S&P turns Brinker view to negative

S&P said it revised its outlook for Brinker International Inc. to negative from stable and affirmed the BB- issuer rating.

“The outlook revision reflects Brinker's elevated leverage due to weaker profitability caused by commodity and wage inflation. Brinker saw commodity inflation in the first and second quarters of fiscal 2023 of 25% and 17%, respectively, with significant year-over-year cost increases coming from chicken and beef. Investments in its workforce such as raising wages in the mid-single-digit area year-over-year have resulted in better retention but higher costs. We expect increased costs in the short term related to operating initiatives that will take several quarters before their full benefits are realized,” S&P said in a press release.

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