Bloomin' Brands (BLMN) 29 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Mark Graff	Senior Vice President of Investor Relations
David Deno	Chief Executive Officer
Chris Meyer	Executive Vice President & Chief Financial Officer
Jeffrey Bernstein	Barclays
Sharon Zackfia	William Blair
Alex Slagle	Jefferies
John Ivankoe	JPMorgan
John Glass	Morgan Stanley
Lauren Silberman	Credit Suisse
Jeff Farmer	Gordon Haskett
Brian Vaccaro	Raymond James
Brett Levy	MKM Partners
Brian Mullan	Deutsche Bank
Jon Tower	Citi

Call transcript

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Operator

Greetings, and welcome to the Bloomin’ Brands Fiscal First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow management’s prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Senior Vice President of Investor Relations. Thank you, Mr. Graff.

presentation. your begin may You

Mark Graff

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

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

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

that, first our highlights, open provide up financial overview an completed today's now we'll remarks to to call to we've recap I'd these David an During like call the over XXXX fiscal the call, questions. update a company brief quarter and performance we'll turn of with And Deno. XXXX, for of the guidance. for Once

David Deno

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

XX%. $X.XX per morning's in adjusted share versus $X.XX diluted this XXXX release, earnings in noted earnings As QX XXXX, up was QX

our company These the sustainable clear without and to commitments leaner, QX and and concepts. our tied customers. support have better momentum This more is We and possible plan comp not reaffirm one dedicated on even across would the work operation-centric focused on taken strategies food over ability also in sales to good build hard growth. are to positive the last results We serve restaurant a years. center. with talented It's prepared comprehensive company, and has the employees few in even sales our restaurants a that in providing place key directly saw growth planning all drive the been deliver working and stronger,

guests makes Your successful. our what level to commitment and is providing the hospitality restaurants service so highest of

we growth. deliver the build against momentum to As the the priorities following focused first upon we on sustainable quarter, from key remain executing

investments over sales showing First, improved elevate made grow service the at especially to improving in-restaurant customer years the customer and experience past by social The offerings. are Outback. food levels in scores, and up

new continue execution improve effort, to As ovens, technology, as grills part out and simplify and to several this cooking rolling innovations of the for such consistency. quality advanced we including ways improve to business food includes productivity. This look to and

We our and display kitchen deploying technology pacing improve innovations for system further meal handheld customer also reduce costs servers. are service. These should and for

relocations base. our on, at million. in exceeding returns and volumes are Outback remodels While good is we recent continue this providing going lifts offering asset and upgrade all sales are outsized to Investments $X.X

outperformance. in and Second, are pandemic. held we're the were to US during off-premises capitalized business. delivery and levels on $X capabilities over with QX our our steady strong leading carryout off-premises billion sales XXXX. We contributing fiscal sales Retention

margins the in-restaurant result profit channel the This margins in two the to is were initiatives that are of comparable past quarters. this business. Importantly, in of completed

individual people offices. platters continue returning as significant box large also through bundled are to pursuing We catering our value for offer group and/or platforms, which We opportunities includes parties, options.

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

reduced the in-restaurant channels. targeted reliance sales higher by on pivoted growing It leverage and also digital LTOs more healthy discounting growing This costs. off-premises reducing Third, by across and return promotional towards operating gains traffic advertising starts channels. and margin spend and

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

to in to finally, despite become inflation, As we approximately achieve were and we've large objectives. Chris Last more In been channels. And XX% able total margin food US increases our an company. digital labor digitally-savvy of through off-premises will sales discuss, QX, Both even expectations frictionless year over implemented business. X.X the creating a technology million customer system new and enhancing mobile app are support experience, initiatives engagement. ordering and online while aimed a have new digital outperformed These at app also has downloads. our customer

for functionality features in more so as guide digital beyond. improve on and in activity a XXXX details momentum the many offerings. once restaurant taken app a stronger our for will You over unit we are These the have priorities position plans. begin our and growing and sheet I way areas now and in turn balance call we Because base business provide Mark to can see much meaningful of development we our responsibility will to to of the our again. additional expect Graff, who be recently a over new has to

Mark Graff

I'm been we business unit attractive ROIs. experience, economic less prototype year development strategy a we new the more we're expensive provide These near-term capture in model. the X% opportunity units in that restaurant accelerate growth the enhance as the over growth Dave. US. opportunities with initiatives can we markets the returns. to areas. each When the execution patiently excited pursue about particularly see to off-premise past we've smaller smaller, have achieve new the in parallel, with meaningful to fill-in years simplify outback Thanks, designing made strengthened enable believe combining we able the trade will unit customer to our portfolio, several the The healthy In believe discuss improvements growth across and

domestically that. without efforts these prioritizing are We

Additionally we'll Brazil. Fleming's on with internationally focus and

The we growth. reduced relocation demand South. a the and major opportunity indicator restaurants strength. success each Let remains metro me two in is This opportunity Outback aspects opportunities. We of the The house past unit of some five configuration the and building the approximately and We us $X.X the with category in the of restaurants. redesigning in design In of this million. opening back leading the also relocated are of for first Outback XX% new XX X,XXX overall incorporates We of rapidly million. the by sales dining in perspective of unit is brand opportunity Florida, the more areas other restaurant. restaurant. Recent room. feet. around leader provide lifts in Outbacks XXX this one size XX% and restaurants key opportunities. clear capture markets; that by still average brand optimizing these a can done about of smaller and volumes the be the of Texas included the the on building relocate asset in prototype following recent building We believe years, have markets by of new accomplished helps additional the we've ways: simplifying to to $X restaurants additional growing the the states an a square with significant believe over by program second, This new layout and in

experience and brighter feel, a Importantly, Aussie or we package did a number bar highlighting heritage. ambience, the redesigned a Guests will the while our compromising and guest decor that notice without the look of tables. new this contemporizes

the technology integrates million This strengthening personal of prototype Outback. new the and execution, speed, improves These enhancements. volumes. guest people back consistency the new and $X to expect million house elements are to $X front experience critical while at Second, support

translated sales, sites profitability. source in expected Fleming's simplification our our plan strong the from learnings And year current reduced XXXX. better also have the approximately growth. contract of and the provides volumes incorporating and open averaged actively unit finally, added a million leveraging returns. sales the and we is of are and off-premises Fourth, unit have $X accommodate among efficiency With our category This design. to Florida new three Texas have of and off-premises for volumes California, be important the XX% company. are the to At open top of We measures pipeline Recent new proven the we profitability approximately this overall benefits leader Third, expect Outbacks a by channel. we into to XXXX markets. with and units XX%. our Fleming's the we space building cost our six for growth double in level currently development of business are additional Outback efforts we're attractive We to portfolio. XX enhanced build highest enhanced that opportunity combined this will under profitability the into in averaging

the been we've on strength the always look remains for We building to today growth, better and in Brazil the positioned particularly we've are given quarters. the for never forward That pipeline coming market. actively bullish expansion. and been Internationally optimism discussing of this in growth

expectations. new Our units above to continue open well

this new to Outbacks The continue expect We growth. year of pipeline is strong underpenetrated this potential the market and XX business future remains for build and tremendous. a

to and overtime. XXX can XXX we grow have approximately opened We Outbacks today Outbacks believe

formats well such we'll addition, innovate as with Grill, airport kitchens as virtual to In also continue nontraditional Aussie and locations.

new in and pipeline. provide expand early opportunities we're to growth reach our the incremental consumers stages While these

while opportunities growth apply excitement Carrabba's geographies. We returns outstanding providing our will employees I'll This smaller also to for of to And and from the and them in the back learnings the Bonefish to This Dave. prototypes the and building now company includes leverage the our call creates opportunistically rest portfolio. shareholders. and core turn plan

David Deno

us Mark, goal. In another XXXX terrific sets this this on achieve providing up an quarter was QX update and to well Thanks summary our for initiative. critical

seeing, detail will business Chris remain on with year QX and that now raised XXXX. Given turn And provide we the who are we call bullish the to full over the thoughts momentum guidance. have we more I'll on on and

Chris Meyer

good a fiscal which driven quarter our QX the of in by start for in and would were billion a I U.S. Total $X.XX restaurant first by up everyone. XX.X% Dave XXXX, Thanks financial from providing like recap increase comparable revenues was to performance XXXX. sales. XX% morning of

traffic. X.X% in pricing in traffic an increase approximate Omicron last call. increase was came, basis a results driven and impact two X.X% variant sales Our The factors. and despite a increase consisted mix we point unfavorable from on earnings increase in same-store weather mix in XXX our X.X% a the discussed increase of that by in This

appetizers of and sales in and the First, there beverages. significant was items menu higher-priced additional trade

average year. of of was and In where check At XX% in of from revenues addition, flat revenue a this XX% US XX% year-over-year. in higher last drive it of in-restaurant US carries than also mix was Off-premises QX revenues QX off-premises helped off-premise shift revenues higher in US dining. menu in of This dining was year was channel QX.

U.S. to third-party continues and XX% XX% the was versus business grow Importantly, in QX incremental delivery highly in of QX. revenues

QX Carrabba's and XX% Off-premises remains part sales In terms our lapping ongoing final our of restrictions. growth moving QX execution XX%. of of part of Brazil reflected strategy quarter was and concept Outback and COVID-related of a performance key on large will was first XX% success forward. a sticky, note, up Brazil's is were sales. comps a the remain the combination And of strong operating sales. of

As quarter Adjusted was diluted earnings performance, other versus quarter record diluted it per in represented in to performance the of per earnings the our aspects $X.XX $X.XX This Operating was company. in a QX $X.XX per X.X% for XXXX. margin XXXX. X.X% share, first GAAP versus financial XXXX. of QX, share $X.XX was versus adjusted relates for diluted share earnings income in

the leverage quarter. increase Our sales same-store on in significant drove

to benefits XX%. a highly inflation addition, continue and Commodity what benefit up efficiency These XX% to was inflation be continues into up environment. In labor was efforts from QX, offset inflationary we our to helped in drive business.

both some be to on inflation XXXX. million the commodity Also, back year, we as and our of first XXXX. half from labor the year in As lap we QX QX half of higher inflation elevated of last were should we ease the marketing and expenses expect earnings indicated $X and in up this from call,

and ROI well to below Although reinvesting drive levels spending build both higher into marketing awareness we vehicles XXXX frequency. some remain we are

our previous our upsize convert Term existing It did this million use provides of our transactions SOFR retire additional terms this facility, us can and capital LIBOR allow currently from debt. capacity revolver to our on A allowed also This us that capacity the terms transaction but flexibility. we structure, $XXX completed In financial revolver, standard. to to new liquidity as Loan, leverage-neutral has similar from to We $X the billion. to week credit additional

addition, through repurchased a $XX Board $XX XXth have million April our existing In $X.XX. of remaining and million have we of cash dividend authorization. on also stock The declared

$X.X and reflection benefits expect well investment. now total guidance, as as $X.XX This our billion. prior $X.X between, we marketing a billion be $X.XX the of XXXX This revenues and is our of strong to to billion. guidance is Turning billion of additional QX from up between traffic

million is year. is investment We back $XXX a sales the million million. partially offset, and to prior expect by in $XXX to higher of EBITDA between our This infrastructure between, $XXX of $XXX primarily be up million. half guidance product and from make This some plan we the IT of

accounting expect between to GAAP our and EBITDA, EPS and the adjusted is a we for driven convertible bonds. Similar to sales effective $X.XX be Also, tax of increase the guidance We EPS be count as this income This our rate relates And with by $X.XX $X.XX is a expectations increase EPS to previous the slight GAAP year. our $X.XX. between a to XX.X%. increase treatment now in $X.XX to adjusted ranges. from and expect EPS between in reminder, primarily share of between XX.X% increase our and difference our

aspects reaffirming our including as labor our We well are prior on all other commodity inflation, CapEx. expectations of guidance, as and

our quarter turning second Now, guidance. to

QX and expect we was Brands way questions. up we reflects This between Brazil's to performance And US EPS on are and operations-focused a open summary, successful better, call adjusted for expect be our and benefits becoming of this and another Bloomin’ we from that, the will stronger year-over-year with $X.XX. the recovery. In quarter $X.XX for company. a revenues well strong $X.XX guidance continuation to between in We the $X.X and billion be billion to

Operator

we this one Bernstein Jeffrey first session. line limit comes At and one a question-and-answer will be question follow-up. question the [Operator yourself Please Instructions] time, conducting Our to from with of Barclays.

your question. proceed may with You

Jeffrey Bernstein

questions. you just the One very Two Great. menu Thank on much. pricing.

move said there's wondering about think be as the whether I'm quarter. to would I of rest year? a you and macro. slowing maybe through how in any much we the X.X% the you appears elevated just pricing And expect what concern first

that to Just you take wondering impact test momentum and maybe much seem be so to you how negatively don't and formulate gauge you traffic too building? the

David Deno

Hi, we important. our competitively very, others our we've Jeff. we what been morning. wants. we're doing look closely at or and competition, And very pricing is Yes, at and below what very aware believe Good we actions are watching customer it of very our are which and

is to consumer trying this and managing everything margin and calculus the along So pricing we're with else what do.

too, far is various as have Now, as of can go the market we powder a good news lot is programs. how to we dry with

how learned Our intention is platforms. not lot pandemic to do large-scale discounting and invest things service market, like different during that, a about our but our in lot with with and go We a to food we to digital, the offers.

some potential So of can maybe we that's the consumer. address how slowing

the Although, consumers our still be healthy see right pretty space. we in now,

about over it to now, the So to I'll price talk turn Chris details.

Chris Meyer

morning, Yes. good Hey, Jeff.

pricing, than did mid-quarter I thinking think menu idea. definitely but stitch And because is QX, some in higher right so, a we X% of the in terms we go-forward saw simply QX, the now take probably what QX below

to do we're lap that with range. reassess, in make when are I a because that's you think, an QX. of we pricing make And are So on we'll where we X.X%, XXXX. that's pricing to what get And think the a want where want when when the to we just where consumer I just QX, then going then, our somewhere took and assessment start you X.X%, to to company, call we in margins is, in as that

Jeffrey Bernstein

know, just past Or you're But that obviously, in it of can seems more still dining your slowing, you you Indeed the what you there is brands a business behavior a as entire macro. casual years the what that your indicator, your landscape. Understood. change is the demonstrate to maybe, consumer the macro see being economy? the sense that, current vulnerable at US, change to you wondering, in brands because, just, US just any across seen is check. And oversee the consumer when higher-priced demonstrate do mentioned seems I maybe, the pretty leading four give look in a you've on maybe like healthy. at then, any you reaching I'm follow-up. in maybe,

if your be for you second seeing to on just you'd and to what So slower you're a comments looking see asking put there's a for or anything macro? hat demonstrate

David Deno

an Well, good we where about about it's feel thanks economist, good Jeff, We We look we and feel something like. But the trend our [ph] feel and in us current I channels. stand. undergraduate we day. trends is And good for talking is enjoy about. looking we information every what the -- about good get consumer

in-restaurant business party. and off-premises business, into our back the is there, as in at business, As look business off-premises in-restaurant coming certainly especially at our hanging we the look people third

look lastly, to end continues look the we So the consumer. then And at of channels, very at well. do high health the

see talked the we Not Fleming's we number as Brazil. what doing the in potential as outperforming large if you is Fleming's numbers. marketplace. then business of it looks And at is And business future look the the lastly, is Fleming's sales it about marketplace, extremely a see same-store in that And in And You have far well. growing like the Brazil. we is. as only the strong, units but number

one So about well. as we to have talk that

in four brands then and So we domestic brands Brazil. our have

good. So question, Jeff, trends to our rounding out the continue be

Jeffrey Bernstein

and guess say that you comment of trends, current when a been hasn't So momentum to related has April slowdown is a sustained itself that there I late?

David Deno

feel it year very quarterly second got raised. we about good we pleased we're guidance. that April are We full -- It's We've to stand. quarter we very you trends the incorporated a gave which everybody guidance And clear. there the see give Right. and guidance. where in

Jeffrey Bernstein

Great. Thank very much. you,

Operator

William line question of Blair. from Sharon the next Zackfia with comes Our

proceed your question. may with You

Sharon Zackfia

morning. Hi. Good

a clarification on Just the mix.

missed but of of menu know, you far how that on-premises don't then what spend I to others? quarter? higher question are off-prem I in concept dynamic seen that did color payer. between you've consumers the one Brazil. actually kind up it inflationary attach in so And ticket have when on US? this, at difference Brazil the in the second And mentioned you understood the give if trade is trending a they're Brazil more versus to kind I versus consumers' or are box? switching and items. may I is how correctly. think noticeable I the compared And is you seeing any But understood on-prem in up on

David Deno

Sure.

the first stuff. is something question I'll good US. country used to. the that that very is to other as Let turn Brazil The environment in over inflation me then and answer April Brazil it Chris in to are the handle like just trends The well very

We are strong see you of results, our you'll margins. pricing. at segment reporting, on top Sharon. our on We're look of top very And if

so that And momentum. very for clearly have marketplace, we a good

the We growth of us things. Before the to turn those the economics talked business, we now has to the of box, talked I someday. gives Outbacks XXX the first and with And Chris, about making how kind business, And when do -- potentially over to continue innovations of have there we the we confidence having that XXX. we it we build think the expand can that this business. about to country, we're bought the

indication where And Chris So of over the that's is to other I'll question. country answer turn that an going. to

Chris Meyer

Sharon. Hi Yes.

of year some components, larger or such a of in one which off-premise this a that versus was talked benefit. was such lift drove we relative X% we I was and basically consumer It's check returned That piece not so And in average which component, call that that to was X% one not year. the half mix surprising mix mix The consumer year. the carries sales of the the fact higher fact a QX little of surprise. two think versus a being would last that mix. dining So change to in-restaurant probably a of about surprise or percentage last in-restaurant the customers

beverage to pretty other the things sales a be sales, half into like side was I just additional day on mix other up And trade of components. appetizer It's health The more seen alcoholic the we've carried appears that little think good. additional surprising. the consumer

bit two cities it So tale was a of that of a on one.

Mark Graff

benefit years. We're service investments Yes. want for of improving and seeing food our I in that add the we some the enhanced noticing our food us third seeing it parties over one the And and the offering customers to the operating and because thing other made what and too. scores of are are and in trade-up of customer the just we're restaurants by service nicely. that's

Sharon Zackfia

Thank you/

Operator

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

Alex Slagle

morning had on off-premise. and I congrats. the question Good a Thanks.

there but dynamics a You And in mix previous the the dining. margins comparable was of talked comments driving could from whether growing. about the this just it pricing big don't a talk And I if that the about dine-in even approaching to that's it's being or of digital, know was that have delivery you jump? step-up sizable what's help shift pretty happen which the seen with maybe

your of analysis kind Just curious there?

Chris Meyer

We've so when at talking from talked for some business make curbside your basically is in-restaurant Well to things. labor experience. off-premises. What you're example there. check on average that costs maintain a of dining in we margin able you're a profile lower lose up it so parity of in your couple parity we for historically the depends One, channel

yes, in-restaurant. where speaks incrementality what I would just that's It third off-premises business in-restaurant. have to shifting box. loudly success that party to party party of is But we're the party above is in this to there third driving an In fact component terms through third the mix we a to having continues again, think and our mix pricing that from increase the curbside we that environment of have

Alex Slagle

and opportunity digital and and the through opportunities a going? see digital of you've platform pandemic that headway the and leveraging this out efficient disposable investments the analytics the the of on marketing had the curious sort next marketing and that have mean and spend I of and follow-up at building it And leveraging I like as more and your you what had good a really tools where bunch of feels sort more you loyalty. improvements on insights the deployment looks the of of front like? phase kind

David Deno

biggest opportunity noticing. Single competitive want great continued But reasons Yes. We're the concepts. And our apps it. get development progress. into our in of I various is don't is making for consumer to

at our are benefit of lot what look you'll are we're the a using that you occasions that people and of IT percent making on we're pandemic progress. now the apps the – past people team significant the by If done how work get reaping our us, of – what the over accessing And was we're using that. couple of years during

like if look boom, can ease it instance, For hit now just great. and to with ordering favorite it's it – we're and just the you of make ease favorites that because go and Outback, a going at button you

Secondly, us that's frequently, can points-based, a points a more use more have opportunity we program et will to customers Rewards more give converted the that to that to have us allow Dine new partnerships chance they because even cetera. access

customer. I even chance to continue engagement our very is the a So make go and more and terrific. then ordering be with you're the and going really operations that's us going going app lastly, restaurants enhancements give along enhancements to And seamless which for see data, to to to to in think that off-premises easy more consumer ahead

as to go us the on lot yes and market know it with now, digital side flexibility behind a gives Finally, learned go and about and we that's spend both opportunities how have been from exactly the we various returns we like what know that marketing a a look capability we primarily forward partners the and investing standpoint. and IT marketing an we standpoint of lot we've

Alex Slagle

much Thank you very

David Deno

Welcome

Operator

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

John Ivankoe

you. Thank Hi.

extent Outback of ways they about also income exactly, in consumers doesn't with lot Can $XX as skew data to is to that of but Is some the can all well. of Just lower new amount discretionary looking the you Can lower higher. you obviously there's protect particular ticket do about want sizable who higher at you cut that talk you middle the back that that there talk the have? it a a consumers your more customer occasions? income around spend average in obviously

David Deno

John. changed rates accessible about gas Yes, sure. months are on tack the A of Chris menu items stronger. talked XX around and and made appetizers trade-ups. thing. check, really team smart a I things and some mean the so couple more things of did their ago Outback the the

a that's So helping lot.

much. discounting we aren't Secondly, as

some of have away. locked customers those So

I got check build of income we consumer importantly, still So still have us. seeing both look And price off middle earlier, competition. and they and know from pricing they're our a that. we've getting food what tried much a service. because as certainty, and seeing the as about possible guest important we they are But as That's talked – point we we've are moderate to at very use as

ways at the and well. as way. end So said higher we're end trying that company our the But or to PPA like different access manage you the to check the there's that way -- low

John Ivankoe

what just the great. average? household number be mean of you you question, kind obviously,say I it might would proprietary mean but of if what this you'd like. a too would I -- American the whatever picking you're mean below just I answer Outback And are it, the be income can customers you have but percentage

David Deno

Yes.

to that proprietary we think as pretty I ourselves John could, like we'd we especially because [indiscernible] and Okay. keep to if that's

So directly like but usually questions to your I that answer

John Ivankoe

shot on didn't a when took but think I you get never know. that know. it don’t I I I'd

Okay.

and And apologize late are chain, let minutes and call KDS grills I on was the So this. -- where of handhelds side. switch mean where we the technology I few the in if are I terms supply I terms mean missed me I getting a to store? projects or see margins are of in we to excited come we could tweaks the from the to I expectations? necessary projects both in there these as -- they be customer you in how of I material that implemented employees and some mean, relative benefit some might the guess,

David Deno

clamshell QX. No that Handhelds we highest restaurant. tweaks The is a backhouse put being in in done restaurants out, restaurants great versus it bunch in next restaurants. time we're the these we think to results. One they John, And talked be just the street time over some see I talked responding. on rolled very of like about. in want of the will think of that. seeing some I exactly the really to grills, We we appreciate KDS which you down the expected is and the call. a we're we kind quarters It's pleased speak. on from will rolled in just didn't spot Charlotte. are on other specifically bunch thing average as to our import the John, it of put equipment few last and you high-volume out putting volume be want of are We some clashes And

I'll it accuracy over one guest and address to We're come to will higher financials. looking that seeing to of the me cooking let's the higher about see opportunity turn going improvement. what at really talk on -- let our to Now about stake satisfaction biggest talk But which we're we're And issues, Chris customer. is an here that and traffic.

for throughput our a will it easier service really lastly And -- lot speed engage front-of-house Secondly, great. to employees to be with is customers. of handheld with our

from things really three the are see. side we that the those So customer

financial for to about think see. great proprietary financials I a detail benefits to Now of the of to we're the some we're but over I'll it few talk getting don't on going reasons, to turn Chris

Chris Meyer

to said of to the from standpoint would of our target one margin, you the is is Well, margin catalysts to continue to in us fact be the I about add that Dave to productivity technology. box guess efficiencies what the X% drive operating long-term allow going talk all when I a key

execution, It's service. clearly the front this the the as certainly an there house about grilling the the with server but house handheld to about efficiency in is of benefit cetera. but So clearly kitchen in relates also the back et is in technology, of it technology the also

broadly just So X% this the when longer again target. it's part us of calculus about allows term to you I out more look that that margin would say think

Mark Graff

is what enhanced technology the customer to is trying lastly the to service out to big enhance quality offerings. That here our And and customer goal here food part John, of roll a do we're service. is

John Ivankoe

you. Thank clear. That’s

Operator

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

with your proceed may question. You

John Glass

that? against the just on as morning quarter of it revenue I'm quarter and consensus Thanks in brand -- guidance second the quarter, lapping Are I positive brand? year. have and doesn't guidance earnings Outback thinking second the the view can you in is good particular, Outback about last very the positively from -- positive? all. comps your comp a assumes your you comments Can think on on second Chris you tough for your and

Chris Meyer

strong our for look Positive. absolutely. And the we're right? Well, comps all You're positive brands say across portfolio get year we're spot the what as comps pretty those that on a well to tough last recovery are a restaurant I thoughts positive lap as would embedded success though striving had we -- of John. is all given the It's the Brazil. in in sure, guidance, for

John Glass

their restaurants lot And commodity update commodity issued you you change thought guidance higher. or Thank since last commodity in guidance has this guidance to the have updated you. was A your already going Okay. world. Many your time changed didn't be quarter. you it

the visibility going than others talk benefit that see in more in beef sense you'll for you declines benefits could that you rate some Maybe on others, gives XXXX market you have doesn't more contracting? maybe in anything And So that's that that example? the that specifically about back you maybe half? do the contracting

Chris Meyer

in strategies remainder don't the contract Yeah. for on XXXX, it's the that look we're obviously has really think Look XX% our of we're really sustained right hasn't in was changed. all that guidance I We're our when positive -- really pretty thinking commodities say originally. news but year. pursuing been commodity and locked there that improved landscape any in our we think to I gave and much But anything and now spot embedded the hasn't overall category, consistent

So I obviously end on our that it's think highly environment. inflationary changed really nothing's a but

starting look would for in of to change at in our it's from that we're year higher commodity inflation year versus product of, terms expectations landscape I in more Now commodity a periods sea big the from as a any the an progression lap ago the say, you standpoint, XXXX. fact far

John Glass

Okay. any market And what update the on is beef doing? beef specifically, is there

Chris Meyer

the again, historically. for it It's is this point But cycle beef be the words, curve just somewhat what but see from would beef where it's locked you other that. in of The of we're would at In at curve same, typically is time. in. elevated elevated representative

don't kind pricing. have in So, we our that volatility of

John Glass

you. Thank Yeah.

Operator

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

proceed may You with your question.

Lauren Silberman

Hi. Thanks ask so unit much. wanted about to I growth.

So, then, you a net growth unit talked XXXX goal? number? is about the this X%. a Is And that

David Deno

Obviously, market bill. is a But We provide more got We'll the to achieve look a few company, work get but working it because total. on addressing as is happen, going in asset number of our possible, try to to forward. gross company as as an a look if I've be the XXXX closures expansion that done the our CEO number, but sense very it's lot always about with guidance. a X% I'm X% and build years Yeah. the It anticipate But what it. following details be Good over morning. interested we with to realistic gross on basis. base, quickly at the team. any We'll we've closures of a will

Lauren Silberman

part just Great. state unit color it on the the looking the the cost, any of beyond I supporting Specific by of point? in economics then, acceleration, total Outback about approach the but you changes the reduced and are all to portfolio, is closures the US? largest thinking development guess to other your I the And unit at prototypes. Are in to there Outback units, concept broader appreciate potential how you've made is our confidence

David Deno

see place. COVID. Yeah. in the very were even into thing The during restaurant in frankly a came to We what sad we out is much came though out stronger big

And pretty is you in now strong at still we're South, opportunity growth like in good, look there's unit opportunities. our new very cities So really expansion the good. if opportunities, unit there's

team new that carryout smaller that. we're is talked hold carefully enabled looks US. So, hopefully, Mark really Meyer, goes sure we're South. prototype think we better. as in make are led building very economics we're the the in by progress we about to between available making And that can the make looking that really And finance time Chris Outback continue any Outbacks to We the beyond mistake. -- But, XX on by and and markets returns not at in the our to the to us. And much fast-growing XXX there's delivery piece

have we that So, tool as well us. available to

XX to So, restaurants. more XXX

couple add at two seen great can change Bonefish quick. in let And in now those change. things teams markets Those expanding step I selectively our performance, step a that look have addressing stronghold we Now a a real me markets. Carrabba's job more think and We've done marketplace.

in we're seeing really high end, assets, as markets like I upgrading the our key earlier, in looking is Fleming's returns Texas and really our environment. about Florida, is We're is well Lastly, there Fleming's California and also expand in talked extremely that business strong. strong because well. to performing we're

So Brazil as talked -- like there and what million that $X And finally in got the there. we everybody opportunities I'd remind about well. we've we -- returns. box wonderful with and think about it's opportunities look of expansion cash

you build of X%. up kind the how that's So,

Lauren Silberman

much. so Thanks Fantastic.

Operator

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

proceed may You your with question.

Jeff Farmer

you. Thank

a couple wanted of Just things. follow-up to on

you're to addition commodities year. more top contracted commodity covered top think be said we would those in are five as exposures, I for that contracted or questions. exposures? right less guys your you Can the XX% John's stand which First But roughly share or five you now?

Chris Meyer

Yes.

seafood. goes is things from there, dairy but of for The kind And a is a less number of still things. then rest small. oil pretty to the of say So, food is obviously, reasonable it would like There's chicken. other it which I those popery biggest. exposed, beef more

-- Yes, produce. so say I So, I sorry, as well. would I'm missed produce

some the and So, terms the like example, it's beef, largest, it largest, what with periods But the then it's lock-in a dairy, that oil, beef mixed of locked -- of produce, five. is second And middle. we're and those locked I just obviously, in not, really time. produce, we're being beef look of you things with the extended the what for on in for being bag don't to much think and fully in pretty be you've seafood of got poultry we're would rest

those So, of categories. XX% a locked in lot

Jeff Farmer

on opportunity. of pieces with and other one of quick size the for business helpful. And just Obviously, this to business. back That's help follow-up is the both which out right. But in us lot up Carrabba's. off-premise of the sort you core concepts just I'm across All looking moving your a business

you -- increasing shock like the largest curious So, what delivery to I'm the moving an team. greatest the is and meaning opportunity forward? see looks for you the of off-premise brand is go virtual have focus which where tender piece now and catering management

David Deno

Yes.

dedicated for pricing talk We're a grow of to a products We I'll years. got of off-premise this things together. come ago. to parts. We've the been at business We've growing delivery and We doing future business. looking packaging going specific team piloted it those Chris So, of number pieces make management it about all some ago. the the to carryout started give long long can

is a we talked profitability. big that that what interesting. about, good is Carryout, So, business Chris are pretty part seeing has Jeff of and our

And has is mentioned on that catering partnerships follow. finally, for piece, got we've led there. great us Outback we earlier, grow way and to continues I the as to then -- Carrabba's Third-party, and on the

the good -- Carrabba's and a highest all delivers if it in occasion. mix of It's and gains off-premises it, you you've some Over food you concepts, if form the on had seeing food has what standpoint. Chris. as know I'm of growth. about you the the on capability we're from service that those our and if talking the to call, well best well to really So, Clearly, have

Chris Meyer

at our was you to XXXX and -- curbside finished go our mix dining and or XXXX we X% think off-premises was to-go. XX% off-premises XX% at if we was total I back of were where of about Well, think mix that our you

your in parity. are we to fast almost delivery. third-party delivery now that for delivery basically all And and your You is at QX, curbside were where and forward example, of

what used shift. So, from something at fundamental our the I take and just the I shifts third-party will incrementality be think to given But delivery its that what high just is been that think and seen ability said Like all is those have now. you've biggest to long execute a level. that day I

David Deno

standpoint And solution their the consumers it products that where food fact specific past think last is, just really that I Jeff, few set in offer we are a thought seeing forms. we've seeing be service And learned about works other in the our really in from well. in they closing, years what They're can customer deliver maybe what the well.

Jeff Farmer

right. All you. it. Appreciate Thank

Operator

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

may with You your proceed question.

Brian Vaccaro

but be occasion? closures. low traffic average about versus on exiting dine-in to differences that data how incremental I guess much, Omicron. I if business. your But somewhere you in that ask category dine-in see? I'd into industry within helpful. dig given Outback, big might wanted down thoughts category about why morning. love mid-teens on to teens And particularly there quick is might is be have I'll insights regional are that down Just still any still recently ask you pre-COVID. really question. your as that's are QX perspective would guess there the get the new to the in And Are improved off-premise for there And the sales versus I'd in and weekly Outback the I broader it's Thanks recovery And good dine-in a assume more you

David Deno

and Yeah, And especially more change that's off-premises more see consumers to dine-in business for as their going. that back our We're of habits have begin company. in-restaurants. and an opportunity keep come as we sure. the -- to and to We the occasion going

turn Omicron, because in for our and of March, that until talked because us, we Brian, didn't space. that's digital opportunity in-restaurant on really I've Secondly, marketing back about the an

The and back goal have more the as we is So that from continue off-premise see same. our forward. come to sales dine-in staying to go of you'll is with brands

The pieces. handhelds throughput back all going of are the result. the really a the that's talked in front of the about making and the as improve traffic. That's clamshell house the investments we of some those going of Then house. we're grills, importance two to to So improve the important

are the four future for for move things or as an So those coming we company and it we as us the forward quarters in forward. we see the see three upside that

Brian Vaccaro

do any guess I of across magnitude of you dine-in see a regions recovery if you give us But sense that? the range how of of seen? big I you've Can terms could, in

David Deno

they're better as but the still we're continues Yeah, Northeast the we're Midwest back. a were And slower back, in getting and well. it's Obviously, at And look upper coming regional. the do and our come -- seeing the South results. to we to stronger that little

nice everything So that we've else build summer chance back I and think dining a as could and to the northern opportunity the and everything, this coming outdoor us. and environment especially a on got be now for

Brian Vaccaro

All of out through right. seasonality guide the the where maybe and plays a but Thank are and QX sense us you. average normal June? the moving Carrabba's at you where remind give quarter-to-date? recovered And course, May Outback I ballpark towards of And how could you appreciate QX, weekly of perhaps end sales us also trends just

Chris Meyer

traditional really sales. then seasonality do step suggest And us April of weekly certainly concept. from terms take for a an would down in a standpoint, at our average weekly in sales you Yeah. is March strong average month

of And that's year. time any the call low-XXs, of So Outback I'm averaging in it, mid- was the year to you high-XXs to to has of standpoint. kind That going kind the in change That's this in be just looking averaging sort seasonality. trajectory. see if do nothing April what an of in with was at if typically this at you're Outback in would just

Brian Vaccaro

Okay.

there seeing be obviously to a or -- about what anything reported to mindful Brazil, a true numbers just that there calendar the of you to Can little the but think, strong take underlying were trend? seen recovery hold Carnival be Okay. of? think there. shifts mindful in bit, you I And we're any in moved you've around versus

Mark Graff

is strong. true underlying The trend No. Brian very

Chris Meyer

They're doing great.

Mark Graff

And you of out U.S., pandemic companies the about strong. talked come some

in like Brazil very only business leading a can what like You strong. imagine of category Outback looks pandemic out coming

Brian Vaccaro

Okay. last And me. one then for

us Outback what sales remind was of and Just on that you channel catering. pre-COVID? Carrabba's percent for Can

Chris Meyer

Tiny.

David Deno

very a small was it Yes, number.

Brian Vaccaro

new there And some that. around are initiatives

of broad an plan forward that the moving exiting announcement There's saw sales you're recent with channel a weeks. strategic sort I within think that I in pandemic?

David Deno

a because Yes, see. happy bit were for But we not at place there's of quite in to that so on which much been while. at a outback coverage that's Caramba's,

Brian Vaccaro

I’ll All Thank along. pass right. you.

Operator

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

may proceed with You question. your

Brett Levy

bit my guess, taking a terms towards at margin. what question. regional question, trending? labor Just taking continue of for We we're but ranges kind us little their out you Thanks you in competitor of they're the about seeing heard Great. either more a or from you of your regionally are there levels, seeing I full a or bit you're as by staffing also margins quartiles or just of are, unit sense staffing on what give to little challenges. quintiles? level unpack how the indirect bit further little what on How your yesterday opportunity a an recovery? least an just productivity, Can venture

David Deno

relatively try than in if we're look That the the retained. you at a I'm and We was go. people benefiting our the best financial And levels to during Yes. from on take were Chris only treated didn't I'll let among updates, levels, and Of staffing, We a that turnover enhanced he'd like first But strong our retention and to make the history had are. that. it there? restaurants. our broader people, The in -- anybody industry, all. I'll spot a succinct. staffing others they're people the we much there and industry. of better did and to Are in out culture we course, I'll But strong our of make it started much, there much, challenges in on not long measures long, question turn how over going but provide. too this

Second spots Northeast, Midwest parts are and has of parts though certain improved. staffing environment environment expect the the you'd even it improved staffing of has the spots the in all, is challenging what the but of

got just off levels down in our keep good costs is big cuts us We've it and a culture and in and high churn to and very strong on turnover restaurant. retention satisfaction costs our customer So enables the way. paying that training

I'll So to turn Chris anything that for for it over else.

Chris Meyer

able offset across strong to We're in period We're had QX seeing the would it we some we way were that the of at volumes question line. But we in that good these QX. came just price no saw again year-over-year inflation our XX% industry. look news that labor that add, internally, and terms seeing being such inflation. We labor when fact unit average you and in have the together, the the that inflation our in there's there's to the in we the efficiencies up model. Well, I a actually had that leverage is

Brett Levy

of Thanks. what know, Great. is how in And as Thanks. just of you contributing color this, unit comps? in to – and that's well for implied like guidance new little bit I the can XQ gave X.XX productivity give terms new within some on more X.X the a clarity but much you terms as

Chris Meyer

Yeah.

is last again lot going to then, bring guidance. the closures when consider year-over-year that said try and is that that that especially to time we time of well. number go be I other recovery, easy piece Again, think in would they Brazil's up sales were that positive, largely we've just built into comp had COVID-related positive have miss, to April a it you be back year recovery – through that, we as question. same-store embedded our to but And to they the

that's So how get the X.X. you the to to X.X

pretty of year. terms that the flowing sales and through led to full from it's straightforward. increase just We're and a the think together I for margins that's that the we how standpoint, In again, came profitability our

by million. up going $XX it guidance year full Our call

And fact QX appreciation this some Some average again, the of of into coming that we second of are continue see that's that, that's in QX. had the quarter. product check a to into we expecting to

year-over-year more the recovery in of of the in that, off-premises And unique probably to Now, as QX so we was just saw in-restaurant the was not much the fact a as relative product business. QX. terms strong, that's

second You dynamic quarter. don't that same have the quite in

average first saw isn't QX QX, that be strong are as Those probably as to probably going the out. pieces it call I check the quarter. would the was parts, benefit in in So in we

Brett Levy

helpful. Very you. Thank

Operator

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

your You question. may with proceed

Brian Mullan

Thank you.

question would And Chris remind notes. you you for waiting? I what guess then that would one, on right two, the sense there convertible are or you the a cardholders? you have redeem to with something market open considering, is scenario the number outstanding just or I the negotiation mentioned Just do where versus to do make last scenario those? when still you can call that but a maybe, before on in in just

Chris Meyer

Yeah.

of is So our first XXXX May have right. when we

date. the premium negotiate, there's can math. pay, converts we're think also through just prior challenge you way there that have that a look, premium that you place not have these well. The to but warrants the associated because warrants with doing And to in However, the to a I holders, is we is, as your

convert. reason associated whether share relative that that, overhang exit just because is, so that the have And some off we with a debt. we of is us we're as to strongly benefit to have the or the gives to paying would premium would I run the not pay tell that, to why to calculus you outsized considering there

math of to But a I the lot think make sense from communication challenges that, that just psychologically creates some too. standpoint. has a also

we're convert sort make of – to in a the I And our relieving it's is then of going year, math be any those the So sense we're to kind to able think conversation if of going from give overhang that, explore us terms to dual-pronged our going to story. space ability communicate possible. should breathing two And this that sense? make something be

Brian Mullan

give then if hear US could And you about wondering, you just back the It's to how to additional that. topic. many for think do opportunity Thanks that you development brand? Okay. Outbacks, support. the longer you helpful there the just bringing think to trying the could same for get term? Fleming's be how see of sense type to that of for many Just commentary the magnitude a I'm of over

David Deno

given think Fleming's. is, opportunities unit that's average additional could two There's we XX their volumes do. that at Yes. there's we And One significant.

we've in can we've really restaurants we what shall some restaurants opportunity that can the is the a our the given and Second, and areas some those little of make trade big modern improvements kind bar, done great making know inside other other say we things sales. got strong in more by expanding

and both adding restaurants doing up and be and we'll areas those. existing of more Fleming's. XX be We'll So trade improving to strong enhancing

Brian Mullan

Thank you.

Operator

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

proceed your question. You may with

Jared Garber

us to new that product on feel. to just for time and all But that Outback mentioned. to customer kind tell the of, as question. new relates remodels commentary changes it you in of Hi. Thanks ambience Actually, sort on about in and specifically the of follow-up supply box some asset and that terms the the of some

Just some wondering design? units older and Thanks. and updated back -- match are at or existing -- and the assets, sort new of specifically this contemplating of the going if new portfolio you remodeling refreshing to in Outbacks this

David Deno

Yes.

do going do cadence across to a remodels years. country in and our will speak. both. It's in our our the we remodels the refreshing to We There's those we're embedded restaurants that coming interior we'll and as guidance continue and

brand then technology obviously experience investments stands the think the of and units elevated the we can we and house. the making the And it from restaurant between And back enhance an in customer we're where today. that so have new two to

Jared Garber

opportunity do you a maybe are about there from of the it Thanks. what of feel and now? upside sort asset Thanks. way we you comfortable to the I'm of design just those left portfolio of frame of to sort go? in curious you is Is as And are think have sort remodels. redesigns And maybe more many now? -- XX-XX with terms how the percentage

David Deno

all we've endpoint I Yes. really but the never We've -- question mean been We're I really there's se. think per don't to Jared always ever along. refreshing. doing got dodge don't an remodels there's --

had and the opportunity relocate restaurants, be always will you by the in be Because more time forward relocation finish and to there the are build an each we and year. start and we'll obviously over our again. loop business. we up restaurants with As over to we those immediately But for a new program that we've time to continuous more with continue will continue us refresh -- be move to every our restaurants you build underway can grow that that restaurants restaurants XXX they'll brand then refresh assets updated as iteration one more

Operator

with Tower the question Jon last Citi. of line from Our comes

question. You with may proceed your

Jon Tower

sneaking for in here. Thanks me Awesome. And follow-ups. mostly just --

I some I throughout topics I think of you on to of make wanted sure but down. call nail that them these just kind hit the

In terms traffic call, Outback it some of the levels. you looking looks a pre-COVID bit And in on at on the quarter have much slipped period. mention I of I'm first during didn't little the too like it the might the hear Omicron weighed traffic traffic for general just in-store or assuming the but versus

the explain was versus bit why maybe you weaker a traffic first during first So XXXX could quarter? little the

David Deno

XXXX versus correct? Yes,

Chris Meyer

Yes. And versus XXXX.

David Deno

last called Omicron and that was But in I at XXX call. And the we're expected things talked we traffic on of QX and mean doing impact that Outback the -- we our out levels. about we points some basis had forward. moving

Jon Tower

on staffing were spurred thinking Got a handle in felt then, I things? David, to felt terms just good staffing environment hit spend marketing seeing could where and in you're side the the in-store on earlier had or And you idea in-store something the go by where offering or decision you you. the you and that. the little But back just seeing that in data it. think this data I customers out the that that you area what traffic the to your take to like the it about could demand, up on incremental there that own sequentially? market handle in Thank was to some commentary. an need remind brands levels something of and brought coming bit -- you the or And appreciate and

David Deno

marketing on. we of wise things in-restaurant did. it how marketing wise to always about earlier not when talked the in back March have something you some We to off-premise spend on turned that we some And like that's Yes. spend Omicron, and It's it's marketing. exactly

projects what earlier really mentioned Jon, we've sense got I as of Now, good cetera initiative a work. et marketing

the in going and we're specifically dining. be in-restaurant those products behind returns, specifically looking and investing specifically at around around So space and digital to those

you'll more forward. us of as that go from see we So

the hopefully, and return pandemic-related make opportunity to habits company that deep but with not the to they us, but for some believe engage in good anything on we're sure a for it's of of we that have we behind of that, that It's use vehicles a very who with intention we have have to that dining. ideas marketing. discounting can work. we and and knows and capitalize issues, forward good the to Our this we an And our returns believe if like our sense going is to business if or sense move offer in-restaurant

Jon Tower

How piece sizes then of Is Obviously, that far. store about brands than different the I these the it. for you've about are co-locating any versus just before? even Got but am what of down and the Thank base in more. about more to non-mall. bit on getting And a today or platforms? stores so the other you. pad. a bit different customer you're even thinking you much the done we've philosophy lastly existing specifically than the what it it. mall growth specifically stores details the you seen these curious Thank curious learn on thinking past little think versus demographics Is when market to all maybe with are thinking siting footprints how little just about it the you unit about

David Deno

Well, freight we talked at there. the work the all footprint and done length about we've

Secondly, markets economic we stronghold fact areas. and advantage talked about the very that our are demographic

South and we to intend We that. are very strong capture in the

cities seeing as are in Nashville, that infill contemplated in past cetera we are Miami areas growing metro growing opportunities rapidly. we little just et may quick Third, not years have major Austin,

far as Carrabba's extra, then, where as we developing the the Third, those time and I the was city kind to we're were in markets, things for and our what just trade think like. so look We our also strong. much expansion areas new that unit new be particular which area. of rapidly growing amazed how generally has opportunities very the tend grown team instance. are Bonefish the that at today, Dallas first at Those talked And that in for area, about also core in opportunity. cities in And looking are that's

looking trade be things the some that to of those some Outback, we'll do extent areas. we with at can that as at not well we're So in but looking restaurants our core

got We've competitively started and a in are growing we in the in things the that sites. to are the those metropolitan areas We're when -- opportunity. rapidly pick and a are we're versus position pandemic all really to geographies the growing much team -- that asset. the and So, rapidly. development stronger us And coming summary, got we've provide together

Jon Tower

Great. Appreciate it. Thank you.

Operator

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

David Deno

everybody Well, appreciate company interest call. to look we your thank you attending on and our questions and for and July our updating you quarter in we your in forward today second

Operator

conference. This concludes today's

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

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