Why Brinker International Shares Popped

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 as high as 11% on Monday after the company's quarterly results topped Wall Street expectations.

So what: Brinker's third-quarter profit jumped 12% as increased traffic boosted same-store sales, prompting analysts to increase their growth expectations on the stock. Smaller fast-casual chains like Chipotle Mexican Grill and Panera have taken a big bite out of Brinker's market share in recent years, but today's results suggest that its Chili's and Maggiano's franchises are at least starting to hold some ground.

Now what: Based on the recent positive sales, traffic growth, and cost improvements, management reaffirmed its longer-term profit goals. "These factors combined with returning value to shareholders through share repurchases make us confident we'll deliver on our promise to double EPS by 2015 to $2.75 to $2.80." Of course, with the stock setting a new 52-week high today -- up about 50% from its September lows -- much of that optimism might already be baked into the price.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Chipotle and Panera. Motley Fool newsletter services have recommended buying shares of Chipotle and Panera, as well as creating a bear put spread position in 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's disclosure policy always gets a perfect score.

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