Labor issues, from shortages to strikes, are intensifying and hurting company profits. The increasing likelihood that more wage gains lie ahead implies higher costs and thinner margins, while also undermining the prospect of transitory inflation.
The latest labor news comes from restaurant firm Brinker International Inc. — the Dallas-based parent of restaurant chains Chili’s and Maggiano’s Little Italy. The company owns, operates or franchises more than 1,600 restaurants in 29 countries.
Brinker shares fell 9.1% Wednesday after its fiscal first-quarter profit fell far short of analysts’ forecasts as it faces higher commodity and labor costs. Peer Chipotle Mexican Grill Inc., which is due to report on Thursday, also slipped in Wednesday trading, as did other dining stocks.
The “COVID surge starting in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and bottom line more than we anticipated,” Brinker CEO Wyman Roberts said in the statement. “We