Brinker International (NYSE: EAT) closed fiscal 2026 with a quarter that largely met expectations. The real story is the growing divergence between its two brands. Total revenue of $1.54 billion was up 5.1% year over year and a hair above the $1.533 billion consensus. Non-GAAP diluted EPS of $3.07 beat the $3.085 estimate by a penny and rose 23% from $2.49 a year ago. The headline numbers are fine. The details beneath them are more interesting.
Chili's comparable restaurant sales rose 5.6% in Q4. This marks the brand's fifth consecutive year of same-store sales growth and a cumulative 71% increase over that period. Traffic contributed 1.5 points of that growth, with menu pricing adding 4.3 points and mix-shift subtracting 0.2 points. That traffic number is the key signal: Chili's is still pulling customers in, not just raising prices on a shrinking base. The Big Crispy chicken sandwich and other menu initiatives drove momentum that accelerated into July, per management.
Maggiano's tells a different story. Comparable sales fell 2.5%, driven entirely by a 5.3% traffic decline that menu pricing of 2.9% could not offset. Restaurant operating margin at Maggiano's compressed to 10.3% of company sales from 13.3% a year ago, a 300bp drop driven by sales deleverage and higher food and beverage costs. The brand contributed just $1 million of operating income in Q4, down from $13.4 million. At 49 domestic locations, Maggiano's is a small piece of Brinker's portfolio, but its trajectory is deteriorating.
Consolidated restaurant operating margin, non-GAAP, improved modestly to 18.0% of company sales from 17.8%, driven by Chili's 18.6% print (up from 18.2%). The improvement came from sales leverage and lower manager bonuses, partially offset by higher beef costs and a temporary spike in produce costs from a Florida freeze. Food and beverage costs as a percentage of company sales rose 30bp year over year to 26.3%, a pressure that persisted through the quarter.
Capital allocation was the quarter's most decisive action. Brinker repurchased $400 million of stock in fiscal 2026, and the board authorized a new $750 million repurchase program. The company also redeemed $350 million of 8.25% notes subsequent to quarter-end, funding the payoff with borrowings from its revolving credit facility. That debt refinancing will reduce interest expense meaningfully in fiscal 2027. The company also agreed to acquire 12 Chili's franchise restaurants in Alabama and Mississippi, a bolt-on that adds company-owned units without the build-out risk of new construction.
Fiscal 2027 guidance includes a 53rd operating week, which management estimates will add roughly 2% to total revenue and $0.70 to non-GAAP EPS. Excluding that week, the midpoint of the revenue range ($6.21 billion) implies organic growth of about 4% over fiscal 2026's $5.81 billion, a deceleration from the 8% comparable sales growth Chili's posted in the full year just completed. The non-GAAP EPS midpoint of $13.00, adjusted for the 53rd week, lands near $12.30, up roughly 14.5% from fiscal 2026's $10.74. Solid, but not accelerating.
The guidance suggests management is being appropriately cautious. Chili's has lapped extraordinary comparable sales growth of 25% in fiscal 2025 and 9.2% in fiscal 2026. The 53rd week provides a mechanical boost, but the underlying trajectory implies a normalization of same-store sales growth toward mid-single digits. The buyback authorization gives EPS a tailwind, but the pace of repurchase will depend on free cash flow generation and the cost of debt after the refinancing.
What to watch next quarter: whether Chili's traffic growth can hold above 1% as pricing moderates, whether Maggiano's can stabilize its traffic decline, and how quickly the new $750 million buyback authorization gets deployed. The July acceleration in Chili's momentum is encouraging, but the FY2027 guide signals that management expects the easy comparisons to fade.