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REPLAY: EAT | Best idea long
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Analyst ratings and short interest indicate a bearish sentiment on EAT.
Considering the historical context of how EAT has been managed in the past and current trends in the casual dining sector, this bearish outlook has often been proven the right place to be. However, we believe significant changes at the company justify positioning it as the Best Idea LONG.
Themes from two years Of Kevin Hochman as CEO of EAT:
Engaging with Frontline Employees: Kevin Hochman conducted a listening tour during his first 60 days, engaging directly with restaurant general managers and managers. He asked two key questions: what keeps them excited about being part of Brinker? And what would they change if they were CEO? This approach led to actionable feedback, driving significant changes and improvements within the company and empowering employees.
Simplifying Operations: Kevin focused on reducing unnecessary tasks to improve efficiency and employee satisfaction. For example, he eliminated the tedious task of counting shrimp, saving significant labor hours without impacting waste. Streamlining operations allowed employees to focus more on customer service and improve the overall guest experience.
Reviving the Company's Culture: Kevin emphasized making work fun and engaging for employees. This included creating a culture calendar with various events and activities, such as themed days and contests. By reinvigorating the company culture, he aimed to restore the vibrant, fun atmosphere that was characteristic of Brinker in its early days.
Focusing on Core Menu Items: He identified and prioritized four core items (burgers, fajitas, margaritas, and chicken tenders) that have historically driven significant business for Chili's. Simplifying the menu to focus on these core items helped improve consistency, customer satisfaction, and sales.
Leveraging Technology: Kevin views technology projects as enterprise initiatives that require cross-functional collaboration. Examples include pay-at-the-table devices that enhance customer experience and operational efficiency and a new kitchen display system to streamline back-of-house operations.
Driving Innovation Within Strategic Parameters: Innovation at Brinker is aligned with strategic goals and focuses on enhancing the core menu items. Kevin emphasizes that innovation should grow the business significantly or improve margins without adding operational complexity.
Servant Leadership: Inspired by Brinker's founder, Norman Brinker, Kevin practices servant leadership by prioritizing the needs and well-being of employees and guests. This approach involves deep listening, genuine care, and consistent follow-through on employee feedback.