Shares of the restaurant company Brinker International (EAT -11.04%) — the parent company of Chili’s and Maggiano’s Little Italy — fell on Wednesday after it reported financial results for its fourth quarter of fiscal 2024. As of noon ET today, Brinker shares had fallen about 13%.

Bad results

Brinker’s fourth quarter ended in late June, and traffic at its restaurants was surprisingly strong during the period. A nearly 6% increase year over year combined with price increases led to 13.5% sales growth at its stores in the fourth quarter. This helped push annual revenue to $4.4 billion, up nearly 7% from fiscal 2023.

On an adjusted basis, full-year diluted earnings per share (EPS) of $4.10 were below analyst expectations. In addition, management expects adjusted diluted earnings per share to be no more than $4.75 in fiscal 2025, which is also below expectations.

Missing expectations is leading to a lower share price for Brinker today, even though the numbers were good by almost any metric.

What now?

It is important to note that prior to the fourth quarter report, Brinker stock had already risen by around 60% year to date, well above the S&P500. Ultimately, this is a modestly growing, more mature company.

In other words, the stock was not expected to make such strong gains, so it is not surprising that it is down a bit today, given its recent run-up.

At the time of this writing, Brinker stock is trading at 13 times projected earnings, which I think is reasonable. If the company can continue to drive more restaurant visits, this stock could continue to rise in the quarters and years to come. However, investors should be aware that the company will not always generate higher revenue through higher menu prices, as was the case in fiscal 2024.