Record Gross Profit Margin Achieved in Q2 2025 at 52.7%
Gross profit margin increased to a record 52.7% in Q2, representing a 170 basis point expansion from previous quarters.
This margin expansion is attributed to operational improvements, product rationalization, and higher-margin product introductions.
Management emphasized this as a result of strong performance across operations and supply chain teams, with expectations to sustain or improve margins through ongoing mitigation efforts.
Brinker's 3-Year Turnaround Achievements and Future Outlook
Brinker has completed three years into its turnaround plan, with consistent positive results over seven quarters of outperformance in traffic and sales growth.
The company's average restaurant volume increased from $3.1 million in 2022 to $4.5 million in 2025, reflecting significant operational improvement.
Brinker's restaurant operating margin improved from 11.9% in 2022 to 17.6% in 2025, driven by menu simplification, increased labor investment, and better equipment.
The company paid down over $570 million of debt in three years, reducing leverage to 1.7x and strengthening its balance sheet.
Management emphasizes that the brand is fundamentally different today, with a focus on fundamentals, marketing, and operational excellence.
Adjusted EBITDA increased 14.3% to $59.2 million; adjusted EPS increased 1.6% to $1 per diluted share, including $0.18 EPS impact from additional interest on securitization.
Board approved increase in quarterly dividend from $0.27 to $0.30 per share, totaling approximately $8.4 million.
Company-owned restaurant sales increased $2.6 million due to 3.6% same-store sales growth and two net new restaurants.
Cost of sales as a percentage of company-owned sales declined 70 basis points to 75.2%, driven by sales leverage on labor and operating expenses.
SG&A increased $4.8 million to $32.9 million due to headcount investments and $1.5 million nonrecurring system implementation expenses.
System average food cost sustained at approximately 34%, within targeted mid-30% range.
System-wide sales increased 13.9% to $1.3 billion in Q2 2025, with same-store sales declining 1.9%.
Total revenue increased 12% to $174.3 million versus prior year, driven by 464 net franchise openings and partially offset by domestic same-store sales decline.
Unlevered cash-on-cash returns for brand partners remain industry-leading at 70%.
Strategic Margin Management and Cost Structure Reset in 2025
TreeHouse Foods has initiated a margin management plan starting in Q4 2024, leading to deliberate pricing and distribution choices to improve efficiency.
The company is focusing on controlling costs, reducing structural expenses, and optimizing plant capacity, including closing two plants in pickles and cookies categories.
The goal is to deliver $250 million in gross supply chain savings through 2027, with a strategic emphasis on profitability and cash flow over volume growth.
Management emphasizes that most of the margin management activities are behind them, setting the stage for a potential growth year in 2026.
BJ's Restaurants reported Q2 fiscal 2025 sales of $366 million, a 4.5% increase year-over-year, with comparable restaurant sales up 2.9% driven by 3.3% traffic growth.
Cost of sales was 24.8%, 90 basis points favorable year-over-year, with food cost inflation at approximately 2%, down from 3% in Q1.
Labor and benefit expenses were 35.4% of sales, 70 basis points favorable to last year, driven by better labor scheduling and operational execution.
Net debt decreased by $5.9 million to $34.5 million, supporting share repurchases and remodel investments.
Net income was $22.2 million with diluted earnings per share of $0.97, a 35% increase from $0.72 last year.
Occupancy and operating expenses were 22.8% of sales, slightly unfavorable by 10 basis points due to $2.5 million incremental marketing investments.
Restaurant-level cash flow margins improved by 150 basis points to 17%, and adjusted EBITDA margins increased by 120 basis points to 11.5%.
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