Brinker International Inc (EAT)
Interest coverage
Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Dec 23, 2020 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 513,100 | 466,800 | 379,900 | 286,000 | 253,600 | 216,100 | 210,800 | 189,300 | 145,700 | 142,500 | 127,500 | 126,800 | 172,100 | 217,500 | 220,200 | 202,500 | 199,200 | 122,500 | 94,800 | 19,500 |
Interest expense (ttm) | US$ in thousands | 53,100 | 57,300 | 60,300 | 62,300 | 65,000 | 64,400 | 62,400 | 59,600 | 54,900 | 51,700 | 48,600 | 45,900 | 46,100 | 47,900 | 50,900 | 54,100 | 56,000 | 57,500 | 58,000 | 59,000 |
Interest coverage | 9.66 | 8.15 | 6.30 | 4.59 | 3.90 | 3.36 | 3.38 | 3.18 | 2.65 | 2.76 | 2.62 | 2.76 | 3.73 | 4.54 | 4.33 | 3.74 | 3.56 | 2.13 | 1.63 | 0.33 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $513,100K ÷ $53,100K
= 9.66
The interest coverage ratio for Brinker International Inc. exhibits significant variability from December 2020 through June 2025. At the end of 2020, the ratio was notably low, with a value of 0.33 as of December 23, 2020, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, signaling potential financial distress or high leverage.
Subsequently, there was a substantial improvement by December 31, 2020, where the ratio increased to 1.63, suggesting an improved capacity to meet interest obligations, though still close to a critical threshold. The upward trend continued through 2021, with ratios reaching 2.13 in March, 3.56 in June, and stabilizing further at 3.74 and 4.33 toward the end of the year. This sustained improvement indicates that the company's earnings increasingly covered its interest expenses, thus reflecting a strengthening financial position.
From 2022 onward, the ratio experienced some fluctuations but generally maintained a positive trend. It decreased to 2.62 at the close of 2022 but rebounded to 2.76 in March 2023, and slightly declined to 2.65 in June 2023, before rising again to 3.18 in September 2023 and 3.38 at the end of 2023. These figures suggest that while earnings remain sufficient to cover interest expenses, the margin of safety is moderate and has experienced some compression during this period.
Forecasts into 2024 and 2025 depict a notable trend of increasing interest coverage ratios: projected to rise from 3.36 in March 2024 to 6.30 in December 2024, and further to 8.15 and 9.66 for June and September 2025, respectively. This trajectory indicates expectations of both higher earnings and improved ability to meet interest obligations, reflecting a potentially healthier leverage position.
In summary, Brinker International Inc.'s interest coverage ratio improved markedly from a low of 0.33 in late 2020 to more stable and increasingly robust levels approaching and exceeding 3, suggesting improved financial health and reduced insolvency risk. The substantial projected increases through 2025 imply an optimistic outlook for earnings capacity relative to interest expenses, further enhancing the company's creditworthiness over this period.
Peer comparison
Jun 30, 2025