=Brinker (EAT) reported earnings on Wed 25 Jan 2017 (b/o)

Brinker misses by $0.03, misses on revs; lowers FY17 guidance below consensus :

• Reports Q2 (Dec) earnings of $0.71 per share, $0.03 worse than the Capital IQ Consensus of $0.74; revenues fell 2.2% year/year to $771 mln vs the $787.83 mln Capital IQ Consensus. 
• Comps -3.1%; Chili's co owned -3.3%; Maggiano's -0.8%
• Co issues downside guidance for FY17, sees EPS of $3.05-3.15 vs. $3.37 Capital IQ Consensus Estimate; sees FY17 revs of down 2.0-2.5% to ~$3.18-3.19 bln vs. $3.22 bln Capital IQ Consensus and decrease ~1.0 to 1.5 percent excluding the impact of the 53rd week in fiscal 2016.
  • Comparable restaurant sales are now estimated to be down 1.5 to 2.0 percent. Restaurant operating margin is now estimated to be down ~90 basis points year-over-year on a 52 week basis.
• "While we believe our initiatives are gaining traction and plan to enhance our focus to improve performance, we are reducing our full-year adjusted EPS guidance primarily to reflect lower category sales than originally planned," The company is updating guidance for fiscal 2017 due to changes in our performance expectations and recent reorganization activities. We have reorganized Chili's restaurant operations team and certain positions at the Restaurant Support Center to streamline our staffing to align with our current management strategy. We estimate that this action will result in severance and other separation related charges of ~$6.0 million. These amounts will be recorded in the third quarter of fiscal 2017 in the Other gains and charges caption of our consolidated statements of comprehensive income. We anticipate that this reorganization will result in pre-tax savings of over $5 million in fiscal 2017 and approximately $12 million on an annualized basis.