Merida, Mexico, Paseo Montejo Avenida Colon, Chili’s restaurant, shrimp Caesar salad with menu (Jeffrey Greenberg/Getty Images)

Brinker feels god in this Chili’s tonight; restaurant owner soars on huge sales growth

Luke Kawa

10/30/24 8:22AM

Shares of Brinker International are spiking after the owner of Chili’s and Maggiano’s Little Italy posted much larger profits than Wall Street expected and said that trend was poised to continue.

Earnings per share of $0.95 were about 40% above the consensus estimate for its fiscal Q1 2025, and management boosted their guidance for full-year sales and profits. The stock is up nearly 8% in the premarket.

While most of the industry — particularly the quick-service restaurant space — continues to be obsessed with providing value to price-conscious consumers, Brinker doesn’t seem to have the same problem at the chain that accounts for 90% of its revenues.

Management credited both higher traffic and higher prices for driving robust same-store sales growth of 14.1% year on year at company-owned Chili’s locations.

Brinker International Q1 2025 results — Source: Brinker International

“Great food with great service at industry-leading value is driving strong Chili’s sales and traffic,” President and CEO Kevin Hochman said.

This marks Brinker as a winner in a slowing market: after booming from 2021 through 2023, the annual growth in US spending at “food dining and drinking places” has decelerated to well below its prepandemic rate.

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DraftKings moves to counter prediction market threat

DraftKings rose after hours, following news that it is buying Railbird in an effort to address the competitive threat from prediction markets that has weighed on its share price — and that of FanDuel parent Flutter Entertainment — for weeks.

The deal is then latest example of the increasing linkages and overlap between worlds of financial markets, gambling, and prediction markets.

Earlier this month, ICE — the parent company of the New York Stock Exchange and the ICE futures markets, among others — announced it would invest up to $2 billion in prediction markets company Polymarket.

And Robinhood shares have recently gotten a lift from its ongoing partnership with prediction market platform Kalshi, which has seen growing uptake of its events contracts that allow buyers to take positions on football games.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

By and large investor excitement over prediction markets — which has picked up since the start of football season — has seemed to come at the expense of Flutter and DraftKings, the two companies that dominate US sports betting.

Over the last three months through the end of regular trading on Wednesday, DraftKings and Flutter were down 23% and 18%, respectively, while the S&P 500 is up about 7%.

DraftKings acquires predictions platform Railbird

The deal is then latest example of the increasing linkages and overlap between worlds of financial markets, gambling, and prediction markets.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

Over the last three months through the end of regular trading on Wednesday, DraftKings and Flutter were down 23% and 18%, respectively, while the S&P 500 is up about 7%.

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US stocks go nowhere amid big rotation out of gold and into fake meat

The calmest session for the S&P 500 in over a month.

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The no-fundamentals, high-volatility winning trades are reversing hard

The volatile, speculative momentum trades that have been on fire in recent months are getting smoked.

The SPDR Gold Shares ETF is on track for its biggest daily loss since April 2013, as of 10:28 a.m. ET.

And Goldman Sachs’ baskets of “high beta momentum longs” and “non-profitable tech” stocks, which have pretty much been the exact same line for two months, got dumped last Thursday and are down big again today.

D-Wave Quantum, Planet Labs, and Navitas Semiconductor are some of the stocks that feature in both of Goldman’s baskets and are down more than 2% as of 10:24 a.m. ET.

All of these groups have been handily outperforming the S&P 500 for an extended period of time despite by their very nature having more hype than actual track records — in terms of producing profits for shareholders — to speak of. Gold, obviously, generates no income. Nonprofitable tech stocks aren’t really in a position to spin off cash they don’t have to their owners. And, as mentioned, high-beta momentum and nonprofitable tech stocks have pretty much traded the same!

It’s difficult to pinpoint a fundamental catalyst for why speculative momentum trades suddenly turn on a dime, just as it’s often tricky to identify why they went on such a mammoth run in the first place. Perhaps the onset of earnings season — which gives us the opportunity to assess fundamental progress — means that right now, there’s more attention being paid to “line go up” when it comes to revenues and profits, and that’s taking away from the mindshare on “line go up” with respect to recent share price performance.

Brinker feels god in this Chili’s tonight; restaurant owner soars on huge sales growth

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