Brinker International Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of restaurant operator Brinker International (NYS: EAT) climbed a delicious 13% today after its quarterly results and 2012 outlook topped Wall Street expectations.

So what: The parent company of Chili's and Maggiano's has been losing market share amid intense competition, but today's revenue beat -- $717.5 million versus the consensus estimate of $710.6 million -- suggests that some of management's turnaround initiatives are catching on. Specifically, the launch of low-priced lunch combos and the "2 for $20" dinner deal helped Chili's post a 2.1% same-store sales increase.

Now what: I wouldn't bite on the shares just yet. While management now sees full-year adjusted 2012 earnings of $1.80 to $1.95 per share (versus the average analyst estimate of $1.77), an increasingly crowded casual dining space makes Brinker a questionable long-term opportunity. For Fools yearning to get into the restaurant biz, younger, faster-growing concepts like Buffalo Wild Wings (NAS: BWLD) and Chipotle Mexican Grill (NYS: CMG) seem like tastier opportunities.

Interested in more info on Brinker?Add it to your watchlist.

At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings and Chipotle. Motley Fool newsletter services have recommended creating an iron condor position in Chipotle. The Fool owns shares of Buffalo Wild Wings and Chipotle. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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