Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 28, 2018 | Apr. 30, 2018 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 28, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | BRINKER INTERNATIONAL INC | |
Entity Central Index Key | 703,351 | |
Current Fiscal Year End Date | --06-27 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 43,853,794 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 28, 2018 | Jun. 28, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 13,400 | $ 9,064 |
Accounts receivable, net | 44,336 | 44,658 |
Inventories | 24,407 | 24,997 |
Restaurant supplies | 46,685 | 46,380 |
Prepaid expenses | 15,191 | 19,226 |
Total current assets | 144,019 | 144,325 |
Property and Equipment, at Cost: | ||
Land | 149,150 | 149,098 |
Buildings and leasehold improvements | 1,673,950 | 1,655,227 |
Furniture and equipment | 719,924 | 713,228 |
Construction-in-progress | 10,563 | 21,767 |
Property plant and equipment, gross | 2,553,587 | 2,539,320 |
Less accumulated depreciation and amortization | (1,609,722) | (1,538,706) |
Net property and equipment | 943,865 | 1,000,614 |
Other Assets: | ||
Goodwill | 164,011 | 163,953 |
Deferred income taxes, net | 29,239 | 37,029 |
Intangibles, net | 24,744 | 27,512 |
Other | 31,001 | 30,200 |
Total other assets | 248,995 | 258,694 |
Total assets | 1,336,879 | 1,403,633 |
Current Liabilities: | ||
Current installments of long-term debt | 7,301 | 9,649 |
Accounts payable | 97,166 | 104,231 |
Gift card liability | 126,627 | 126,482 |
Accrued payroll | 75,995 | 70,281 |
Other accrued liabilities | 139,051 | 111,515 |
Income taxes payable | 2,857 | 14,203 |
Total current liabilities | 448,997 | 436,361 |
Long-term debt, less current installments | 1,361,705 | 1,319,829 |
Other liabilities | 134,719 | 141,124 |
Commitments and Contingencies (Note 11) | ||
Shareholders’ Deficit: | ||
Common stock - 250,000,000 authorized shares; $0.10 par value; 176,246,649 shares issued and 43,843,747 shares outstanding at March 28, 2018 and 176,246,649 shares issued and 48,440,721 shares outstanding at June 28, 2017 | 17,625 | 17,625 |
Additional paid-in capital | 509,479 | 502,074 |
Accumulated other comprehensive loss | (5,445) | (11,921) |
Retained earnings | 2,655,387 | 2,627,073 |
Shareholders' deficit including treasury stock | 3,177,046 | 3,134,851 |
Less treasury stock, at cost (132,402,902 shares at March 28, 2018 and 127,805,928 shares at June 28, 2017) | (3,785,588) | (3,628,532) |
Total shareholders’ deficit | (608,542) | (493,681) |
Total liabilities and shareholders’ deficit | $ 1,336,879 | $ 1,403,633 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 28, 2018 | Jun. 28, 2017 |
Common Stock, authorized shares | 250,000,000 | 250,000,000 |
Common Stock, par value | $ 0.10 | $ 0.10 |
Common Stock, shares issued | 176,246,649 | 176,246,649 |
Common Stock, shares outstanding | 43,843,747 | 48,440,721 |
Treasury Stock, shares | 132,402,902 | 127,805,928 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2018 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Company sales | $ 790,495 | $ 790,624 | $ 2,250,125 | $ 2,276,743 |
Franchise and other revenues | 22,039 | 20,017 | 68,199 | 63,433 |
Total revenues | 812,534 | 810,641 | 2,318,324 | 2,340,176 |
Operating costs and expenses: | ||||
Cost of sales | 207,328 | 201,903 | 587,808 | 587,742 |
Restaurant labor | 265,367 | 261,632 | 766,858 | 760,894 |
Restaurant expenses | 190,205 | 192,372 | 566,983 | 582,146 |
Company restaurant expenses | 662,900 | 655,907 | 1,921,649 | 1,930,782 |
Depreciation and amortization | 37,553 | 39,335 | 113,728 | 117,526 |
General and administrative | 36,619 | 35,931 | 102,065 | 102,014 |
Other gains and charges | 2,752 | 6,600 | 25,167 | 13,984 |
Total operating costs and expenses | 739,824 | 737,773 | 2,162,609 | 2,164,306 |
Operating income | 72,710 | 72,868 | 155,715 | 175,870 |
Interest expense | 14,549 | 13,658 | 42,754 | 36,108 |
Other, net | (755) | (402) | (2,246) | (1,084) |
Income before provision for income taxes | 58,916 | 59,612 | 115,207 | 140,846 |
Provision for income taxes | 12,000 | 17,243 | 33,048 | 40,607 |
Net income | $ 46,916 | $ 42,369 | $ 82,159 | $ 100,239 |
Basic net income per share | $ 1.03 | $ 0.87 | $ 1.76 | $ 1.96 |
Diluted net income per share | $ 1.02 | $ 0.86 | $ 1.74 | $ 1.93 |
Basic weighted average shares outstanding | 45,433 | 48,954 | 46,719 | 51,211 |
Diluted weighted average shares outstanding | 45,973 | 49,506 | 47,195 | 51,854 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | $ (243) | $ 734 | $ 577 | $ (1,411) |
Other comprehensive income (loss) | (243) | 734 | 577 | (1,411) |
Comprehensive income | $ 46,673 | $ 43,103 | $ 82,736 | $ 98,828 |
Dividends per share | $ 0.38 | $ 0.34 | $ 1.14 | $ 1.02 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 28, 2018 | Mar. 29, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 82,159 | $ 100,239 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 113,728 | 117,526 |
Stock-based compensation | 11,037 | 13,237 |
Deferred income taxes, net | 7,788 | (8,684) |
Restructure charges and other impairments | 16,047 | 8,837 |
Net loss (gain) on disposal of assets | 1,360 | (628) |
Undistributed loss (earnings) on equity investments | 330 | (82) |
Other | 2,431 | 2,082 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 2,710 | 11,078 |
Inventories | (128) | (1,386) |
Restaurant supplies | (1,118) | (1,338) |
Prepaid expenses | 3,915 | 3,273 |
Other assets | (148) | (340) |
Accounts payable | 290 | (7,487) |
Gift card liability | 145 | 9,109 |
Accrued payroll | 5,708 | 4,592 |
Other accrued liabilities | 6,679 | 10,576 |
Current income taxes | (10,961) | (14,603) |
Other liabilities | (4,270) | (338) |
Net cash provided by operating activities | 237,702 | 245,663 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment | (69,503) | (79,730) |
Proceeds from sale of assets | 14,825 | 3,077 |
Insurance recoveries | 1,747 | 0 |
Proceeds from note receivable | 1,185 | 0 |
Net cash used in investing activities | (51,746) | (76,653) |
Cash Flows from Financing Activities: | ||
Borrowings on revolving credit facility | 524,000 | 200,000 |
Payments on revolving credit facility | (484,000) | (328,000) |
Purchases of treasury stock | (162,004) | (350,768) |
Payments of dividends | (53,098) | (54,087) |
Payments on long-term debt | (7,834) | (2,847) |
Proceeds from issuances of treasury stock | 1,316 | 4,505 |
Proceeds from issuance of long-term debt | 0 | 350,000 |
Payments for debt issuance costs | 0 | (10,216) |
Net cash used in financing activities | (181,620) | (191,413) |
Net change in cash and cash equivalents | 4,336 | (22,403) |
Cash and cash equivalents at beginning of period | 9,064 | 31,446 |
Cash and cash equivalents at end of period | $ 13,400 | $ 9,043 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | References to “Brinker,” the “Company,” “we,” “us” and “our” in this Form 10-Q are references to Brinker International, Inc. and its subsidiaries and any predecessor companies of Brinker International, Inc. Our unaudited consolidated financial statements as of March 28, 2018 and June 28, 2017 and for the thirteen and thirty-nine week periods ended March 28, 2018 and March 29, 2017 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We are principally engaged in the ownership, operation, development, and franchising of the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands. At March 28, 2018 , we owned, operated or franchised 1,686 restaurants, consisting of 997 company-owned restaurants and 689 franchised restaurants, located in the United States, two United States territories and 31 other countries. The foreign currency translation adjustment included in Comprehensive income on the Consolidated Statements of Comprehensive Income represents the unrealized impact of translating the financial statements of our Canadian restaurants and our Mexican joint venture (prior to divestiture) from their respective functional currencies to U.S. dollars. This amount is not included in net income and would only be realized upon disposition of the businesses. The Accumulated other comprehensive loss (“AOCL”) is presented on the Consolidated Balance Sheets . Additionally, certain prior year balances in the Consolidated Balance Sheets have been reclassified to conform to fiscal 2018 presentation. These reclassifications have no effect on our net income as previously reported and an immaterial impact on our prior year Consolidated Balance Sheets . The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and costs and expenses during the reporting periods. Actual results could differ from those estimates. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718). This update changed the recognition of excess tax benefits and tax deficiencies resulting from the settlement of share-based awards from an adjustment to Additional paid-in capital on the Consolidated Balance Sheets to an adjustment to the Provision for income taxes on the Consolidated Statements of Comprehensive Income and is applied on a prospective basis. This update also changed the classification of excess tax benefits from cash flows from financing activities to cash flows from operating activities on the Consolidated Statements of Cash Flows and is applied retrospectively. This update was effective for annual and interim periods for fiscal years beginning after December 15, 2016, which required us to adopt these provisions in the first quarter of fiscal 2018. We recognized a discrete tax expense of $1.1 million in the Provision for income taxes , which resulted in a decrease in Diluted net income per share of $0.02 , in the Consolidated Statements of Comprehensive Income for the thirty-nine week period ended March 28, 2018 . The impact for the thirteen week period ended March 28, 2018 was negligible, and did not result in any impact to our to Diluted net income per share in the Consolidated Statements of Comprehensive Income . The inclusion of excess tax benefits and tax deficiencies within our Provision for income taxes will increase its volatility as the amount of excess tax benefits or tax deficiencies from share-based compensation awards depends on our stock price at the date the awards vest. In addition, we reclassified $2.0 million of excess tax benefits received from cash flows from financing activities to cash flows from operating activities on our Consolidated Statements of Cash Flows for the thirty-nine week period ended March 29, 2017 . The adoption of the other provisions in this update, including the accounting policy election for accounting for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows, had no impact on our consolidated financial statements. We will continue to estimate forfeitures of share-based awards. The information furnished herein reflects all adjustments (consisting only of normal recurring accruals and adjustments) which are, in our opinion, necessary to fairly state the interim operating results, financial position and cash flows for the respective periods. However, these operating results are not necessarily indicative of the results expected for the full fiscal year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations. The Notes to the Consolidated Financial Statements (unaudited) should be read in conjunction with the Notes to the Consolidated Financial Statements contained in the June 28, 2017 Form 10-K. We believe the disclosures are sufficient for interim financial reporting purposes. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Mar. 28, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the dilutive net income per share calculation. Basic weighted average shares outstanding are reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Week Period Ended Thirty-Nine Week Period Ended March 28, 2018 March 29, 2017 March 28, 2018 March 29, 2017 Basic weighted average shares outstanding 45,433 48,954 46,719 51,211 Dilutive stock options 115 168 98 212 Dilutive restricted shares 425 384 378 431 540 552 476 643 Diluted weighted average shares outstanding 45,973 49,506 47,195 51,854 Awards excluded due to anti-dilutive effect on diluted net income per share 974 993 1,260 970 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted on December 22, 2017 with an effective date of January 1, 2018. The enactment date occurred prior to the end of the second quarter of fiscal 2018 and therefore the federal statutory tax rate changes stipulated by the Tax Act were reflected in the second quarter. The Tax Act lowered the federal statutory tax rate from 35.0% to 21.0% effective January 1, 2018. Our federal statutory tax rate for fiscal 2018 is now 28.1% , representing a blended tax rate for the current fiscal year based on the number of days in the fiscal year before and after the effective date. For subsequent years, our federal statutory tax rate will be 21.0% . In accordance with ASC 740, we re-measured our deferred tax accounts as of the enactment date using the new federal statutory tax rate and recognized the change as a discrete item in the Provision for income taxes. For the thirty-nine week period ended March 28, 2018, the adjustment was $8.4 million , this changed slightly from the prior quarter due to revised full year estimates for changes in our net deferred tax balance. Our accumulated foreign earnings and profits are in a loss position and therefore no taxes are applicable related to a deemed repatriation. A reconciliation between the reported provision for income taxes and the amount computed by applying our federal statutory income tax rate of 28.1% to Income before provision for income taxes is as follows (in thousands): Thirteen Week Period Ended March 28, 2018 Thirty-Nine Week Period Ended March 28, 2018 Income tax expense at statutory rate $ 16,555 $ 32,373 FICA tax credit (7,087 ) (13,857 ) State income taxes, net of federal benefit 2,284 4,467 Stock based compensation excess tax (windfall) shortfall (43 ) 1,127 Revaluation of deferred taxes (321 ) 8,417 Other 612 521 $ 12,000 $ 33,048 |
OTHER GAINS AND CHARGES
OTHER GAINS AND CHARGES | 9 Months Ended |
Mar. 28, 2018 | |
Other Gains and Charges [Abstract] | |
OTHER GAINS AND CHARGES | Other gains and charges in the Consolidated Statements of Comprehensive Income consist of the following (in thousands): Thirteen Week Period Ended Thirty-Nine Week Period Ended March 28, March 29, March 28, March 29, Restaurant closure charges $ 2,777 $ 794 $ 7,321 $ 3,621 Lease guarantee charges 510 — 1,943 — Accelerated depreciation 483 — 1,449 — Hurricane-related costs 240 — 5,460 — Foreign currency transaction gain (948 ) — (66 ) — Restaurant impairment charges — — 9,133 1,851 Gain on the sale of assets, net — (55 ) (303 ) (2,624 ) Severance — 5,929 — 6,222 Information technology restructuring — — — 2,700 Other (310 ) (68 ) 230 2,214 $ 2,752 $ 6,600 $ 25,167 $ 13,984 Fiscal 2018 Restaurant closure charges during the third quarter of fiscal 2018 were $2.8 million which includes $1.7 million related to lease termination expenses. We are the primary lessee of leases that were sublet to a divested brand, currently in bankruptcy proceedings, that discontinued sublease rental payments and closed the restaurants. Additionally, we recorded Lease guarantee charges of $0.5 million in the third quarter of fiscal 2018, and $1.4 million in the second quarter of fiscal 2018 related to the same divested brand for certain leases under which we were secondarily liable. For additional information on lease guarantees, see Note 11 - Contingencies . Restaurant closure charges during the thirty-nine week period ended March 28, 2018 primarily includes expenses associated with nine Alberta, Canada Chili’s restaurants closed during the second quarter of fiscal 2018. Alberta has an oil dependent economy and has experienced an economic recession in recent years related to lower oil production. The slower economy has negatively affected traffic at the restaurants. The decision to close these restaurants was driven by management’s belief that the long-term profitability of these restaurants would not meet our required level of return. During the third quarter of fiscal 2018, $1.1 million of Restaurant closure charges was recorded primarily due to landlord rejections of previously identified sublease tenants related to Chili’s restaurants in Alberta, Canada closed during the second quarter. During the second quarter of fiscal 2018, we recorded Restaurant closure charges of $4.3 million primarily related to lease termination charges and other costs associated with certain locations for which no sublease tenant was identified. During the first quarter of fiscal 2018, we recorded Restaurant impairment charges also related to the Canada closures of $7.2 million primarily related to the long-lived assets and reacquired franchise rights. Additionally, during the second quarter of fiscal 2018, we recorded Restaurant impairment charges of $2.0 million primarily related to the long-lived assets of certain underperforming Maggiano’s and Chili’s restaurants that will continue to operate. See Note 8 - Fair Value Measurements for further details. Accelerated depreciation of $0.5 million and $1.4 million was recorded during the third quarter and the thirty-nine week period ended March 28, 2018, respectively, primarily related to depreciation on certain leasehold improvements at the corporate headquarters property. We plan to relocate the corporate headquarters in fiscal 2019. During the third quarter of fiscal 2018, we sold the portion of our current headquarters property that we owned for net proceeds of $13.7 million . We will continue to occupy the property rent-free until our new corporate headquarters location is available or March 31, 2019. The net sales proceeds have been recorded within Other accrued liabilities on the Consolidated Balance Sheets (see Note 7 - Accrued and Other Liabilities for further details), until we have fully relinquished possession of the sold property and our involvement has been terminated. Once our possession of the existing headquarters has terminated, we will recognize the sale, and record a gain related to the transaction. As of March 28, 2018 , Land of $5.9 million , and additional Net property and equipment of $2.3 million were recorded on our Consolidated Balance Sheets related to the sold property. Hurricane-related costs include incurred expenses associated with Hurricanes Harvey and Irma primarily related to employee relief payments and inventory spoilage. Our restaurants were closed in the areas affected by these disasters and our team members were unable to work. Payments were made to assist our team members during these crises and to promote retention. We carry insurance coverage for these types of natural disasters. It was determined that Hurricane Irma damage was below insurance claim deductible limits, and we do not expect any insurance proceeds related to this storm. During the second quarter of fiscal 2018, we received insurance proceeds related to certain Hurricane Harvey property damage of $1.0 million that was mostly offset by the long-lived asset write-off, of which the net amount of $0.1 million was included within Other gains and charges in the Consolidated Statements of Comprehensive Income . The business interruption portion of the claim relating to Hurricane Harvey is still under review following the established claims adjusting process. During the third quarter of fiscal 2018, we received property damage insurance proceeds of $0.5 million related to natural flooding in Louisiana that are recorded within Other gains and charges in the Consolidated Statements of Comprehensive Income . Additionally, during the third quarter, we received business interruption funds of $0.4 million related to the Louisiana flooding from insurers that are recorded within Restaurant expenses on the Consolidated Statements of Comprehensive Income . During the second quarter of fiscal 2018, we sold our equity interest in our Mexico joint venture to the franchise partner in the joint venture, CMR, S.A.B. de C.V. for $18.0 million . We received a note as consideration to be paid in 72 equal installments, with one installment payment made at closing and the other payments to be made over 71 months pursuant to the note. The note is denominated in Mexican pesos and is re-measured to U.S. dollars at the end of each period resulting in a gain or loss from foreign currency exchange rate changes. Foreign currency transaction gain for the third quarter of fiscal 2018 included a $0.9 million gain because the value of the Mexican peso increased as compared to the U.S. dollar during this period. During the second quarter of fiscal 2018, we recorded a $0.9 million loss due to the decline in the exchange rate for the Mexican peso relative to the U.S. dollar. Additionally, related to the CMR equity interest sale, in the second quarter of fiscal 2018 we recorded a gain of $0.2 million within Gain on the sale of assets, net which included the recognition of prior period foreign currency translation losses reclassified from AOCL, please see Note 9 - Shareholders’ Deficit for further details. The current portion of the note, which represents the cash payments to be received over the next 12 months, is included within Accounts receivable, net while the long-term portion of the note is included within Other assets on the Consolidated Balance Sheets . Fiscal 2017 During the third quarter of fiscal 2017, we completed a reorganization of the Chili’s restaurant operations team and certain departments at the corporate headquarters to better align our staffing with the current management strategy and resource needs. This employee separation action resulted in severance charges and accelerated stock-based compensation expenses of $5.9 million . Substantially all of the severance amounts were paid by the end of the third quarter of fiscal 2017. Additionally, we recorded restaurant closure charges of $0.8 million primarily related to lease and other costs associated with closed restaurants. During the second quarter of fiscal 2017, we recorded a $2.6 million gain on the sale of property, partially offset by restaurant impairment charges of $1.9 million primarily related to the long-lived assets and reacquired franchise rights of six underperforming Chili’s restaurants which continue to operate. See Note 8 - Fair Value Measurements for further details. During the first quarter of fiscal 2017, we recorded restaurant closure charges of $2.5 million primarily related to lease termination charges for restaurants closed during the quarter. Additionally, we incurred $2.5 million of professional fees and severance associated with our information technology restructuring. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 28, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our company-owned Chili’s restaurants in the United States and Canada as well as the results from our domestic and international franchise business. The Maggiano’s segment includes the results of our company-owned Maggiano’s restaurants. Company sales are derived principally from the sales of food and beverages. Franchise and other revenues primarily includes royalties, development fees, franchise fees, banquet service charge income, gift card breakage and discounts, digital entertainment revenue, Chili’s retail food product royalties and delivery fee income. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly in the United States. There were no material transactions amongst our operating segments. Our chief operating decision maker uses operating income as the measure for assessing performance of our operating segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Company restaurant expenses include food and beverage costs, restaurant labor costs and restaurant expenses, including advertising. The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP (in thousands): Thirteen Week Period Ended March 28, 2018 Chili’s Maggiano’s Other Consolidated Company sales $ 688,879 $ 101,616 $ — $ 790,495 Franchise and other revenues 17,204 4,835 — 22,039 Total revenues 706,083 106,451 — 812,534 Company restaurant expenses 572,812 89,991 97 662,900 Depreciation and amortization 31,011 3,957 2,585 37,553 General and administrative 10,601 1,420 24,598 36,619 Other gains and charges (75 ) 6 2,821 2,752 Total operating costs and expenses 614,349 95,374 30,101 739,824 Operating income (loss) 91,734 11,077 (30,101 ) 72,710 Interest expense — — 14,549 14,549 Other, net — — (755 ) (755 ) Income (loss) before provision for income taxes $ 91,734 $ 11,077 $ (43,895 ) $ 58,916 Thirteen Week Period Ended March 29, 2017 Chili’s Maggiano’s Other Consolidated Company sales $ 689,662 $ 100,962 $ — $ 790,624 Franchise and other revenues 15,224 4,793 — 20,017 Total revenues 704,886 105,755 — 810,641 Company restaurant expenses 565,327 90,454 126 655,907 Depreciation and amortization 32,386 4,078 2,871 39,335 General and administrative 8,771 1,624 25,536 35,931 Other gains and charges 4,233 — 2,367 6,600 Total operating costs and expenses 610,717 96,156 30,900 737,773 Operating income (loss) 94,169 9,599 (30,900 ) 72,868 Interest expense — — 13,658 13,658 Other, net — — (402 ) (402 ) Income (loss) before provision for income taxes $ 94,169 $ 9,599 $ (44,156 ) $ 59,612 Thirty-Nine Week Period Ended March 28, 2018 Chili’s Maggiano’s Other Consolidated Company sales $ 1,940,076 $ 310,049 $ — $ 2,250,125 Franchise and other revenues 51,992 16,207 — 68,199 Total revenues 1,992,068 326,256 — 2,318,324 Company restaurant expenses 1,648,094 273,187 368 1,921,649 Depreciation and amortization 93,818 12,029 7,881 113,728 General and administrative 29,443 4,202 68,420 102,065 Other gains and charges 17,994 777 6,396 25,167 Total operating costs and expenses 1,789,349 290,195 83,065 2,162,609 Operating income (loss) 202,719 36,061 (83,065 ) 155,715 Interest expense — — 42,754 42,754 Other, net — — (2,246 ) (2,246 ) Income (loss) before provision for income taxes $ 202,719 $ 36,061 $ (123,573 ) $ 115,207 Segment assets $ 1,126,650 $ 151,649 $ 58,580 $ 1,336,879 Payments for property and equipment 58,613 5,590 5,300 69,503 Thirty-Nine Week Period Ended March 29, 2017 Chili’s Maggiano’s Other Consolidated Company sales $ 1,970,390 $ 306,353 $ — $ 2,276,743 Franchise and other revenues 47,417 16,016 — 63,433 Total revenues 2,017,807 322,369 — 2,340,176 Company restaurant expenses 1,658,067 272,137 578 1,930,782 Depreciation and amortization 97,630 12,019 7,877 117,526 General and administrative 28,115 4,836 69,063 102,014 Other gains and charges 9,102 746 4,136 13,984 Total operating costs and expenses 1,792,914 289,738 81,654 2,164,306 Operating income (loss) 224,893 32,631 (81,654 ) 175,870 Interest expense — — 36,108 36,108 Other, net — — (1,084 ) (1,084 ) Income (loss) before provision for income taxes $ 224,893 $ 32,631 $ (116,678 ) $ 140,846 Payments for property and equipment $ 60,770 $ 10,673 $ 8,287 $ 79,730 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Mar. 28, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | Long-term debt consists of the following (in thousands): March 28, June 28, Revolving credit facility $ 432,250 $ 392,250 5.00% notes 350,000 350,000 3.88% notes 300,000 300,000 2.60% notes 250,000 250,000 Capital lease obligations 43,667 45,417 Total long-term debt 1,375,917 1,337,667 Less unamortized debt issuance costs and discounts (6,911 ) (8,189 ) Total long-term debt less unamortized debt issuance costs and discounts 1,369,006 1,329,478 Less current installments (7,301 ) (9,649 ) $ 1,361,705 $ 1,319,829 During the thirty-nine week period ended March 28, 2018, net borrowings of $40.0 million were drawn on the $1.0 billion revolving credit facility primarily to fund share repurchases. Under the revolving credit facility, $890.0 million of the facility is due on September 12, 2021 , and the remaining $110.0 is due on March 12, 2020 . The revolving credit facility bears interest of LIBOR plus an applicable margin, which is a function of our credit rating and debt to cash flow ratio, but is subject to a maximum of LIBOR plus 2.00% . Based on our current credit rating, as of March 28, 2018 we are paying interest at a rate of LIBOR plus 1.38% for a total of 3.27% . One month LIBOR at March 28, 2018 was approximately 1.89% . As of March 28, 2018 , $567.8 million of credit is available under the revolving credit facility. Obligations under our 2.60% notes , which will mature in May 2018, have been classified as long-term, reflecting our intention to pay off these notes through our existing revolving credit facility. Our debt agreements contain various financial covenants that, among other things, require the maintenance of certain leverage and fixed charge coverage ratios. We are currently in compliance with all financial covenants. |
ACCRUED AND OTHER LIABILITIES
ACCRUED AND OTHER LIABILITIES | 9 Months Ended |
Mar. 28, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED AND OTHER LIABILITIES | Other accrued liabilities consist of the following (in thousands): March 28, June 28, Insurance $ 18,143 $ 17,484 Sales tax 17,174 12,494 Dividends 16,839 16,649 Interest 16,628 7,696 Property tax 13,952 16,566 Deferred sale proceeds (1) 13,706 — Other (2) 42,609 40,626 $ 139,051 $ 111,515 (1) Deferred sale proceeds relates to the corporate headquarters sale, please see Note 4 - Other Gains and Charges for further details. (2) Other primarily consists of reserves for restaurant closure activities, certain lease reserves (see Note 11 - Contingencies for details), accruals for utilities and services, banquet deposits for Maggiano’s events, and the current portion of straight-line rent and landlord contributions. Other liabilities consist of the following (in thousands): March 28, June 28, Straight-line rent $ 56,115 $ 57,464 Insurance 42,138 42,532 Landlord contributions 23,527 26,402 Unfavorable leases 3,948 5,398 Unrecognized tax benefits 3,102 3,116 Other 5,889 6,212 $ 134,719 $ 141,124 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 28, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value, as follows: • Level 1 – inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 – inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities. • Level 3 – inputs are unobservable and reflect our own assumptions. Non-Financial Assets Measured on a Non-Recurring Basis We review the carrying amounts of property and equipment and intangibles such as reacquired franchise rights and transferable liquor licenses semi-annually or when events or circumstances indicate that the fair value may not exceed the carrying amount. We record an impairment charge for the excess of the carrying amount over the fair value. During the thirty-nine week period ended March 28, 2018, based on our second quarter semi-annual review, we impaired long-lived assets with carrying values of $2.3 million , primarily related to one underperforming Maggiano’s restaurant and one underperforming Chili’s restaurant which will continue to operate. We determined the leasehold improvements associated with the impaired restaurants had a fair value of $0.3 million , based on Level 3 fair value measurements, resulting in an impairment charge of $2.0 million . During the first quarter of fiscal 2018, we impaired long-lived assets and reacquired franchise rights with carrying values of $6.0 million and $1.2 million , respectively, primarily related to nine underperforming Chili’s restaurants located in Alberta, Canada which were identified for closure by management. We determined the leasehold improvements and other assets associated with these restaurants had no fair value, based on Level 3 fair value measurements, resulting in an impairment charge of $7.2 million . The restaurant assets were assigned a zero fair value as the decision to close the restaurants in the second quarter of fiscal 2018 will result in substantially all of the assets reverting to the landlords. During the thirty-nine week period ended March 29, 2017, long-lived assets and reacquired franchise rights with carrying values of $1.3 million and $0.8 million , respectively, primarily related to six underperforming restaurants, were determined to have a total fair value of $0.2 million resulting in an impairment charge of $1.9 million . We determine the fair value of transferable liquor licenses based on prices in the open market for licenses in the same or similar jurisdictions. Based on our semi-annual review, during the second quarter of fiscal 2018 and fiscal 2017, we determined there was no impairment. We review the carrying amounts of goodwill annually or when events or circumstances indicate that the carrying amount may not be recoverable. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the implied fair value of the goodwill. We determined that there was no impairment of goodwill during our annual test in the second quarter of fiscal 2018 and fiscal 2017 as the fair value of our reporting units were substantially in excess of their carrying values. No indicators of impairment were identified through the end of the third quarter of fiscal 2018. All impairment charges were included in Other gains and charges in the Consolidated Statements of Comprehensive Income for the periods presented. Please see Note 4 - Other Gains and Charges for more information. Other Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, a long-term note receivable and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying amounts because of the short maturity of these items. During the second quarter of fiscal 2018, we received an $18.0 million long-term note as consideration related to the sale of our equity interest in the Chili’s joint venture in Mexico. We determined the fair value of this note based on an internally developed analysis relying on Level 3 inputs. This analysis was based on a credit rating we assigned to the counterparty and comparable interest rates associated with similar debt instruments observed in the market. As a result of this analysis, we determined the fair value of this note was approximately $16.0 million and recorded this fair value as its initial carrying value. The current portion of the note represents the cash payments to be received over the next 12 months and is included within Accounts receivable, net , while the long-term portion of the note is included within Other assets in the Consolidated Balance Sheets . The carrying amount of debt outstanding related to our revolving credit facility approximates fair value as the interest rate on this instrument approximates current market rates (Level 2). The fair values of the 2.60% notes, 3.88% notes and 5.00% notes are based on quoted market prices and are considered Level 2 fair value measurements. The carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values of the 2.60% notes, 3.88% notes and 5.00% notes are as follows (in thousands): March 28, 2018 June 28, 2017 Carrying Amount Fair Value Carrying Amount Fair Value 2.60% Notes $ 249,928 $ 249,800 $ 249,495 $ 250,480 3.88% Notes 298,178 285,480 297,912 286,077 5.00% Notes 344,983 342,300 344,405 347,956 |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 9 Months Ended |
Mar. 28, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' DEFICIT | In August 2017, our Board of Directors authorized a $250.0 million increase to our existing share repurchase program resulting in total authorizations of $4.6 billion . We repurchased approximately 4.8 million shares of our common stock for $162.0 million during the thirty-nine week period ended March 28, 2018. The repurchased shares included shares purchased as part of our share repurchase program and shares repurchased to satisfy team member tax withholding obligations on the vesting of restricted shares. Repurchased common stock is reflected as an increase in treasury stock within shareholders’ deficit. As of March 28, 2018 , approximately $204.7 million was available under our share repurchase authorizations. Our stock repurchase plan has been and will be used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings, and planned investment and financing needs. During the thirty-nine week period ended March 28, 2018, we granted approximately 1.2 million stock options with a weighted average exercise price per share of $31.28 and a weighted average fair value per share of $4.46 , and approximately 0.5 million restricted share awards with a weighted average fair value per share of $32.02 . Also, during the thirty-nine week period ended March 28, 2018, we paid dividends of $53.1 million to common stock shareholders, compared to $54.1 million in the prior year. Our Board of Directors approved a 12% increase in the quarterly dividend from $0.34 to $0.38 per share effective with the dividend declared in August 2017. We also declared a quarterly dividend in February 2018, which was paid on March 29, 2018 in the amount of $16.8 million . The dividend was accrued in Other accrued liabilities on our Consolidated Balance Sheets as of March 28, 2018 , see Note 7 - Accrued and Other Liabilities . On October 13, 2017, we sold our Dutch subsidiary that held an equity interest in our Chili’s joint venture in Mexico to the franchise partner in the joint venture, CMR, S.A.B. de C.V. for $18.0 million . During the second quarter of fiscal 2018, we recorded a gain of $0.2 million to Other gains and charges in the Consolidated Statements of Comprehensive Income which included the recognition of $5.4 million of foreign currency translation losses reclassified from AOCL consisting of $5.9 million of foreign currency translation losses from previous years, partially offset by $0.5 million of current year foreign currency translation gains. The changes in AOCL related to the CMR joint venture sale for the first thirty-nine weeks ended March 28, 2018 are as follows (in thousands): Accumulated Other Comprehensive Loss Balance at June 28, 2017 $ (11,921 ) Cumulative losses as of June 28, 2017 reclassified from AOCL due to disposition 5,899 Current period other comprehensive income before reclassifications 1,096 Current period reclassifications from AOCL due to disposition (519 ) Net current period other comprehensive income 577 Balance at March 28, 2018 $ (5,445 ) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Mar. 28, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | Cash paid for income taxes and interest is as follows (in thousands): Thirty-Nine Week Period Ended March 28, March 29, Income taxes, net of refunds $ 36,227 $ 63,381 Interest, net of amounts capitalized 29,463 18,595 Non-cash investing and financing activities are as follows (in thousands): Thirty-Nine Week Period Ended March 28, March 29, Retirement of fully depreciated assets $ 27,917 $ 17,964 Dividends declared but not paid 17,804 17,276 Capital lease additions 6,079 1,147 Accrued capital expenditures 5,091 4,599 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Mar. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | In connection with the sale of restaurants to franchisees and brand divestitures we have, in certain cases, guaranteed lease payments. As of March 28, 2018 and June 28, 2017 , we have outstanding lease guarantees or are secondarily liable for $62.6 million and $69.0 million , respectively. These amounts represent the maximum potential liability of future payments under the guarantees. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2018 through fiscal 2027. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. In the first quarter of fiscal 2018, we were notified that Mac Acquisition LLC, the owner of Romano’s Macaroni Grill restaurants, closed certain of its properties for which we have outstanding lease guarantees or are secondarily liable. Based on management’s belief that Mac Acquisition LLC would default on the leases for these closed locations, a liability was established based on an estimate of the obligation associated with these locations of approximately $1.1 million in fiscal 2017. In the second quarter of fiscal 2018, Mac Acquisition LLC filed for Chapter 11 bankruptcy protections. Based on information obtained from the bankruptcy proceedings pertaining to our obligations under the Romano’s Macaroni Grill leases and related lease guarantees, during the thirty-nine week period ended March 28, 2018, total incremental charges recorded based on additional leases rejected in the bankruptcy proceedings were $1.9 million , including $0.5 million related to the thirteen week period ended March 28, 2018. Please refer to Note 4 - Other Gains and Charges for more details. We paid $1.0 million during the thirty-nine week period ended March 28, 2018 to settle the remaining obligations of five of these leases. We believe at March 28, 2018 , that our current liability of $2.0 million , recorded in Other accrued liabilities on the Consolidated Balance Sheets , is appropriate based on our analysis of the potential obligations. We do not expect additional leases to be rejected in bankruptcy proceedings. We will continue to monitor leases for which we have outstanding guarantees or are secondarily liable to assess the likelihood of any incremental losses. We have not been informed by landlords of Mac Acquisition LLC of any lease defaults other than those detailed in the bankruptcy filings. No other liabilities related to this matter have been recorded as of March 28, 2018 . The Mac Acquisition LLC lease obligations are based on Level 3 fair value measurements based on an estimate of the obligation associated with the lease locations, stated rent and other factors such as ability and probability of the landlord to mitigate damages by leasing to new tenants. Please refer to Note 8 - Fair Value Measurements for further details surrounding Level definitions. We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of March 28, 2018 , we had $31.0 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable between 12 to 24 months. Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the consolidated financial statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Liabilities have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on our consolidated financial condition or results of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 28, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to the end of the quarter, an amendment to the revolving credit facility was executed. This amendment was executed to provide the ability to execute certain sale-leaseback transactions and to increase the restricted payment capacity. Please see further details at Part II, Item 5. Additionally, net borrowings of $26.0 million were drawn on the revolving credit facility subsequent to the end of the quarter. On April 30, 2018 , our Board of Directors declared a quarterly dividend of $0.38 per share to be paid on June 28, 2018 to shareholders of record as of June 8, 2018 . |
EFFECT OF NEW ACCOUNTING STANDA
EFFECT OF NEW ACCOUNTING STANDARDS | 9 Months Ended |
Mar. 28, 2018 | |
Effect of New Accounting Standards [Abstract] | |
EFFECT OF NEW ACCOUNTING STANDARDS | In February 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Lease Easement Practical Expedient for Transition to Topic 842. This update provides a practical expedient for existing or expired land easements that were not previously accounted for in accordance with ASC 840. The practical expedient would allow entities to elect not to assess whether those land easements are, or contain, leases in accordance with ASC 842 when transitioning to the new leasing standard. The ASU clarifies that land easements entered into (or existing land easements modified) on or after the effective date of the new leasing standard must be assessed under ASC 842. We are in the process of evaluating the full impact that adoption of the new leasing standard and this land easement practical expedient guidance will have on our consolidated financial statements, see further details as described below in the ASU 2016-02 update. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update eliminates step two of the goodwill impairment analysis. Companies will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, they will measure impairment as the difference between the carrying amount and the fair value of the reporting unit not to exceed the carrying amount of goodwill. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2019, which will require us to adopt these provisions in the first quarter of fiscal 2021. Early adoption is permitted for interim or annual goodwill impairment tests performed with measurement dates after January 1, 2017. The update will be applied on a prospective basis. We do not expect the adoption of this guidance to have any impact on our consolidated financial statements as the fair value of our reporting units is substantially in excess of the carrying values. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230). This update provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019. Early adoption is permitted for financial statements that have not been previously issued. The update will be applied on a retrospective basis. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or debt covenants. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset for virtually all leases, other than leases with a term of 12 months or less. The update also requires additional disclosures about the amount, timing, and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods for fiscal years beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of fiscal 2020. Early adoption is permitted for financial statements that have not been previously issued. This update will be applied on a modified retrospective basis. We anticipate implementing the standard by taking advantage of the practical expedient option. The discounted minimum remaining rental payments will be the starting point for determining the right-of-use asset and lease liability. We had operating leases with remaining rental payments of approximately $606.9 million at the end of fiscal 2017. We expect that adoption of the new guidance will have a material impact on our consolidated balance sheets due to recognition of the right-of-use asset and lease liability related to our current operating leases. We are continuing to evaluate the effect the new guidance will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The FASB has subsequently amended this update by issuing additional ASU’s that provide clarification and further guidance around areas identified as potential implementation issues. These updates provide a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. These updates also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14 delaying the effective date of adoption. These updates are now effective for annual and interim periods for fiscal years beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019. Early application in fiscal 2018 is permitted. These updates permit the use of either the retrospective or cumulative effect transition method. We currently expect to apply the cumulative effect transition method. We do not believe these updates will impact our recognition of revenue from sales generated at company-owned restaurants or recognition from royalty fees from our franchisees, which are our primary sources of revenue. We have performed a preliminary analysis of the impact of the new revenue recognition guidance and developed a comprehensive plan for the implementation. The plan includes analyzing the impact on our current revenue streams, comparing our historical accounting policies to the new guidance, and identifying potential differences from applying the requirements of the new guidance to our contracts. Under current accounting guidance, we recognize initial franchise fees when we have performed all material obligations and services, which generally occurs when the franchised restaurant opens. Under the new guidance, we anticipate deferring the initial franchise fees and recognizing revenue over the term of the related franchise agreement. We anticipate the new guidance will also change our reporting of advertising fund contributions from franchisees and the related advertising expenditures, which are currently reported on a net basis in our Consolidated Statements of Comprehensive Income within Restaurant expenses. Under the current guidance, advertising fund contributions received may not equal advertising expenditures for the period due to timing of promotions. To the extent that contributions received are different from advertising expenditures, the net difference is treated on the Consolidated Balance Sheets within Accounts payable. Under the new guidance, we anticipate advertising fund contributions from franchisees will be reported on a gross basis within Franchise and other revenues on the Consolidated Statements of Comprehensive Income, and the related advertising expenses will continue to be reported within Restaurant expenses. Additionally, we anticipate that estimated breakage income on gift cards will be recognized in the same pattern as gift cards are utilized. We do not expect breakage income to differ significantly on an annual basis in future years. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | Basic weighted average shares outstanding are reconciled to diluted weighted average shares outstanding as follows (in thousands): Thirteen Week Period Ended Thirty-Nine Week Period Ended March 28, 2018 March 29, 2017 March 28, 2018 March 29, 2017 Basic weighted average shares outstanding 45,433 48,954 46,719 51,211 Dilutive stock options 115 168 98 212 Dilutive restricted shares 425 384 378 431 540 552 476 643 Diluted weighted average shares outstanding 45,973 49,506 47,195 51,854 Awards excluded due to anti-dilutive effect on diluted net income per share 974 993 1,260 970 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Reconciliation Of Federal Statutory Tax Expense To Provision For Income Taxes | A reconciliation between the reported provision for income taxes and the amount computed by applying our federal statutory income tax rate of 28.1% to Income before provision for income taxes is as follows (in thousands): Thirteen Week Period Ended March 28, 2018 Thirty-Nine Week Period Ended March 28, 2018 Income tax expense at statutory rate $ 16,555 $ 32,373 FICA tax credit (7,087 ) (13,857 ) State income taxes, net of federal benefit 2,284 4,467 Stock based compensation excess tax (windfall) shortfall (43 ) 1,127 Revaluation of deferred taxes (321 ) 8,417 Other 612 521 $ 12,000 $ 33,048 |
OTHER GAINS AND CHARGES (Tables
OTHER GAINS AND CHARGES (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Other Gains and Charges [Abstract] | |
Schedule Of Other Gains And Charges Table | Other gains and charges in the Consolidated Statements of Comprehensive Income consist of the following (in thousands): Thirteen Week Period Ended Thirty-Nine Week Period Ended March 28, March 29, March 28, March 29, Restaurant closure charges $ 2,777 $ 794 $ 7,321 $ 3,621 Lease guarantee charges 510 — 1,943 — Accelerated depreciation 483 — 1,449 — Hurricane-related costs 240 — 5,460 — Foreign currency transaction gain (948 ) — (66 ) — Restaurant impairment charges — — 9,133 1,851 Gain on the sale of assets, net — (55 ) (303 ) (2,624 ) Severance — 5,929 — 6,222 Information technology restructuring — — — 2,700 Other (310 ) (68 ) 230 2,214 $ 2,752 $ 6,600 $ 25,167 $ 13,984 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP (in thousands): Thirteen Week Period Ended March 28, 2018 Chili’s Maggiano’s Other Consolidated Company sales $ 688,879 $ 101,616 $ — $ 790,495 Franchise and other revenues 17,204 4,835 — 22,039 Total revenues 706,083 106,451 — 812,534 Company restaurant expenses 572,812 89,991 97 662,900 Depreciation and amortization 31,011 3,957 2,585 37,553 General and administrative 10,601 1,420 24,598 36,619 Other gains and charges (75 ) 6 2,821 2,752 Total operating costs and expenses 614,349 95,374 30,101 739,824 Operating income (loss) 91,734 11,077 (30,101 ) 72,710 Interest expense — — 14,549 14,549 Other, net — — (755 ) (755 ) Income (loss) before provision for income taxes $ 91,734 $ 11,077 $ (43,895 ) $ 58,916 Thirteen Week Period Ended March 29, 2017 Chili’s Maggiano’s Other Consolidated Company sales $ 689,662 $ 100,962 $ — $ 790,624 Franchise and other revenues 15,224 4,793 — 20,017 Total revenues 704,886 105,755 — 810,641 Company restaurant expenses 565,327 90,454 126 655,907 Depreciation and amortization 32,386 4,078 2,871 39,335 General and administrative 8,771 1,624 25,536 35,931 Other gains and charges 4,233 — 2,367 6,600 Total operating costs and expenses 610,717 96,156 30,900 737,773 Operating income (loss) 94,169 9,599 (30,900 ) 72,868 Interest expense — — 13,658 13,658 Other, net — — (402 ) (402 ) Income (loss) before provision for income taxes $ 94,169 $ 9,599 $ (44,156 ) $ 59,612 Thirty-Nine Week Period Ended March 28, 2018 Chili’s Maggiano’s Other Consolidated Company sales $ 1,940,076 $ 310,049 $ — $ 2,250,125 Franchise and other revenues 51,992 16,207 — 68,199 Total revenues 1,992,068 326,256 — 2,318,324 Company restaurant expenses 1,648,094 273,187 368 1,921,649 Depreciation and amortization 93,818 12,029 7,881 113,728 General and administrative 29,443 4,202 68,420 102,065 Other gains and charges 17,994 777 6,396 25,167 Total operating costs and expenses 1,789,349 290,195 83,065 2,162,609 Operating income (loss) 202,719 36,061 (83,065 ) 155,715 Interest expense — — 42,754 42,754 Other, net — — (2,246 ) (2,246 ) Income (loss) before provision for income taxes $ 202,719 $ 36,061 $ (123,573 ) $ 115,207 Segment assets $ 1,126,650 $ 151,649 $ 58,580 $ 1,336,879 Payments for property and equipment 58,613 5,590 5,300 69,503 Thirty-Nine Week Period Ended March 29, 2017 Chili’s Maggiano’s Other Consolidated Company sales $ 1,970,390 $ 306,353 $ — $ 2,276,743 Franchise and other revenues 47,417 16,016 — 63,433 Total revenues 2,017,807 322,369 — 2,340,176 Company restaurant expenses 1,658,067 272,137 578 1,930,782 Depreciation and amortization 97,630 12,019 7,877 117,526 General and administrative 28,115 4,836 69,063 102,014 Other gains and charges 9,102 746 4,136 13,984 Total operating costs and expenses 1,792,914 289,738 81,654 2,164,306 Operating income (loss) 224,893 32,631 (81,654 ) 175,870 Interest expense — — 36,108 36,108 Other, net — — (1,084 ) (1,084 ) Income (loss) before provision for income taxes $ 224,893 $ 32,631 $ (116,678 ) $ 140,846 Payments for property and equipment $ 60,770 $ 10,673 $ 8,287 $ 79,730 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt consists of the following (in thousands): March 28, June 28, Revolving credit facility $ 432,250 $ 392,250 5.00% notes 350,000 350,000 3.88% notes 300,000 300,000 2.60% notes 250,000 250,000 Capital lease obligations 43,667 45,417 Total long-term debt 1,375,917 1,337,667 Less unamortized debt issuance costs and discounts (6,911 ) (8,189 ) Total long-term debt less unamortized debt issuance costs and discounts 1,369,006 1,329,478 Less current installments (7,301 ) (9,649 ) $ 1,361,705 $ 1,319,829 |
ACCRUED AND OTHER LIABILITIES (
ACCRUED AND OTHER LIABILITIES (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consist of the following (in thousands): March 28, June 28, Insurance $ 18,143 $ 17,484 Sales tax 17,174 12,494 Dividends 16,839 16,649 Interest 16,628 7,696 Property tax 13,952 16,566 Deferred sale proceeds (1) 13,706 — Other (2) 42,609 40,626 $ 139,051 $ 111,515 (1) Deferred sale proceeds relates to the corporate headquarters sale, please see Note 4 - Other Gains and Charges for further details. (2) Other primarily consists of reserves for restaurant closure activities, certain lease reserves (see Note 11 - Contingencies for details), accruals for utilities and services, banquet deposits for Maggiano’s events, and the current portion of straight-line rent and landlord contributions. |
Schedule of Other Liabilities | Other liabilities consist of the following (in thousands): March 28, June 28, Straight-line rent $ 56,115 $ 57,464 Insurance 42,138 42,532 Landlord contributions 23,527 26,402 Unfavorable leases 3,948 5,398 Unrecognized tax benefits 3,102 3,116 Other 5,889 6,212 $ 134,719 $ 141,124 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying amounts, which are net of unamortized debt issuance costs and discounts, and fair values of the 2.60% notes, 3.88% notes and 5.00% notes are as follows (in thousands): March 28, 2018 June 28, 2017 Carrying Amount Fair Value Carrying Amount Fair Value 2.60% Notes $ 249,928 $ 249,800 $ 249,495 $ 250,480 3.88% Notes 298,178 285,480 297,912 286,077 5.00% Notes 344,983 342,300 344,405 347,956 |
SHAREHOLDERS' DEFICIT (Tables)
SHAREHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The changes in AOCL related to the CMR joint venture sale for the first thirty-nine weeks ended March 28, 2018 are as follows (in thousands): Accumulated Other Comprehensive Loss Balance at June 28, 2017 $ (11,921 ) Cumulative losses as of June 28, 2017 reclassified from AOCL due to disposition 5,899 Current period other comprehensive income before reclassifications 1,096 Current period reclassifications from AOCL due to disposition (519 ) Net current period other comprehensive income 577 Balance at March 28, 2018 $ (5,445 ) |
SUPPLEMENTAL CASH FLOW INFORM27
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Mar. 28, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Paid for Income Taxes and Interest | Cash paid for income taxes and interest is as follows (in thousands): Thirty-Nine Week Period Ended March 28, March 29, Income taxes, net of refunds $ 36,227 $ 63,381 Interest, net of amounts capitalized 29,463 18,595 |
Non-Cash Investing and Financing Activities | Non-cash investing and financing activities are as follows (in thousands): Thirty-Nine Week Period Ended March 28, March 29, Retirement of fully depreciated assets $ 27,917 $ 17,964 Dividends declared but not paid 17,804 17,276 Capital lease additions 6,079 1,147 Accrued capital expenditures 5,091 4,599 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | Mar. 28, 2018LocationrestaurantCountry |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,686 |
Number of foreign countries in which entity operates | Country | 31 |
Number of U.S. territories in which entity operates | Location | 2 |
Entity Operated Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 997 |
Franchised Units [Member] | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 689 |
Adjustment for New Accounting P
Adjustment for New Accounting Pronouncements (Details) - Accounting Standards Update 2016-09 [Member] - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Mar. 28, 2018 | Mar. 29, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ (1.1) | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share | $ (0.02) | |
Excess Tax Benefit from Share-based Compensation, Financing Activities | $ 2 |
Schedule of Weighted Average Nu
Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2018 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | |
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Basic weighted average shares outstanding | 45,433 | 48,954 | 46,719 | 51,211 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 540 | 552 | 476 | 643 |
Diluted weighted average shares outstanding | 45,973 | 49,506 | 47,195 | 51,854 |
Awards excluded due to anti-dilutive effect on diluted net income per share | 974 | 993 | 1,260 | 970 |
Employee Stock Option [Member] | ||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 115 | 168 | 98 | 212 |
Restricted Stock Units (RSUs) [Member] | ||||
Reconciliation of Weighted Average Shares Outstanding [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 425 | 384 | 378 | 431 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Tax Expense to Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 28, 2018 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | Jun. 26, 2019 | Jun. 27, 2018 | |
Income Tax Disclosure [Line Items] | ||||||
Income tax expense at statutory rate | $ 16,555 | $ 32,373 | ||||
FICA tax credit | (7,087) | (13,857) | ||||
State income taxes, net of federal benefit | 2,284 | 4,467 | ||||
Stock based compensation excess tax (windfall) shortfall | (43) | 1,127 | ||||
Revaluation of deferred taxes | (321) | 8,417 | ||||
Other | 612 | 521 | ||||
Provision for income taxes | $ 12,000 | $ 17,243 | $ 33,048 | $ 40,607 | ||
Scenario, Forecast [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 28.10% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 28, 2018 | Mar. 28, 2018 | Jun. 26, 2019 | Jun. 27, 2018 | |
Income Tax Disclosure [Line Items] | ||||
Revaluation of deferred taxes | $ (321) | $ 8,417 | ||
Scenario, Forecast [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 28.10% |
Other Gains and Charges - Sched
Other Gains and Charges - Schedule of Other Gains and Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Mar. 29, 2017 | Dec. 28, 2016 | Sep. 28, 2016 | Mar. 28, 2018 | Mar. 29, 2017 | |
Other Gains and Charges [Abstract] | ||||||||
Restaurant closure charges | $ 2,777 | $ 4,300 | $ 794 | $ 2,500 | $ 7,321 | $ 3,621 | ||
Lease guarantee charges | 510 | 1,400 | 0 | 1,943 | 0 | |||
Accelerated depreciation | 483 | 0 | 1,449 | 0 | ||||
Hurricane-related costs | 240 | 0 | 5,460 | 0 | ||||
Foreign currency transaction gain | (948) | 900 | 0 | (66) | 0 | |||
Restaurant impairment charges | 0 | $ 2,000 | $ 7,200 | 0 | $ 1,900 | 9,133 | 1,851 | |
Gain on the sale of assets, net | 0 | (55) | $ (2,600) | (303) | (2,624) | |||
Severance | 0 | 5,929 | 0 | 6,222 | ||||
Information technology restructuring | 0 | 0 | $ 2,500 | 0 | 2,700 | |||
Other | (310) | (68) | 230 | 2,214 | ||||
Other gains and charges | $ 2,752 | $ 6,600 | $ 25,167 | $ 13,984 |
Other Gains and Charges - Addit
Other Gains and Charges - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 28, 2018 | Dec. 27, 2017 | Sep. 27, 2017 | Mar. 29, 2017 | Dec. 28, 2016 | Sep. 28, 2016 | Mar. 28, 2018 | Mar. 29, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restaurant closure charges | $ 2,777 | $ 4,300 | $ 794 | $ 2,500 | $ 7,321 | $ 3,621 | ||
Lease guarantee charges | 510 | 1,400 | 0 | 1,943 | 0 | |||
Restaurant impairment charges | 0 | 2,000 | $ 7,200 | 0 | $ 1,900 | 9,133 | 1,851 | |
Accelerated depreciation | 483 | 0 | 1,449 | 0 | ||||
Net proceeds from sale of corporate headquarters | 13,700 | |||||||
Insurance recoveries | 1,747 | 0 | ||||||
Sales price of JV | 18,000 | |||||||
Foreign currency transaction gain (loss) | 948 | (900) | 0 | 66 | 0 | |||
Equity method investment in JV, realized gain on sale | 200 | |||||||
Severance | 0 | 5,929 | 0 | 6,222 | ||||
Gain on the sale of assets, net | 0 | 55 | $ 2,600 | 303 | 2,624 | |||
Information technology restructuring | 0 | $ 0 | $ 2,500 | 0 | $ 2,700 | |||
Lease termination [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restaurant closure charges | 1,700 | |||||||
Other lease liability [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restaurant closure charges | 1,100 | |||||||
Land [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Sale leaseback transaction, net book value | 5,900 | 5,900 | ||||||
Other Capitalized Property Plant and Equipment [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Sale leaseback transaction, net book value | 2,300 | $ 2,300 | ||||||
Hurricane [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Insurance recoveries | 1,000 | |||||||
Insured Event, Gain (Loss) | $ 100 | |||||||
Flood [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Insured Event, Gain (Loss) | 500 | |||||||
Gain on Business Interruption Insurance Recovery | $ 400 |
Segment Information (Schedule o
Segment Information (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 28, 2018 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | Jun. 28, 2017 | |
Segment Reporting Information [Line Items] | |||||
Company sales | $ 790,495 | $ 790,624 | $ 2,250,125 | $ 2,276,743 | |
Franchise and other revenues | 22,039 | 20,017 | 68,199 | 63,433 | |
Total revenues | 812,534 | 810,641 | 2,318,324 | 2,340,176 | |
Company restaurant expenses | 662,900 | 655,907 | 1,921,649 | 1,930,782 | |
Depreciation and amortization | 37,553 | 39,335 | 113,728 | 117,526 | |
General and administrative | 36,619 | 35,931 | 102,065 | 102,014 | |
Other gains and charges | 2,752 | 6,600 | 25,167 | 13,984 | |
Total operating costs and expenses | 739,824 | 737,773 | 2,162,609 | 2,164,306 | |
Operating income | 72,710 | 72,868 | 155,715 | 175,870 | |
Interest Expense | 14,549 | 13,658 | 42,754 | 36,108 | |
Other, net | (755) | (402) | (2,246) | (1,084) | |
Income before provision for income taxes | 58,916 | 59,612 | 115,207 | 140,846 | |
Assets | 1,336,879 | 1,336,879 | $ 1,403,633 | ||
Payments for property and equipment | 69,503 | 79,730 | |||
Chili's Restaurants [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Company sales | 688,879 | 689,662 | 1,940,076 | 1,970,390 | |
Franchise and other revenues | 17,204 | 15,224 | 51,992 | 47,417 | |
Total revenues | 706,083 | 704,886 | 1,992,068 | 2,017,807 | |
Company restaurant expenses | 572,812 | 565,327 | 1,648,094 | 1,658,067 | |
Depreciation and amortization | 31,011 | 32,386 | 93,818 | 97,630 | |
General and administrative | 10,601 | 8,771 | 29,443 | 28,115 | |
Other gains and charges | (75) | 4,233 | 17,994 | 9,102 | |
Total operating costs and expenses | 614,349 | 610,717 | 1,789,349 | 1,792,914 | |
Operating income | 91,734 | 94,169 | 202,719 | 224,893 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Income before provision for income taxes | 91,734 | 94,169 | 202,719 | 224,893 | |
Assets | 1,126,650 | 1,126,650 | |||
Payments for property and equipment | 58,613 | 60,770 | |||
Maggiano's Restaurants [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Company sales | 101,616 | 100,962 | 310,049 | 306,353 | |
Franchise and other revenues | 4,835 | 4,793 | 16,207 | 16,016 | |
Total revenues | 106,451 | 105,755 | 326,256 | 322,369 | |
Company restaurant expenses | 89,991 | 90,454 | 273,187 | 272,137 | |
Depreciation and amortization | 3,957 | 4,078 | 12,029 | 12,019 | |
General and administrative | 1,420 | 1,624 | 4,202 | 4,836 | |
Other gains and charges | 6 | 0 | 777 | 746 | |
Total operating costs and expenses | 95,374 | 96,156 | 290,195 | 289,738 | |
Operating income | 11,077 | 9,599 | 36,061 | 32,631 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | |
Income before provision for income taxes | 11,077 | 9,599 | 36,061 | 32,631 | |
Assets | 151,649 | 151,649 | |||
Payments for property and equipment | 5,590 | 10,673 | |||
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Company sales | 0 | 0 | 0 | 0 | |
Franchise and other revenues | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Company restaurant expenses | 97 | 126 | 368 | 578 | |
Depreciation and amortization | 2,585 | 2,871 | 7,881 | 7,877 | |
General and administrative | 24,598 | 25,536 | 68,420 | 69,063 | |
Other gains and charges | 2,821 | 2,367 | 6,396 | 4,136 | |
Total operating costs and expenses | 30,101 | 30,900 | 83,065 | 81,654 | |
Operating income | (30,101) | (30,900) | (83,065) | (81,654) | |
Interest Expense | 14,549 | 13,658 | 42,754 | 36,108 | |
Other, net | (755) | (402) | (2,246) | (1,084) | |
Income before provision for income taxes | (43,895) | $ (44,156) | (123,573) | (116,678) | |
Assets | $ 58,580 | 58,580 | |||
Payments for property and equipment | $ 5,300 | $ 8,287 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 28, 2018 | Jun. 28, 2017 |
Debt Instrument [Line Items] | ||
Capital lease obligations | $ 43,667 | $ 45,417 |
Total long-term debt | 1,375,917 | 1,337,667 |
Less unamortized debt issuance costs and discounts | (6,911) | (8,189) |
Total long-term debt less unamortized debt issuance costs and discounts | 1,369,006 | 1,329,478 |
Less current installments | (7,301) | (9,649) |
Long-term debt, less current installments | 1,361,705 | 1,319,829 |
5.00% notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | 350,000 | 350,000 |
3.88% notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | 300,000 | 300,000 |
2.60% notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes | 250,000 | 250,000 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 432,250 | $ 392,250 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) $ in Millions | 9 Months Ended |
Mar. 28, 2018USD ($) | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Covenant Compliance | We are currently in compliance with all financial covenants. |
$1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Net Borrowings on revolving credit facility | $ 40 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000 |
Line of Credit Facility, Interest Rate During Period | 3.27% |
Debt Instrument, Description of Variable Rate Basis | One month LIBOR |
Line of Credit Facility, Remaining Borrowing Capacity | $ 567.8 |
$890M of the $1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | Sep. 12, 2021 |
$110M of the $1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | Mar. 12, 2020 |
Maximum [Member] | $1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.00% |
Minimum [Member] | $1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.38% |
London Interbank Offered Rate (LIBOR) [Member] | $1B Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.89% |
Accrued and Other Liabilities38
Accrued and Other Liabilities (Other Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 28, 2018 | Jun. 28, 2017 | ||
Accrued Liabilities and Other Liabilities [Abstract] | ||||
Insurance | $ 18,143 | $ 17,484 | ||
Sales tax | 17,174 | 12,494 | ||
Dividends | 16,839 | 16,649 | ||
Interest | 16,628 | 7,696 | ||
Property tax | 13,952 | 16,566 | ||
Deferred sale proceeds (1) | 13,706 | [1] | 0 | |
Other (2) | [2] | 42,609 | 40,626 | |
Other accrued liabilities | $ 139,051 | $ 111,515 | ||
[1] | Deferred sale proceeds relates to the corporate headquarters sale, please see Note 4 - Other Gains and Charges for further details. | |||
[2] | Other primarily consists of reserves for restaurant closure activities, certain lease reserves (see Note 11 - Contingencies for details), accruals for utilities and services, banquet deposits for Maggiano’s events, and the current portion of straight-line rent and landlord contributions. |
Accrued and Other Liabilities39
Accrued and Other Liabilities (Other Liabilities) (Details) - USD ($) $ in Thousands | Mar. 28, 2018 | Jun. 28, 2017 |
Accrued and Other Liabilities (Other Liabilities) [Abstract] | ||
Straight-line rent | $ 56,115 | $ 57,464 |
Insurance | 42,138 | 42,532 |
Landlord contributions | 23,527 | 26,402 |
Unfavorable leases | 3,948 | 5,398 |
Unrecognized tax benefits | 3,102 | 3,116 |
Other | 5,889 | 6,212 |
Other liabilities | $ 134,719 | $ 141,124 |
Fair Value Disclosures (Narrati
Fair Value Disclosures (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Mar. 28, 2018USD ($) | Dec. 27, 2017USD ($)Restaurants | Sep. 27, 2017USD ($)Restaurants | Mar. 29, 2017USD ($) | Dec. 28, 2016USD ($) | Mar. 28, 2018USD ($) | Mar. 29, 2017USD ($)Restaurants | |
Schedule of Impairments [Line Items] | |||||||
Carrying Value Of Impaired Long Lived Assets | $ 2,300 | $ 6,000 | $ 1,300 | ||||
Carrying value of reacquired franchise rights | 1,200 | 800 | |||||
Fair value of impaired long lived assets | 300 | 0 | $ 200 | 200 | |||
Restaurant impairment charges | $ 0 | $ 2,000 | $ 7,200 | $ 0 | $ 1,900 | $ 9,133 | 1,851 |
Goodwill, Impairment Loss | 0 | 0 | |||||
Liquor Licenses [Member] | |||||||
Schedule of Impairments [Line Items] | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 0 | $ 0 | |||||
Maggiano's Restaurants [Member] | |||||||
Schedule of Impairments [Line Items] | |||||||
Number Of Underperforming Restaurants | Restaurants | 1 | ||||||
Chili's Restaurants [Member] | |||||||
Schedule of Impairments [Line Items] | |||||||
Number Of Underperforming Restaurants | Restaurants | 1 | 9 | 6 |
Fair Value Disclosures (Other F
Fair Value Disclosures (Other Financial Instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 28, 2018 | Jun. 28, 2017 | |
Fair Value Disclosure, Senior Notes [Line Items] | ||
Sales price of JV | $ 18,000 | |
Notes Receivable, Fair Value Disclosure | $ 16,000 | |
2.60% notes [Member] | ||
Fair Value Disclosure, Senior Notes [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.60% | |
Long-term Debt | $ 249,928 | $ 249,495 |
Long-term Debt, Fair Value | $ 249,800 | 250,480 |
3.88% notes [Member] | ||
Fair Value Disclosure, Senior Notes [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.88% | |
Long-term Debt | $ 298,178 | 297,912 |
Long-term Debt, Fair Value | $ 285,480 | 286,077 |
5.00% notes [Member] | ||
Fair Value Disclosure, Senior Notes [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |
Long-term Debt | $ 344,983 | 344,405 |
Long-term Debt, Fair Value | $ 342,300 | $ 347,956 |
Shareholder's Deficit - Additio
Shareholder's Deficit - Additional information (Share Repurchase) (Details) - USD ($) $ in Thousands, shares in Millions | 9 Months Ended | |
Mar. 28, 2018 | Mar. 29, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares repurchased, shares | 4.8 | |
Purchases of treasury stock | $ 162,004 | $ 350,768 |
Shareholders' Deficit - Additio
Shareholders' Deficit - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | |||||
Mar. 28, 2018 | Sep. 27, 2017 | Mar. 29, 2017 | Sep. 28, 2016 | Mar. 28, 2018 | Mar. 29, 2017 | Jun. 28, 2017 | |
Stockholders' Equity Note [Abstract] | |||||||
Increase In Share Repurchase Program | $ 250,000 | ||||||
Stock repurchase program, authorized amount | $ 4,600,000 | 4,600,000 | |||||
Amount available under share repurchase authorizations | $ 204,700 | $ 204,700 | |||||
Stock option, granted | 1.2 | ||||||
Stock option, weighted average exercise price | $ 31.28 | ||||||
Stock option, weighted average fair value | $ 4.46 | ||||||
Restricted share awards, granted | 0.5 | ||||||
Restricted share awards, weighted average fair value | $ 32.02 | ||||||
Payments of dividends | $ 53,098 | $ 54,087 | |||||
Percentage increase in quarterly dividend declared | 12.00% | ||||||
Dividends per share declared | $ 0.38 | $ 0.38 | $ 0.34 | $ 0.34 | $ 1.14 | $ 1.02 | |
Accrued Dividends Payable | $ 16,839 | $ 16,839 | $ 16,649 | ||||
Sales price of JV | 18,000 | ||||||
Equity method investment in JV, realized gain on sale | 200 | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (5,400) | ||||||
Reclassifications out of AOCI, current year, net of tax, attributable to prior years | (5,899) | ||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax | $ 519 |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 28, 2018 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | Jun. 28, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||
Accumulated other comprehensive loss | $ (5,445) | $ (5,445) | $ (11,921) | ||
Cumulative losses as of June 27, 2017 reclassified from AOCL due to disposition | 5,899 | ||||
Current period other comprehensive income before reclassifications | 1,096 | ||||
Current period reclassifications from AOCL due to disposition | (519) | ||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (243) | $ 734 | $ 577 | $ (1,411) |
Supplemental Cash Flow Inform45
Supplemental Cash Flow Information - Cash Paid for Income Taxes and Interest (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 28, 2018 | Mar. 29, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes, net of refunds | $ 36,227 | $ 63,381 |
Interest, net of amounts capitalized | $ 29,463 | $ 18,595 |
Supplemental Cash Flow Inform46
Supplemental Cash Flow Information - Non-Cash Investing and Financing Activities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 28, 2018 | Mar. 29, 2017 | |
Other Significant Noncash Transactions [Line Items] | ||
Retirement of fully depreciated assets | $ 27,917 | $ 17,964 |
Capital lease additions | 6,079 | 1,147 |
Accrued capital expenditures | 5,091 | 4,599 |
Dividend Declared [Member] | ||
Other Significant Noncash Transactions [Line Items] | ||
Dividends declared but not paid | $ 17,804 | $ 17,276 |
Contingencies - Additional info
Contingencies - Additional information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 28, 2018 | Dec. 27, 2017 | Mar. 29, 2017 | Mar. 28, 2018 | Mar. 29, 2017 | Jun. 28, 2017 | |
Guarantor Obligations [Line Items] | ||||||
Lease guarantee charges | $ 510 | $ 1,400 | $ 0 | $ 1,943 | $ 0 | |
Payments for Legal Settlements | 1,000 | |||||
Letters of Credit Outstanding, Amount | 31,000 | 31,000 | ||||
Lease Guarantees And Secondary Obligations [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Loss Contingency, Estimate of Possible Loss | 62,600 | 62,600 | $ 69,000 | |||
Loss Contingency, Accrual, Current | $ 2,000 | $ 2,000 | $ 1,100 | |||
Description of Material Contingencies of Parent Company | No other liabilities related to this matter have been recorded |
Loss Contingencies (Details)
Loss Contingencies (Details) | Mar. 28, 2018LegalMatter |
Loss Contingencies [Line Items] | |
Loss Contingency, Pending Claims, Number | 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
May 04, 2018 | Mar. 28, 2018 | Sep. 27, 2017 | Mar. 29, 2017 | Sep. 28, 2016 | Mar. 28, 2018 | Mar. 29, 2017 | |
Subsequent Event [Line Items] | |||||||
Dividends per share declared | $ 0.38 | $ 0.38 | $ 0.34 | $ 0.34 | $ 1.14 | $ 1.02 | |
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Dividend, date of declaration | Apr. 30, 2018 | ||||||
Dividends per share declared | $ 0.38 | ||||||
Dividend, date to be paid | Jun. 28, 2018 | ||||||
Dividend, date of record | Jun. 8, 2018 | ||||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from Lines of Credit | $ 26 |
EFFECT OF NEW ACCOUNTING STAN50
EFFECT OF NEW ACCOUNTING STANDARDS ADDITIONAL INFORMATION (Details) $ in Millions | Jun. 28, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Leases, Future Minimum Payments Due | $ 606.9 |