Brinker to Focus on International Growth

Guy Constant, vice president of operations analysis, said in a Webcast of the Bear Stearns' 14th Annual Retail, Restaurants & Consumer Conference in New York that the company would target having 300 restaurants operating overseas by 2009. The company's franchisees currently operate 152 locations in 24 countries.

"The global marketplace holds tremendous potential," he said.

Brinker operates the Chili's Grill & Bar chain as well as Maggiano's Little Italy and On The Border Mexican Grill & Cantina.

Those chains have reported declining same-store sales recently at its domestic locations as more consumers cut back on discretionary spending in the face of high gas prices and the weak housing market. Same-store sales dipped 2.1 percent companywide in the second quarter.

Same-store sales, or sales at locations open at least a year, is a key indicator of restaurant performance since it measures growth at existing locations rather than newly opened ones.

Constant blamed the drop in same-store sales, in part, on slow sales at Chili's locations in states most affected by the housing market. He said those states make up about 20 percent of the company's total number of locations.

The company will work on growing its same-store sales by offering value menu items like a bottomless express lunch that features all-you-can-eat salad, soup and chips, Constant said. The company said it will also cut back on the number of new restaurants it opens in 2008 and 2009.

Constant said the company will develop 75 company-owned restaurants in fiscal 2008 and probably fewer than 40 new location in 2009 to focus on increasing its sales at its existing restaurants.

"Our top priority remains increasing profitable traffic over time," he said.

Brinker shares fell 71 cents, or 4 percent, to $17.13 in midday trading.