Chili’s sales surge for a second straight quarter

It was the second straight quarter of 31% growth for Chili’s. | Photo: Shutterstock

Customers just can’t get enough of Chili’s Grill and Bar these days.

Same-store sales at the resurgent casual-dining chain surged 31.6% year over year in the first three months of 2025 on traffic growth of 21%. It continued Chili’s momentum to finish 2024, when same-store sales jumped 31.4%.

The growth has been driven largely by Chili’s valued-focused advertising around its $10.99 3 for Me meals as well as the viral popularity of its Triple Dipper appetizer platter, which now accounts for 15% of sales. 

Chili’s did not add any new menu items or advertising in the first quarter, meaning it continued to ride the wave of value and virality.

But it continued to make investments in its service and atmosphere that it says has kept the influx of customers coming back. During an earnings call Tuesday, executives said traffic gains are coming from both new customers and existing ones who are visiting more frequently. 

The performance came despite numerous headwinds in the industry. Bad weather in February kept many consumers from dining out. Consumer confidence fell precipitously due to inflation and anxiety over President Donald Trump’s tariff policies. And there was a significant increase in promotional activity from Chili’s competitors.

None of it seemed to bother the chain. Indeed, executives said the momentum from the first quarter has bled into April, a month in which Trump’s flip-flopping on tariffs has created a lot of economic uncertainty.

“As far as our business results, that doesn’t seem to be all that impacted by what’s going on right now,” said Kevin Hochman, CEO of Chili’s parent Brinker International, during the call Tuesday.

The results validated the brand’s strategy of using marketing to bring customers in and strong operations to get them to return. The Dallas-based chain has now racked up four straight quarters of double-digit same-store sales growth using that formula. 

Now the question is, how will Chili’s top the difficult comparisons that it will face starting with this current quarter, when it will lap a 14.8% same-store sales increase from a year ago?

Hochman said this is something Chili’s leadership talks about a lot, given its emphasis on same-store sales growth as opposed to systemwide sales growth.

Last year at this time, “everybody was asking the exact same questions, which is, ‘How the heck are they going to comp with plus-15%?’” he said. “I think we’re generally over that now.”

He said Chili’s will continue to work on fundamentals and menu innovation, adding that there is more opportunity ahead of Chili’s than behind it. 

“What I focus on with our team is on food, service and atmosphere. Are we going to be significantly better this year versus last year?” he said. “If the answer is yes, we have a lot of confidence we’re going to continue to grow the comp.”

To that end, Chili’s plans to continue adding or upgrading menu items and working to improve operations.

Earlier this month, it debuted a new burger, the Big QP, as part of its 3 for Me lineup. The Big QP thus far has outsold the launch of the popular Big Smasher burger a year ago. 

It’s also making a big promotional push around its margaritas, one of the “Core 4” menu items it is focused on. 

Over the next few quarters, it plans to relaunch its ribs, a signature item for the brand that makes up just 3% of its sales today. It will also reformulate its queso dip and nachos ahead of football season. “The nachos that I’ve tasted, I think, is unbeatable in the market right now,” Hochman said.

Meanwhile, Chili’s has continued to make operational simplifications. In the last quarter, it removed three menu items and three wing sauces, which has helped ease the workload at the fry station. It also reconfigured its kitchen display system to make it easier for cooks to see what they should be preparing. And it held listening sessions with dishwashers and made changes based on their feedback.

It also renewed its training on “burger mastery” ahead of the Big QP launch to ensure employees are cooking its burgers properly.

These operational improvements, combined with escalating sales, helped boost Chili’s restaurant-level margins to 18.9% in the period, an increase of 470 basis points compared to a year ago.

Chili’s has used the additional cash flow to invest in its restaurants and pay down debt. It paid off $125 million of debt in the quarter, leaving it with $90 million left on a $350 million revolver that matured in October.

Next up, it says it wants to return cash to shareholders, likely via a share repurchase program.

But it is also ramping up investments in renovating its restaurants and adding new equipment, specifically TurboChef ovens that are intended to help speed service times. It now expects to spend $265 million to $275 million on capital expenditures for the year, up from $240 million to $260 million previously.

It also raised its revenue guidance for the year to $5.33 billion to $5.35 billion, from $5.15 billion to $5.25 billion. 

Despite the impressive quarter and apparent continued momentum at Chili’s, Brinker International stock plunged 15% Tuesday for reasons that were not immediately clear. It is still up more than 174% over the past 12 months and has been one of the best-performing restaurant stocks during that period.

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