Odd warnings at Brinker…
Brinker International (EAT), owner of several “casual dining” chains, said in its last 10-Q that it faces “challenging times.” With gas prices spiking up and consumer confidence spiking down, it seems Americans have been taking fewer spins to Brinker restaurants like Chili’s and On the Border. (Meanwhile, Brinker has been trying to sell its Macaroni Grill chain, which I’m hoping doesn’t actually serve grilled macaroni.)
I happened to click on a press release Brinker filed yesterday announcing a routine quarterly dividend. As is customary (thanks to the existence of lawyers), the release has a disclaimer at the bottom rattling off a number of factors that could conceivably affect the company’s future financial results.
Like any sensible person, I normally ignore this boilerplate nonsense. But Brinker caught my attention with its particularly eclectic assortment of worries, ranging from “epidemics or pandemics” to “unfavorable publicity.” They also mention:
general business and economic conditions, the impact of competition, the impact of acquisitions and divestitures and other strategic transactions, the seasonality of the company’s business, adverse weather conditions, future commodity prices, fuel and utility costs and availability, terrorist acts, consumer perception of food safety, changes in consumer taste and behavior, changes in demographic trends, availability of employees, the company’s ability to meet its growth plan, acts of God, governmental regulations, and inflation.
One might assume that Brinker only recently added the references to fuel costs, commodity prices and inflation, those three boogeymen of the current economic moment. (BTW, Fed Chairman Bernanke pronounced inflation a “significant concern” earlier this week.)
It turns out, though, that Brinker has consistently been throwing commodity prices, fuel costs and inflation into the warnings at the end of its press releases since at least 2003. Not only does this company mix up a mean Presidente Margarita, but apparently it can see into the future.
Note: Thanks to Michelle’s posts about the Florida “sex house” financed by Countrywide Financial (CFC), footnoted earned a nice mention in Floyd Norris’s High and Low Finance column in today’s NY Times.
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Posted in Tags: odd filings, risks |
 3 Comments » |
June 6th, 2008 at 10:44 am
I think fuel costs are hitting everyone and im sure its effecting a lot of retail stores. Its crazy, I think they need to really work on creating ways to not rely on overseas for oil
June 7th, 2008 at 1:53 am
It’s amazing that there is so much analysis about a business when basics of business is at it’s best. Where do people want to eat when the belt is tight? When an entree is about ten dollors instead of twenty. Even Microsoft employees will spend ten dollars for a great burger because they can. The Bellevue, WA Chili’s location was busy and fun to be at. If you provide great food with great service then that is a formula that any business would thrive on.
June 8th, 2008 at 9:23 am
Please don’t take this the wrong way, but looking at a single outlet of a large nationwide company and using that as a barometer is a bit simplistic for most footnoted readers. Companies put these risk factors in for very careful reasons, and more investors should be paying attention to them instead of dismissing them as mere boilerplate. The fact remains that when the economy is rocky, people tend to cut back on going out to eat.