What Happened: Shares of casual restaurant chain Brinker International (NYSE:EAT) jumped 8.5% in the morning session after the company reported first quarter results. Despite in line same store sales and a slight miss on the revenue line, Brinker International beat analysts' gross margin and EPS expectations. Looking ahead, the company raised its full-year revenue and earnings guidance, both of which now exceeded Wall Street's estimates. Overall, we think this was a solid quarter that should satisfy shareholders.
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What is the market telling us: Brinker International's shares are quite volatile and over the last year have had 11 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 5.2% on the news that the company reported second quarter results that exceeded analysts' gross margin and EPS expectations. Looking ahead, full-year earnings guidance came in ahead of Consensus. However, revenue for the quarter and full-year revenue guidance slightly missed Wall Street's estimates. Regardless, revenue improved sequentially during the quarter, which is a good sign. Overall, this quarter's results still seemed fairly positive, and shareholders should feel optimistic.
Brinker International is up 27.3% since the beginning of the year. Investors who bought $1,000 worth of Brinker International's shares 5 years ago would now be looking at an investment worth $1,252.