Accrued capital expenditures | $ 15.1 | $ 20.3 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit (Unaudited) - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Jun. 29, 2022 | $ (268.1) | $ 7 | $ 690.9 | $ (148.4) | $ (812.3) | $ (5.3) |
Net income (loss) | (30.2) | 0 | 0 | (30.2) | 0 | 0 |
Other comprehensive loss | (1) | 0 | 0 | 0 | 0 | (1) |
Stock-based compensation | 4.7 | 0 | 4.7 | 0 | 0 | 0 |
Purchases of treasury stock | (2) | 0 | 0.2 | 0 | (2.2) | 0 |
Issuances of treasury stock | 0 | 0 | (7.8) | 0 | 7.8 | 0 |
Retirement of stock | 0 | (1) | 0 | (306.1) | 307.1 | 0 |
Ending balance at Sep. 28, 2022 | (296.6) | 6 | 688 | (484.7) | (499.6) | (6.3) |
Beginning balance at Jun. 28, 2023 | (144.3) | 6 | 690 | (351.9) | (482.4) | (6) |
Net income (loss) | 7.2 | 0 | 0 | 7.2 | 0 | 0 |
Other comprehensive loss | (0.2) | 0 | 0 | 0 | 0 | (0.2) |
Stock-based compensation | 5.7 | 0 | 5.7 | 0 | 0 | 0 |
Purchases of treasury stock | (24.7) | 0 | (0.2) | 0 | (24.5) | 0 |
Issuances of treasury stock | 0 | 0 | (11.7) | 0 | 11.7 | 0 |
Ending balance at Sep. 27, 2023 | $ (156.3) | $ 6 | $ 683.8 | $ (344.7) | $ (495.2) | $ (6.2) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Sep. 27, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | References to “Brinker,” the “Company,” “we,” “us,” and “our” in this Form 10-Q refer to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our Consolidated Financial Statements (Unaudited) as of September 27, 2023 and June 28, 2023, and for the thirteen week periods ended September 27, 2023 and September 28, 2022, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company is principally engaged in the ownership, operation, development and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. As of September 27, 2023, we owned, operated or franchised 1,651 restaurants, consisting of 1,181 Company-owned restaurants and 470 franchised restaurants, located in the United States, 29 other countries and two United States territories. Use of Estimates The preparation of the Consolidated Financial Statements (Unaudited) is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements (Unaudited), and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to Consolidated Financial Statements contained in our June 28, 2023 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. Foreign Currency Translation The foreign currency translation adjustment included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income (loss) and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). New Accounting Standards Implemented in Fiscal 2024 We reviewed accounting pronouncements that became effective for our fiscal 2024 and determined that either they were not applicable or they did not have a material impact on the Consolidated Financial Statements (Unaudited). We also reviewed recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the Consolidated Financial Statements (Unaudited). |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Sep. 27, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Deferred Franchise and Development Fees Our deferred franchise and development fees consist of the unrecognized fees received from franchisees. Recognition of these fees in subsequent periods is based on satisfaction of the contractual performance obligations of our active contracts with franchisees. We also expect to earn subsequent period royalties and advertising fees related to our franchise contracts; however, due to the variability and uncertainty of these future revenues based upon a sales-based measure, these future revenues are not yet estimable as the performance obligations remain unsatisfied. Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets (Unaudited). The following table reflects the changes in deferred franchise and development fees between June 28, 2023 and September 27, 2023: Deferred Franchise and Development Fees Balance as of June 28, 2023 $ 11.1 Amount recognized to Franchise revenues (0.4) Balance as of September 27, 2023 $ 10.7 The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of September 27, 2023: Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2024 $ 0.7 2025 0.9 2026 0.8 2027 0.8 2028 0.7 Thereafter 6.8 $ 10.7 Deferred Gift Card Revenues Deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees. The following table reflects the changes in the Gift card liability between June 28, 2023 and September 27, 2023: Gift Card Liability Balance as of June 28, 2023 $ 73.0 Gift card sales 18.1 Gift card redemptions recognized to Company sales (23.8) Gift card breakage recognized to Company sales (3.0) Other 0.6 Balance as of September 27, 2023 $ 64.9 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 27, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value is the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under market conditions. Fair value measurements are categorized in three levels based on the types of significant inputs used, as follows: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than quoted prices in active markets for identical assets or liabilities Level 3 Unobservable inputs that cannot be corroborated by observable market data Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items. The carrying amount of debt outstanding related to our revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 5.000% and 8.250% notes are based on quoted market prices and are considered Level 2 fair value measurements. The 5.000% notes and 8.250% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows: September 27, 2023 June 28, 2023 Carrying Amount Fair Value Carrying Amount Fair Value 5.000% notes $ 349.2 $ 342.0 $ 349.0 $ 343.5 8.250% notes 344.5 342.6 344.3 348.3 Non-Financial Assets The fair values of transferable liquor licenses are based on prices in the open market for licenses in the same or similar jurisdictions and are categorized as Level 2. The fair values of other non-financial assets are determined based on appraisals, sales prices of comparable assets or estimates of discounted cash flow and are categorized as Level 3. We review the carrying amounts of non-financial assets, primarily long-lived property and equipment, finance lease assets, operating lease assets, reacquired franchise rights, goodwill and transferable liquor licenses annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. Any impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited). During the thirteen week periods ended September 27, 2023 and September 28, 2022, no indicators of impairment were identified. Intangibles, net in the Consolidated Balance Sheets (Unaudited) includes both indefinite-lived intangible assets such as transferable liquor licenses and definite-lived intangible assets such as reacquired franchise rights. Accumulated amortization associated with definite-lived intangible assets at September 27, 2023 and June 28, 2023, was $16.0 million and $15.3 million, respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Sep. 27, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Other accrued liabilities consist of the following: September 27, June 28, Property tax $ 29.4 $ 24.5 Insurance 27.9 29.3 Interest 17.1 6.4 Sales tax 16.6 17.3 Utilities and services 10.7 10.4 Current installments of finance lease obligations 10.2 10.2 Other 23.0 18.2 $ 134.9 $ 116.3 |
LEASES
LEASES | 3 Months Ended |
Sep. 27, 2023 | |
Leases [Abstract] | |
Leases | We typically lease our restaurant facilities through ground leases (where we lease land only, but construct the building and improvements) or retail leases (where we lease the land/retail space and building). In addition to our restaurant facilities, we also lease our corporate headquarters location and certain equipment. The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) were as follows: Thirteen Week Periods Ended September 27, September 28, Operating lease cost $ 45.6 $ 45.1 Variable lease cost 15.6 15.6 Finance lease amortization 3.2 5.2 Finance lease interest 0.9 1.1 Short-term lease cost 0.1 0.1 Sublease income (0.4) (0.9) Total lease costs, net $ 65.0 $ 66.2 Supplemental cash flow information related to leases: Thirteen Week Periods Ended September 27, September 28, Operating lease assets obtained in exchange for operating lease liabilities $ 9.1 $ 23.6 Finance leases assets obtained in exchange for finance lease liabilities 0.1 0.2 Finance lease assets are recorded in Property and equipment, at cost, and the net balance as of September 27, 2023 and June 28, 2023 was $48.1 million and $51.3 million, respectively. |
DEBT
DEBT | 3 Months Ended |
Sep. 27, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Long-term debt consists of the following: September 27, June 28, Revolving credit facility $ 175.3 $ 161.3 5.000% notes 350.0 350.0 8.250% notes 350.0 350.0 Finance lease obligations 65.1 67.8 Total long-term debt 940.4 929.1 Less: unamortized debt issuance costs and discounts (6.3) (6.7) Total long-term debt, less unamortized debt issuance costs and discounts 934.1 922.4 Less: current installments of long-term debt and finance leases (1) (10.2) (10.2) Total long-term debt, less current portion $ 923.9 $ 912.2 (1) Current installments of long-term debt consist of finance leases and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 4 - Accrued Liabilities for further details. Revolving Credit Facility In the thirteen week period ended September 27, 2023, net borrowings of $14.0 million were drawn on our revolving credit facility. As of September 27, 2023, $724.7 million of credit was available under the revolving credit facility. The $900.0 million revolving credit facility matures on August 18, 2026 and bears interest of SOFR plus an applicable margin of 1.50% to 2.25% and an undrawn commitment fee of 0.25% to 0.35%, both based on a function of our debt-to-cash-flow ratio. As of September 27, 2023, our interest rate was 7.17% consisting of SOFR of 5.32% plus the applicable margin and spread adjustment of 1.85%. Financial Covenants |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Sep. 27, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Lease Commitments We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees for the related restaurants. As of September 27, 2023 and June 28, 2023, we have outstanding lease guarantees or are secondarily liable for an estimated $14.6 million and $16.9 million, respectively. These amounts represent the maximum known potential liability of rent payments under the leases, but outstanding rent payments can exist outside of our knowledge as a result of the landlord and tenant relationship being between two third parties. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2024 through fiscal 2029. We have received notices of default and have been named a party in lawsuits pertaining to some of these leases in circumstances where the current lessee did not pay its rent obligations. In the event of default under a lease by an owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties. In the thirteen week period ended September 27, 2023 we recorded a $0.5 million charge in Other (gains) and charges in the Consolidated Statements of Comprehensive Income. Letters of Credit We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of September 27, 2023, we had $5.8 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable within the next 12 months. Cyber Security Litigation In fiscal 2018, we discovered malware at certain Chili’s restaurants that may have resulted in unauthorized access or acquisition of customer payment card data. We settled all claims from payment card companies related to this incident and do not expect material claims from payment card companies in the future. In connection with this event, the Company was also named as a defendant in a putative class action lawsuit in the United States District Court for the Middle District of Florida (the “Litigation”) relating to this incident. In the Litigation, plaintiffs assert various claims at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $5.0 million, injunctive and declaratory relief, and attorney’s fees and costs. On August 15, 2023, we filed a Petition for Panel or En Banc Rehearing seeking further review by the Eleventh Circuit Court of Appeals of the panel’s July 11, 2023, decision vacating in part the district court’s class certification order. Rehearing was sought to address the panel’s upholding of the plaintiffs’ damages methodology. The Eleventh Circuit denied our petition on September 15, 2023. We are exploring the option of petitioning the United States Supreme Court for further review. All matters at the district court remain stayed. We believe we have defenses and intend to continue defending the Litigation. As such, as of September 27, 2023, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation. We will continue to evaluate this matter based on new information as it becomes available. Legal Proceedings Evaluating contingencies related to litigation is a process involving judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Consolidated Financial Statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 27, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Thirteen Week Periods Ended September 27, September 28, Effective income tax rate — % 4.7 % The federal statutory tax rate was 21.0% for the thirteen week periods ended September 27, 2023 and September 28, 2022. The effective income tax rate in the thirteen week period ended September 27, 2023 decreased compared to the thirteen week period ended September 28, 2022. The decrease is primarily due to a less favorable impact from the FICA tip tax credit against higher Income before income taxes. |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 3 Months Ended |
Sep. 27, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Deficit | Retirement of Common Stock During the first quarter of fiscal 2023, the Board of Directors approved the retirement of 10.0 million shares of Treasury stock for a weighted average price per share of $30.71. As of September 27, 2023, 16.1 million shares remain in treasury. Share Repurchases Our Board of Directors approved a $300.0 million share repurchase program during fiscal 2022. Our share repurchase program is used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs. In the thirteen week period ended September 27, 2023, we repurchased 0.8 million shares of our common stock for $24.7 million, including 0.7 million shares purchased for $21.0 million as part of our share repurchase program and 0.1 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. As of September 27, 2023, approximately $183.0 million of share repurchase authorization remains under the current share repurchase program. Stock-based Compensation The following table presents the restricted share awards granted and related weighted average fair value per share amounts. Thirteen Week Periods Ended September 27, September 28, Restricted share awards Restricted share awards granted 0.6 0.5 Weighted average fair value per share $ 33.12 $ 28.42 |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Sep. 27, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Basic net income per share is computed by dividing Net income (loss) by the Basic weighted average shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the Diluted net income per share calculation. Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended September 27, September 28, Basic weighted average shares outstanding 44.6 43.9 Dilutive stock options (1) 0.0 — Dilutive restricted shares (1) 0.8 — Total dilutive impact 0.8 — Diluted weighted average shares outstanding 45.4 43.9 Awards excluded due to anti-dilutive effect 0.8 2.8 (1) Due to the net loss for the thirteen week period ended September 28, 2022, zero incremental shares are included because the effect would be anti-dilutive. |
OTHER GAINS AND CHARGES
OTHER GAINS AND CHARGES | 3 Months Ended |
Sep. 27, 2023 | |
Other Gains and Charges [Abstract] | |
Other Gains and Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) consist of the following: Thirteen Week Periods Ended September 27, September 28, Litigation & claims, net $ 2.2 $ 0.5 Enterprise system implementation costs 2.0 1.0 Restaurant closure asset write-offs and charges 0.6 1.5 Lease contingencies 0.5 — Remodel-related asset write-offs 0.2 0.8 Other 0.8 1.2 $ 6.3 $ 5.0 • Litigation & claims, net primarily relates to legal contingencies and claims on alcohol service cases. • Enterprise system implementation costs primarily consists of software subscription fees, certain consulting fees, and contract labor associated with the ongoing enterprise system implementation that are not capitalized. • Restaurant closure asset write-offs and charges includes costs associated with the closure of certain Chili’s restaurants in the current year and both Chili’s and Maggiano’s restaurants in the prior year. • Lease contingencies includes expenses related to certain sublease receivables for divested brands when we have determined it is probable that the current lessee will default on the lease obligation. Refer to Note 7 - Contingencies for additional information about our secondarily liable lease guarantees. • Remodel-related asset write-offs relates to assets that are removed or discarded in connection with Maggiano’s and Chili’s remodel projects. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Sep. 27, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our Company-owned Chili’s restaurants, which are principally located in the United States, within the full-service casual dining segment of the industry. The Chili’s segment also has Company-owned restaurants in Canada, and franchised locations in the United States, 29 other countries and two United States territories. The Maggiano’s segment includes the results of our Company-owned Maggiano’s restaurants in the United States as well as the results from our domestic franchise business. The Corporate segment includes costs related to our restaurant support teams for the Chili’s and Maggiano’s brands, including operations, finance, franchise, marketing, human resources and culinary innovation. The Corporate segment also includes costs related to the common and shared infrastructure, including accounting, information technology, purchasing, guest relations, legal and restaurant development. Company sales for each segment include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, gift card breakage, delivery, digital entertainment revenues, merchandise income and are net of gift card discounts from third-party gift card sales. Franchise revenues for each operating segment include royalties, franchise advertising fees, franchise and development fees and gift card equalization. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly located in the United States. There were no material transactions amongst our operating segments. Our chief operating decision maker uses Operating income (loss) as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Restaurant expenses during the periods presented primarily includes restaurant rent, repairs and maintenance, delivery fees and to-go supplies, supplies, utilities, advertising, credit card processing fees, and workers’ compensation and general liability insurance. The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended September 27, 2023 Chili’s Maggiano's Corporate Consolidated Company sales $ 897.8 $ 104.2 $ — $ 1,002.0 Franchise revenues 10.3 0.2 — 10.5 Total revenues 908.1 104.4 — 1,012.5 Food and beverage costs 233.1 25.7 — 258.8 Restaurant labor 311.0 37.1 — 348.1 Restaurant expenses 258.5 32.2 0.1 290.8 Depreciation and amortization 36.2 3.2 2.5 41.9 General and administrative 10.0 2.4 30.0 42.4 Other (gains) and charges 3.7 0.2 2.4 6.3 Total operating costs and expenses 852.5 100.8 35.0 988.3 Operating income (loss) 55.6 3.6 (35.0) 24.2 Interest expenses 0.8 0.1 16.1 17.0 Other income, net — — — — Income (loss) before income taxes $ 54.8 $ 3.5 $ (51.1) $ 7.2 Segment assets $ 2,066.7 $ 245.5 $ 162.6 $ 2,474.8 Payments for property and equipment 38.9 5.2 2.8 46.9 Thirteen Week Period Ended September 28, 2022 Chili’s Maggiano's Corporate Consolidated Company sales $ 840.6 $ 105.5 $ — $ 946.1 Franchise revenues 9.3 0.1 — 9.4 Total revenues 849.9 105.6 — 955.5 Food and beverage costs 260.9 28.6 — 289.5 Restaurant labor 294.4 36.2 — 330.6 Restaurant expenses 236.9 31.7 0.2 268.8 Depreciation and amortization 36.0 3.2 2.7 41.9 General and administrative 9.5 2.5 27.5 39.5 Other (gains) and charges 3.0 0.5 1.5 5.0 Total operating costs and expenses 840.7 102.7 31.9 975.3 Operating income (loss) 9.2 2.9 (31.9) (19.8) Interest expenses 1.0 0.1 11.2 12.3 Other income, net — — (0.4) (0.4) Income (loss) before income taxes $ 8.2 $ 2.8 $ (42.7) $ (31.7) Payments for property and equipment $ 42.7 $ 1.9 $ 2.1 $ 46.7 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Pay vs Performance Disclosure | ||
Net income (loss) | $ 7.2 | $ (30.2) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 27, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Sep. 27, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements (Unaudited) is in conformity with generally accepted accounting principles in the United States (“GAAP”) and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements (Unaudited), and the reported amounts of revenues and costs and expenses in the reporting periods. Actual results could differ from those estimates. The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been omitted pursuant to SEC rules and regulations. The Notes to Consolidated Financial Statements (Unaudited) should be read in conjunction with the Notes to Consolidated Financial Statements contained in our June 28, 2023 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. All amounts in the Notes to Consolidated Financial Statements (Unaudited) are presented in millions unless otherwise specified. |
Foreign Currency Translation | Foreign Currency Translation The foreign currency translation adjustment included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to United States dollars. This amount is not included in Net income (loss) and would only be realized upon disposition of our Canadian restaurants. The related Accumulated other comprehensive loss is presented in the Consolidated Balance Sheets (Unaudited). |
New Accounting Standards Implemented in Fiscal 2024 | New Accounting Standards Implemented in Fiscal 2024 We reviewed accounting pronouncements that became effective for our fiscal 2024 and determined that either they were not applicable or they did not have a material impact on the Consolidated Financial Statements (Unaudited). We also reviewed recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the Consolidated Financial Statements (Unaudited). |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Changes in Deferred Franchise and Development Fees | The following table reflects the changes in deferred franchise and development fees between June 28, 2023 and September 27, 2023: Deferred Franchise and Development Fees Balance as of June 28, 2023 $ 11.1 Amount recognized to Franchise revenues (0.4) Balance as of September 27, 2023 $ 10.7 |
Remaining Deferred Franchise and Development Fees to be Recognized | The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of September 27, 2023: Fiscal Year Franchise and Development Fees Revenue Recognition Remainder of 2024 $ 0.7 2025 0.9 2026 0.8 2027 0.8 2028 0.7 Thereafter 6.8 $ 10.7 |
Changes in the Gift Card Liability | The following table reflects the changes in the Gift card liability between June 28, 2023 and September 27, 2023: Gift Card Liability Balance as of June 28, 2023 $ 73.0 Gift card sales 18.1 Gift card redemptions recognized to Company sales (23.8) Gift card breakage recognized to Company sales (3.0) Other 0.6 Balance as of September 27, 2023 $ 64.9 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Fair Value Disclosures [Abstract] | |
Debt Instruments - Carrying Values and Estimated Fair Values Schedule | The 5.000% notes and 8.250% notes carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values are as follows: September 27, 2023 June 28, 2023 Carrying Amount Fair Value Carrying Amount Fair Value 5.000% notes $ 349.2 $ 342.0 $ 349.0 $ 343.5 8.250% notes 344.5 342.6 344.3 348.3 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities Schedule | Other accrued liabilities consist of the following: September 27, June 28, Property tax $ 29.4 $ 24.5 Insurance 27.9 29.3 Interest 17.1 6.4 Sales tax 16.6 17.3 Utilities and services 10.7 10.4 Current installments of finance lease obligations 10.2 10.2 Other 23.0 18.2 $ 134.9 $ 116.3 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Leases [Abstract] | |
Lease Expenses Included in the Consolidated Statements of Comprehensive Income | The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) were as follows: Thirteen Week Periods Ended September 27, September 28, Operating lease cost $ 45.6 $ 45.1 Variable lease cost 15.6 15.6 Finance lease amortization 3.2 5.2 Finance lease interest 0.9 1.1 Short-term lease cost 0.1 0.1 Sublease income (0.4) (0.9) Total lease costs, net $ 65.0 $ 66.2 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases: Thirteen Week Periods Ended September 27, September 28, Operating lease assets obtained in exchange for operating lease liabilities $ 9.1 $ 23.6 Finance leases assets obtained in exchange for finance lease liabilities 0.1 0.2 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt Schedule | Long-term debt consists of the following: September 27, June 28, Revolving credit facility $ 175.3 $ 161.3 5.000% notes 350.0 350.0 8.250% notes 350.0 350.0 Finance lease obligations 65.1 67.8 Total long-term debt 940.4 929.1 Less: unamortized debt issuance costs and discounts (6.3) (6.7) Total long-term debt, less unamortized debt issuance costs and discounts 934.1 922.4 Less: current installments of long-term debt and finance leases (1) (10.2) (10.2) Total long-term debt, less current portion $ 923.9 $ 912.2 (1) Current installments of long-term debt consist of finance leases and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 4 - Accrued Liabilities for further details. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Schedule | Thirteen Week Periods Ended September 27, September 28, Effective income tax rate — % 4.7 % |
SHAREHOLDERS' DEFICIT (Tables)
SHAREHOLDERS' DEFICIT (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stock-based Compensation Schedule | The following table presents the restricted share awards granted and related weighted average fair value per share amounts. Thirteen Week Periods Ended September 27, September 28, Restricted share awards Restricted share awards granted 0.6 0.5 Weighted average fair value per share $ 33.12 $ 28.42 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Earnings Per Share [Abstract] | |
Basic to Diluted Weighted Average Number of Shares Reconciliation | Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows: Thirteen Week Periods Ended September 27, September 28, Basic weighted average shares outstanding 44.6 43.9 Dilutive stock options (1) 0.0 — Dilutive restricted shares (1) 0.8 — Total dilutive impact 0.8 — Diluted weighted average shares outstanding 45.4 43.9 Awards excluded due to anti-dilutive effect 0.8 2.8 (1) Due to the net loss for the thirteen week period ended September 28, 2022, zero incremental shares are included because the effect would be anti-dilutive. |
OTHER GAINS AND CHARGES (Tables
OTHER GAINS AND CHARGES (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Other Gains and Charges [Abstract] | |
Other Gains And Charges | Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) consist of the following: Thirteen Week Periods Ended September 27, September 28, Litigation & claims, net $ 2.2 $ 0.5 Enterprise system implementation costs 2.0 1.0 Restaurant closure asset write-offs and charges 0.6 1.5 Lease contingencies 0.5 — Remodel-related asset write-offs 0.2 0.8 Other 0.8 1.2 $ 6.3 $ 5.0 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Sep. 27, 2023 | |
Segment Reporting [Abstract] | |
Segment Information Tables | The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: Thirteen Week Period Ended September 27, 2023 Chili’s Maggiano's Corporate Consolidated Company sales $ 897.8 $ 104.2 $ — $ 1,002.0 Franchise revenues 10.3 0.2 — 10.5 Total revenues 908.1 104.4 — 1,012.5 Food and beverage costs 233.1 25.7 — 258.8 Restaurant labor 311.0 37.1 — 348.1 Restaurant expenses 258.5 32.2 0.1 290.8 Depreciation and amortization 36.2 3.2 2.5 41.9 General and administrative 10.0 2.4 30.0 42.4 Other (gains) and charges 3.7 0.2 2.4 6.3 Total operating costs and expenses 852.5 100.8 35.0 988.3 Operating income (loss) 55.6 3.6 (35.0) 24.2 Interest expenses 0.8 0.1 16.1 17.0 Other income, net — — — — Income (loss) before income taxes $ 54.8 $ 3.5 $ (51.1) $ 7.2 Segment assets $ 2,066.7 $ 245.5 $ 162.6 $ 2,474.8 Payments for property and equipment 38.9 5.2 2.8 46.9 Thirteen Week Period Ended September 28, 2022 Chili’s Maggiano's Corporate Consolidated Company sales $ 840.6 $ 105.5 $ — $ 946.1 Franchise revenues 9.3 0.1 — 9.4 Total revenues 849.9 105.6 — 955.5 Food and beverage costs 260.9 28.6 — 289.5 Restaurant labor 294.4 36.2 — 330.6 Restaurant expenses 236.9 31.7 0.2 268.8 Depreciation and amortization 36.0 3.2 2.7 41.9 General and administrative 9.5 2.5 27.5 39.5 Other (gains) and charges 3.0 0.5 1.5 5.0 Total operating costs and expenses 840.7 102.7 31.9 975.3 Operating income (loss) 9.2 2.9 (31.9) (19.8) Interest expenses 1.0 0.1 11.2 12.3 Other income, net — — (0.4) (0.4) Income (loss) before income taxes $ 8.2 $ 2.8 $ (42.7) $ (31.7) Payments for property and equipment $ 42.7 $ 1.9 $ 2.1 $ 46.7 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | Sep. 27, 2023 Restaurants Country territories |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,651 |
Chili's Restaurants [Member] | |
Franchisor Disclosure [Line Items] | |
Number of foreign countries in which entity operates | Country | 29 |
Number of U.S. territories in which entity operates | territories | 2 |
Entity Operated Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,181 |
Franchised Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 470 |
REVENUE RECOGNITION (Deferred F
REVENUE RECOGNITION (Deferred Franchise and Development Fees) (Details) - Deferred Franchise and Development Fees [Member] $ in Millions | 3 Months Ended |
Sep. 27, 2023 USD ($) | |
Changes in deferred franchise and development fees [Line Items] | |
Balance as of June 28, 2023 | $ 11.1 |
Amount recognized to Franchise revenues | (0.4) |
Balance as of September 27, 2023 | $ 10.7 |
REVENUE RECOGNITION (Remaining
REVENUE RECOGNITION (Remaining Deferred Franchise and Development Fees to be Recognized) (Details) $ in Millions | Sep. 27, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 10.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.7 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.9 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-06-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.8 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-06-25 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.8 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-06-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 0.7 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-06-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining deferred franchise and development fees to be recognized | $ 6.8 |
Remaining deferred franchise and development fees to be recognized, expected timing of satisfaction in years | 15 years |
REVENUE RECOGNITION (Deferred G
REVENUE RECOGNITION (Deferred Gift Card Revenues) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Deferred Gift Card Revenues [Line Items] | ||
Balance as of June 28, 2023 | $ 73 | |
Increase (decrease) in gift card liability | (8.1) | $ (8.9) |
Balance as of September 27, 2023 | 64.9 | |
Gift card sales [Member] | ||
Deferred Gift Card Revenues [Line Items] | ||
Increase (decrease) in gift card liability | 18.1 | |
Gift card redemptions [Member] | ||
Deferred Gift Card Revenues [Line Items] | ||
Amount recognized to Company sales | (23.8) | |
Gift card breakage [Member] | ||
Deferred Gift Card Revenues [Line Items] | ||
Amount recognized to Company sales | (3) | |
Gift card other [Member] | ||
Deferred Gift Card Revenues [Line Items] | ||
Increase (decrease) in gift card liability | $ 0.6 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Carrying and Fair Values of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 27, 2023 | Jun. 28, 2023 |
5.000% notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes, stated percentage interest rate | 5% | |
Carrying value of notes | $ 349.2 | $ 349 |
Fair value of notes | $ 342 | 343.5 |
8.250% notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes, stated percentage interest rate | 8.25% | |
Carrying value of notes | $ 344.5 | 344.3 |
Fair value of notes | $ 342.6 | $ 348.3 |
FAIR VALUE MEASUREMENTS (Non-Fi
FAIR VALUE MEASUREMENTS (Non-Financial Assets Measured on a Non-Recurring Basis) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 27, 2023 | Sep. 28, 2022 | Jun. 28, 2023 | |
Additional Fair Value Elements [Abstract] | |||
Accumulated amortization associated with definite-lived intangible assets | $ 16 | $ 15.3 | |
Schedule of Impairments [Line Items] | |||
Impairment of definite lived assets | 0 | $ 0 | |
Impairment of goodwill | 0 | 0 | |
Liquor Licenses [Member] | |||
Schedule of Impairments [Line Items] | |||
Impairment of liquor licenses | $ 0 | $ 0 |
ACCRUED LIABILITIES (Schedule o
ACCRUED LIABILITIES (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Millions | Sep. 27, 2023 | Jun. 28, 2023 |
Other accrued liabilities [Line Items] | ||
Property tax | $ 29.4 | $ 24.5 |
Insurance | 27.9 | 29.3 |
Interest | 17.1 | 6.4 |
Sales tax | 16.6 | 17.3 |
Utilities and services | 10.7 | 10.4 |
Current installments of finance lease obligations | 10.2 | 10.2 |
Other | 23 | 18.2 |
Other accrued liabilities | $ 134.9 | $ 116.3 |
LEASES (Disclosure of Lease Exp
LEASES (Disclosure of Lease Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 45.6 | $ 45.1 |
Variable lease cost | 15.6 | 15.6 |
Finance lease amortization | 3.2 | 5.2 |
Finance lease interest | 0.9 | 1.1 |
Short-term lease cost | 0.1 | 0.1 |
Sublease income | (0.4) | (0.9) |
Total lease costs, net | $ 65 | $ 66.2 |
LEASES (Supplemental Informatio
LEASES (Supplemental Information Related to Leases) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 27, 2023 | Sep. 28, 2022 | Jun. 28, 2023 | |
Leases [Abstract] | |||
Operating lease assets obtained in exchange for operating lease liabilities | $ 9.1 | $ 23.6 | |
Finance leases assets obtained in exchange for finance lease liabilities | 0.1 | $ 0.2 | |
Finance lease, right-of-use asset, net | $ 48.1 | $ 51.3 |
DEBT (Schedule of Long-Term Deb
DEBT (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Sep. 27, 2023 | Jun. 28, 2023 | |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 65.1 | $ 67.8 | |
Total long-term debt | 940.4 | 929.1 | |
Less: unamortized debt issuance costs and discounts | (6.3) | (6.7) | |
Total long-term debt, less unamortized debt issuance costs and discounts | 934.1 | 922.4 | |
Less: current installments of long-term debt and finance leases | [1] | (10.2) | (10.2) |
Long-term debt and finance leases, less current installments | 923.9 | 912.2 | |
5.000% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 350 | 350 | |
8.250% notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | 350 | 350 | |
$900.0M Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 175.3 | $ 161.3 | |
[1]Current installments of long-term debt consist of finance leases and are recorded within Other accrued liabilities in the Consolidated Balance Sheets (Unaudited). Refer to Note 4 - Accrued Liabilities for further details. |
DEBT (Additional Information) (
DEBT (Additional Information) (Details) $ in Millions | 3 Months Ended |
Sep. 27, 2023 USD ($) | |
Line of Credit Facility [Line Items] | |
Net borrowings | $ 14 |
$900.0M Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Revolving credit facility, remaining borrowing capacity | 724.7 |
Revolving credit facility, maximum borrowing capacity | $ 900 |
Revolving credit facility, expiration date | Aug. 18, 2026 |
Basis spread on variable rate | 1.85% |
Revolving credit facility, interest rate at period end | 7.17% |
Revolving credit facility, covenant compliance | we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 5.000% and 8.250% notes |
Minimum [Member] | $900.0M Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.50% |
Undrawn commitment fee spread | 0.25% |
Maximum [Member] | $900.0M Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.25% |
Undrawn commitment fee spread | 0.35% |
Base Rate | $900.0M Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Revolving credit facility, variable rate basis | SOFR |
Revolving credit facility, interest rate at period end | 5.32% |
CONTINGENCIES (Lease Commitment
CONTINGENCIES (Lease Commitments) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 27, 2023 | Sep. 28, 2022 | Jun. 28, 2023 | |
Guarantor Obligations [Line Items] | |||
Lease contingencies | $ 0.5 | $ 0 | |
Maximum [Member] | Lease Guarantees And Secondary Obligations [Member] | |||
Guarantor Obligations [Line Items] | |||
Loss contingency, estimate of possible loss | $ 14.6 | $ 16.9 |
CONTINGENCIES (Additional Infor
CONTINGENCIES (Additional Information) (Details) $ in Millions | Sep. 27, 2023 USD ($) LegalMatter |
Loss Contingencies [Line Items] | |
Amount of undrawn standby letters of credit outstanding | $ 5.8 |
Number of matters pending or threatened which are expected to have a material adverse effect | LegalMatter | 0 |
Cyber security incident [Member] | |
Loss Contingencies [Line Items] | |
Loss contingency, estimate of possible loss | $ 5 |
INCOME TAXES (Effective and Sta
INCOME TAXES (Effective and Statutory Tax Rates) (Details) | 3 Months Ended | |
Sep. 27, 2023 Rate | Sep. 28, 2022 Rate | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0% | 4.70% |
Federal Statutory Income Tax Rate, Percent | 21% | 21% |
SHAREHOLDERS' DEFICIT (Retireme
SHAREHOLDERS' DEFICIT (Retirement of Common Stock) (Details) - $ / shares shares in Millions | 3 Months Ended | ||
Sep. 28, 2022 | Sep. 27, 2023 | Jun. 28, 2023 | |
Stockholders' Equity Note [Abstract] | |||
Retirement of treasury stock, shares | 10 | ||
Treasury stock retired average price per share | $ 30.71 | ||
Treasury stock, shares | 16.1 | 15.7 |
SHAREHOLDERS' DEFICIT (Share Re
SHAREHOLDERS' DEFICIT (Share Repurchases) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Sep. 27, 2023 | Sep. 28, 2022 | Aug. 16, 2021 | |
Remaining amount of share repurchase authorizations available | $ 183 | $ 300 | |
Number of shares repurchased | 0.8 | ||
Purchases of treasury stock | $ 24.7 | $ 2 | |
Withheld from Employees [Member] | |||
Number of shares repurchased | 0.1 | ||
Open Market Purchase | |||
Number of shares repurchased | 0.7 | ||
Purchases of treasury stock | $ 21 |
SHAREHOLDERS' DEFICIT (Stock-ba
SHAREHOLDERS' DEFICIT (Stock-based Compensation) (Details) - $ / shares shares in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted share awards granted | 0.6 | 0.5 |
Weighted average fair value per share | $ 33.12 | $ 28.42 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - shares shares in Millions | 3 Months Ended | ||
Sep. 27, 2023 | Sep. 28, 2022 | ||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||
Basic weighted average shares outstanding | 44.6 | 43.9 | |
Total dilutive impact | 0.8 | 0 | |
Diluted weighted average shares outstanding | 45.4 | 43.9 | |
Awards excluded due to anti-dilutive effect | 0.8 | 2.8 | |
Stock Options [Member] | |||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 0 | [1] |
Restricted Share Award [Member] | |||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | |||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.8 | 0 | [1] |
[1]Due to the net loss for the thirteen week period ended September 28, 2022, zero incremental shares are included because the effect would be anti-dilutive. |
OTHER GAINS AND CHARGES (Schedu
OTHER GAINS AND CHARGES (Schedule of Other Gains and Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 27, 2023 | Sep. 28, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Litigation & claims, net | $ 2.2 | $ 0.5 |
Enterprise system implementation costs | 2 | 1 |
Restaurant closure asset write-offs and charges | 0.6 | 1.5 |
Lease contingencies | 0.5 | 0 |
Remodel-related asset write-offs | 0.2 | 0.8 |
Other | 0.8 | 1.2 |
Other (gains) and charges | $ 6.3 | $ 5 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Reporting) (Details) $ in Millions | 3 Months Ended | ||
Sep. 27, 2023 USD ($) Country territories | Sep. 28, 2022 USD ($) | Jun. 28, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||
Segment Information, disclosure of major customers | We do not rely on any major customers as a source of sales | ||
Total revenues | $ 1,012.5 | $ 955.5 | |
Food and beverage costs | 258.8 | 289.5 | |
Restaurant labor | 348.1 | 330.6 | |
Restaurant expenses | 290.8 | 268.8 | |
Depreciation and amortization | 41.9 | 41.9 | |
General and administrative | 42.4 | 39.5 | |
Other (gains) and charges | 6.3 | 5 | |
Total operating costs and expenses | 988.3 | 975.3 | |
Operating income (loss) | 24.2 | (19.8) | |
Interest expenses | 17 | 12.3 | |
Other income, net | 0 | (0.4) | |
Income (loss) before income taxes | 7.2 | (31.7) | |
Segment assets | 2,474.8 | $ 2,487 | |
Payments for property and equipment | $ 46.9 | 46.7 | |
Chili's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of foreign countries in which entity operates | Country | 29 | ||
Number of U.S. territories in which entity operates | territories | 2 | ||
Total revenues | $ 908.1 | 849.9 | |
Food and beverage costs | 233.1 | 260.9 | |
Restaurant labor | 311 | 294.4 | |
Restaurant expenses | 258.5 | 236.9 | |
Depreciation and amortization | 36.2 | 36 | |
General and administrative | 10 | 9.5 | |
Other (gains) and charges | 3.7 | 3 | |
Total operating costs and expenses | 852.5 | 840.7 | |
Operating income (loss) | 55.6 | 9.2 | |
Interest expenses | 0.8 | 1 | |
Other income, net | 0 | 0 | |
Income (loss) before income taxes | 54.8 | 8.2 | |
Segment assets | 2,066.7 | ||
Payments for property and equipment | 38.9 | 42.7 | |
Maggiano's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 104.4 | 105.6 | |
Food and beverage costs | 25.7 | 28.6 | |
Restaurant labor | 37.1 | 36.2 | |
Restaurant expenses | 32.2 | 31.7 | |
Depreciation and amortization | 3.2 | 3.2 | |
General and administrative | 2.4 | 2.5 | |
Other (gains) and charges | 0.2 | 0.5 | |
Total operating costs and expenses | 100.8 | 102.7 | |
Operating income (loss) | 3.6 | 2.9 | |
Interest expenses | 0.1 | 0.1 | |
Other income, net | 0 | 0 | |
Income (loss) before income taxes | 3.5 | 2.8 | |
Segment assets | 245.5 | ||
Payments for property and equipment | 5.2 | 1.9 | |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 0 | 0 | |
Food and beverage costs | 0 | 0 | |
Restaurant labor | 0 | 0 | |
Restaurant expenses | 0.1 | 0.2 | |
Depreciation and amortization | 2.5 | 2.7 | |
General and administrative | 30 | 27.5 | |
Other (gains) and charges | 2.4 | 1.5 | |
Total operating costs and expenses | 35 | 31.9 | |
Operating income (loss) | (35) | (31.9) | |
Interest expenses | 16.1 | 11.2 | |
Other income, net | 0 | (0.4) | |
Income (loss) before income taxes | (51.1) | (42.7) | |
Segment assets | 162.6 | ||
Payments for property and equipment | 2.8 | 2.1 | |
Company sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,002 | 946.1 | |
Company sales [Member] | Chili's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 897.8 | 840.6 | |
Company sales [Member] | Maggiano's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 104.2 | 105.5 | |
Company sales [Member] | Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | |
Franchise revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 10.5 | 9.4 | |
Franchise revenues [Member] | Chili's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 10.3 | 9.3 | |
Franchise revenues [Member] | Maggiano's Restaurants [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0.2 | 0.1 | |
Franchise revenues [Member] | Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 0 | $ 0 |