BLMN - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to the Bloomin' Brands' Fiscal Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Vice President of Investor Relations. Thank you, Mr. Graff.

begin. may You

Mark Graff

now, good of can will are our section. GAAP and Executive be the With on website XXXX earnings Officer. of me President our most bloominbrands.com access Thank fourth be fiscal Smith, morning, found Investors our Throughout call quarter basis. website this our An call, the By adjusted in Administrative and previously and release Liz Chief measures release. explanation results presenting Deno, should measures financial CEO; described. we use today's have on non-GAAP our and to to It you, and an at conference earnings on Financial as everyone. appear you reconciliations on also and Vice comparable our Dave directly at

begin part that could to statements strategies results Before statements. differ are These remind I'd include of to cause a statements our remarks, and discussion forward-looking we from to forward-looking uncertainties today materially that of risks growth and will guidance. including like everyone our actual formal financial numerous discussion subject

which of available Some are our filings, in release. at are risks discussed SEC our sec.gov. mentioned Others in earnings these are

Smith. these and provide objectives, we'll call an During today's on to a Liz update we'll turn highlights, over now for With like an XXXX the financial remarks, our that, overview company open for strategic questions. the fiscal performance on recap Once call, a fourth of the of XXXX, call progress completed I'd we've quarter discussion to key up guidance. regarding

Elizabeth A. Smith

listening Mark, Thanks, today. everyone to and welcome

up from per adjusted release, last share earnings year. morning's was quarter fourth this in diluted noted earnings XX% $X.XX, As

which increase adjusted year, EPS X%. For of achieved the was we an $X.XX, of total

marks X.X% was of more and quarter X.X%, This comp significantly QX this brand. Outback's which XXX fourth of up X.X% sales outperformance industry. the in the U.S. Our up Even consecutive impressive with encouraging, the sales versus strength basis of are industry combined points. by the traffic quarter XXXX outperformed very comp with fourth results QX reflecting

how upgrades improvements into that the so investments are This paying were QX elevate where trends against performing In benefits to strategy of food while we pivot The strengthening These customer are our was in experience performance the followed XX the and improved made that making in sales this are brand XXXX, customer-facing had pleased with core at progress addition, to off. reflected towards We strategy strongest first early quality our substantial XXXX. prioritized our Outback of back strategy culminating concurrently momentum enhancements, we this continues. spending further reallocate particularly brands were ago portion validates build throughout our discounting, far traffic reinvesting including away months began quarterly the and from year measures. investments improving ambience. service since experience. to and What health continued in are

loyalty a attracting The traffic program capabilities, personalization addition the data accelerate to are Dine incremental The an approximately healthier program consumer the long experience, million momentum achieved X.X program the Dine over focused to X% loyalty building investing layers sales Rewards rapidly-growing and These off-premise the over term. we well members. on Rewards the business. has now medium In customer is in performing and sales and and is lift. include

manner. to and progress. leverage from business the data tailwind to a incremental represents to best has industry. Eivaz Digital received how as structural to look to further insights Also our off-premise to continue hired for determine our in optimize great market made and a personalized more efficiently existing consumers business Analytics program data us the engage This and CRM significant the more customers. the Marketing, Head Ramin We recently will help We of evolve and

of Our an sales. the potential be. Over that experience reach bigger research we time, thought staffing to the We XX% would than opportunity currently are and fine-tuning off-premise operations offer it to off-premise has suggests restaurant this XXX that ensure and total restaurants exceeds the delivery is even expectations. originally have

the the addition, offerings trade first smaller takeout-only our both and locations and In utilized concept format. the in opened, delivery and Express reach This into Outback new combining areas. be expand footprint will Carrabba's fill-in to have help will And it the year. We off-premise open currently initial have our eight locations These expect are results three strategy. early, although go-forward is by development to end and promising. inform of

X.X% are Now, making The continue since impressive and comp up and the sales to the outperformed was traffic turning X.X% In XXXX. highest by were up quarter the traffic. Outback's basis Outback's to industry customer improved fourth elevate drive QX, the an traffic XXX points. quarter to brands. we represented investments experience

momentum design. of key As with pleased of restored All the very service, across been These within as as a complexity underlying year restaurants have trends through reducing reminder, we enhancements food, steak saw and well in increases value. our the contemporize price long these are We momentum. the that improved business the investments preparation measures year-over-year sizing, portion positive exterior remodel include brand. of and portions health and including signs social indicators ambience

and remodels rollout were restaurants multi-year sites completed become in Outback XXX relocations We XXXX. XX Outback the quickly and substantially of exterior quality relocating as program have are also completed as There available. the remodel

Looking an interior ahead our to focus that XXXX. remodels, will particularly update have since had XXXX, not to those shift

that were QX in XX our also us pipeline, despite through and we has comp X.X%, in We Italian market cooking. heritage advertising. the authentic its the with strength restaurants. take it positioned is the well encouraging choice performance, of highlighted service, Given Italian another of refocused for expect Outback's efforts sales XX% Carrabba's At to further restaurant leaves performance XXXX as experience of reduction relocate up to This pleased of a celebration share. to Carrabba's, dining. is were this ensure the

via Carrabba's more for core marketing off-premise remains the same complicated strong family strategy pursue expanding also shifted business, execution in strategy a on focusing delivery LTOs will bundles In brand and occasions. the towards and and platforms. addition, of XXXX, its while the special excellent we have growing menu

Turning QX up X.X%, in XX% advertising. to reduction comp were Bonefish. despite sales a

We with satisfaction fresh return continue scores marketing mass invest to high restore healthy the to health service. traffic it's we offering the brand This growth. in core superior experience. fish consumer that is known away reflect for, the strategy the to enjoy business from To to and brand pivoted lifestyle expected accomplish have this, to customer

and to the returning rights We partnership our are more to giving roots decision restaurants.

Bonefish reliance chain. In comp philosophy local to For sales example, partners QX, the ability the fresh for This that their as have were unchain Fleming's defines once the will restaurant. choose fish is again with the discounting of quarter, Fleming's strategy in first brands to was In the our X.X% year-over-year. begin XXXX. was traffic. up negative portfolio reducing down the our the of discounting last on domestic

selection brand on localized the the Steakhouse menu Moving forward, work high-end Fleming's traditional customer from will through and segmentation. differentiating

posted are turning International. line performing strong to expectations. comps our in Now with quarter The with Brazil Outback high another restaurants up X.X%.

concept seeing Italian success. of, also Abbraccio, Our is

great future As leader is Italian for brands. intend Brazil a with share in with providing these expand market to second XXXX, further market significant reminder, the no our runway leading largest with We in us growth. segment clear

to in We market accelerate continue for International. pursue are different become to growth more long-term To and strategy. China view a this a opportunity potential speaking we nimble, go-to-market as partners with

business successful an Hong established in have and Kong. We

the of consistency. However, China has sales level not maintained same

that growth to and medium priorities key in was initiatives achieve healthy, objectives. traffic aggressively We in our level us our year a on market. Our in we the will strategy a important behind as unit belief in and In look this have potential XXXX capitalize optimizing economics China is momentum the sustainable partner help an strategic over XXXX the defined could realize that opportunity assist spent to summary, term. long drive to and

priority service restaurants U.S. investments grow profitability The remodels. healthy built sales be we as will have over strategic interior momentum to in our and The investments and benefits first pivot these food, ambience and time. to in from behind gained the in

disciplined significantly Express and manner. us very also past Rewards the personalization each case drive system that XX the layer, have expected sales Outback pursued the remodels, believe with opened data lift the opportunity are addition, on with that will we continue program. units Fleming's in their consumers and Dine Besides months we above are business a volumes will go exceeded engage we will be more that restaurants across attractive at new and building efficiently potential and sales we in have loyalty have Fleming's including effectively for focus The for average. the the In pipeline to forward. help four Outback remodels quantifying as

beyond. growing XXXX this have We that in growth drive will healthier, sustained strategy and confidence

priority off-premise second opportunity. is growing executing Our investing behind and the

to restaurants delivery and We elevated are optimizing the sales building support infrastructure the existing volumes. the XXX

Express help the off-premise from units learnings In addition, our enhance us opportunity. will

opportunity. maximize in continue capital Abbraccio. growth will invest to Brazil success we This the includes to Third, international and with leveraging Outback the

the form pursue value. potential the all in sale will portfolio In lens to to represent strong This, $XXX and shareholders cash substantially opportunities, cash the of another of with we'll in share opportunities XXXX, we have committed assets. We addition, our growing to of Asia coupled shareholder remain complete returning and beginning And of real flow, and maximize to them shareholder dividends is final of reviewing our of In total our priority remaining million evaluate brands. with expect been through maximizing Latin repurchases. the strong returned Since we franchise return. XXXX, shareholders. to America estate our will year the

and about year excited progresses. look forward as prospects you updating ahead are the We the to

Dave to a It's QX. thank provide and for I and that, exceptional off. year first. the our turn Lastly, say you developing to want call field of operators to details the to putting big And on with over I'll the teams their all customers Dave? more of an paying in Deno, mentoring

David Deno

for morning, you, off everyone. kick Liz, quarter. thank around and Well, profit performance with the good sales I'll and discussion

release exclude results, I referring to see when numbers earnings for certain Please and their and reminder, directly U.S. a costs metrics As benefits. adjusted between GAAP the speak most measures. that I'll non-GAAP to comparable reconciliations be

selective discussion connected we related revenues GAAP results $X.XX of quarter $X.XX was last our versus billion each earnings and to to per diluted China sales costs comp share revenues. and as call GAAP XXrd higher that comp diluted XXXX. both With $X.XX an nature This that an briefly the net and also due the were as versus our million our revenue share like weeks the last the We I lower of of versus from well overall prior was driven week, a Adjusted now in for adjusted results business. restaurant mind, of our partially decline quarter year. offset to the openings. comp in costs ended included the closures earnings in our This $X.XX the restructuring was by XX Total in XX QX. weeks for as was earnings and adjustment. impairment severance ago. in discussed organizational per our in earnings $XX.X QX increase fourth increase primarily would refranchising, quarter other increased additional sales by follows: provide quarter. to were negative X.X% mind fourth $X.X year that that discuss XX, primarily comparable the to franchise December on domestically year and fourth XXXX XXXX, internationally, from versus a Keep than financial our

for So it sales performance our of comparison apples-to-apples quarter. is an the

million change million million in XXXX, of a now expense. driver driven comp we G&A turn Liz year-over-year increase margin QX in QX on of largest The in incentive had versus in expense went XXXX. to recorded a X.X% the QX comps operating incentive QX compared compensation sales the up in X.X% QX with XXX in this to and traffic point incentive largest up Our expense. I'll This to an compensation as in by compensation year-over-year In improved decline was basis the reversal expense, of quarter operating elements This concept, X.X%. was performance. sales $XX.X change resulted by change through in combined incentive contributor expense performance. X.X% and profit Adjusted ago. other compensation year income was finished impact so our $X a over our $XX.X U.S. margin

increased by by In addition as earnings as XXrd productivity negatively costs. largely and benefit were comp, offset to well our expense. adding continued These advertising lower week the savings impacted incentive margins to be the of labor

in the week. diluted between depreciation for of monthly because margin XXrd the week the benefit XXXX of extra impact large a our have from The that to we relates operating Christmas of New EPS our EPS was many and days margin it expenses XXrd estimate operating did the the results. our week. as reflected not week $X.XX As basis and of our from week fixed rent are and recorded is XXrd our the this and busiest normal week, year Year's such to worth this includes was impact accounting on higher than on an This some

On International locations, in opened locations seven fourth Express one one Outback and Fleming's, including the one the system-wide we development front, four quarter location.

our capital to Turning structure.

the our and up financing consists facility $X of credit and credit $XXX extended During $X.X quarter, billion allows amended The for billion fourth revolving we of A million term loan and new to facility. a facility.

upcoming of year. strong XX metrics, average our basis increases This lower points. we're anticipated over interest rates offset financial help rate In to spread of the an addition, due interest able LIBOR to in us the will some our over by

end our the maturity the of Importantly, we new XXXX. to credit facility extended for

partners receive to confidence our company. shown the we they've support continue and banking our appreciate We from in tremendous

guidance, in Before of XXXX on accomplishments some XXXX. key reflect it's I to important the discuss

business with outpacing are clear comp our Outback. driven First, a Outback casual comp investments it dining traffic at and the up positive sales our industry off. year by U.S. X.X%, significantly with finished finished is the X.X% paying also

original a of the Hurricane year EPS. the Irma have our would which adjusted share, excluding was finished we range $X.XX for Second, within impact guidance

over the We is proceeds. progress perform and in business a total, sales high than opportunities program finished we Fourth, the properties less expect on XX a our This initiative. now to received continues over capitalize additional us In million market. we year can million thus sold made additional in growth performance be successful have our in and at to have remain confidence level sales $XXX Third, leaseback in far completed. gives proceeds important that $XXX to Brazil very once gross this with X.X% we comp. very

last shares in of Finally, million stock. we of another repurchase of share repurchased have directors board of million week's XX.X our inception million. stock. $XXX in the we of the At XXXX $XXX approved Since XXXX, authorization meeting, program over repurchased

win Our our big for shareholders. share repurchase program has a been

for set has Our credit you guidance. strong now cash through strong capital continued managing to with XXXX up in given our our a prudently With XXXX. the mind, for year performance our structure was that metrics. balance us success shareholders financial XXXX take company the has flexibility us returning and in to I'll and

be we EPS We and expect be adjusted $X.XX. between $X.XX expect and to $X.XX GAAP between and $X.XX EPS to

basis, represents of the XXrd you from guidance adjusted week XXXX If have $X.XX to adjusted results, been exclude range our impact would XXXX the XX% EPS our $X.XX. XX% growth. On EPS that

benefits, rate match tax as our well will tax adjusted health development to from These into expect We of XX%. and XX%, as our XX% to additional larger a rate intend XXX This the XX%. X% fuel effective approximately between reinvestments to compensation, leadership XX% XXXX to our employees. be We basis income between our training. point adjusted reinvest come of XXXX basis the to effective form XXX tax of an savings and GAAP be decrease in our enhancements tax income rate point back XXX(k) to represents

sales As U.S. other we relates up it a basis. to be aspects guidance, to calendar expect to X% our of on X% comparable comp

slightly deflationary up On pressures commodity to is have XXXX. several in the in of be as categories. X% the finish headwind Persistent in been sales demand are for inflation Commodities across to Labor in line, labor years. a XXXX. compared expected in industry expected XXXX. production be will cost X.X% are XXXX to continue reality we Approximately labor to key X% several outpace seeing a

of be inflation an part and productivity model. ongoing important these will pressures, our cost food labor Given

to off-premise we'll and growth and in We be line and the digital ongoing complement the we'll fleet high restaurants continue out areas We'll top with our Outback return such approximately maintenance, investments provide Outside our Outback relocation to spending. as and in expected our opened our these Brazil build addition, than approach programs. International. being momentum sales to XX% in capital spending is XX capabilities to areas less disciplined or Capital million majority our remodel business. through make to $XXX in XXXX. In be interior

in our Finally, the for a XXXX be year-over-year a in from to impacts our in we fiscal expect Each the one calendar shift first calendar. in XXrd we quarter fiscal provided QX release XXXX will comparing quarter. results and and comparable this dates payable week help fiscal a EPS; shift. understand of comparing you to Please that our impact our fiscal XXXX, creates negative EPS. by $X.XX results and year-over-year complexity some particular. to QX impact week a XXXX year quarter expect to of both quarter calendar fiscal full quarter negative morning includes refer the to XXXX and earnings XXXX, $X.XX better in fourth In of in This

full of the year, week. XXrd $X.XX EPS the For we will lose from lapping

addition there'll results. In shifts week, we losing calendar to our be another the in $X.XX of to holiday and estimate XXXX $X.XX XXrd

Eve very For included excludes strong year, $X.XX XXXX example, have fiscal sales EPS our our of Year's in New in impacts adjusted is guidance been to already $X.XX. These XXXX day. which a

of impact As include outlook recognition not release, our standard. our financial XXXX indicated in the any new earnings potential the from revenue adoption does

the estimated XXXX We the the into better earnings for the Once do XXXX XX% to standard impact our a is of call company. the EPS results change. of adjusted the changes. finish or QX In our summary, of new our We before finalizing of our process these of year to a not growth. of was fantastic XX% insight adoption revenue this very any from provide guidance complete, work recognition expect changes strong still to either are impact we'll impact to in QX on these restate

that the structure investments We for that, making to the growth. are questions. with into of momentum Importantly, and our increased remain flexibility and we up we We And confident are seeing right call long-term remain to return stewards the cash sales open capital we capital to support quarter. first will continue provides now improving necessary disciplined shareholders.

Operator

questions. The you. Thank for is floor open now

is coming from Jeffrey Barclays. Our question go of first Please Bernstein ahead.

Jeffrey Bernstein

much. Great. guess on comp all relates question but one U.S. brand. Thank focusing better you the Outback expected trends, than My mean question One brands, the I and just I at to follow-up. very

mentioned should Outback. quarter? give can we you the absolute of Obviously, that points quarter that a assuming in into the think considering in if I means be know don't XXXX, would XXX If first be are at similar continues that more into you terms especially any which X% through the at color harder. the trends know momentum I and range. impressive level even be I would compares that basis

of in an meant And the into then, absolute trends you whether the And or swing So, momentum not had follow-up. sequential significant? basis one through any color that continued, terms I XQ? the because on has quarter again is comparison and

Elizabeth A. Smith

Jeff, Hey it's Liz.

much more know and love would be to possible. You to tried granular we I as give as

on just I'm Outback at feel to And momentum about on I'm updating good leave the the to portfolio. that we very we continued more momentum going our So an call. And category, going has sales sales and our where brands forward look and impressive it. next level about you to the that's the that reiterate at

Jeffrey Bernstein

then, just XXXX Dave, you. Got of guidance. terms in And the

EPS $X.XX versus guiding benefit. the we maybe excluded be midpoint – at in be If XXXX flowing so. to the dime you're week guidance the be reform the XXrd if The would benefit that which only XX% it like would EPS you $X.XX estimate adjusted now. that you're you the to above a modestly But versus excluded through sounds would $X.XX-ish closer that of adjusted tax or to

mitigate benefit should EPS to taking that of we tax assuming you assuming want how the XXXX could whether make things, the the in reading to ex some and color am I just Maybe just very be right modest growth that is you Thanks. I some sure labor and that? the comp. on despite commodity much So plan overwhelming so to positive pricing on other the give

David Deno

Jeff. Yeah,

bottom holistic the got We've tax think as extremely I'm is $X.XX there. it's holiday some But line appropriate. XX% $X.XX guide. I through must XX%. a I got for my say, headwinds. our about then to coming sorry, EPS act remarks, you we've shift prepared misspoke to It's remember through XX% XX% in also, spending. the guide to and

our there's this company. New a instance, day. For no Year's big Eve That's in year

there's $X.XX approximately there. So,

the very year includes $X.XX. XX% guide it think it's is we're about we XX% appropriate, about the this It spending is So, to holistic, benefit tax $X.XX EPS to reform. our and

it's commodities, provided which that that the past a that also guide think is it's holiday that labor shift we and and within holistic we in So well includes guides important. the

Jeffrey Bernstein

productivity inflation, And you're talk that the that if about X% said offset pricing about? know you you $XX X% and How you we should if labor. think I million think, commodity running, pricing, guys there's often plus

David Deno

great Yeah. plan X%-ish year keep try range and our We've and the we gotten on productivity within pricing.

Jeffrey Bernstein

much. very Great. Thank you

Operator

Thank you.

Our from coming ahead. question John Please is go next Ivankoe with JPMorgan.

John William Ivankoe

you may. questions, There's follow-up. Thank if much. Hi. a I so Two

I Firstly, down actually mean a number on quite CapEx, that has come lot.

guided that one you're planning at point in now in XXXX, you think $XXX XXXX. million $XXX to $XXX million and million I

guess $XX of to have going Or than right that business opportunity lower to I kind take for a is, planning mean question do I lot that try understand and what projects CapEx do were quite what's your money in an is business mean, or to $XXX conditions that how the of in to if run just a to were kind mean of and I million your size. million the company happening I kind much that rate it the $XX CapEx past the you're that's of is future, – deferred? million we So the if is look lower of of of dictate? you size you XXXX even for in

David Deno

things, John. Two Yeah.

did the is exterior our that. a of I remodel had an all, – excellent attention of example lot followed needed That's we number of mean, up. that one. and not know, Outback gotten they assets older, as had catch to of we we as you were you First company, that. some our had do to

we extremely follow-up So, reflects secondly, and guide do year. we tight. CapEx are money we're where then investing lower for And the on the focused our this very that are

or be trying really continuing business, our our them to and it'd identify with so, to it with OpEx be at that's really where we're capital. pursue behind opportunities invest We're And the going gusto. Brazil

we we catch-up, some now the $XXX but million So think did is right years spend in past appropriate.

Elizabeth A. Smith

The John, thing only budgets look those other plans at on capital return investment are and dollars. capital I'd the on that is add, that of submitted we obviously

at whether a in whether – never going But disciplined it's Outback And – or optimism, see commitment domestically me heard so, see bringing we're mentioned, a the time, fleet up behind. opportunistic our it's in a in forward fashion. to reflection reduction and opposite; in that there's the opening going big you standards current now same fleet Express, the we and of a a our is in reduction behind to isn't do get us. it's we've those a the pursue We Fleming's, potentials quite spending relief CapEx it's caught in in to

to year. for cadence But up needed spending the catch a you the that's big the fleet So, as know, this to has happen. which, been

John William Ivankoe

Okay.

the Do should interpreting that so this been expected XXXX. riddle company the maturity? because mean, year that ago with heard. reaccelerate Outback understand development Certainly, you're would I market, never be point? give Brazil we we near us Now, but have mean, your scale, on color development at follow-up. thinking that in some at that least some that? you what that that is can got the enthusiasm has I think business wouldn't Just a from maybe is China doesn't term we've I that your in have or some coincide necessarily a the middle

David Deno

may market Brazil, few John. still restaurants but at. We're available selective a that's have XXX We extremely remain and to us, enthusiastic our lot the being as we in up just investment number. still more getting looking Liz close of openings, In We're in that to a in we attention. for think No, past, also Yeah. had matures. the openings also the we about Brazil. that market has mentioned think Outback Abbraccio And that we're warrants extremely total

about We So up same not not Brazil. opportunity restaurants. there have still the see we to we be prior in as market enthusiastic as at we quite was the open rate because opening but quite the mature, remain years new may

John William Ivankoe

you. Okay. Thank

Elizabeth A. Smith

I I mean, to opportunities. be been excited of and mean, we're Brazil, have bulk about Yeah. honestly the to XX real in as sometimes do with we Outback. the has going as is it estate

So because I'm I we want have there. Abbraccio, up that, and the that said, opening brought clarify glad as Dave to four. And and you we're runway then another nine

So and well. those performing extraordinarily that's increase, a XX% are

Brazil I and another of down feel businesses how great being kind about So, well the received. pushing really we're trademark that's there extremely

John William Ivankoe

what company-operated community, it's benchmark pretty your question. analyst maybe is that an a also complicated it very theme, obviously mean, a for and are? determine current number side we plans your brands to the growth given paper, G&A? think effectiveness I brands spend you a the the you I international And on point but right know Several from you're best these from U.S. sheet the efficiency do on us run same have can of exposure investment best benchmarks of How company-operated of different of view, in as do are easily well. in what the should we, G&A

Elizabeth A. Smith

Sure. then Well, chime look, I think and – I'll to Dave I'll every ask this answer in.

tell I company line can spend our has, competition out, is as every with our What much in store is that different think per very you domestically. structures. you pointed G&A I

from you lunch of it. is ours. Lunch doesn't Bonefish basis, a we not know have still which have different in Now, historical in all AUVs,

very But that you when So, – with actual think we're affects the it's that. the a really per amount it's store, when you look about in percentage, line at as the denominator G&A industry. the much

always is to the you in and restaurants. have to suffers, store way best in the know, excellent as if most you it service get thing thin I think the at too because, important look service your then a that's

So, we're competitors expect the right on grow continue we store in line we as and with to volumes. our G&A per

off-premise has it's growing. we've that is come and delivery, to lunch see still down which these which a all fact legs percentage as because going of lot whether levers, in got is a You're growing significantly, growth

So, want Dave, by add. if our the through anything fact there's that'll to improving that restaurants. improve just you I the don't AUVs know are

David Deno

Yeah.

The other very administrative know, thing that organization to need the we and managing made make. just public the on quarter, I'd changes add, appropriate We as overhead in John, been gone primarily making in since fourth some the you we've structure side. our changes we've

So, us. for that's really important

Liz will in overhead I than is that even and talked to better that. fact So, lot door we continue that growth look at, think that something a about

The franchise a which operations company I to look other investors support. company thing because ownership, the to a encourage of overhead at, more is level look at take versus ownership require all take

those we're looking are Liz's look that at with remarks So, at we overhead. along the things when

John William Ivankoe

Thanks.

Operator

you. Thank

next from Please Our ahead. of Morgan go Stanley. is John Glass question coming

John Glass

more Thanks on maybe very could follow-up If G&A, much. I just specifically.

fourth a the in accrual bonus a versus understand So last reversal quarter, I year. is there

So said for comp year. year to plus million you ended this reload, in that you million, at the – $XX would million you million and $XXX up so get $XXX $XXX

you overspend right basis? XXXX ultimately could dollar to be an And on XXXX that, is did above-target lower payment similar is, XXXX in G&A because So of the question base was in level a I therefore year? guess this or there real use in this or the hence

David Deno

fantastic Yeah. had to and No, did our a we G&A, we accrue overachieve we incentive target. overspend payment in didn't up had the we and but quarter fourth

in is and and and every appropriate spend key is appropriate number So, our an we overhead, did flat think XXXX for like digital goal be us. – we to is areas growth of I year places. our but invest other in term – long mean number that's But there

John Glass

what Did your I'm you XXXX say? it. I Maybe you sorry, say for target what G&A? missed is did

David Deno

say each year. is, our is goal to We our but flat did what XXXX be not target

John Glass

Flat in percent...

David Deno

Dollars spend.

John Glass

Dollars spend.

you to – a baseline can is Okay. for And question, that XXXX the use dollars that my is true? good that on spend if that was XXXX, use

David Deno

you'd You use like. Yeah. could that if

John Glass

feel like Well, hope it Okay. too. I is you

David Deno

Thank you, John.

John Glass

Outback out, you really of brand focusing your accelerants on that. are strategic and of you the Liz, that the priorities listed on some course on

weren't forward? they and not did top those that leave the talk secondary You going the the you How brands because thoughts that in about do or Are evolving didn't your portfolio about think brands on you you four? own. just

Elizabeth A. Smith

– shift, And to three Sure. of the own happened think work more saw mass dollars all from section. accordingly the here's more Well, done hopefully I the restaurant as I is personalization of QX the from from what we've them results which returning brands work and did mass saw I QX across that reallocating to headline is very, and and we're as that. their terms cover communicated well the those very that think with the the I on those marketing, mass that, has brands. I XXXX each away in that execution performance, experience got you you in And in authentic, in call sections moving what of that that marketing CDR, pleased really

You reduced saw comp sales growing marketing spend having and to advertising despite XX% XX%.

that unsupported not of that's those So their what authenticity. call, to validation kind brands but I pretty quiet roots authenticity good think returning of, I

much you all our TV, digital; part a personalization. they're part can with science of of you effort. ROI get big data bet can a the and off higher data of our we're they're a bet making in personalization investments So We data moving and big

You also can you can really on they Rewards. do really and well they well do bet Dine off-premise on bet that

more think has because unchain from that. I and And very marketing; served really the so, as been well in their has they've be well brands those returned I overt done category chains that the to we've the all away what pivot call marketing louder,

increasingly wanted short them, through to continue XXXX to didn't which So, to in say strategy we're is going this mean XXXX. them, cut successful behind that

John Glass

Okay. you. Thank

Operator

you. Thank

from next America. go question coming Gregory Please of is ahead. of Bank Francfort Our

Unknown Speaker

for I earlier unit (XX:XX:XX) follow just the Hey, wanted question. on up actually Greg. on growth to it's

gross Just there's target where that confirm International dialing be number? going also specifically bit markets of is that wanted be And over a reduction to XX in wondering if a so? back previous just that years, would and a it's to

David Deno

new number build opportunities our U.S. like Fleming's of gross believe some with, have We've Outback, the it's openings. timing. new mentioned, typically a We been Liz It's Yeah. our and in just thrilled really we portfolio still

and how but of openings have want to our to XX at do that I Outback well, portfolio. planned this XX a we're just year our building relocations International. majority it's So extremely that do or continues is mention we

Elizabeth A. Smith

kind in but Singh accepting much success development about and ruthless we're sites. of our Yeah. And under and had I'll so leadership we've of just relocations that A add anything not sites Suk quality the

mean number, to showing that be are we're have more more patient, And may lenses and that sites more we we're I but past to if So be under that. the only have going going candidly, probably absolute be would existed patient. here, for the results best

Unknown Speaker

guys. Thanks,

Operator

you. Thank

next coming of ahead. Fargo. go Please Jeff Farmer question is Our Wells from

Jeff D. Farmer

or level X% Great. impact XXXX since Thank meaningful over saw two your seen you elevated that Anything I'm just that pretty any traffic in last inflation if X.X% of curious level to the inflation promotional you've The commodity that drive that you. highest product jump strategies? helped think. I is the to of will quarters.

Elizabeth A. Smith

not really commodity change to again X% year, one or is love like momentum program kind Yeah. of the just and a a situation I Jeff. – X.X% environment leg No, we'd support. to next our that LTO to Hey, not success program want thing. going the have but is stool all of or stress, deflationary Outback's to marketing

the metrics, everything don't working. you health performance without get in strong quarter-after-quarter improving So, that

a we for the do grows. that The restaurant growing then we And in may remodels haven't brand. So dependent is is pivot to (XX:XX:XX) much are we're change. have accommodate or spent is we may about as the volume us digital, the the that for we as and continue, well personalization way what on, mass on which time the so LTO know CRM demand performing a interior now, the going in it's not overly Dine Rewards off-premise the that really and to how capabilities. That's not

is I were of the again any other to wish about year, nothing So, change this on commodities, than going flat they our Outback. programming

Jeff D. Farmer

Okay. one... And just

David Deno

If could... I

Jeff D. Farmer

ahead. Go

David Deno

I If Jeff. may something, add

Jeff D. Farmer

Sure.

David Deno

lot trends but And a paying talked financially the else, Liz they're standpoint, numbers, and you XX look in the very XX investments about traffic looks the months. it off. months at run financial We the over talked the from to everything Clearly last them, when strong. about business a each of

Jeff D. Farmer

then believe in And wage mentioned inflation XXXX. unrelated, Okay. X% you I

level XXXX? Just out of curiosity, of in see inflation you did what

David Deno

same. the About

Jeff D. Farmer

About the same.

Okay. you. Thank

David Deno

Yeah.

Operator

you. Thank

is go next Please Sachs. ahead. Karen coming Goldman from Holthouse Our question of

Karen Holthouse

question. the taking for Thanks Hi.

question Just the program. loyalty quick on a

from You mentioned lift a it. X% traffic

mean to transactions overall spend what in up in X%. transactions were Just basis understand quantifying that trying or X%? metric Does the the program on are Overall overall benefit? that up program were that How is. a member you per

Elizabeth A. Smith

Yeah.

know, So with we two tests spent, this. as in years you Karen,

that what is as, call, I'd the across and And program we well is that we an across in XXX% data models when analytic exterior us say pure, XXX done lift. Dine Rewards that brands, provides So program we if the holdouts. our basically what and the basis good portfolio, number. of That's every brand. points across providing is to we pretty hadn't remodel similar points had lift It's it as are, basis is to traffic now a all XXX portfolio

Karen Holthouse

then And are that? or guess, over-indexing are that that there I within to brands under-indexing

Elizabeth A. Smith

yeah. And that performance. you they've wildly, the think in like, I three no, I rest QX one and along, see at Not all. see no There – gosh, think you lagging is that is oh frankly, are

benefits lot first you, with would off program We because were time. lot be we're cross-fertilization and edited – a So, kind really after finish people, that's coming in Fleming's significant new your we are qualified that visit amount, where is do. your discovering Fleming's. Carrabba's Bonefish And three $XX with points a well and curious you the get and what you a with Fleming's of to about we're visits. and find that their redeeming the performing of is for the now really how portfolio acquiring really tightly that's them Outback discovering of people the that comes to other having then is at a great honest of thing of seeing news and

the is with as we we're to. so, that them. X.X And get exactly much about and because to And million, offers we'll working smarter tailor honestly customers we able it individual our be hoped smarter as learning program to so

Karen Holthouse

a And I with site the behind of wanting guess, driven on just opens for flow, that. guidance financial as more in from Was sort your a the return higher we flexibility on decision then returns thought unit and process – question level that terms of by that more gross that thing? another slower sites more or year. of your availability, think cash expected of free should this potential

David Deno

Outback building the our we've mentioned, Timing available the capital pipeline, And strategy. our and sure and in we also at XX the to like big got I look pipeline. a – Liz the is part at reiterate want number sites best relocations making of just

Karen Holthouse

Great. Thank you.

Operator

ahead. Our & Gallo from next coming question of go C.L. Associates. is Please Michael King

Michael W. Gallo

Hi. Good results. morning on good and the congratulations

you standpoint? what about think should you. harvest long that et feel obviously at the So, my return had. of Outback. menu the sales additional you the quality, there last behind investments wondering better Thank contemplated pace start to Obviously, point lot question do Do be we margins, at a where those on investments just way we lines at think this go made from investments sustain we're in cetera, a And that to that better XXXX? how cross have of you you in you is point a couple a product years. over you? could starts where you the But if investments I Are in was

Elizabeth A. Smith

Michael. Sure,

chime Dave I'll answer to as So, in I'll then and ask always.

multi-year and And right, been be current stay You're to always never in behind. a facing have we're get on to going journey. we investing customer things

more run data not the continue invest the marketing data probably we're but we and some capital certainly now gap in going same is What in, it's those that and to So data that I to the little have the – we've the customer, in going of going investment restore the capability, kind in would continue very which say to the earnest closed but are rate. ROIs to my we personalization. innovate comment investments made at high of let's invest bulk pays XXXX, quantity. and in and We and a like quality XXXX bit of

fruit and itself where bearing ahead about in and of we pay going inflection I'll are let some but he are at you think that performance it, Dave mentioned to I talk do made we've we So investments itself – an see are important year. that in next I the growth margin point do will – feel like for

to I comment know want don't on Dave, that. So if you

David Deno

Yeah. at look part productivity. when dollar, we've have business improving International XX% everybody really progress We'll continued that on see in that well. of high as a very a remind the I margins. investments that through strong we're We'll make margin see flow a traffic expansion. you operating And to margin making. And We'll helps that's incremental got

talked that about see expansion we XXXX the to be to happen will it. expect and and we of a that just So, elements part in beyond, key

Michael W. Gallo

on a Okay. possible planned initiatives productivity us for Dave. to detail more follow-up, it just have give year? this you Great. And Is what some then

David Deno

Yeah.

very and We tools pipeline. food put in labor have the in good place both We've cost a productivity management.

year We distribution in and productivity expect management, cost supply another chain and also and really strong management, be will on up food working in costs. that in primarily labor our

to lastly, we So, flow job we places. have the of number rationalization SKU very like we also good our utilities at do there reduce and managing be our a SKUs to much and a facilities will other have. And through continue and the looking just trying to that that expenses chance

pursuing year going forward. be a productivity and we've that in this opportunity multi-tier So we'll

Michael W. Gallo

you. Thank

Operator

you. Thank

is question next Guggenheim Please have line live. go Matthew a you today? from DiFrisco ahead. Matthew, Securities. question Do is your coming of Our

Matthew DiFrisco

making? you're about investments infrastructure you – or Sorry that. off-premise Can just the discuss quantify the

David Deno

delivery We're going tremendous into get but have detail on experience. with it, we not to leaders great

and we've at expansions that the got our that got that restaurants the got So in we're some to-go our We've about. make people. talked the like restaurants the doing to We've capability of Express Liz rooms happen.

from of the at kind Express, delivery look leaders, look have making. on the those we are the investments that So that building off-premise rooms you and at the side look we're delivery you when we experienced leadership at when with that to-go capability

Matthew DiFrisco

you just XQ can you off-premise And in of quantify of currently? percent sales the the as partners are well using Okay. as

David Deno

a of kind just standpoint. competitive that from in detail, get to not prefer We

Matthew DiFrisco

Okay.

Elizabeth A. Smith

– got just of make partners of and clarify. the this restaurants, to the really them and we you of the have sure year. the to rolling terms on that like expectations feel In But good systems. ourselves, we back because are know, nail using, own will we're half into on XXX exactly getting right we're are delivery We In our timing. delivery the at it in-store that, you starting in to we the rolling anticipate be that so volumes also more you I our also and doing focused it get want it really such as those

do We those, a are delivery, would think but a opportunistically third-party in other role there for system. with is we working that hybrid but exist

David Deno

Yeah.

Matthew DiFrisco

from profitability there gap big the third of you is the a the delivery or And kind in party doing are yourself?

Elizabeth A. Smith

can than – anytime delivery all or a is you sure profitability different you longer direct that when as well. and industry have different you I'm this chain and supply it's distribution is our – there imagine yourself, go a and chain that than way no

David Deno

data, if it other the we about direct the And thing customer... the all have is, doing Yeah.

Elizabeth A. Smith

key... that's And

David Deno

and that's that's everything key, key. it, of ...information

Elizabeth A. Smith

great relationship. point. that's you the your to want your where a relationship, and do customer own What That's is

we're customer want. so customers our What your just I elevates having we delivery, now critical. kind that's is even of exactly send incremental by And them what data seeing customer mean, purchases. messages with the

Matthew DiFrisco

you're or on? markets And the test, there a focusing store using criteria is the in in XXX specific

Elizabeth A. Smith

to to cross stores. expandable it wanted a representation, universe we total was that get our Well, so the of

would an for think I representative. thing So area to of of get where we that as could So, hey like? total group, that a tried to because fill trying Express research so we and go? in U.S., does whoa, group the it this clusters an was many are How have data start pick and construct good really read off-premise, area market we to what in the you're projectable look a things

Matthew DiFrisco

very for Thank color. you much all the

Operator

Thank over closing time, comments. any the you. I'd back management floor to like for turn to this additional At or

Elizabeth A. Smith

on forward Take Thank our call. joining look you, We all thank you you for the us. and to care. updating QX on progress

Operator

This Ladies concludes conference. and thank gentlemen, participation. your you today's for

your may day. have this and wonderful a time, at You disconnect lines

Bloomin' Brands (BLMN) 22 Feb 182017 Q4 Earnings call transcript