• Chili’s reported a 14.8% like-for-like sales increase last quarter, driven by the popularity of its Triple Dipper and its $10.99 Big Smasher meal.
• Brinker International has been trying to turn the chain around for the past two years, and this quarter’s results showed that the efforts are bearing fruit, said CEO Kevin Hochman.
• But Brinker disappointed investors with his outlook, as the company is waiting to see whether the economy worsens.

An advertising campaign aimed at fast-food chains and a viral appetizer on TikTok helped Chili’s increase sales nearly 15% at existing stores last quarter.

But Kevin Hochman, CEO of parent company Brinker International, told CNBC that the chain’s strong performance was simply a sign that customers were finally realizing the chain’s two-year turnaround.

Brinker shares have risen 53% this year, raising their market value to $2.99 ​​billion. However, the stock closed 10.7% lower on Wednesday after the company disappointed analysts with weaker-than-expected earnings and a conservative outlook for the 2025 financial year.

Shares rose 7 percent Thursday afternoon, recovering from what BMO Capital Markets called an “overreaction” by investors. KeyBanc Capital Markets also upgraded the stock Thursday, saying the quarterly results had been misunderstood.

Forecast aside, Chili’s even makes StreetAccount’s revenue forecast of 8.6% growth look cautious. With revenue growth of 14.8%, Chili’s is in rare company, joining Chipotle and Wingstop as one of the few public restaurants reporting strong footfall and in-store revenue growth at a time when many consumers are cutting back on spending and putting pressure on the industry. Chili’s casual dining competitors such as Dine Brands-owned Applebee’s and Bloomin’ Brands’ Outback Steakhouse have reported declines in in-store revenue in recent quarters.

“This is a whole new step in the industry,” Hochman said. “I think the sky’s the limit for this brand.”

About 60 percent of Chili’s growth last quarter came from its $10.99 Big Smasher meal, Hochman said. The chain promoted the business by targeting fast-food competitors in television ads.

“We took advantage of this insight that we had seen on social media months earlier: customers were angry about fast food pricing,” Hochman said. “The ad obviously struck a nerve.”

Another successful menu offering for Chili’s this quarter was the Triple Dipper, which lets guests choose between three appetizers and dips. The offering went viral on TikTok in May. Hochman estimates that the Triple Dipper was responsible for about 40% of the chain’s sales growth.

But the popularity of the Triple Dipper and Big Smasher has brought new problems for Chili’s. Restaurants must adjust to the influx of customers, many of whom are trying Chili’s for the first time or returning after a long absence. Hochman said Chili’s has invested in labor over the past two years — from hiring busboys to adding more cooks — but those moves put pressure on the bottom line this quarter.

According to Hochman, Chili’s turnaround has not only affected the workforce.

Under his leadership, the company has attempted to increase sales profitably over the past two years. Chili’s has reduced its offerings by about 22 percent.

Brinker has also ended some less profitable customer acquisition strategies. Chili’s no longer offers as many coupons as it once did, and Brinker has discontinued its virtual brand, Maggiano’s Italian Classics.

At the same time, Chili’s has also been able to gain value before competitors launch their own deals. But Hochman is confident that Chili’s can maintain its lead – and the new customers that TikTok and TV advertising have brought.

“We’ve been promoting our values ​​for almost 18 months, and a lot of people are late to the game. Sometimes they’re more aggressive values, and they’re just not as aware of it as we are because we’ve been at it for a while,” he said.

But Brinker may find it difficult to retain its new customers as the new fiscal year approaches. Numerous restaurants, from McDonald’s to Outback Steakhouse, have launched discount menus aimed at diners looking for discounts. And customers may further limit their restaurant visits to save money. Takeout prices, which have risen 4.1% over the past 12 months, have remained relatively stable.

For the 2025 fiscal year, which began in July, Brinker expects earnings per share of $4.35 to $4.75 and sales growth of 3 to 4.6 percent. Given Chili’s recent success, investors had expected stronger growth prospects. But Brinker is playing it safe in case the economy worsens.

“It’s important for our team to set goals that we believe are achievable,” Hochman said.

“(The economy) has certainly deteriorated over the last three to four months,” he added.