Chili's 2015 Annual Report Download - page 42

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Total revenues for fiscal 2014 increased to $2,909.5 million, a 2.1% increase from the $2,849.7 million
generated for fiscal 2013 driven by a 2.0% increase in company sales and a 4.0% increase in franchise and other
revenues. The increase in company sales was primarily attributable to the acquisition of 11 restaurants in Canada
at the end of fiscal 2013, a 0.6% increase in comparable restaurant sales, as well as increases in capacity (see
table below).
Fiscal Year Ended June 25, 2014
Comparable
Sales
Price
Increase
Mix
Shift Traffic Capacity
Brinker International ................ 0.6% 1.2% 1.0% (1.6)% 1.6%
Chili’s Company-owned ......... 0.6% 1.2% 1.2% (1.8)% 1.6%
Maggiano’s ................... 0.6% 1.5% (0.7)% (0.2)% 1.7%
Chili’s Franchise(1) ................. 0.2%
U.S. ......................... (0.3)%
International ................... 1.6%
Chili’s Domestic(2) ................. 0.3%
System-wide(3) .................... 0.5%
(1) Revenues generated by franchisees are not included in revenues on the consolidated
statements of comprehensive income; however, we generate royalty revenue and
advertising fees based on franchisee revenues, where applicable. We believe including
franchisee comparable restaurant’s revenues provides investors information regarding
brand performance that is relevant to current operations and may impact future restaurant
development.
(2) Chili’s Domestic comparable restaurant sales percentages are derived from sales
generated by company-owned and franchise operated Chili’s restaurants in the United
States.
(3) System-wide comparable restaurant sales are derived from sales generated by company-
owned Chili’s and Maggiano’s restaurants in addition to the sales generated at franchise
operated restaurants.
Chili’s company sales increased to $2,443.9 million in fiscal 2014, a 2.1% increase from $2,392.9 million in
fiscal 2013. The increase was primarily driven by the acquisition of 11 restaurants in Canada at the end of fiscal
2013, a 0.6% increase in comparable restaurant sales, as well as increases in domestic restaurant capacity. Chili’s
company-owned restaurant capacity increased 1.6% (as measured by sales weeks) compared to the prior year due
to the acquired Canada restaurants and five net restaurant openings during fiscal 2014.
Maggiano’s company sales increased to $379.1 million in fiscal 2014, a 1.4% increase from $373.7 million
in fiscal 2013 driven by an increase in restaurant capacity and menu pricing. Maggiano’s restaurant capacity
increased 1.7% for fiscal 2014 (as measured by sales weeks) compared to the prior year due to two restaurant
openings during the fiscal year.
Franchise and other revenues increased to $86.4 million in fiscal 2014 compared to $83.1 million in fiscal
2013 driven primarily by revenues associated with tabletop devices, partially offset by lower royalty income.
Royalty income decreased primarily due to the Canada acquisition in June 2013 as these restaurants were
franchised and five net domestic franchise restaurant closures during fiscal 2014, partially offset by an increase
in international franchise royalty revenues due to 22 net restaurant openings in fiscal 2014. Our franchisees
generated approximately $1,617 million in sales in fiscal 2014.
COSTS AND EXPENSES
Cost of sales, as a percent of company sales, decreased 0.2% in fiscal 2015 due to favorable menu pricing
and efficiency gains related to new fryer equipment, partially offset by unfavorable menu item mix and
unfavorable commodity pricing primarily related to burger meat, which is market based, as well as unfavorable
F-6