Is EAT's Traffic Growth Structural or Fueled by Promotional Timing?

Brinker International, Inc. EAT delivered another standout quarter, with Chili’s posting 13% traffic growth in first-quarter fiscal 2026, well ahead of the broader casual dining industry. The key investor question is whether this momentum reflects durable structural gains or simply the timing of promotions.

Management’s commentary points strongly toward a structural underpinning. Chili’s has now outperformed the industry on traffic for eight consecutive quarters, suggesting repeatable execution rather than episodic lifts. Importantly, leadership emphasized that traffic gains are not dependent on short-lived discounts but are supported by consistent everyday value, improved food quality and better in-restaurant execution. The $10.99 value platform remains stable and profitable, while operational upgrades, from menu renovations to service simplification, are driving repeat visits rather than one-and-done trials.

Perhaps the most compelling evidence is Brinker's new cohort-level data. Management now tracks monthly guest cohorts and their visit frequency over time. According to the company, both new and existing guests are returning at stable rates across cohorts, indicating that traffic acquired through advertising is being retained. This directly counters the notion that recent traffic spikes are driven by promotional pull-forward rather than sustained engagement.

That said, promotional timing still plays a role at the margin. Management acknowledged that traffic lifts were stronger when messaging leaned into explicit value pricing versus unpriced promotions like the Triple Dipper campaign. This suggests traffic can be accelerated or moderated, based on the marketing mix, even within a structurally stronger base.

Overall, while promotional cadence influences near-term volatility, the evidence suggests EAT’s traffic gains are increasingly structural, rooted in value positioning, execution consistency and improving guest retention rather than temporary promotional timing.

How Do EAT’s Traffic Trends Compare With Key Casual-Dining Peers?

Comparing Darden Restaurants DRI and Texas Roadhouse TXRH helps frame whether traffic growth in casual dining is structural or promotion-driven. Darden’s Olive Garden has relied more heavily on limited-time value bundles and promotional offers to defend traffic in a pressured consumer environment. While these tactics have delivered near-term lifts, traffic trends tend to soften when promotions rotate, suggesting a greater dependence on timing rather than sustained behavioral change.

Texas Roadhouse offers a different model. Its traffic resilience has been driven by consistent execution, strong service culture and menu focus rather than discounting. However, TXRH’s higher average check and protein-heavy menu make traffic more vulnerable to macro slowdowns, particularly among value-conscious diners.

Against this backdrop, EAT stands out. Chili’s traffic growth appears less promotional and more structural, supported by everyday value pricing, operational improvements and improving guest retention, placing it between DRI’s promotional reliance and TXRH’s execution-led but higher-priced model.

EAT’s Price Performance, Valuation and Estimates

Brinker’s shares have gained 14.2% over the past three months, outperforming the industry’s 1% growth.

Price Performance

In terms of its forward 12-month price-to-earnings ratio, EAT is trading at 12.99, down from the industry average of 23.94.

P/E (F12M)

Over the past 30 days, the Zacks Consensus Estimate for EAT’s fiscal 2026 earnings per share has increased, as shown in the chart.

EAT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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