doug comings

Chili's run is remarkable. But what's also notable about it all is how simple it really is. If you're a restaurant company, and you want some inspiration, just look at what they did. Chili's formula is basically this: Ditch the gimmicks. Focus on unit economics. Simplify and improve the menu. Improve operations. Back it all up with strong marketing. The company focused on a few key menu items and upgraded their quality. It spent money to fix issues in the restaurants and worked to improve the quality of in-store operations. It got rid of those dumb robot servers. The CEO, Kevin Hochman, is one of the country's best marketing minds, and he brought in a CMO in George Felix who knows what he's doing. They took advantage of consumer frustration over prices and got a bit lucky with the cheese pull trend on social. Because the company did all that work on operations, its stores were ready when all those customers came in. And they keep coming back. It is comping positive on insanely positive numbers right now. Chili's 4-year stacked comps are 50%. By comparison, Wingstop, which also had an amazing run a couple of years ago, is up 34.1% over that same period after its sales started falling. It's tough to keep those sales when they boom like that. Can everybody do this? No, because a lot of companies are overleveraged or they're franchised and refuse to make the kind of investments required for such a strategy. But the formula is honestly there. And there are chains following the same one, such as Burger King. $EAT

Chili's two-year stacked same-store sales hit 40% last quarter and appear to be accelerating. That's five straight quarters of 35%+ quarterly performance. It's ridiculous. Chili's did this with a one-two punch of in-store service improvements and social media marketing. A bit of luck also helped. The company first focused on getting the stores right, fixing little things, investing in service, etc. They then hit on customers' demand for value on items they want, tapping into frustration about high fast-food menu prices. They got a bit lucky with the "cheese pull" trend on social media. But, as @kdhochman notes, Chili's restaurants were ready for the onslaught. Now the company is just really popular with the kids. Go into any Chili's and you'll see Gen Zer after Gen Zer. This is a damn casual-dining chain for crying out loud. Kids aren't supposed to be there. But they've discovered the wonders of the bar-and-grill chain. Anyway, Chili's now does $1 million more per store than its longtime rival Applebee's and $1.7 million more than TGI Fridays. Just an insane story. $EAT