Must-know: Why Chili’s same-store sales increased

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Same-store sales

For the restaurant industry, one of the key drivers is same-store sales earnings. In the Starbucks (SBUX) series, we mentioned that same-store sales earnings is driven by the traffic and ticket. Traffic is the number of customers. Ticket is the average amount of money that customers spend. Same-store sales, or comp sales, demonstrate the growth in sales from the existing restaurants over a period of time.

EAT Same-Store Sales Growth 2014-09-21

Chili’s same-store sales growth

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Brinker International (EAT) reported a same-store sales growth of 2.5% for Chili’s—compared to -0.6% in the same quarter last year. The increase was due to initiatives like menu innovation, leveraging digital strategy, new cooking equipment and procedures, and new restaurant developments. These are some of the strategies that restaurants use to improve the same-store sales. We discussed these strategies in our Tim Hortons (THI) and Burger King (BKW) series. We’ll discuss these strategies in the upcoming parts of this series.

If you want to invest in a diversified restaurant portfolio, you should consider an exchange-traded fund (or ETF) like the Vanguard Total Stock Market (VTI).

Chili’s franchise

Same-store sales for Chili’s franchised restaurants grew by 1.4%—compared to 0.5% in the same quarter last year. Chili’s company-owned global same-store sales grew 0.8%—compared to 2.3% in the same period last year.

Maggiano’s Little Italy

Same-store sales for Maggiano’s grew 0.9%—compared to 0.2% in the same quarter last year. Maggiano’s same-store sales also grew due to initiatives like new restaurant development and menu innovation.

Brinker International introduced new menu items. According to the company, the new items helped increase same-store sales growth. We’ll discuss the menu innovation in the next part of the series.

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