BLMN - Earnings call transcript Q3 2021

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Operator

Greetings and welcome to the Bloomin' Brands' Fiscal Third Quarter 2021 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host Mark Graff, Senior Vice President and Investor Relations. Thank you, Mr. Graff.

You may begin your presentation.

Mark Graff

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

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

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

provide guidance that, of fiscal current During brief like for XXXX QX third today's with we've up to questions. we'll the And to XXXX, call now open financial the trends a David quarter a call, call discussion regarding over completed these the metrics. performance Deno. select for turn remarks, I'd we'll recap Once and our

David Deno

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

record earnings morning's the known in quarter XXXX to per diluted company. earnings was adjusted As this $X.XX in XXXX. for release, represents This third improvement a QX QX share $X.XX comparison in significant profit

over one and and on stronger, comprehensive customers. to a key work plan the food leaner is directly company improve return. strategies providing even we our tied even Our last operation-centered on hard few In place planning XXXX, to service sustainable plan shareholder commitments, the and to total years. taken that build in significantly designed This to better drive reaffirm a focused company, presented growth. are working success to and more deliver has This our is ability

results. from a the minutes we details I to want get take quarter, initiatives of behind the which the driving are the third the XXXX of to few force Before our into plan, review the strength

improving First, and sales offerings. levels grow by food in-restaurant service

few last across at the in made investments areas the the especially Over have Outback. to years, customer elevate we experience portfolio, these

quarter, As market were basis a points was industry. on XXX sales the X.X% up versus third result, are ahead X-year same-store of a XXXX. share. U.S. In taking This we basis the

capabilities leading our pandemic through and we Second, levels business, high outperformance. XXXX on during sales off-premises the off-premises capitalized are contributing strong our off-premises in to retention the

U.S. generated representing $XXX During the off-premises third U.S. sales. the in quarter, million of XX% over company total sales, approximately

are the completed margins profit last is approaching channel of the few the initiatives This the in-restaurant of in margins off-premises were Importantly, business. result quarters. the in that

remain of to large the and going forward. off-premises a expect business growing We part

by operating to grow framework of nearly levels. starts growing representing Third, channels. by This growing margins margins basis a XXX detailed costs. revenue, established operating sales We've traffic a to in-restaurant margin and and improvement across rapidly the improved off-premises reducing point X% XXXX healthy from

advertising We also higher LTOs, targeted, discounting on initiatives. spend ROI pivoted towards and and reduced reliance promotional digital more

and are P&L pursuing labor we overhead. managing aggressively and the the remain middle in in In efficiencies addition, of disciplined food,

XXX% In We savvy increase ahead innovations levels. committed learnings through of the continue efficiently reduce These quarters. framework service remain several XXXX we'll margin even more we digital innovations customer total leveraging out the our that were U.S. QX, should restaurants. over in sales to we improve channels, digitally and are and company. Importantly, support achieve to in off-premises XX% this and approximately equipment Fourth, become more to were to of run efforts the recent a Margins long-range the technological steadfast to in and restaurants coming intend quarter third in further roll test costs. goal.

to app a implemented have and outperformed mobile business. Both our expectations. support Over we the these past year, online digital new have of system ordering

can You stronger finally, much sheet. the in build more quarters. And fronts see activity a these balance coming on expect to

results, the down Given have a year-to-date free cash good and debt. flow very generated of we great are paying deal

metrics track as quarter, lease-adjusted return on to balance value. and are goal great remain next flexibility of also enhance opportunities A Xx and each the improving credit business that as buybacks dividends achieve early shareholder year. through shareholders sheet provides we leverage Our to cash will healthy to by well share pursue

relocated at Outback the opportunity for we a areas this indicator are demand. leading clear is new brand Outback growth. Outback is relocation that growth about program unit The Fleming's. One excited of a accelerating is In of developed we $X.X recently of the will a that the unit substantial and average sales success meaningful prototype with restaurant expensive new growth XX% unit more and of years, lifts enable past of returns. with We healthy less million. have X approximately restaurants XX volumes

opening $X are Importantly, also volumes. million in above new Outback average unit

of our category best proven a a We open the will Fleming's and markets. California also opportunity in have growth leader the performing X additional to be source Florida, of is for Fleming's and company.

look are outline in development discussing February, new building We a the quarters. growth the to restaurant for years. plan a in for coming coming unit pipeline increase In forward actively in the and meaningful this growth will we

Recently, the trends. turning in Now in product industry. QX have to regarding restaurant current been there shortages discussions business some

work of have relationship we strength team, and the Fortunately, supply any encountered with hard suppliers not our chain major because of of the our the shortages.

manage supplied growing the actively industry to network consumer ensure appropriately also restaurants to around discussion in with of been our meet staffing are continue We the products to There's challenges. demand. the

our significant While people. immune not we are we made to in issues, these have investments

pandemic, we and instance, among the retention scores engagement the the best in This the For industry. employee to furloughs. contributed that did decision or has are layoffs any not have during

to that is our and our turnover industry averages. addition, In hospitality guests our better expect. This enabled us than deliver customers the better serve

Combined Now for XXXX. sales up U.S. X.X% July. update. QX up versus started The were comp through in a sales quarter strong

variant. traditional over and of delta the moderation from resumption concerns August, we seasonality the in However, saw some

that to Outback Steak Steakhouse. at Shrimp promotion a XXXX Additionally, we we ran at The promotional made chose in Lobster replicate Unlimited offers Steak the include to the discounted & repeat significant decision not not for activity to & $XX.XX, tied the X offers XXXX impact of last third-party traffic early collective our August programs These delivery channel. of the points started in XX approximately and over XXXX. and of the had QX of weeks price percentage launch

Although in there not for promotion were company did merits current activity, repeating to this our environment. XXXX this make sense the

The comp not activities from In impact basis decision We are carried weeks U.S. quarter, restaurant-level first done it was of impact there versus by spend to U.S. in a positive this lapping X points have XXXX into negative promotional our Through adjusted replicate did QX, sales While fourth profitability. operating XXXX, up the on margins promotional traffic XXX the impact grew of XXXX. a QX over fourth has quarter. the XXXX. be mid-November. heavy X% should in

These Importantly, industry, our possible confidence the our team momentum in business. have the employees the thank the company. members us like support at without been to restaurant to the and I the gives which in talented center. would sales of continued throughout would hard-working results not outperform the dedicated and restaurants

terrific what our successful. levels the In serving and summary, was quarter. ruthlessly Your against another of We is key executing experience with hospitality guests on our so remain focused makes initiatives. service, highest restaurants commitment QX to

total our turn will to I and QX the on will return. preliminary shareholder are we optimistic what who and with expect to for capitalize provide Chris now about We detail And XXXX. on continue on over call to ability that, these QX, drive provide more opportunities thoughts

Chris Meyer

for financial providing Thanks performance recap start good to the fiscal everyone. XXXX. of by morning, Dave, of a and I our like third quarter would

Total our of in X.X% performance. impact XXXX. results, billion, in context fueled QX which the against the in down increase X% was U.S. were The revenues today Given increases Total in was XXXX, compare of the XXXX, and up check. quarter segment believe underlying QX. revenues driven segment our significant on revenues of decline international continued versus $X.XX COVID QX our which most had off-premises XX% third X-year COVID-related were sales we discussion provides a environment better from sales higher on an revenues constraints in the Brazil, driven basis. international were was improved in headwinds which in by by average Total capacity by up from will XXXX to U.S. This

we As a we QX. were X-year on I the for trajectory in is unit have the now the of as far coupled Since thus early August X.X% closer late sales sales in in July $XX,XXX weekly impact Average we a In improved weekly momentum with will emergence seasonality. call, much sales volumes week. up of per average were as dipped back QX. volumes moment, per in into resumption to week QX the down have basis. of did last week September U.S. approximately accelerated middle number Brazil the September, range sales in traditional see the earnings how unit delta discussed variant, $XX,XXX from some finished build discuss per volumes seen That U.S. comp $XX,XXX and $XX,XXX the

XXXX combination average sales promotional a our entirely by unit in gap average gains versus of discussed, September some almost end of were XXXX. weekly of consistent the for versus by and degree comp October, a unit QX XXXX volumes traffic Dave compression did to As XXXX industry into context, a we driven July. healthy average since maintained driven volumes sales have replicating check see the XXXX and give additional larger activity. not To

check actions. a degree, increases pricing in increased mix, and driven XXXX average were to reduction in Our a menu by lesser discounts

very volumes was sales In and in sales has Carrabba's. which Turning revenues represented This were of Outback to proven XX% business Off-premises off-premises. at off-premises in-restaurant impressive slightly down even of QX, have XX% an U.S. as to from improved. XX% XX% sales, at of QX. only sticky be

held have All steady these in of early QX. metrics

highly in quarter. remained strategy were which the Brazil's of success in was ongoing and Off-premises start will Brazil our of Importantly, QX sales our revenues QX. remain a June, grow COVID large third-party part of part moving the down continues cases Brazil business XX% X.X% forward. U.S. was a to XXXX. and key comp third elevated growth of incremental versus is delivery

to case average Brazil increase began the As the an sales. at XXXX turned in increased versus vaccination beginning counts the August positive past over sales are weeks. X% rate saw Comp in immediate up XXXX we X on and moderate, versus of and

ability Brazil to confident environment. Our the their are level, team navigate current execute continues we at high in in extremely an and to

to GAAP versus was other As $X.XX relates performance, the for aspects XXXX. diluted our in QX share of earnings it per quarter $X.XX financial

the of a our diluted payment results earnings sales QX $XX founders XXXX $XX is royalty stream onetime for income per from was quarter. million. income during by operating in adjusted This Our XXXX. our adjusted Adjusted versus adjusted the profit to our company. from large per $XX was exceeded into quarter in acquired item result third for QX recovery, $X.XX our driven of income results. a versus represented X.X% our lower This improvement share include strong was This record efforts significant made we Adjusted operating quarter expenses. drive This Adjusted to as in diluted efficiency earnings Carrabba's million share ongoing remaining of the marketing their $X.XX and million. excluded performance X.X% operating XXXX. business was margin

XXX favorable The In was large points significant waste to labor XXXX in QX. and XXX COGS for was of in adjusted average QX primarily terms reduction basis on unit by driven leverage labor to change our volumes points The in average check. drove increases favorable performance XXXX, cost category, XXXX. by basis line

offset a growth simplification efforts. in average were permanent $XX Operating to to-go unit primarily expense and from higher also showed points delivery XXXX This third-party marketing in off-premises. In in favorable fees volumes. reduction due in to by basis benefited This hours. expenses million food a up to reduction addition, XXX increases the was prep and supplies favorability in we related

includes front, million of initiatives down detailed from benefit we that This net have On XXXX was of on the prior cost G&A savings QX ongoing adjustments. $X.X calls. the

end capital In at total the million. of terms of our $XXX third debt structure, the was quarter

ratio is X.Xx. Our trailing lease-adjusted XX-month leverage

evaluate ratio enhance value. significant further net debt to reach targeted shareholder making other of paydown debt-to-adjusted ratio, EBITDAR. or we targeted Once cash of leverage progress will uses towards our are We the Xx we

QX to Turning guidance.

We revenues total at be expect billion. least QX to $X.XX

unit As QX. volumes indicated average we first weekly been the averaging of earlier, have $XX,XXX X weeks week I per for in U.S.

excluding in approximately Our for guidance the increase revenues to assumes for unit average quarter, U.S. volumes the of balance $XX,XXX total to week. the Thanksgiving weekly

QX Thanksgiving than reminder, due a lower a the operating volume day. much is week lost weeks week in As traditionally other to

We at to least million. $XXX expect be adjusted EBITDA

represent adjusted EPS GAAP versus would at $X.XX profitability expect to significant We least EPS and EBITDA $X.XX. at be least measures for EPS levels with growth XXXX. These of

EPS out adjusted U.S. optimism in quarter. quarter bullish fourth the current and our they finish guidance $X.XX. XXXX our more Brazil a was We continued as QX in reflects perspective, For outlook on believe performance our their for

In be have we terms to of guidance, need year updated. full items X XXXX that

expect X.X% approximately inflation we previous of First, X%. versus commodity now to approximately our be guidance

locked on seeing into lock pressures some to are unable we arrangements. beef, Although are are in commodities we longer we that term

inflation driven given landscape expect to our pressures increased by Second, labor guidance we efforts. largely of versus to retention X.X% as be competitive now X% and is the training X.X%. as This wage prior well increased approximately

although commodity XXXX. it and initial is early, some I Finally, to on provide labor for wanted inflation thoughts

much on in XXXX February. provide fulsome guidance will We more

chain We given is of elevated approximately currently strong seeing market expect across shortages to demand The product supply be commodity commodity XX% consumer and to inflation year. proteins all next disruptions. levels inflation due

are increases across input higher packaging contributing addition, In to and fuel, well. freight as labor, costs

minimized has elevated XXXX next favorable expect to due risk in year. we supply to work chain into the of inflation and great see these this been team our contracting, While continue of levels

have positions at in we significant We typically any early decisions as taken this December. not in these contracting point make time

labor competitive we are is labor will next And We on highly the additional to in will higher believe provide wages in legislation, remains in impact market the recent the this to paying addition of in digits challenged. February. lead mid-single that inflation call The year. visibility environment. We a

technology-driven labor headwinds. pricing reduction, to elevated confident Brazil. include that have While the opportunities, will and we recovery historical offsets mitigate overhead to be from inflationary these periods, a in productivity commodities offsets menu we pressures significant significantly are These and relative

X% In terms a taking late of we pricing, in November. increase are

As material increase taken a not late a reminder, since we have menu price XXXX.

to long-term there that that operating actions. XXXX, And earlier variables laid current we out of into the continue we heading onset potential to shown can for achieving will many ability committed the for to landscape. the margin changing although Since adapt pandemic, framework pricing constantly X% monitor a investors We inflationary trends year. to are are further change have the this we

XXXX well inflation, another details call becoming up We the for for and on guidance, with our including Bloomin' that, margins more provide call. will on this we will summary, we earnings In of to company. February better, our was a in And questions. successful the are Brands, aspects all and quarter stronger capital operations-focused sales, open way

Operator

Barclays. Jeffrey first question the Our [Operator line from Instructions] comes of Bernstein with

Jeffrey Bernstein

one think wondering those And 'XX, expansion more committed about cost margin. mentioned cost -- the we're in considering to despite your the seems seeing. just still question and to see talk like you the it question achieved. pressures can one had this I headwinds? follow-up. achieve margin your you And are fairly just recent be margin be guys X% in then and I'm for side achieved then I in the confident It I'm targets. possible of one your is things. you follow-up, terms of on if operating think you structural the confidence in when And ability timeframe specifically might wondering headwinds combat to margin to the

Chris Meyer

It's Yes. Jeff. good morning. Sure Chris,

as of you this. construct way provided year kind on that the come in get commodities think it's first the more all, very the like you about could about right? about labor, XXXX, think So of when give guidance think think and in it we'll But of call. guidance to we that have together I the early, given we to you if February the XXXX,

inflation inflation typical $XX of going more maybe start mid-single-digit talked for little about, headwind. year. elevated inflation, $XX million that you that that OpEx, And maybe you're headwind in If would than with would inflation, you million. $XXX a be represent add then to another of get about And if we us normal, commodity XX% cost another next million labor

about all look that all, been of So we year we're to to of that's thinking a that that about keep we've have you in if next would framework $XXX how the construct million inflation at discussing. in headwinds offset it,

upside help So told $XXX take, question a Brazil. guys pricing taking about that's that we're just also it's going right? get the then the million to offset or we and you, of Then talked menu we So to million. offsets, $XXX X% of give you already

tracking $XX XXXX. context new year. the the last in for around In breakeven Brazil. Brazil years. restaurants of And over to Let's give added they're now made million they've XXXX, couple

offset we're not So a inflation incentive we year other year, Brazil There more the compensation pressure. to could necessary. believe the necessary, again or a holding a help if inflationary then operating in opportunities on could our path tailwind us, next pressures beyond represent to opportunities to you overhead productivity when between X% add all still taking and of up, absolutely, menu are of we a see offsetting that very levers reset significant And we pricing, little those there's have that's next that that if margins. front

that business. Now a still think and a lot little asked get we the that that in terms visibility you But once comes we'll marketing we the into ROI question does that how there's season. back traffic when fit more is into more and about better of holiday had February where get to the in? past in Well,

good that thing, for I inflation important feel of about in our us. manage our front very pressures and see that for investors to ability the we is think, The you we

David Deno

to the Yes. add I X% Jeff. very too, just want to margin. We're committed

is If you look their numbers, operating up at significantly QX our profit XXXX. versus margin

discussion, significantly QX our XXXX. at versus look You up

the got place to levers we've happen. that in So make

Chris Meyer

year think that different question about hasn't keep end at ends recovery one to is in started in if mind to QX, what's more of QX their I yet in full the you Brazil thing And QX think the about November. just Yes. add because and the effect

full in menu until into QX. weeks next That's that benefit. that discussed about a get pricing why the going might see X margin get muted And what the We effect not Brazil. year. benefit is late QX than we're little only we've to more doesn't the So go you of of

Jeffrey Bernstein

year seems absorbing Understood. wondering Dave, are my what seem your is is higher like brands, which and likely. just seeing of And obviously range follow-up outsized you've just multiple close incomes outlook level, then I'm of unless broadly and 'XX. this consumer wide spending inflation that a seem everything, got the would consumer. just on sustain seemingly that by is and to your It prices the with more hard growing to overview on on therefore doesn't maybe into consumers.

just your this check in see how from you the pullback wondering, of When I'm does So a out? a perspective, consumers' reality spending play maybe do from terms perspective?

David Deno

we gains Certainly, goods, can the just get you Fleming's performance it robust they going by team. in-restaurants a other call holiday Fleming's, hopeful and outsized a if If services this are places. they to for you sales see Carrabba's at season. at can't very And instance, I just can also that people enjoy can in get business. is and the on the remarkable team, what's want our And look

little talk to I think, a XXXX. it's too about Jeff, early, So

the We through. see have flow to pandemic

We But consumer. the we company a remain and in really our with as optimistic have good happens restaurants. to see what demands seeing we're

Operator

comes Brian Mullan of line next from Bank. Deutsche Our the question with

Brian Mullan

deceleration fourth Just in on the a versus quarter question XXXX. sales the

helpful. and sounds up Bonefish activity like Carrabba's to you're like well some through of third quarter that ran Outback of You in trend. the a have weeks. October as at slowed It it couple looks That But relative ends in lapping. promotional the was

X activity to promotional only Or that at were decided to not there brands also specific those you are So Outback? those pursue?

David Deno

Bonefish that There of do we this the definitely most things year. to well we promotional not opportunities. did elected Perhaps at as were

of Fleming's QX. remarkable their some in just numbers growth as the Carrabba's in sales But seeing the numbers. are you're So that same-store are

price again -- offers great. we to & Unlimited and at just ran Steak did some But Outback remind delivery gains and mean, those -- have the we channel. the new of in QX everybody really & tied about Steak my a QX talked sales to we I $XX.XX, XXXX, of in piece kind Shrimp for So discounted we Lobster And quarter-on-quarter is year-on-year discussion. to

brand how that's during want build for we Outback, traffic, in XX to You -- points those up at the add the substantial in in long to and we run we the percentage increases because time decided during company the worth that and margin support period. brand the term, all and had

rationale. the of some that's So

Chris Meyer

promotion. relative thing back and did LTOs. you And run if difference The is XXXX, Yes. time Carrabba's big an would that mid-August They you're only between what I to Steak effective & between And real driving similar X the they the offers and ran ran and are some we you're a but run, very other that's the Shrimp that what brands. discounted to looking at look a maybe the maybe to is at at the they add limited LTOs X in price, promotions Lobster most the Those at effective traffic-driving at are & Outback. then Unlimited Carrabba's, Outback that Steak we the delta mid-November, seeing albeit of Outback between traffic.

Brian Mullan

level? then you follow-up, at targets, those you going as of those this you understand way? decisions And decisions? with operating your to pricing those top that not discourage on Just maybe at X% you And would pricing trying that. in are months in pricing manage the on the top think make making of as of they are us Meaning, and restaurant you're margin from should calculus to part the the decisions make Or business took, look would way a mind? the about just -- just the how that's decisions thinking right that coming specifically in to X%

David Deno

X% Yes. to Sure. a we're as going company. is move a stick us forward and for to margin Well, target

X%. value the our or and not to can Chris beyond we want to many in price we inflation. our want everything about have talked to that take want offsets productivity that, plus pursue we to to pursue possibly I We We Now need traded in place. mean right? levers keep pricing company

into Brazil Chris the our initiatives in restaurants But in technology Now of objectives. the come things side, if economy on come we've we as need got back, some objectives the going to, course all talked of margin help our of unfolds. those our the some about profitability achieve and play opportunities, we to the will,

Operator

MKM Our line Brett next partners. of with question comes Levy from the

Brett Levy

When about on think we've driving companies if on even you cost. How are of it's little like heard that holistically that a you positioning, they're share, labor streamlining you footing. costs the hit your trying of in terms sound there are solid really maybe traffic trying now volume bit of more right to to to some in focused of business? other where and leverage you're about And more a drive traffic terms thinking in get just as really opposed gain to and market that and protection pricing margins just from the out

David Deno

to always Yes. and want we traffic preserve gains our both, want We want Brett, we margins. right?

So the that's can what And pandemic, did. speak but we to we do. to I anybody. what to we're didn't let can't to speak I other we companies, anybody during didn't And trying really furlough go,

great look and at the the scores scores, to turnover if industry. you back, And already both engagement people when really employee came our were business there. our our compared are So

So we to grow manage to traffic, all that. profile margins analysts, job our is the have business. And labor and certainly taken I want do the of to will grow we to our you underscore definitely and do investors both, just and and the right

Brett Levy

gains give just region? any across consumer. the pockets or And any across incremental either question then on detail just Can the outsized -- seeing are one brands -- pressure on you you more of into the more variants,

David Deno

but they're look Fleming's Well, geography numbers, at Chris you we some remarkable. of -- the those maybe, -- can overall I to mean, talk Fleming's

the extremely so is high end And well. doing

and in really restaurants business. our numbers They're are well of particularly on the demand very a the fine great among Fleming's All and the are side, it's best doing dining. attractive

business of else. to. that's I know Chris, add talk want if pocket But anything So to a you don't I would that

Chris Meyer

whether the of the pockets Well, for where it's no, in there's more on in we those both side, definitely side And even little to the North to still the well. Midwest. the though, The this still a terms And Southeast, Carolina, Georgia, to Texas, states basis, Northeast in that players with Midwest, stores and the labor Northeast continue right? have we they talking for New staffing, the bifurcation, players, York cetera, regional on positive. really differences, volume. tend same the side. et Still sell and balance of goes pockets been strength But about, and more do it's issues we've State, Michigan, same are same we've not Tennessee, the issue as labor as a record, system. where had in have they're It's the challenging X-year the just be positive driving on continue

Operator

next the Stanley. with Morgan question from Glass line of John Our comes

John Glass

fourth in the that you just quarter equity do think a How quarter build average that do to Chris, reported think First, to fourth I seasonality? just way a about of the the average on a guide, excludes total improve? your follow-up. things Or of you promotion, lap that? And as On sales sales that quarter you assumption equity said basis? Thanksgiving. improving, assume Is function is this there you once

Chris Meyer

about impact lapping an issue up quarter going the just a in Yes. talking It step-up the terms overall if include on progresses. activity, It if of you in overall again, to you're not the step probably have and to just a the But really $XX,XXX progresses. week as absolute does both the it guide, that's about as goes And per quarter product is down volumes. volume seasonality seasonality Thanksgiving week. more of include of

David Deno

And John, the quarter, they're us. you X for right, of last the big just as weeks know,

great for We'll holiday but prepared last for the a X be big. season, we'll be so prepared And weeks are that.

Chris Meyer

weeks, been how guidance typical and last those and I it's many least anything year at together. there's so come is mean X for they this an a reason. but It -- unknowns over we'll has see really

John Glass

technology investments. equipment and about talked you And

you into I Can those of think from what my some for ideas wage able opportunity is some said this to what now, my labor-saving at sort that's of understand or that restaurants recollection we for you least of so maybe you dimensionalize nontraditional be notes. think inflation standpoint newer the mitigate that's benefits? how you on going might

David Deno

not and equipment to we labor do as an I'm competitive pace equipment to out. tests. It's us I'm the really John, as This detail extremely we can people get to -- is ready but far what I'm to going Outback, Yes. into roll. help the labor think getting as moving cooking not be, for forward can what the optimistic manage reasons about great

that's the lets chain the We're will will chain also can. comes but in-test. be to table is this the equipment lets is equation, So have for not sales and rolling the in as or of cooking This so better, us a pietree. just from us a turns faster, -- the It's And we supply part out standpoint accuracy out improve. the place you as equipment quickly go. we this supply product

of coverage. lot house, have and restaurant the a the On companies have also have, front technology-enabled servers we our of can there, to table help greater like products we

But going will details the along are part So and much place parts be -- do I'm on not for in that well of to beyond. into get what have and the we XXXX our know labor. just how that plans to pieces, will initiatives that these and X

Operator

Gordon Our comes of line the from Haskett. next question Jeff with Farmer

Jeff Farmer

staffing. Just a on follow-up

headwind X% quarter that constraints. sales capacity you quarter. by concepts? drove of roughly your the of level of out dining see to pointed Did Driven to same-store in your play staffing a the One casual that any shortfalls, any peers across dynamic for X%

David Deno

we in kind and stuff talked and we let in the paid values had Jeff, headwind. that parts so things place and that we had seen practices we to really we anybody for didn't the payroll the go our we've during of didn't. us, the some really got and of the things, haven't that There's and manage But, we No, pandemic, about pockets of of team managed. off Chris country and

Jeff Farmer

me, then the reinflation XXXX. for question And in core mid-single-digit so wage Okay.

just market-by-market of increase attracts little are just you getting basis? are on that level across a point So additional looking for sort components that a tackling wage wage you you of an Or moving employees gotten system? have How where in mandated forward? your the it, to Florida have the the here. but about that a color wage There's of a beyond of you terms across on thinking tackling in rates piece system,

Chris Meyer

It Every elements we has No. national a of play a different to a It's not market, really thought. market to. in have is market-specific market adjust sort that thought. by

that really across the So it certainly pressures pretty is But are out way seems it a thought. country. is national that is it like systemic playing not

Operator

line next comes question the of Ivankoe JPMorgan. from with John Our

John Ivankoe

curious elimination helping was dollar Did of about saw you the quarter third that guess it also profit. profit? did Is quarter traffic impact I XX% those that the you think I apply to from help And also the the October? apparently dollar promotions. fourth promotions

Chris Meyer

Yes.

of runs the So that ran right in one up the way did through -- the Lobster Steak the that all November. we promotion, promotion XXXX & middle discuss

that was that certainly the 'XX, that to So is not something Lobster for that discount given question no activity positive replicating profitability there's continue impacting with sales a & Steak comparability margins. that same-store promotion in see impact And and we Outback. the that has associated on

John Ivankoe

think I October Interesting. right. Outback comp, All I secondly, of which a focus the Okay. think industry. to -- are on going some And is underperforming lot that people

-- kind XXX% operating or the challenges we that quarter didn't incremental or the hours, maybe more just do that industry? understand So question, that bit staffing are I to what want you XXX% in you may think it necessarily what cause relative just the to see promotion. of asked incremental saw be, to due try is month any than about more change have October of that some little Outback in trend that of this a I just And you to third you, I in seeing to

David Deno

I if about OpEx John, may, I Sure. with the respectfully you disagree piece. may

per be continues very a weekly on to basis. week look consistently XXXX good industry to revenue Outback, If and outperform at continues it the at you in our

about So good very that. we feel

tied difference and spelled which detail clearly we is that's great the in points percentage out traffic. activities, XXXX believe to So XX in

So we we not replicate reasons. -- feel and But good revenue that about where look trend, you for the Outback overall chose we good many at to if stand.

of the not seen the On part second we that. question, your have piece, incremental is

challenges, but shape. we're of Our good staffing in some levels, have pockets we

John Ivankoe

something 'XX, I of And as about half, Dave. And there's half do for could normalizes X ways "hope" you be XX%, the very of such And year number look we the for mean, 'XX? I commodities, a in Thank -- in great worse number is we recognize job be it in unbalanced think different XX% clear, couldn't it your that October, and we basically you're question difficult I first why think I as guess, first that the where then kind did you comparison have secondly, something you're in When a XXXX. is obviously commodities? very kind worse obviously the team in have quarterly a then of year? but than right materially even I clarification. why if a Might second I the 'XX. same half second expectations of the at we asked materially you half to in mean, 'XX be about have mean,

David Deno

the question, to John, first turn over it timing. take I'll I'll about and the Chris

is outside supply in haven't we December. right pasta, market look us, of have et That's concepts lot we do have work the completely done chain And beef. we basket XX% that extremely For seafood, yet. a of finished think that now our always cetera. and We've we got accurate. We

so just translate inflation basket you you entire can't can't of -- just not commodities. -- that know translate into John, that, doing the beef I but And the you're

baskets out But commodity the of know that to that that over -- us appropriate. muting are aspects other it that's we there's think bit. I'll turn we Chris. we So is a guide what that today, XX% helping

Chris Meyer

would in again, X/X first is in the about maintain beef. variability locking commodities. that year there's it's thought lock of beef the the XX% is potential always of for we -- to think that think XX the of in half guidance we the the half, on how full second and Well, overall about And that way takes the no only would I offer, out locking basket. flexibility we we're dynamic. and But we question, commodity some -- our that try thought in, for But

about bit elevated get a out dynamics. more you be the year. opportunity So as the there's for little think and when going if first be the to we And of full I But to these first the realize in first some because get in second the because dynamic, think to off 'XX more year to absolutely hold may price in lock holistic, half, would variability half takes you then advantage obviously, an opportunity is of half. half, do level of then of these back inflation lower if some back come half second elevated It full these with a try the a take that for that. lapping the lot a of there half, the there XX%. little bit we in conversations, back we supply But goods thought we'll the the would of half, the half below a we a down of commodity little is unlocking of from into get

John Ivankoe

don't chicken from And you we talked 'XX and for think haven't the ever risk a perspective. talked about to if versus poses chicken -- we've a as I you potential in in you where a that remind us 'XX? contract contract Can are commodity

Chris Meyer

year. about was that thing it the more elevated this was annual, It's one chicken but

where year So that to or be that expect XX%. I think chicken guided you below we at can next either

Operator

Garber with of next Sachs. Jared comes Our the Goldman question from line

Jared Garber

couple of has rightsizing you're some looking the X% flow price or over to proposition. Chris, last headwinds. encouraging that Can months value you've you year that things activity think through? brands about help it at inflationary of the about pricing here. been the And got offset to that to Obviously, will the of frame a was one kind Outback I where hear of think XX

So sense X% I brand? get the how a to you're that of across wanted thinking just about

David Deno

Yes.

headway very with So year went we at brand looked to we And take look by Outback, we both do. market by We take what accurate on brand look brand point. when pricing. to it's and to going we're significant a last -- a how as products we made

take so price And to do restaurant be what adding to up we'll And specifically. competitive get we not for right. to stand look our exactly X%. what as our in going chain we we're each some each of prefer where the to reasons, we're might at have. about we that going of pricing opportunities Outback overall, into how various ports We to but by to do careful going as There But together, we we're equation at differences we're I'd the it customer -- do do and very -- get our there. with -- value you're that

price taken since haven't XXXX. we Importantly,

we to front. the pricing certainly that saying got position headroom not I'm and so are a we've kinds in all industry on And of in opportunity price, good but take the

Chris Meyer

Yes.

took we price new and with at preserved -- the of So we of Outback decreases menu. all the tenants the

lowered stakes encourage the for the and example. between the prices to X-ounce trade to X gap, we our We Just example, an give you on preserve X to up. gap the reduce that

again, So where -- the the price set all the tenants still of we landing. we with as reductions still competitive believe and our is lot are Dave the a that below of things is inflation, this well still is did in said, And Outback place. pricing

Jared Garber

can but XXXX? is And now this of just you margin follow-up. all activity remind the quarter, right spend and versus marketing the I color then marketing appreciate level quick one help where us

Chris Meyer

Yes.

consistent. pretty it's been So

I a think overall QX, below. million pretty $XX We've X.X% in X.X%, like kept in we're gap just sales spend. of consistent

supporting consistent of pretty things been we're LTOs but is terms Now year approach the we versus of course, how the that the XXXX. it's and different, in

Jared Garber

you Would level expect to into that continue next year?

Chris Meyer

that spend for the line sales we're margin said, spend. if doesn't framework, and long-term key business, would that's We've we That margin year It going top is including approach X% we just depends marketing is. we've headset at through level where to the I our think that lot look for play going expansion depend of is marketing, got same next now always the where you the longer Like increase Yes. that marketplace mean growth. X% But do to to on factors, margin XXXX. that the we're our growth things It consumer said, to range. term out. a the in term, reserve that really believe in unit stores, of right house same-store healthy sales potentially sales of going longer competitive we order, on of

our just in when marketing question a be to of on. investing turn part that is of over so time. that engine is back going And It we

David Deno

have we from And the digital in place. marketplace, on and where investment, learned seen marketing progress add, return spend marketing, in We've that pandemic, to Outback the we've a want made lot come that. just opportunities to tools the the our significant during the about app

So we've we but going there's place this key to of we that marketing about happen. about forward, have the looking talked And at, tools think we things as that the be some a lot make learned. will Chris in

Operator

of the from Russell comes question line next Alexander Our Slagle Jefferies. with

Alexander Russell Slagle

On we margins? think off-premise overall is stronger if Or about you as third-party off-premise road? that how delivery then the curious down wondering level? the to profitability to for further is close the in, room margins And offsetting parity? improvement lower the carryout should just continue delivery just there Or approaching stable dine the this this profitability at see

Chris Meyer

Yes.

your and it's the first going little there. of third-party was lower your a Yes, math going curbside the to part lower So experience. third-party and in-restaurant experience than question be to the is than be

us curbside given of little labor. service for of important lack in some just is margin, The experience the a in-restaurant actually our thing the is better than calculus our

prohibitively and off-premises honed again, our the offset not some -- and curbside vehicles, that, have margin help give third-party I it and the lower us help refined of for opportunity, to on the leading offset low. a got pricing mean, some party. us with is margin does profitability to third remind little that. third-party it the that So way everybody extra does I in of think we've really I But we

pretty about we feel margins good are. So our third-party where

David Deno

On new customer we're front, clearly sales seeing there. the third-party a

when they that by they're we're channel particular and they the about order, is growing, ordering, opportunities the of You tell how can excited future channel. what order,

profitability is our on, obviously I'm keep we'll company. has a and close for eye the glad that into something very that come shape really So

Operator

Vaccaro next Our question from line of Raymond comes the Brian James. with

Brian Vaccaro

a trying I of consistent sales on case if just the U.S. comment? gap on July. bit? weekly that sequentially specifically end maybe overall week back maintaining were positive and through or since seeing improved you just what sort through a Outback weekly Is to you're in see in Outback little September? How I'm at a expand frame an wanted Just could versus August October. average you mismatch. that for of Chris, volumes Can that about recent you you circle the has just that much trends And And and to seeing comment sales think that promotional the $XX,XXX kind made is that

Chris Meyer

Yes.

to So help get -- I'll handle the Dave the first we'll second some one. answer one, you and

unit to volume fortunate calculation Black we're So average provides Box industry strong have X and in Box. KNAPP casual Black really a benchmarks weekly for dining.

has you we Outback's shared our that earnings If to weekly consistent compare that July gap volume benchmark stayed since volumes, unit last call. results average on the

I we'll out of to sales, level The off-premises then actually of as in be saw on they've the the stronger of a pretty total continue at and about consistent like talked terms So the we and high what us noise Outback -- Outback this promotion is but sort it what such -- And company business, the that from saw period. Outback you the the the calculation strong consistent. sales has Well that story they've bit total pretty portfolio. the about time a the we takes second profitable. of XXXX been maintained, comp maintained with because throughout is for that piece honestly little same Carrabba's of -- takes to progression it's the confidence gives get calculation. that's what

Brian Vaccaro

for or All terms the imply commodity inflation? quarter does what or right, the in commodity And guide updated fourth was the quarter of great. And front, fourth helpful. inflation? does what annual what QX what the on That's is

Chris Meyer

Yes.

were jump to QX, QX. So X.X% and in would in they X.X% up commodities

Brian Vaccaro

think these perhaps roll you source to to moving me. about equipment technology units ability number items around Great. 'XX for and your reasonable the chains last pace to given tight year. just next world, supply to or these the one speak of you changes the and through a 'XX? And I see then opportunities And ask a can you just wanted into could you into what's and

David Deno

little better, as And the months. works more I thing. we'd on The on the side. is the up supply soon chain next think to manage don't know, we Yes. understand labor. piece. something time important premature important possible a that pace. to supply over and restaurants as that helps the That's I we most like us in It's but experience we'll see That's like I'd it working. though have and customer that roll got and quickly can how know improves most a the equipment we've little move thing but we XX chain the the the to Brian, challenge in it's get a

Operator

Lauren next comes Our from of question Silberman Suisse. line Credit with the

Lauren Silberman

to steady versus Or where Can on-premise And and did business? sales for the the mirror XQ? off-premise, and a quarter does on-premise dollars XXXX? are with you talk stay it about into sales overall transactions you you trend throughout similar see

David Deno

Yes.

have in-restaurant we grow the back dining as to the open things we're and standpoint in-restaurant be dining think as our in. still we back and moving an customers get up tailwind us holidays On more coming could things, that rooms from to actually side, opportunity used about a a of that And for hoping forward.

rooms grow overall third on the side, seeing and the delivery So in we delivery side is advantage of. side. business, that you Chris, out -- off-premises on is to to dining our carry sales We're and in job there's side, the on our off-premises the the add especially on dollars. But some if color grow job, and capacity details. carryout then could still some side the especially that can And the the take party,

Chris Meyer

Yes.

data So that might of a be helpful. couple points

down So our QX were in sales in-restaurant X%.

data as from still quarters, Dave tailwind seen real is standpoint couple that curbside has a the opportunity. last bit. we're getting off-premises The buffer, talked from nice about come improved our a that back volume obviously, of point little over real nice a OPD have So one you in-restaurant an

third-party one is us, exciting know piece that that's we is incremental is steady. The very the to pretty actually held and piece, which very

the In at actually actually grown. it's weeks, over XX% it's last of It fact, now X sales. was --

So is pretty us. it watch because something out continues to grow, and to that for for that's exciting

Lauren Silberman

supply transitory versus some permanent expect the the of versus elevated these levels? level as near think levels, Great. beyond the about come cost understand to about what across more what cost these And of do increasing of to a think the labor commodity normalized we just term, given nature you from how chain, then trying you'd down sort is inflation from

Chris Meyer

Yes.

really seen. be commodity does It's side, On to the it very remain elevated.

perfect of as overseas have storm overseas. as You very U.S. high high supply both and demand tight demand, The and this well. the in

what's in spot that's the we estimate see that pricing. the first you and have in demand gave but long out going we beyond markets remains to the how we're to current wait be about remains with reflected It look, XXXX, pricing in But elevated current that So good the that these and half level seen that just there. visibility of see. feel to of

Operator

line Our next Fargo. Wells Tower the of question comes Jon from with

Jon Tower

follow-ups. Awesome, been answered, a of have couple lot but

particularly growth, and what's unit and Outback Fleming's quarter the mentioned the first in at for foremost, buying Just And second, idea restarting and of then that? had rationale Dave, you founders timing the during Carrabba's potentially in the the around the future.

I commentary me. margin? then -- also, return growing. is was one, EBIT cash-on-cash And Bonefish. your you but the term absent longer what hoping, noticeably store excuse thinking EBITDA of around like about offer Carrabba's So or metrics brands growth just targets could And prototypes in new expectations? the And X% around and your some sort of embedded and you're with Fleming's, then margin, was It that Outback

if So I'm to curious there's anything to know into that. read

David Deno

I for bought brand simple extremely But We I anything. the I'll great if company. best John, the reason. Carrabba's royalty for can, do the value one we unpacked, lots doing is on the miss so a piece, It's well. --

relationship going moving you it smart one and to right that's All would with see see, got great that measures of get full doing As to the was a you're for we've very business, the decision well our now. And the company, benefit enjoy extremely forward. indicate financial founders. a that profitability we

very why. we're the think going unit prototype to opportunity, new in it. going our see tell is significant. talk about you we have we in the call, enabled, volumes costs, rolled high unpack Brazil to can of has we're say that we million, and above for expand talk the and million. test a some and the have number more Outback being returns footprint out, unit in very February. we'll brand with seats that opening U.S. there On and still to volumes development the we're a to talk that our February returns, the has associated costs that $X.X and our that is about of units We're the In view the can going relocations I which in I delivery about average smaller we're that on large new are and $X opening off-premise

and Flemings, very we didn't Outback. I extremely not and And So and good about Carrabba's the to Florida, California that and Fleming's continues return. our in attractive we're because we're extremely Bonefish, have right performing right mention far business priorities now and mention our results speak feel well now to doing brands and is But a very, themselves, expansion for those the see. we'll it then in Outback could very but and the U.S. enough well do news, other opportunities along well. future. remarkably then are Brazil are in

you Chris back at expect bounce be margins, that the out, we that our business way be, you in we have we rapid position look laid company in in a that really in good Brazil if the as the side. of will the will at QX, inflation if business, of year it'll expand, XXXX. some look headwinds one look the to at offset some there we you the on have out And in If opportunity market the

Jon Tower

were And the P&L? following that you just it on cost the royalty Carrabba's on sell was it the And or Was up paying? the the how on side did piece. side? hit What

Chris Meyer

Yes.

It operating hit in-restaurant so expense. was about royalty. it X.X% So or overall

another So so. the up, margin million of -- that points we're XX from close royalty, will to on call to which basis annual repurchase basis $X of pick that or an going it, add

particularly moving is a bottom is given really efficient to I the it forward, performing. way line very strong how a, add think, So company us business to for that

Operator

like have end back question-and-answer closing David for over to we call Deno gentlemen, today's of the remarks. and Mr. would to turn I Ladies this reached session.

David Deno

everybody. Well, thank you,

a you. the For we forward were our and providing we look we than today, completely we'll some measures. XXXX. this on in about XXXX up XXXX, and And XXXX. in until wrap to company February discussion exit February talking you the results XXXX, -- on call, QX Thank about our many guidance will different discussion QX to

Operator

today's This conference. concludes

the time. Enjoy at of your participation. lines day. disconnect this for Thank your may your You you rest

Bloomin' Brands (BLMN) 2 Nov 212021 Q3 Earnings call transcript