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Struggling Operator of the Chili’s Restaurant Chain Had Executive Purchase Shares

Brinker International Inc. (NYSE:EAT), whose insider buying activity has not been full of life in recent months, had one executive buy shares earlier this week. Thomas J. Edwards, Chief Financial Officer and Executive Vice President, bought 5,500 units of common stock on Wednesday at prices varying from $45.48 to $45.51 per unit, which lifted his ownership to 20,056 units.

The shares of the operator of Chili’s Grill & Bar and Maggiano’s Little Italy restaurants are down 4% year-to-date, partly owing to another bunch of disappointing financial results. The company’s Chili’s sales for the third quarter that ended March 23 increased 6.1% year-to-year due to an increase in restaurant capacity from the acquisition of a franchise of 103 Chili’s Grill & Bar in June 2015 for $106.5 million. Nonetheless, the company recorded a 4.1% decline in sales from its company-owned Chili’s locations, which marks the fourth consecutive quarter of sales declines at this restaurant chain. Brinker International owned, operated or franchised a total of 1,647 restaurants at the end of March, of which 1,596 restaurants were under the Chili’s Grill & Bar name. Meanwhile, Maggiano’s third-quarter company sales grew 2.8% year-on-year, with comparable restaurant sales increasing 0.2% year-over-year. It is important to note that the customer traffic at company-owned Chili’s locations has been on a sharp and steady decline in the past five quarters.

The shares of the operator of the Chili’s restaurant chain are changing hands at around 12.9-times expected earnings, significantly below the forward P/E multiple of 25.0 for the Restaurants sector. Cliff Asness’ AQR Capital Management had 1.27 million shares of Brinker International Inc. (NYSE:EAT) in its equity portfolio at the end of 2015.