Research Update: Brinker International Inc. Outlook Revised To Positive On Margin Expansion, Reduced Leverage; 'BB-' Rating Affirmed

Dallas-based casual dining restaurant operator Brinker International Inc. reduced S&P Global Ratings-adjusted debt to EBITDA to approximately 3x as of the fiscal year ended June 26, 2024, compared to 4.2x a year ago as it grew sales and EBITDA margins. We now forecast the company will further reduce S&P Global Ratings-adjusted leverage to less than 3x in fiscal 2025 amid further sales growth and stable EBITDA margins. Therefore, we revised our outlook on Brinker to positive from stable and affirmed all of our ratings, including the 'BB-' issuer credit rating. The positive outlook reflects our expectation for Brinker to maintain leverage of less than 3x over the next 12 months as it benefits from improved execution and labor retention despite

...- Dallas-based casual dining restaurant operator Brinker International Inc. reduced S&P Global Ratings-adjusted debt to EBITDA to approximately 3x as of the fiscal year ended June 26, 2024, compared to 4.2x a year ago as it grew sales and EBITDA margins. - We now forecast the company will further reduce S&P Global Ratings-adjusted leverage to less than 3x in fiscal 2025 amid further sales growth and stable EBITDA margins. - Therefore, we revised our outlook on Brinker to positive from stable and affirmed all of our ratings, including the '##-' issuer credit rating. - The positive outlook reflects our expectation for Brinker to maintain leverage of less than 3x over the next 12 months as it benefits from improved execution and labor retention despite menu mix and traffic pressures....

Research Update