Chili’s sales run has been going on so long it’s progressed from answering questions about potential changes to how the company plans to keep growing. It starts by looking in the mirror, CEO Kevin Hochman said.
Even going back three-plus years, when Hochman began to outline a broad, deliberate refacing of the business, he stressed a foundational start—focus on the fundamentals of casual dining.
Headed into 2026, Chili’s asked, “are we going to be better this year than last year?” If true, Hochman said, the brand’s “world-class marketing” engine wasn’t going anywhere.
So, there’s no reason to bet against the chain’s same-store sales climbing to category-leading peaks, as they have for 19 consecutive quarters.
Such was the case in Q2, announced Wednesday, as Chili’s comps rose 8.6 percent to lap a year-ago result of 31.4 percent, giving the company a 40 percent two-year stack. Traffic climbed 2.7 percent on top of 2025’s 19.9 percent to bring the figure to 22.6 percent over that span.
Across three years, Chili’s same-store sales are 45 percent higher.
The Q2 performance, Hochman said, outpaced the casual-dining industry by 680 basis points.
He added Chili’s has no intentions of taking its foot off the gas. This means a continued focus on food, service, and atmosphere as well as making “Chili’s more fun, easier, and more rewarding for our team members.”
There are a host of metrics to suggest Chili’s roadmap, which of late has placed added emphasis on food improvements, remains the right one.
To start, guest backlash last quarter triggered a decision to bring back Skillet Queso. After doing so, Hochman said, Chili’s sold 20 percent more Southwestern Queso—the option that replaced the classic—alongside the original compared to previous offerings. Additionally, relaunched nachos featuring Chili’s signature chicken bacon and house-made ranch is now a 170 percent bigger business than prior iterations.
Chili’s completed its bacon upgrade to thicker strips and improved its Bacon Cheeseburger to feature triple the topping. It’s doing 43 percent more sales.
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“What’s important to take away from these examples,” Hochman said, “is as we upgrade the menu offerings while attracting a new generation of guests, we continue to build bigger, sustainable sales layers in the business.”
Unpacking that point, over the past three years, Chili’s coupled menu rationalization with direct fixes to core items. It’s seen success with Crispers, margaritas, burgers, ribs, frozen drinks, and, following Q2’s performance, queso and nachos. Now, more segments are on deck.
Namely, Chili’s is about to roll a “super premium” chicken sandwich lineup systemwide in April, backed by “substantial” advertising.
Chili’s hinted at this in previous calls without any great mystery behind the inspiration. Hochman said, even years removed from the so-labeled “chicken sandwich wars” between Chick-fil-A, Popeyes, and other QSRs that dove in, it remains a “very large market” with more than 80 percent of people buying them at least once last year. It is, Hochman noted, by far the biggest segment of all restaurant chicken servings.
Chili’s feels this launch has the potential to drive guest traffic with new and existing diners. And like it’s marketed over the past three years, Hochman believes the lineup is “superior, distinctly on brand, and highly differentiated than what is in the market today.”
Chili’s will hit media with a traffic-driving opening price point within a three-tier lineup (more details to come). And it’s going to, unsurprisingly, lean into that “sharp price point,” Hochman said, through marketing to drive awareness.
The brand tested the lineup in a merchandising-only pilot across 200 stores, which, Hochman said, performed “exceptionally well from a mix standpoint.”
“And we expect even bigger numbers when we launch nationally in April with advertising and earned media attention,” he continued.
Again, this arrives as Chili’s keeps cutting back along the fringes to spotlight the center. A net total of six menu items came off in Q2. Ten SKUs were sliced in Q4. Early on, the brand removed more than 25 percent of offerings.
One perhaps less publicized adjustment as well was to move away from LTOs and toward platform innovation and the barbell. So, when something like a chicken sandwich launch knocks, Chili’s fits the product into its playbook rather than reinventing messaging for a spell.
Chili’s talks about the barbell as having “good, better, best” price tiers so there’s choice for guests and menu mix doesn’t get too weighted toward the $10.99 arena (3 For Me).
Although, it’s worth noting, the 3 For Me Chili’s customer tends to come more often and spend more over the course of the year than higher-priced ones.
But with the chicken sandwiches, Hochman explained, it’s not just going to be about a hot opening price point. The brand will also tout a “chicken sandwich with benefits.” There will be entry levels and then more premium options to climb up the ladder.
And if Chili’s executes the product with excellence, he said, there’s going to be runway behind an initial burst.
That final note ties into Chili’s larger approach over this comeback story. It continues to operationally tighten the business before encouraging trial. The brand spent more than $100 million on just maintenance and repairs and took its marketing investment from $32 million in Year 1 to $132 million this past calendar. It’s also pouring $160 million more into labor than it did in fiscal 2022.
Chili’s initially worked on its base chicken sandwich recipe roughly a year ago. It went to a focused build that, Hochman admitted, took some inspiration from Popeyes. When the QSR chain sparked the frenzy in August 2019, it did so with a product that wasn’t exactly complex. Popeyes challenged customers to compare it to Chick-fil-A not based on which option was more unique, but, simply, which sandwich was better. There was a fried chicken filet, pickles, mayonnaise (and spicy version), on a brioche bun. Most of the commentary centered on size not novelty.
Hochman said Chili’s learned from Popeyes, and that’s what stirred a year ago. There’s a brioche bun, semi-cured pickle, mayonnaise, and a “very large hand-breaded chicken breast that we think is incredibly abundant in the category.”
There’s no data to say Chili’s will have the biggest chicken sandwich, he noted, but when customers eat it, they might just think that’s the case.
Chili’s will introduce flavor updates (Hochman couldn’t divulge details) and create a lineup with a variety of sandwiches across different benefit spaces, like price tiers, based on some of the signature flavors Chili’s generally offers as well as a new one that’s not in restaurants today “that mixed really well when Popeyes launched the sandwich,” Hochman hinted.
Once more, it’ll come down to “good, better, best” approach with a base feature and then leveling up to medium and a super-premium sandwich with bacon and other add-ons.
Hochman said Chili’s will support the launch with additional side innovation, too, making it “more distinctly Chili’s.”
“So, it really will look like a completely new lineup to guests,” he said. “And it’s in areas that we know that consumers are excited about [with] chicken sandwiches but done in a very unique Chili’s way. Not just in the flavor profiles, but the abundance and value that we think that you’re going to get.”
More metrics to count and upgrades ahead
Avoiding LTO distractions, Hochman said, enabled Chili’s to maintain efforts around its core and drive guest scores. One of the daily metrics it measures is “GWAP,” or “guests with a problem.” That’s down to 2.1 percent versus 2.9 percent a year ago. When Chili’s began its turnaround journey, GWAP was at about 5 percent.
That’s continued to improve as Chili’s keeps hitting business fundamentals, Hochman said. Chili’s has also begun to see movement in syndicated, external guest perception numbers, which allows it to track progress not just against itself, but also peers.
At the outset, third-party data placed Chili’s at the bottom, or near it, for its competitive set in all seven metrics correlated to future sales growth. In the last quarterly snapshot, however, Chili’s ranked top three in all—quality, value, service, atmosphere, taste, cleanliness, and overall experience.
Another takeaway, Hochman said, other than support for ongoing operational investments, is Chili’s has done the multi-year legwork to reposition the brand on value. Recent TD Cowen analysis showed Chili’s underpriced the industry going back to 2019, with a 300-basis-point pricing gap compared to the full-service category and a 690-basis-point one versus limited service, as of Q2 2026.
The brand carried 4.4 percent price and 1.5 percent mix in Q2’s 8.6 percent comp.
And while Chili’s worked to secure its value leader spot, it improved operating margins from 11 to 18 percent and baked in hundreds of millions of dollars in experience investments into the going four-wall economics.
Food grade scores in the quarter came in at 74 percent, up from 68 percent in the year-ago period. Chili’s also witnessed quarter-on-quarter improvements with intent to return, which rose 6 percentage points from 72 to nearly 78 percent.
The brand’s Wicked Margaritas, as coined by the media, didn’t hurt recent sales, either, as Chili’s sold about 1.5 million more drinks in November than a typical Margarita of the Month feature.
Black Box data had Chili’s as the No. 1 traffic brand in casual dining for 2025. What’s encouraging, Hochman said, is this came despite the brand’s per-person check average falling $3 less than direct competitors and more than $4 under the larger category.
“Simply put,” he said, “Chili’s has been repositioned to win for the long term, and that’s exactly what this team is going to do.”
Ahead for Chili’s is its reimaging program. The brand recently completed its first four and plans to deploy learnings to develop a long-term blueprint and plot new unit growth. Chili’s ended Q2 with 1,108 domestic company-owned restaurants (down two year-over-year), four corporate international stores, 98 domestic franchises (down one), and 366 international franchises (a lift from 358). Net growth hasn’t been a part of Chili’s three-year comeback as the brand elected instead to strengthen the base.
CFO Mika Ware said Chili’s expects to complete another eight to 10 reimages over the balance of this fiscal year before ramping up to 60–80 in 2027. It expects to fully unveil the reimage and new unit growth models in 2028.
Ware added Chili’s knows it can build more stores and is eager to do so. The company is still figuring out what the right cadence will be, though. “We’re really excited about it, especially with the change in the business,” she said. “The areas of opportunities have opened up for us because our business is so much stronger on where we can build in different areas, different locations.”
As for what the new store itself looks like, Chili’s will walk people through during an upcoming Investor Day later in the year. The general premise is they harken back to old Chili’s in terms of vibe and decor, but with a modern take. Hochman said employee and customer feedback has been strong in early goings, but it’s too early to declare victory on sales lifts.
“The comment I typically hear from the managers is we have a new restaurant, which is really cool to hear because these are really old restaurants that haven’t been touched a while,” he said.
Also, people seem to be gravitating toward the model that was the lowest cost to Chili’s. The others, Hochman said, might have too many changes inside and are busier to look at.
The bar part of the reimage, he added, has been “phenomenal.”
Nearer-term, Chili’s said it saw a strong January after a challenged December before recent weather setbacks stopped a lot of business. It’s difficult to gauge the impact just yet although Ware expects a bounce back when people return to Chili’s after some cabin fever.
However, while it grapples with uncontrollables, like icy conditions, you could expect to see a lot of the same from Chili’s as a brand. Hochman said the idea of high prices is more relevant than ever. That hasn’t abated.
So, Chili’s is going to keep attacking it head on with “unbeatable value and abundance,” he said. “There’s no reason why we would change that.”
