BLMN - Earnings call transcript Q4 2019

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Operator

Greetings and welcome to the Bloomin' Brands Fiscal Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session following management’s prepared remarks.

It is now my pleasure to introduce your host, Mark Graff, Group Vice President of Investor Relations. Thank you, Mr. Graff.

begin. may You

Mark Graff

now, good can are; and section. Chris With on website XXXX in Officer. me Executive our bloominbrands.com accessed Thank fourth at be fiscal Deno, morning, found our call quarter By Financial Chief Dave President release. and Investors should Chief today’s have Vice to It you earnings and everyone. you also Executive the Meyer, our Officer; on

explanation of this most an An previously Throughout appear call, adjusted measures release financial as presenting we’ll directly earnings our on measures the use on results our and conference be GAAP in to non-GAAP our described. website of basis. reconciliations comparable

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

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

our strategic alternatives we’ll these an today’s Once remarks, discussion our the the for for regarding performance up highlights, XXXX, call recap on completed of fourth a questions. and quarter progress XXXX key During financial financial fiscal an on a strategic of update overview provide review we’ve call of company objectives, guidance. we’ll open

to now I’d like the turn call Dave that, With to over Deno.

Dave Deno

listening to welcome thank everyone today. you, and Mark Well

two have We for the objectives call.

strategic alternatives. is First, exploration our on we’ll update XXXX and provide the and results XXXX priorities. Chris will finished, Once that cover I and QX of an

all was versus XX% on QX Combined up As comp last release, sales with sales a XXXX comparable noted $X.XX, in per adjusted earnings across basis comp share increase positive morning’s year. X.X% are concepts. US adjusted diluted a representing this earnings

up was points basis industry. traffic the significantly XX and outperformed Importantly,

further increases relative our intentionally strengthen check to have We tempered value average to competition.

guest check points XXX increase. traffic average a the industry with QX modest result, a by outperformed basis As

will This in prudent momentum menu pricing top confidence and We XXXX. strategic of investments such maintaining continue areas digital, us into entering Year. traffic loyalty with about our momentum give line combined as strategy the New this from off-premise

the year margin of year, combine comps where line points including Outback, by up X%. basis concepts sales, to positive solid comparable operating finish operating year. margin QX And expansion. with the management For comp quarter good strong XX at total productivity another US fifth top with are grow and cost consecutive performance for the adjusted represents all We

our for in in on execution will built a We with years new growth across and implement platforms In addition, our line adjusted for year was initial over improve the portfolio. investments and several was the on which comparable very guidance Overall, EPS grew opportunities to this company. XX% basis, our last unlock XXXX a expectations the good the that year. restaurants

all None without of experience hospitality of They team every hard restaurants you this our successful. work. so day beliefs bring the the dedication and to commitment that for exemplify service our would our of be and possible XX,XXX life make and and Thanks principles to members. over your

will further success look capitalize you we the As XXXX. forward, of on

Specifically, priority top key following sustainable executing line our be deliver growth. against will focus to on the

top priority, First, Outback. sales remains across driving the healthy, portfolio profitable our especially at

large labor we’ve restaurant. in and investments upfront quality Over experience enhance always enhancements, complexity explore our for million further is us. to the into investment and the portion but years, food reduce $XX the the efforts guests, behind past We’ll over to three ways invested and service

relocations at outsized Outback addition, are sales continue returns to In upgrade remodels providing asset list. our offering good base, we investments in are and

modernizing brand to focused and on how consumers. with with resonates remain We is priority Our second product compelling customers. marketing that innovation appropriate and very offer we activities communicate

that technologies and channels and marketing new value in reach high us new will to allow customers. existing effectively and efficiently more investing our are We

addition, Dine now has program million over members. XX.X Rewards loyalty the In

have we to made on peers. enhance pivot we towards it our more will reducing value pricing, decision remain while as to equation the building Third, further approach. quality a We focused the reduce reliance tempered also on Over unprofitable time, discounts. traffic, pricing relative healthy,

and we incremental Fourth, launched growth at we of on continue capitalize business. this partnership, nature which The perform and channel. the a rapidly fourth in XX% off-premise continues growing the to saw Carrabba’s. XX% Outback DoorDash to quarter, highlights well the In September, at

We complements continued are existing platform. excited as potential it the about our in-house delivery

business. The accelerate underlying international remained This growth rapidly includes the fundamentals in And with our success to Outback fifth, strong. the Brazil Brazil of will leveraging expanding in we continue Abbraccio. and business

above Our new future is continue and market potential business of the open expectations, growth well that tremendous. underpenetrated to remains units this

In of brands. pursue America, we’ll Latin in Asia opportunities portfolio addition, East Middle and with franchise the a

sustainable remain committed ensuring to to we’ll all and opportunities, all comp growth, value. to through lens returns. maximize We the parallel evaluate reviewing In to of continue shareholder look levers other them we maximizing potential will at

to In to continue a another expect XXXX cash year free summary, in represent We strong of was returning good year. very be allocation and cash XXXX our thoughtful to shareholders.

I and will we now Chris, the turn with I’ll making details about beyond. changes of to XXXX are some call the back be over major in

Chris Meyer

US that directly quarter. everyone. our that see earnings numbers remind release for will I the I’ll will exclude costs metrics morning, sales I’d good to between and to speak I with measures. kick Please for around and off and adjusted profit to the discussion certain everyone when be benefits. their like non-GAAP performance GAAP results, reconciliations referring comparable Dave most Thanks, and

each We of also the nature provided discussion adjustment. a of

diluted Adjusted the versus in $X.XX on quarter our basis was after the versus per for share $X.XX new the year for XXXX. $X.XX fourth a share year quarter earnings adjusting were GAAP accounting prior earnings financial comparable $X.XX last that results as versus in mind, lease per follows. was With diluted standard.

of revenue closures. and quarter. translation. were year These the foreign from increases Carrabba’s XX the revenues and were the sales primarily revenues to $X fourth net X.X% this openings Total billion increases to by due comp currency lower partially locations higher Total of increased earlier restaurant impact offset refranchising in and

US comp sales by traffic since was X% QX traffic driven was and basis check. and ahead increase best of in This QX was growth XXXX average points up were industry. results XXX increase a in our a X.X%. the X.X%

we As a strong a Outback. we lobster by last discussed our which and included popular steak on our start benefited call, the at from driven promotion quarter, promotional to lineup

over the season, Our industry. was still excess well of traffic but some slowed the in holiday

benchmarks. with Importantly, started strong XXXX traffic that has is competitive ahead of growth

of a menu lower on comfortable was in price our we maintaining level are QX X% results. calls, check to as increases QX benefit similar of and have indicated Our average prior we

also noting, We will healthier was that provide more discounting are value from our QX worth confident flat relatively that QX to unlock XXXX. It this is of traffic. and customers

portfolio Outback For for portfolio. as discounting reduced we XX% the full for down were opportunistically in year, the and X% however, we the

traffic. we to with with growth us performance, investments service, outperform on industry momentum. food will Overall, our the the and good out We platform relatively and meaningfully delivery and started sales believe in pleased our are the allow to continue price XXXX menu comp have to industry we continue increases outperform in low and

our XXth and quarter concepts. they the to posted sales consecutive growth, comp were of X.X% their versus Outback’s industry. On up comp outperformance and sales

points. Additionally, by Outback traffic exceeded basis the XXX industry

results by things. a Outback’s were driven QX few

our delivery up has XXX and attractive third-party this XX% and rolled in helps sales XX% margins. off-premise QX own had sales little cannibalization delivery out proving partnership DoorDash to locations, September. delivery were now with Outback. network. highly be third-party to is Delivery DoorDash this our revenues are economics bring and Total of offers First, at off-premise in a year-over-year. is compelling incremental occasion The business to

results. third-party a be to contributor We to expect delivery XXXX strong

and half QX, check. promotion lifting And of both in Second, the our dinner over continues we are momentum business. the building to our first strengthen the growth steak third, traffic average of well guest and the investments impact lobster performed and experience

XXXX. and Carrabba’s traffic Bring Home Carrabba’s QX were up rollout program. versus network. occasion was team delivery was is Like Carrabba’s embraced our this catering the up XX% made Carrabba’s delivery, to XX% complement in to in October. addition our has own in seeing of partners QX. multiple Outback Homemade completed in comp off-premise off-premise to was delivery sales the decision of third-party sales utilize This growth X.X%. Overall both and The

were comps business last dinner This our X.X%. was platforms were as in up from eighth quarters. comp nine improvement momentum over saw Grill we a the three-course up sales Bonefish and dinners. significant the X.X%, our quarter from at positive such Fleming’s QX of representing sales Comp

opening unit continue locations additional a – unit that new well new Anaheim in new opportunities. in This optimism for to September. Our provide site and includes is perform

Stars All the X.X%. up were finished driven comp On promotion X.X% was posted consecutive X.X% accessible year the called has sales successful sales in strike five at traffic point. featured Brazil in international price comp up an by following trucker front, up comp now growth Outback XXXX. of growth favorites a quarters Traffic the with that sales, and Brazil

pleased are team. this performing led with strong We management business by our how is

G&A expenses. business X.X% offset margin as improvements in operating Operating in liability as grow XXXX the the up in points was This impact accounting QX. in was for was Adjusted basis by operating favorability and change. driven adjusting lease income XX of after R&M off-premise and higher we increases supply partially due general costs increases operating expense well by was was as to our expense. This

points margin growth adjusted our and consecutive committed finished fifth closing margin of the with peers. on expansion the represented basis operating to year basis. gap QX a of we Importantly, margin for XX the quarter remain We comparable to XXXX

to Moving tax.

tax on level. heading result year. and and we the performing This both an the is at extremely expectations adjusted rate than In XXXX. strong domestic feel The finished XXXX into modestly business we finished results – quarter was fourth footing X%. Brazil about better is our good where high Our our business at was summary,

Dave Before the to now provide over I I an give on guidance, alternatives. call to strategic XXXX will back turn update

Dave Deno

how has evaluate review including and announced you, all thank including business of our go-to exploration including and our to our cost company. legal Brazil advisors of in and business, a Since with aspects working to portfolio market the various including composition, for with value analyzing the of we structure. operate November, financial Board actively alternatives, our US shareholders, Evaluating maximize management we alternatives sale a concepts. Back the possible in then of Chris. been Well

the of use sale well entire Assessing cash as company. of capital and as allocation flow free

materialized of At has this nothing sale compelling point the time, in an terms company. of in outright

significant business in However, portfolio that one our our is has area within received Brazil. interest

an on with provide Although Brazil fact future management to as obligation We’ll growth. discussions with significant business, parties under sell One ongoing. no this business is are for team outstanding runway updates warm. we clear, this great a interested has events that remains

the thrive outcomes, this public marketplace. review a and into that company return for potential off-premise, the experience operation-centric an and in Independent that strategic and us developed will growth investments provide plan transforms with of remodels can shareholders. believe an coupled We improving guest the plan attractive company accelerates the

represent included The the of initiatives key the guidance following tenants shortly. that in be and plan presenting are Chris this will major

leadership align and efficiency resources and scale. we to First, prioritize structure growth,

Scarlett, dining Gregg of Operating Dining. Specifically, to now will our directly brands new the Chief casual report Officer Casual

Organizing providing within a differentiated Dining between and allow Outback, Carrabba’s equities under improve brands, Bonefish Casual these guest portfolio to experience concept. operations still leverage our three each and us while

his Given brands Gregg there these better moving to is no Outback, at than success lead one forward.

simplified we the in the significant technology and agile investment areas support a of and operations-focused enable more made corporate in years, few last We particularly to organization. Second, digital over infrastructure marketing. functions

are now blocks the able concurrently we in critical working, With to building streamline while monetizing these place these benefits. functions, and

Third, will further changes enhance benefits our already of flow. free strong these cash financial the

last a paying billion of five form down modestly the in and the $X to over returned Over dividends years, share we repurchases, debt. while shareholders

a balanced increase repurchases, to include which dividend. you’ll Going cash share our paying have down and forward, free in a more of continued flow, debt allocation approach will meaningful

$X.XX annual long-term represents to the share. our X% per investors. prices. This return dividend are commitment shareholders to of cash approximately current an doubling yield We to an from at attractive This is reflects $X.XX and

limited ourselves to debt Over have requirements. the years, few paydown we mandatory past

of part we expect of level allocation as debt forward, make capital Moving more discretionary strategy. balanced a additional to paydowns

depending valuation relative offset the Finally, buy to we’ll back to shares dilution. on continue opportunistically and

are restaurants of tremendous We total focus is our these driving us ongoing and deliver confident amount allow outsized sustainable beyond. with our and in on to XXXX actions growth return in work already healthy will A completed. coupled sales

strategic will on to Brands the will that clear, Board continues shareholders. of be strategic transformed Directors the benefit Regardless focus Our thing our a alternatives is of of one reviewing company. outcome review, Bloomin'

year. And expect now back – I’ll call coming to turn details Chris over back provide the to the what for more to

Chris Meyer

on thoughts that you through now With I Dave. context, per take $X.XX. share guidance. be Starting diluted $X.XX we our and to XXXX EPS, between GAAP Thanks, expect will with earnings

is earnings over and diluted adjusted rate $X.XX. to a $X.XX be between expect XX% This growth per of share XXXX. to XX% We

includes of will the of efficiencies profitability, The $XX decision and organization. additional related For efforts. guidance improving context, our restructuring savings million first our that this making increase additional these to while benefits cost savings also in

will with Most be these savings benefit in across little first benefit the be by of be the savings will largely in through QX, impact QX and cost expect line, the G&A These quarter. will $X.XX XXXX. we from XXXX, EPS split in will which significantly below occurring

EPS one-time related costs restructuring. to GAAP be by will impacted Our this

and We between be US comp expect X.X%. X% sales growth to

investments of increase guest to to sales the We check expect approximately a and continued our of the improve momentum X%, growth average and year business. to level throughout from off-premise many at share. by of comp sales the maintaining experience, utilize be driven modest our take importance healthy at our from benefits continue we’ll levers We growth, the particularly recognize ongoing to Outback

cost are expected higher than is expected in be line, sales XXXX. guidance XX% represents the of to particularly is X% in On basket to which the is approximately experience be food XXXX expect reason lobster XXXX. of in inflation, to higher up primary to with Seafood, our we inflation our line commodities going and be XXXX. Beef approximately

will reality Persistent operating by and operating a off-premise approximately for the labor a we year, as to in supplies wage X.X% expecting higher driven are hourly bit pressures inflation been several our we this had years, grow increased XXXX. expenses be Restaurant in business. industry be

savings our XXXX will with an productivity model. years, financial be part Consistent prior important of

We continue labor in to the food areas find opportunities simplification. waste, of and management menu

savings inflationary offset our will these help of expect pressures. some We

expect a As to any in we of plus our versus of costs some discussed, be XXXX. indicated, would impact This expense impact in I $XXX reduction upsides of progress includes After million million XXXX. impact make between might XXXX. approximately cost of to would $XX the to million reducing we that G&A, $XX in removing million This intend $XXX $XX be additional XXXX. million G&A the G&A our expect we significant savings adjustments on we and

sales we growth, in our combine and you initiatives, margin efforts meaningful When anticipate productivity expansion savings do XXXX. operating cost

increase XX We of points is from be XX operating to margin expect XXXX. adjusted X.X% between basis points which to income and X.X%, basis an

be pricing this of actions. Keep in level mind, that similar the without to benefit XXXX, menu of will margin significant expansion realized

XX% effective We XX% X% XXXX effective expect tax income the rate tax to rate be GAAP be between and XX%. and between income the to and adjusted

we As grows our tax our as well. increase rate income to operating year-over-year, expect to continue

Turning the primarily and include is spending majority XX discretionary million. will those will between capital $XXX capital Brazil. in Other of million expected on with flow, approximately to This cash to being be Outback. $XXX focused new locations, be

in accelerating restaurant will We aggressive be more Outback growth. new

strong restaurants round investment nine to is a brand. sale by XX% a of in remodels These at In of of efforts complemented our endorsement and see of expect which continue excess target, addition, health in be new this interior will Outback. lifts relocate we to the

total the and shareholder free XX%, cash EPS are targeting remaining with valuation. we of guidance of a to which ratio an this a dividend of equates return of Dave as terms approximately XX%. X% yield to implies allocation between payout combined XXXX adjusted In XX our dividend flow, of at our in When growth current XX% XX% discussed,

with is cost to but a XX%. effort that shareholder be long-term free usage, It of framework repurchases increase the Share flow within of is of or total inclusion concerted also seen before be at level will will there XX% important our million cash to leverage to XXXX the continue In several to $XX a discretionary in dividend, the our our note the the savings part the of also cash. over future, not reduce more past years. return

context wanted a within our moving quarterly also some the provide I pieces of the following to year. given for cadence earnings,

realized last cost of quarters year. of the million $XX largely the will over First, be savings three the

year. negative have increase will Second, XXXX will This expectations rate first our each earnings lead outsized income operating in growth. an of to quarter quarter in the for in higher on impact tax significant

Third, have impact could the cautious on that XXXX about the Dining. we are election Casual

around years, to that to sentiment for point four the predict impossible time consumer of is comp was it important remember over low our it the is QX the the sales in Although last election, XXXX industry.

environment. We anticipating are be will have hopeful built that XXXX but QX quarter fourth better, sales we plan tougher a our

adjusted DoorDash With grow expect third-party with partnership of be year-over-year will to coupled lowest in EPS growth quarter given continue upcoming our less lapping $X.XX of year, tax and with This that higher September, we’ll although should savings between we cost some. our would Finally, and of rate. of delivery level to to be we rollout from this moderate a the growth context, $X.XX expect QX. a this benefit business

In of addition, $X.XX last unfavorable us cost foreign exchange translation will EPS likely versus year.

be should outlook on cost year as of QX be in our recognize experienced of sales some will very XXXX. but QX We provide year savings to are in EPS a than quarterly flow, growth. we in year-over-year conservatism for the higher moving progresses. we QX terms and what pieces our builds prudently should related and based opportunities, earnings QX EPS updates given last quarter of strong there the lot our

context some I also XXXX. our want business for to provide beyond

by operating points. we prior basis discussed As our XXX peer margins have set in lag calls, approximately our

XXXX work is still that But will done. to more close be there Our guidance gap considerably.

on progress of growth. in profit make This XXXX next have million savings an will and $XX margin the we $XX to margins enable further over identified additional XXXX, two of increasing us combined significant to years. XXXX cost savings ahead million and Looking to facilitate

XXXX, achieve We XXXX. and to while necessary has allow remain we for XXXX we profit growth on provided level in sales, changes succeed just cost structure by same-store not to hope that a making the our the those summary, how plan our to us long-term. to will achieve focused context sustainable of that performance but goals, call in today building outsized In growing over

company strong a even have approach through a We growth. stronger make focused, TSR we to intend that more emphasizes agile that

I’ll the with open call for And questions. that, up

Operator

[Operator At Jeffrey first be coming Barclays. Thank question of will Bernstein go ahead. Please we Instructions] session. a conducting you. from is question-and-answer time, this Our

Jeffrey Bernstein

just one first very you on Thank on – follow-up. question The Yeah much. so question comps. and Great. question one the

about you XXXX said strong we had wondering how to how industry? good think then that X.X% just thinking a have one to think in that compares Just that know, a with just And then the momentum and check. that And year you I’m wondering seemingly X% you’re expecting to as X.X% you X% you year, I mentioned wondering I that about you X% to start are the ’XX? full the follow-up. for I’m relative directionally

Dave Deno

with morning, industry move a trends do look start. to Jeff, and off our We’ve with Good we’re mentioned as it in his prepared really up seen Chris good remarks, trends the great. traffic

to We’re guidance our If to we the be the where is and feel change obviously improve industry things continue will strong, just a X% that’s X.X%, calling going. up.

on Importantly, the impact during we and value the very X% of as update go our we’ll in prudent about and the about has provide talked year. obviously being have then importance a we forward. we’ll election what change see And to guidance PPA be QX careful we

Chris Meyer

certainly year Jeff for for imply the positive – that us. traffic Yeah that and would

Jeffrey Bernstein

to assuming or X.X% you’re the the but below sales that? at would relatively it, industry similar your industry be X% Got to

Dave Deno

Our industry, see. hope but the is beat we’ll to

start I a far quarter. industry this good said off so know, the like is to You before,

Jeffrey Bernstein

seems you’ve heavily dividend the know you wondering on my I’m process, versus follow-up then view just you’re about like that leaning just on shares usage. undervalued. in meaningfully give it. the cash past still was on I the your Got talked And can your repo. at were Board it color any if

like know you. just the any it Brazil. and the wondering maybe if about wondering how royalties full just I’m talked considering sounds in by you’re thinks I’m maintaining the around maybe you on there’s just Board on past But that ownership. So now commentary if collecting color selling it Thank I about and separation? separate

Dave Deno

Jeff. prices what our and doubling provide we long-term discussions our that carefully, terrific I at usage, had of think a wanted Hi, long on to the with cash the looked do Again, was Board returns for dividend some shareholders. to We to felt do. to free today’s know, at to power, and to yield have continue smart thing company was believe our X% buy opportunity have a back our is Obviously, to flow cash you we really undervalued. continue shares we with

continue overall And to business. an balanced go pay look as want approach part we’ll know, well down also debt our we And you some as to we to as of that so at forward.

of we’ll a Brazil, happy had There’s things more there. the got don’t to in On down know any it, Comps We for transpire, on business the we’ve thing more really terrific. follow. color. interest be but fantastic expansion updates we you have year. One for to were business, a more I sure, know, as margin lot provide

Chris Meyer

and Yeah. of add we grow even reflects that well the flow the that more thing continue is company, in that. flow us strength our of our And, Jeff bottom and a EBITDA is, as The to cash provides do terms flexibility. line cash free this shift is usage, only expect to I’d

Jeffrey Bernstein

thank Great, you.

Operator

you. Thank

go Our Gordon Please from Farmer next question coming of Jeff ahead. is Haskett.

Jeff Farmer

to-go bit color How your working between DoorDash, you’ve more Can then Great, just all with the those a are and little you what been provide internal interaction three thanks. doing on guys Good together? methods of morning. infrastructure sales? delivery

Dave Deno

Yeah, been each very Jeff. We’ve in pleased incrementality We’ve channel. it. seen with

set incrementality hard come to we work third-party up. together own see in that’s us. we favorable the have third-party We up which our sales. on We network We’ve set the our provide to seen margins so and

it’s very partnerships where are And – Outback, very overall like, where So the both we’re pleased Carrabba’s to-go very, going. strong. when third-party with parties our what looking at you – look our business for is and our

Jeff Farmer

just helpful. unrelated one And That’s follow-up.

to that Brazil, inflows like in share business? Brazil the in the helps D&A the of CapEx several as number a better of anything inbound questions months been relates that Brazil from and Brazil, cash getting understand obviously, we’ve on investors business. outflows of that it anything Is the terms you last specifics G&A Over can lot there

Dave Deno

information, we on two, provide we very got a traffic. Number detailed couple sales had expansion things a at. strong margin to that segment I Number say, the a – a provided of I and we well just year. that guide during take PPA Well, growth think investor look haven’t needs one, we change international, but

Number flow and three, so continue they unit ahead our of it’s for new lot positive openings growth cash well our of Number to their there’s business, a a spending. expectations, be free there. opportunity four, fund all of

them forward when together, about really led you got team we So a down very really we go them take thoughtful by together, management you be and peer, very strong business. can take there. a business how with we’ve with that attractive And

Jeff Farmer

you. Thank

Operator

Thank you.

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

John Glass

morning. Thanks and good

process restructurings? the you out of the on? of strategy capital where David clarify rest ongoing? fact given just business that allocation the I or that still your are you there in changed is which strategic holding completed Brazil the you’ve some think can review you’ve Does of review these you Does review First, aside, the business of were clear mean the rest

Dave Deno

in everybody as it. a of taken I’m as look busy we our November. offers some we’ve are alternatives. strong And very, continue really put my in to we Like have actions we you mentioned per at you’ve part seen come on been since can talked haven’t really se, our But I not to way. tell, We a ongoing, John compelling examine very, any remarks, seen prepared business deep our but going it we timeline very

aren’t want say. everybody, And we independent we comes a our actions But to company the the we made strategic obviously if but something review, way, create go we’ll because stronger of shall forward. update we that complete, to

John Glass

follow-up restaurant know and comes beyond in although is, do the the first, $XX land where the my specifically? that of And didn’t from the where you address And think $XX where million specifically? XXXX. come I does margin think Thanks. margins million cost maybe restaurant gave from? specific Okay. $XX those did million incremental pieces you you the do you’ve cuts in Where identified? G&A you it, And

Dave Deno

things then Yeah, at of turn want and only restaurant. X% you restaurant of, thing we On know of our a over I in come margin, make that change of that details. costs Chris aware to margin I lot some from looking PPA, the one the to everybody’s for were so sure outside a couple think expenses a I’ll

already importantly, the those decisions past have regarding costs taken, been tense. restaurant, And outside

have very clear to cost So reductions coming. runway where we a very, are those

So to I’ll a of bit more about turn little some Chris over to now details. talk the

Chris Meyer

Yeah.

be year-over-year So margins, give perspective can provide a for don’t thinking how unfavorable higher terms it And restaurant XXXX. relates operating expense expect COGS, we that make would on restaurant likely our then, a you little on insurance Labor say progress bucket as you’re we right, favorability On inflation. wage line. to from rollout business delivery as due I initiatives. guidance about specific by and it our But John, some to in waste we will be as of would some we’re well. I the operating some likely tad of to supplies unfavorable due probably our

all this X% operating of of help our of benefit have in cost important X% includes a important versus everybody that pressure going check and XXXX But to that’s average why of so savings the to put margins, closer some assumption are the I think us a business. but remind you with the news it’s year that that’s on to overall productivity prove a we is of I the in our margins good our improve margins, in guess ability say, know, is, on I’d another XXXX. restaurant finally margins again, to thing that, And restaurant

Dave Deno

in result, And we to how company address do in investments last costs support a here our our and mainly smart it’s that, those saves. our in at ability now last the know, that. and we and made really themselves, infrastructure the saves because were of over costs the lot On center, significant able restaurant you of we these we’ve the conferences stuff, to we’ve have as company and to that you been And about that, been that following monetize monetize that a few talked costs years. able the few quarters,

some of of reduction the been you into there. sequence some most and these runway cost – pay the XXXX, importantly, and pay of go as for made some because it things, on decisions have but Now, is them timing John,

John Glass

Thank you.

Operator

Thank you.

Our next question ahead. is go of coming from Jefferies. Slagle Alex Please

Alex Slagle

thanks. Hey,

you You performance, any drive the of that to the inflection XXXX, some the coming but And might improvement an do for there? see terms help want same-store some specific brands the sales of behind there’s expect in Outback talked brand or should about initiatives quarters? other out you comp dominate if of still expect in drivers outlook to to we in call

Dave Deno

sure. Yeah,

expect of know well our the is but our and during that portfolio. all We in the year, brand largest do to brands in important most brand Outback we

And in initiatives we’ve president, Brett our investments improve our Scarlett tremendous under of so new Patterson we being some just Gregg operations of expect the our to customer-facing talked remodel our program, continue and to and programs, about that you food, our we’ve with know, a relocation COO leadership done, Dining. Casual the of

in again that time seeing also see in are that you long-term, versus want about the we Outback, traffic, to And we think if our we’ll and change good company, So talked our with as think I you prudent can trends in PPA, know, I more industry. the our stress and they’re we’re of get traffic we very the at same. see our to time continue better over

that is delivery and to-go with are really gains in our initiative, but has our our third-party restaurant important, to and at continues traffic, is Carrabba’s Rome clearly pursue, platform customer the that really Carrabba’s at Carrabba’s. off-premise you know, independent pursuing voting own we

and menu, dining Bonefish growth, offering, had in continue to Fleming’s, out like do the has their of had continue they’ll a product innovate sales they And well at same-store the positive dinners to eight that Bonefish. they nine very do long strong well things three-course area. around fine

New of they’re expectations happening important we’re of in and restaurant more her their and openings dining. our are Scott a dining and part that above continue team the upgrade best look restaurants. is And to Beth bar more and finding fine

some look brands. in real a that’s our So quick the initiatives at of

we and with great ahead position point offer far, And they’ll open the obviously restaurants well got expectations. our operations product well earlier, And one we’ve mentioned are number opening the above new in continue like continue at a Brazil, there. great you by plan to of price to tremendous

Alex Slagle

then missed Brazil and some you details the it, expected each many provide on may just have And on great. at you if That’s development, of brand? I in could how

Chris Meyer

overall XX brands, a couple majority the be much company. to end we a know much, those and for locations, a two. the say other for I’d Outback one of in they’ll will that then we up at number – was sure, of be and it Steakhouse being Yeah, the Fleming’s, Brazil, smaller of they’ll handful

Dave Deno

finding more. And business of that sales above of really great out the the that to sites, in too testament XX% returns function things know, power and and mentioned his the Outback seen more opportunity pursuing of one we’ve of share We even then And it’s Chris a remarks take as, that. are can in for that think new think there’s flat you is expand well we just prepared relocations gains, room we’re I units. terrific brand. and Steakhouse of

years Outback well. So you’ll coming new units in in up the see step a as

Alex Slagle

Thank you.

Operator

Thank you.

Our is Please ahead. question coming from go of Katherine Fogertey Goldman Sachs. next

Unidentified Participant

about was kind Katie. that Whether how quarter? January, think talk January the industry up? Jared our or about is weather of Can for you’re you customers playing out Thanks. So trading you’ve pretty you quarter-to-date the know on Hi, do maybe just of what rest this in just thinking was some strong. of in it trends the guys the actually we and

Dave Deno

trends industry, shown participate outpace here, in industry. but we’ll from The pleased in a with. traffic you which we goes it January. industry very where see, that increases in continue know, And the We our the was – has in the participate and rebound to rebound we’re

Chris Meyer

we weather up other there, Midwest, in results. the noted certainly more north that out as folks it’s, industry think was mild and have and I think Yeah, benefited

You benefit know, given but footprint off strong. we the the you know, that, didn’t our of get we a really in start a quarter little less pretty from south,

Unidentified Participant

just Great. quick And if could one I – follow-up.

guys cash are sell of you bit as you as, pay of, of some strategy. there? uses Are were discussed, ratio leverage the You guys a capital with downs? targeting talked specific business a know, you also, being how about Thanks. about the you if thinking Brazil you And allocation to the is debt noted sort little

Dave Deno

to be we’re allocate the turn to we business interest there. is piece. business for final and share down we you to to doing there. proceeds yet said, what sort Brazil we we’re How on still Chris, of and between, that to need on And there other Like you working a as over going to know, have a working come repurchases I’ll decision what the on debt pay come. bunch through Yeah, let’s there’ll in some a of – be But I mix. But that. was fantastic focus

Chris Meyer

Yeah.

to EBITDA of we’ve and certainly multiyear several targeted know, reduction debt we a in growth the allow debt net it’s about talked to times to times we’ve down more as make focus rapidly the years. is remarks getting a and have And, on combination the than prepared but perhaps, a us we goal process, EBITDAR you X here. X metric last So as noted over more progress healthy will that

Unidentified Participant

so Great, thanks much.

Dave Deno

in it debt know, ’XX growth is forecast of it free cash one with Chris more and this, us and ‘XX to mean, you ‘XX things, And mentioned to shareholders our and provide for our just flow the more gives and and just, I to holders. last operating earnings was year

we’re So that’s at things we the reason as why are. looking

Unidentified Participant

time. the Thanks. Appreciate

Dave Deno

Yeah.

Operator

Thank you.

Our Morgan. is J.P. from of coming next Ivankoe go question Please ahead. John

John Ivankoe

your wanted a know, talking you base. G&A of Bonefish, are saw, you. changes know, for more. relative overall the and at to we thank Obviously, but savings Carrabba’s you the the you bit Hi, to about, know, level you we very cost I leadership talk big at really know, numbers, some little about,

we better hoping smaller you specifically How a becomes could was what actually a organization? about, more know, talk you’re I organization So cutting?

Dave, cuts, very as ‘XX cuts roll know, you How go million another know, basis. question per-store where, can you where high not cuts you these there we $XX I’ll a million far, in point mean, and, know, you you actually too into know, find a I know, is you’re of $XX ask directly, the

all actually really into at know, bone know, do too of some you a risk is company at organization organizations? that’s fat look the how we So, the digging you you effective and is that kind more business you putting know, know, deep can meaner, in necessary of they’re leaner, you’re the you muscle for versus this be and and business okay,

Dave Deno

Sure.

and and opportunities and very for are. in the been restaurant and of know, on all, like needs over years to sense support look things various John XX First what a good as where years, working of the I’ve our you you together I’ve XX plus business got

number So that’s one.

made Department we investments has shout Phil that over of in time, he’d area. just of through the know, digitization, out we’re managing pretty our things just all job, significant you our benefits is, in working some automated in as mentioned, two through to Number I I seeing we’re some infrastructure Controller through that the reaping those automation, costs, through a and great the you know, a done functions controller Pace as it, mean,

opportunities and great Michael then and Stutts done IT company. the and organization and in Digital us And come the runs over identify he job has he’s our last year in a really and helped

think place of made the our And house area. I think, very we’re back So that have that the I we progress going. significant in John first is infrastructure

really of think brands. us some some his experience management a of our at look overhead in leveraging Casual efficiencies, smaller took cetera, Scarlett some help we the our in go-to of of how careful HR, Gregg training, reach et we in We all Dining and costs. will Secondly, market,

some seeing systems got and of put and in this is, it’s to new space sequencing you’re here, stuff. right, spacing that why you and XXXX you know, sequence as infrastructure, new reason the go you Three, into

taken look we John, cost know, fall, So, infrastructure cuts time costs. think, you last a at talked really the from our you hard that know, And, know, you we’ve really, at, and our monetization that. and together a I really, percent that. reflects guide XXXX high G&A we’ve and to XXXX versus for and think I we and done that, as needed was were of our competition that address sales of about coming

John Ivankoe

money, kind here ago. think spend you opportunities they’re or I on you actually specifically Could tech of they the couple on there’s more efficiency. maintain finding Specifically on side, net the the know, what It’s in to you’re to whether actually companies finding, more CapEx less. cost data know And, of your different than thought find spend, you it? side don’t and necessary I like, it mean, not a to reduce of your tech ways you are OpEx, most define years focus why to it’s able in in – efficiency,

Dave Deno

technology. behind investing Yeah. Well consumer-facing first we’re of all,

able and back is infrastructure whether our the POS we’ve that. had digital it’s we the cetera, But a the So company, that’s them to it’s infrastructure, invest the in continue going will that in been people new consumer-facing that address and device, and that so managing we’ve John to costs we invest done customer continuous. et the we’re of the house in systems, things continue to doesn’t whatever, to networks, see,

But enhancements and infrastructure in happening. dividends paying it that we years when investments monetizing where all the talked we you XXXX over made and we spent made and we it I now, looked earlier about systems, function, at made that XXXX, what in and and that’s our the behind our spending enhancements the and that’s what’s instance, comm. to the for was control are we the were being

John Ivankoe

you. Thank

Operator

you. Thank

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

Gregory Francfort

Hey, maybe maybe tell give down Can where but go, thanks reason to maybe that then in have expecting targeted change leverage? thanks. the debt and me what for the question. of of that detail you kind the philosophy the you’re a the drove second the And levels I question, stepped there

Dave Deno

know, our be income to, is continue period that in Chris had that Yeah, to ratio for some we’ve over target. time time. are now that able achieved We’ll especially place of operating said now we’re to X.X a you growing and a target over quite years going

So philosophy. I don’t broad really a change see in

that, did a more double happening him of still that And was we dividend was change do money things over – to our with That grow do left have and is, do all we lean that repurchases. that that is we’ll flow share has has into the free of out some One the coming over – heavily to company of the to as earnings. made. cash

Gregory Francfort

and had Thanks. they’ve your quarter little an kind a for and Bonefish expectation having brands smaller Thanks. maybe this Any it. And of then a why both of better got performance reason inflection of been that for kind the bit Hey, little continuing? and on Carrabba’s while.

Dave Deno

mentioned, the I Fleming’s we brands small to like continue, expect well. we Yeah, as

dining. You in job fine team a Scott Beth know, do great and her

expect So grow. to the I we dining fine – brand

such unique that continue We increases really you doing an off-premise and are offer dinner growing discounts, fantastic and products job going about offer and focus. point, have just Carrabba’s careful offer, our customers of think all and a the focused Bonefish if over to menu they I not know, price continue and to we on where you stuff, is also operations at Carrabba’s go traffic, our and be a to attractive price but terrific set continue but

gains brand I think know, same-store see, you we’ll continue well. that as on sales to

Gregory Francfort

Thank you very much.

Operator

Thank you.

MKM is Our next Partners. ahead. coming Levy Please from of Brett question go

Brett Levy

Great. Thank I you. we just could Good guess clarification. morning. start, one

is You’ve off the talked continuing table? to that you’re that there anything about on side the strategic Is evaluate.

Dave Deno

those as take company, at But off talked don’t We table. certainly across anything we’ve today. started look value try of look I are. company very No. carefully – the alternatives all – at we drivers we some about always and we our things our we’ll the And the since public We know and where company. in a of aggressively.

Brett Levy

just And one theoretical then strategic of question. kind

now like outside how inside of $XX Thank you box, you of are permutations using your and but north you’re seeing gotten you. of are they cohort. cross customer are your to off-premise, most your learning usage your you’ve about with million Are third-party any seeing off-premise and and also starting loyal aggregator? the original to also customers cross product? you are how growing that Given What your seeing your you’re on loyalty, go

Dave Deno

is loyalty us. for weapon big a Yes,

smart behind really to it. got we do. was It We’ve database. We’re really invested glad the

We it at and work will to, continue look know, you it.

our and us with investments our of all for Michael Their and we on it consumer-facing in We’re continue as technology at working some and move loyal customers channels. of be to about team loyal talked and in customers something it seeing Stutts modernize earlier that we we’re go very seeing us we’re the it forward. use we And we’re how things. that our And we it’s pleased optimize very that brands. team, use making to forward. will very look And need all

Operator

you. Thank

Matt Our next of Securities. Please from the is Guggenheim coming ahead. DiFrisco question go

Matt DiFrisco

couple asked, Most but or just I were follow-ups my answered a regarding you. relocations. questions had of Thank of

think I for you can if did in you when many How XXXX. you that? was it XX had confirm guys X did XXXX, do you

Chris Meyer

Yeah, right. confirm you We’ll for that sounds though.

Matt DiFrisco

will And most how sort as I how be then I be contemporary many something said also level think in, will many many in [technical left about be to interior when you far and the sort inning look remodels. at as – are that same How that at difficulty] of of what the we of done interiors?

Dave Deno

Yeah, find we And inside early to the it it’s need time last eight that every or ago. or eight we our seven days we seven Outback, know, restaurant. at you on years - did years of refresh wave remodels of was next

it early on imagine days, years. of a based finalizing over couple you remodel we’re see next restaurants, Matt the work on over the how and the our have it’s couple we’ll and but stuff. can forward scope or still program scope rolling years next we high, that’s from be I as medium so the something low we’ll of Steakhouse and So Outback

Chris Meyer

– the XX correct And is

Matt DiFrisco

it. Got

Dave Deno

[indiscernible].

Matt DiFrisco

their at switched there have how from for like think far changed difference really of the look modeled account as business casual you your anything sales, you’re off-premise with been where sales. much how obviously there have they that like And been then comp? you give calculating like of same-store when check more brands is of it. your versus traffic Has – when traffic entree? there Barrel check? history my the large over last brand, didn’t all, off-premise a at consideration Got changed now question respect to Have been Cracker when they you much most you’ve as there adjusted off-premise that the ticket and think you back so Has your diners you methodology, part maybe of your a any to know, has I and

Chris Meyer

casual at the for used accounting Yeah, – no counts our We’ve traffic. of our most entree always change. real brands at

our been no it as business. relates there’s off-premise to So change there

Matt DiFrisco

Excellent. Thank you.

Operator

you. Thank

question is William from coming Blair. go next Please of Sharon Zackfia Our ahead.

Sharon Zackfia

Hi, good morning.

on then if softer through flowing a Just that happened or Brazil’s could cost are you a savings. bit those color line the there? And quarter the any give were little down ever reinvestments? assume there be and the clarification in expected, what than on Should will bottom quite a we the secondarily, we margins to year-over-year were XXXX

Dave Deno

promotion in We you drop a X.X% Brazil X% Star features PPA. All successful menu products increase extensions some great value know, in which called in couple sure. Yeah, with a a our, X.X% of there. saw traffic ran traffic increase of and – very

part was of And margin as so we part some overall commensurate pressures. outperformance. overall of clearly had our strategy it But

the Brazil year, for points. you margins know, were basis And XX up

So that. the segment international in you’ll see, of but we’re about talking traffic in But you great margin and from Brazil large comp there, international comp segment and continued know, Brazil part our XXXX. is so think a performance, expansion great performance, I

Chris Meyer

P&L point. real, and to, guess XXXX. savings at Yeah, you we and in those and this or going I’d on thought know, do that thoughts say on I believe but we’re are expect cost provide the from XXXX But to I the savings, our as guidance benefit the savings not

Operator

Thank you.

go coming BMO question of Andrew Capital ahead. from is Strelzik Please Markets. Our next

Andrew Strelzik

the XXXX, to you isn’t was or believe there case I is room that year discounting me. delta that either. expected And flat just to your I Hey, be of there seems noted wanted confirm PPA I questions a that kind the move it comments in good that big Two lower? for from there for this to morning. quarter. more that was guess

Chris Meyer

that would the we’ve We progresses, we’re to no as But but particular is we discounting. doing discounting always to I whether think correct. stated strategy right year do have year. that will say is will what promotion an be an dramatic to you, with would said going go the we there’s opportunistic a the entering with into keep, say the XXXX we Yeah. if that, way Look shift we’re opportunity what assumption the in about reduce you’re I it’s consistent don’t year there have that via we a will reserve or what

Andrew Strelzik

Okay. the leadership that of you’ve you And employed multi decision some companies Casual terms consolidate other brand obviously from from a is in the as as to strategy my Dining the second of kind other, the well the on the of of know, brands. It’s question strategy. change portfolios

is, optimistic have impact question that you what and from cost line disruption of savings clearly the or confidence the perspective? on but taking the won’t adverse change, gives in side, some my sort a the making some aside So top sound gives confidence you that that sales create what

Dave Deno

one operations Gregg so gives I for to – operations at working brand restaurant confidence. Number two go-to distinctive brand that Carrabba’s leaders we side tremendous Bonefish through and we’ll experience. operation have is, the on and provide market great continue of the better it got of we deal a best business a that couldn’t leaders partner Scarlett, in me ask Well, and running and provide

some Outback really, have is, know, supporting three we brands, will and and know, as those our Outback been that partners, that Brett people always Carrabba’s got in deep know the are got Number running strong. you we’ve Number brand. you industry, terrific he the team terrific really Patterson experience has Outback, Bonefish four, you and he’s on they and Brett be of Gregg work the

in talked reinvest will about. sales our opportunities and to brands, pursue The grow last the continue we these piece as is, we’ve

we’ve But make really with I’m the people, the importantly, pleased bench, you can reinvestment to So this together. got those And talent the expect came in most additional brands. work. how this

Andrew Strelzik

very much. you thank Great,

Operator

Thank you.

is Our Brian sure Vaccaro on next ahead. from James. please go Raymond Please coming Brian, question mute. not of phone is make

Brian Vaccaro

Vaccaro, Raymond Good Brian that. about Sorry morning, James.

level the is in few that the level right the see the years? the side infrastructure G&A at other or the business low you targeted you’re percent sort on the XXXs, Just and is or there target that over appropriate looking of some sales line that savings for of cost of next support

Dave Deno

our to runway a as be still there’ll about field and do on overhead revenue and a our yet service line we and be Chris more and talked to in want we our everything – provide of Brian like percent competitors, XXXX with the customers a in and have to partners our to that. fantastic we’re Yeah,

Brian Vaccaro

even while. and there for like? savings color Could you productivity that efficiency I store at you into something of opportunity And level, the about frame model you you’ve said simplification, at XXXX look technology labor food waste I help that Okay. you the know menu are a where on as you been talked on on still XXXX or that’s guess the it’s more and the any there the leveraging improving and the focused

Chris Meyer

you Yeah, the I with think the on hit nail comment. head the last

I still think can that to to prepare in prepare line, kitchen of when think further the types some and food. that are the it of things can think shifted technologies now has better productivity, we efficiently with Those be the that us, about it’s equipment kitchen are utilized focused more I ahead the the unlock to Brian. productivity that more degree, are whether down on savings we simplification

cost line goods you of the sold pivoting food be back made of there throughout but the know, really goods as COGS more quickly in saw progress is the year right to good the work sold you to waste and cost line, guys on in done. But we XXXX, really

we I feel like down can And cost talked say relates of and driven for a some opportunities So would this these as be goods it goods that will we’ve sales little sold XXXX. I about. bit cost of come a of by as to and still it XXXX, in opportunity percentage of mentioned the sold

Brian Vaccaro

heard outlook, for That’s make great. I commodity sure to last correctly. just me Chris the X%. wanted the on And just one I

said right? flat ‘XX? that Did versus You costs I expected are beef be to hear

Chris Meyer

the in X.X% to XXXX, of same of X% Yeah, the range. in at level it inflation sort the as in – was

Brian Vaccaro

much And overall the you were basket how beef this time? Okay. on at contracted for

Chris Meyer

real good We in were really Beef confident. feel shape.

range. think basket, the overall we’re in for probably the I XX%

fully things shape But produce good baskets on we’re point. some seafood typical not locked like or know, really at You this in XXXX. are in

Brian Vaccaro

Great, thank you.

Operator

Thank you.

today. one for final We’re time showing question

be will Please Jon from Tower Fargo. question ahead. final Our go coming of Wells

Jon Tower

thanks in Great, there. putting for me

referencing on majority XXXX CapEx, about was want is of clarification and a your coming I confirm I that CapEx numbers? is Just your quick Brazil and and XX.X% from to of the total question a that then international just believe

but the a and remodel know based relocation improved, past, in the Question, you know, you right over in the then And you’re mentioned the there’s but about Outback programs. opportunity XX through your traffic’s earlier also an Dave US I time, over now going the years five and program grow to idea unit remarks, that’s stores that down some

at over picking we can looking store you XXX basis start know, realistically growth about, So, where think go higher? you And can when time? this that stores, that unit actually do thinking

Dave Deno

demographics We’d get like done with to brand in, has XX our well relocations we we we’re can become seeing at some changing, do to and some do we’ll have fast you get returns expand great our we’re a Outback, extremely in that key The the XX, of we’re think like going markets as for we participate and Florida, it the available. we look in and at instance, know, more. new chance going more that once to for brand sites improving infill the It’s and locations. as doing

not have you increases, it when going bad of the and XX% plus to have We’re it brand. push sales but openings, shows power the

confidence performance Outback, the get give XX at done to can time, us So so new we’ve over that that the for Outback and relocation gains performance seen, more. of relate the few the we’ve at the least with units we

Chris Meyer

$XX of spend now CapEx I cost and to will our close International. be CapEx million question, targeting right the Yeah, total on we’re international, think

high fluctuations, on subject of XX% foreign the million the which you’re you currency, end but the if $XXX is using about of range. $XX that Now to know, course million,

Jon Tower

you. Great, thank

Operator

you. for turn Deno back comments. the to Mr. I’d this floor time, over like closing Thank At to

Dave Deno

you, thank listening for Well today. everyone

forward to updating We again. talking are and on progress in Thanks you look you to April and XXXX for beyond. our

Operator

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

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

Bloomin' Brands (BLMN) 18 Feb 202019 Q4 Earnings call transcript