BLMN - Earnings call transcript Q2 2022

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Operator

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

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

per last nearly year, was we of While results achieved doubled share in below QX what our earnings XXXX. were

stimulus lapping XXXX, exceptional to payments we to relates it pent-up consumer As demands. and due earnings were

This have the and long-term quarter fully will believe inflationary We inflation. offset QX business. the The our equation We the benefits our value to the confidence strategy, highest year. addition, was both the domestically also short-term of saw in and year. the raise in made internationally part large not prices reflected conscious marketing in in the guidance. making the half and decision of first decision we initiatives preserve In half for year to in by increased are we sales back investments through our the was driven revenue of the the our success

trends we quarter, consistent the with trends During positive industry. May, in the softer through experienced but saw June,

laid efficiencies off-premises Fortunately, for comprehensive company, challenging established to a would operations center. the digital key the us deliver navigate operational to in build possible environment. we employees These in business, dedicated restaurants, restaurant our a improved on growing commitments. stronger, been foundation leading our plan our leveraged leaner to this results without support and talented solid capabilities not centered We the have and

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

ahead focus on you our of despite As achieving look economic challenging the to full remains balance the environment. a year, objectives the more year

to at confidence few while continue and up beyond. and achieve food customer customer The set and made social, offerings. levels Outback. us The plan provide include momentum our to in-restaurant the to sales and sales the improving over are for showing by first, experience in key executing plans the profits. well element grow our in strategy past investments to strengthen have service improved years especially our and to driving experience up elevate We business objectives, the The place XXXX sustainable elevate

improve consistency. simplify continue As part execution look business of this to effort, the to ways and for we to

as several quality We are rolling innovations out food cooking including productivity. to advanced technology, new grills ovens improve such and and

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

highlighting our and drive and deploying we to aimed the at value marketing offer to targeted everyday frequency. initiatives We great guests. more awareness menu build are are also that These

product Importantly, sacrificing accomplished guest quality experience. is without the or this

not discounting and programs In returns on reliant these deep high to drive offer addition, are traffic.

Second, expand our leading off-premises business.

continue Retention steady held strong contributing to out QX and sales performance. are capitalize and carryout levels to with We delivery on capabilities. our

continues to even grow as Third-party people to in-restaurant delivery dining. returned are

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

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

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

healthy across leverage This starts operating off-premises traffic growing and channel. in-restaurant costs. Third, margin gains sales and the by reducing by growing

and reliance We advertising higher discounting return targeted, more towards also spend channels. reduce pivoted on promotional and LTOs digital

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

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

offerings. growing to position features beyond of us the once we and Mark expect Graff a will Last meaningful quarter, areas continue more revitalized and our guide XXXX we activity digital and can development are way plans. many a to to momentum of as stronger we new talked have in and in about our balance so improve again. and because a base sheet, begin in see These our functionality restaurant app priorities seen You the much in

expect good making new accelerate building unit we are a in beyond. and new of pipeline and units We XXXX progress, growth strong to

with will a locations developed new at We strong healthy new areas in that This smaller well opportunities trade model. Our bar new rapidly growing returns. fill-in new positive as Outback. taking and includes growth the and marks pursuing growth we expensive unit accelerate smaller new less and prototype high major first, on in markets, as meaningful priorities more redesign feedback. are; growth opened service brighter metro design the and areas. us are with To of decor ambiance, are Consumers noise giving date, four sales have guest enable

are In good and sales are and at Investments well addition, continue volumes outside recent upgrade lift system remodels exceeding providing relocations above $X.X returns base. to our in we contemporize offering Outback average. asset million and the

fine category at in to are continues Fleming’s. The business opening extremely is leader well unit volumes best dining. portfolio. average restaurant in Second, perform and the the The a new proven

first stronghold We are estate class California building Florida, Texas. real sites, facilities largely of and on in great markets

category they’re and in seeing a is profits. Third, and a recovery Brazil both strong leader sales

New restaurants to continue above open expectations.

detail market. the built three has under to a the plans in XXX are penetrated terrific approximately a We are this a We can And in on our another summary, XXX to remain have robust while growth. great solid QX been follow business key who’ll on the building of now currently year goals, to and for and time years. opened Chris, opportunity. against for track And open beyond. markets. new that through will QX in in in and over top to are finally, XXXX Outback’s working pipeline performers will last thrive They In brand Carrabba’s on our we portfolio we a achieve that have this we expand over key executing that, There XX restaurants believe Brazil and quarter. the over locations more provide turn this business up call of among off-premises brand. to business ruthlessly this grow Carrabba’s for I focused possibilities our has number is on initiatives XXXX More remainder thoughts to the with the XXXX.

Chris Meyer

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

During industry. June with but the trends saw consistent experienced softer quarter, the May, positive through we trends in

approximate up relative industry Importantly, both basis traffic QX sales versus in and XX% sales maintained point XXX the XXXX. to to gap an and XXXX were

believe benefits and dining. from stimulus of Given comparison versus progress in our was in we of sales. provides been QX QX. XX% QX At off-premises that sales outsized in XXXX XX% we perspective slightly off-premises our on the XXXX, This has of significant U.S. bolstered comp in growth sales gains growing down by our sales, progress made have

dining trade continues As our from some to expected, curbside occasions. there business to in-restaurant be

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

comps Off-premises In large XXXX. XX% It QX was Carrabba’s part was a growth versus And sales of remain is strategy sticky will terms of success. X.X% and menu on were versus internal from with QX mix. COVID-related XX% Brazil’s X.X% line QX menu QX relatively was the lapping Brazil year. This XXXX. check part key a and restrictions up last ongoing up was and Average expectations. remaining pricing in quarter the of Outback sales. with in X.X% consistent our concept reflected of was sales. second of forward. at be note performance, moving XX% QX a our of was operating final

levels. were Importantly, an XX.X% XXXX versus comp up sales impressive

the aspects other per our in convertible of $X.XX almost performance, earnings repurchase to of loss share GAAP of loss share per QX relates financial driven was our by diluted versus diluted the for it for The $X.XX As was the notes. quarter GAAP entirely treatment accounting XXXX.

million heavily paid money, total and Given principal paid $XXX in the difference million. was the the million. shares and between consideration created of so $XXX approximately total converts the an $XXX The cash were in loss consideration accounting the

has comparability our been from results. purposes, this For loss adjusted removed

we our of versus dilutive a decision. that earnings $X.XX Adjusted $X.XX from per earnings of share was appreciation, was in prudent share are share Given price the notes confident per diluted these diluted economic potential effect adjusted XXXX. future repurchase

QX double Adjusted adjusted XXXX. X.X% EPS QX of our In income nearly XX% result our in addition, operating XXXX was margin $X.XX. was in versus

mentioned, be Dave inflationary QX expected the most As year. our quarter to of is

For This on a nearly the year. not menu headwinds, while quarter our enough in teens to was faced. operating pricing in QX offset the impact labor perspective, the commodity in inflation significant QX, in last compared X.X% to we was high Despite have did margins inflation XX%. was inflation these

margins however, XXX basis comfortable, levels. given that were this are with X.X% XXXX above decision, our important We QX points of

menus business, and to simplified QX continue increased finally, on note as average taxes. And in a from our international We operations, benefit growth well check. as

items. Our quarter benefiting tax the adjusted tax from was XX% discrete in rate QX

now of our XXXX QX, XX.X%. of end the we the to range rate Given lower guidance closer to lower expect to in be XX.X%

leverage adjusted lease capital Total was at Turning structure. the ratio quarter. $XXX approximately our million our second was of to end X.X debt times and the

are to have with the sheet. we balance pleased We progress made improve our

through existing share terms of million strategy. repurchased $XX have and committed repurchases, on balanced $X.XX. we Board cash The In of a authorization. also allocation of have declared July dividend to remain million stock a We remaining XX capital our $XX

XXXX guidance. to Turning

XXXX are This billion. increase and a revenues guidance driven is to of by We factors. prior between our is to from guidance increasing our for This billion few billion. be $X.XX $X.XX billion up $X.X total $X.X

First, we and of expected domestically first in XXXX revenues in than had half higher both the Brazil.

have we pricing, take we of half will our the the in back finally, increased QX. impacting primarily And investment year. Second, incremental some marketing

total and We for adjusted are year EBITDA. guidance reaffirming EPS our

to $X.XX between As be be $XXX a adjusted reminder, expect and EBITDA between $X.XX $XXX to million we and and million. EPS

be We by utilities, inflation benefits profit supplies, commodities, expect is The seen higher than and to expected higher increased operating R&M. inflation. in offset primarily revenues from the being

expect is inflation it as of our commodity now XX% year. and XX%. guidance the to This relates between from be XX% So guidance, prior to to for we XX% commodity up

end including the guidance months we some persistent six original range more freight. seen less commodity locked and basket, upper of Over have XXXX, have seafood, to first dairy trending our been inflation our in the of of and

for commodity are now on XX% our year. basket the We locked

driven and from $X.XX. is guidance notes. of GAAP to rate the guidance $X.XX notes convertible down expected required on make the $X.XX. be the us loss by This guidance retirement and diluted accounting entire for The to repurchase EPS change year. the $X.XX is GAAP between tax In now is our prior diluted to to the addition, of convertible changes to of GAAP EPS has GAAP the EPS

And it we accounting the loss deductible XX%. our is GAAP be on purposes. between for convert the As XX% to relates expect rate, and rate to tax tax non now tax

adjusted As unchanged. indicated rate I our earlier, tax is

prior XX price, are terms difference counts, In driven down share value be to by as it adjusted of guidance relates shares. This expected in The in approximately changes from convert. is primarily to is average count our the diluted share of the the approximately share million million weighted shares of shares. now XX

to the share where As convert stock course from adjusted of stock the is convert, our SEC to the about it quarter. this dilution the relates share captures what remaining diluted prices provided we how impacts grid balance. at to our potential X-K from our future the count principal furnished the outlining in based full have think trades the million dilution always embedded $XXX future guidance share on than In a our for differing over morning,

to We repurchase potentially right the continue evaluate the additional to will convert. of time amounts

between $XXX is to expected to Finally, be CapEx million million. $XXX

should finish units total. We construction push and We projects delays have that around supply some new XX of some scheduled our XXXX. year the in may into seen still chain

guidance. Now turning third to quarter

revenues between reflects in and be and $X.XX. in $X.XX to billion U.S. both $X.XX expect billion. the adjusted We performance continuation to of expect This guidance $X.XX be EPS and we between QX strong And a Brazil.

open For becoming summary, another we our on call this with to operations stronger are company. way better, EPS was of that, the a Brands, questions. XXXX In we’ll $X.XX. quarter Bloomin’ focused well in successful for for and perspective, And was adjusted our QX up

Operator

your from proceed [Operator question. Instructions] Bernstein Barclays. with is Jeffrey Please question Our first with

Jeffrey Bernstein

Great. Thank Two you very questions. much.

understand the inflation on The just first the is guidance the one year. your pressuring rest for of earnings. I that

slowing to raise macro. into why the be guidance wondering what Just revenue a seems

revenue despite that and the slowdown wondering comment You in not great. you’d on be your would sustaining softening confidence in That July. whether or June, momentum, mentioned just a

So around then a up. and raise guidance follow specifically into revenue just the one slowing macro had

David Deno

then has And on a us. good. good was Chris seen with we’ve sequential Sure, turn half trends. the in good very and in morning. over But it I Brazil specifics. to on revenue very will any briefly answer first it improvement been side July, for

when pleased Jeff, about. the year factors balance revenue what bake very that So go look like, which you at our causing that up, are the in are looks to and guidance we’re those

Chris Meyer

Yes. a And little just to color, give Jeff. additional

our So by revenue $XX we million. raised guidance

of sales half So that if six it, you is about on based months the delivery the first increase over through of think year. the

but U.S., over the portion of Some mentioned, the is Dave in on this that is the in as of delivery based sizeable Brazil.

additional would the remainder the the take driven back benefits when back half pricing the of we Now, marketing the you incremental upside moving at in forward, is look from of the year, half the by year. investment and that of

then same slightly then implying full QX and than we’re in in the way, guide QX. QX, there. because Now, little half, we haven’t raise built little basically still maybe think a this uncertainty it in the all of that the flat benefits and from QX, the these year in marketing back better initiatives that some both into there’s out But maybe a higher comp in bit sales my flat of million. about in $XX pricing it, and terms between up other the is why guidance But store the macro makes

Jeffrey Bernstein

the inflation peers as actually some as on your on have follow-up inflation. far inflation just going their tempered guidance. And then I’m the calling of Understood. top

of get whether was terms what to look you would any provide first accelerating your or we your commodity Thank Maybe could looking is for just assumption XXXX? and expect thoughts there right, like agree, in share as inflation? that whether you can Just you color basket looks second it further what you commodity maybe and you. half basket your and half inflation, into what your

Chris Meyer

sure. Yes, Yes.

half first teens So terms high in look, I inflation. the in was commodity the think of

digits in is has mid-teens we you year to XX% if and I in And to to a quarter first of QX be because for year, probably last range. then year with And low in QX, and XX% laughing ago, third to were when comes year, started example, the that the tick our that as in deflationary again, basket. to is progressed. then we’re it up of somewhere going half that recall commodity probably think what so, the the going dynamic our be or inflation The that double to do more from

So the we’re some from benefit get going lap. to

to as commodity commodities we our when performing we no this it relates how there’s inflation year. were the just thinking our question, are what is higher Now, look, than year, started

I If like you that. seeing prices, there’s the where we’re good some areas look things although like at pockets in news fuel and commodities beef, chicken think back wings half, some and then like smaller

way into numbers of We upside high thus there’s lot are labor demand. There its haven’t find seen still whole shortages, our record far. a

and other see some our, difference pressure it’s categories us way beef maybe I our may where some think is the the on some some So for between buy just putting we of folks example. you

locked much on pretty in We’re beef.

have we of more we upside beef categories. fact, the the probably year half than in in of do the in other back some In

We’re XX% overall locked now basket. at our this point on

So when there variability buying as much large of your sense? that a just on isn’t going to makes buy. you’re be Is not overall portion spot

Jeffrey Bernstein

very does. you It Thank much.

Operator

Sharon Our Please Zackfia question question. is with William with Blair. from your next proceed

Sharon Zackfia

to kind of second versus marketing brand be Will price it I maybe morning. been expecting. the of with would price be about building value the recognizing helpful? be for good plans about the of first or kind second give half, there first and Can that? of will well flavor question half the Hi, diligent for combined you’ve XXXX. proposition also increase on more context the guess, talk side, us the any And below plan keeping marketing magnitude or inflation. the relative that, contrast focused And half very what you the price the

David Deno

We’ll kind those are – questions. Sure. two of

to know, time. long for I’ll our But been come have kick plus marketing pricing. back offset it side. following company the as and the we’ll a try inflation. you has So with is What turn on off we over we’ll and do to Sharon, pricing productivity start then one Chris first then

the over we inflation Now the the inflation and some I’ll back pricing below inflation remain keep although, But and sure our value But there high, to we make going. for below Is any our half will continue we on efforts going. haven’t year? probably value equation all comments so you strong. keep inflation the to the of turn price price that this year, equation to Chris, inflation priced to way side. was very productivity Yes. will other we to

Chris Meyer

give just context Well, to yes, the pricing. around menu

given, did some additional expected. came X.X% in year. So, at this took pricing Dave were QX We – mentioned, in inflation, higher in we pricing as than QX. the We basically and

didn’t that So change.

looks to that when might back it pricing As the we taking inferred half in year. I be of the more

broke in half if about we’re in would that put in QX us that incremental QX. late a less price menu the upon range early you assuming our of pricing more or increase the think I effectively back And either menu – guidance, X% menu X.X% or in year.

still come out we feel And we’re a of pressures so far. to close we’re to seeing provides doesn’t there pretty what And so kind relative that seeing point, value. Dave’s the it like that to inflationary good

David Deno

a have the have also as lot a us we you know, lot, we And on of helping productivity side. margin initiatives

question. me marketing your Now, to let turn

going learned We heavily really spend mix cable, we digital, through near cetera. learned how And et year, that we’re the uptick the uptick market not of through participate nowhere to in about levels. a have categories. it marketing and lot discounting digital. deep we We And and will balance Sharon, our in marketing also go to we is our and XXXX

are of of you generally to our Our watch not deep because menus. we value them. with in we taken associated pricing, there’s a at have compete our that. categories discount a still lot We’ll themselves, our if do plans look on And that, lot haven’t generally but menus that don’t

price. a Outback can four our a in offer there, with secondly, and about for take talk combo price family a products a Carrabba's Bonefish, me especially. – great couple And offerings a food. at Let our At at great of a places, really meals, great family you then look and great some family bundles feed we what at

to So our about talk continue value. we’ll

kind any on plan discounting. deep to of going not We’re

of the year, that saw extent will ticket marketing XXXX. we to not enough We the but have spending the in balance

Sharon Zackfia

Okay. Thank you.

Operator

is question from with proceed with next Slagle Our Jefferies. Alex Please question. your

Alex Slagle

Thank you and good morning.

Just and what things curious, changed just previous lay the goals some the that with and bit dynamics Brazil and not to based in bridge moved margin inflation. on consider. I’m and of stronger, other that you those a behind sure the the be revisit out of operating have how pricing drivers then some around the what’s how higher continued now inputs wanted is evolved? to have to

Chris Meyer

Yes, good sure. morning. Hey,

to pretty we on Dave start part we back is margin indicated prepared don’t forward the target reality are framework to year, think that Dave of the have lever that as provided, only XXXX. the remarks, pricing pressures in record mitigate as past the in inflation. on we best move based operating look, we said And margin rely should And building long-term as the committed the to we because guidance operating So you have the to is And X%. about this despite provided. strong that as you to looking

think that enabled we the that in really provided we’re P&L. this biggest start investment going technology into framework change just the margin seeding to operating is overall of some I

things technology it’s year going back enabled to year. into given about, we be of of we’ve that, so some next half that that And again, confident productivity that and over the the talked remain this deployed

build well what the the As back is That’s would Certainly, in more hope that a you XXXX certainly it to environment of can would we hopefully target long-term as, be? be commodity will margin moderated goal. X%.

to here that’s thinking at not provide for XXXX to our start but in we as next think about this year. guidance point, We’re certainly

but a just of that work margin, things I that premises margins. growth very with Having to out. lever, includes are has there, margins think do a help some a So, other in ROIs, restaurant a have And that digital place higher still dining going could we're that get the that in putting driving off we there. some solution Building back the to another is in point growth business addition with right, best catering, levers, you and levers. is can are lever, higher in the opportunities attractive things to these strong these Brazil, the we sales about lever we're opportunities of which that improve confident

things in add You programs. like loyalty

who a thought was to And there's of look, did. look inflation So lot like the coming going it would've year clearly, variables. this into

So there's a that have lot operating change. forward to we variables do levers, that. we of But can X% target. this margin we we that can achieving committed the And think moving are

David Deno

back little in And bit, higher than company great just were stepping a that's see over that. [indiscernible] XXX basis it's we'll we to And and a continue points XXXX.

And operating so achieve cash to in been big part years. big what been has has margin the change a big few able the we've of been and a last flow

Alex Slagle

Got mean, locked. I beef, it. were just a up, you on And on It's follow helpful.

maybe beef, stays manage perhaps exposure best But forward, been a So in to bit how more your be have looking in you just could were temporary that if the view, that tailwind that of protein in a is just that could a floating future? the bit quarter. one interested elevated

Chris Meyer

sure. Yes,

supply So The go an have assurance year every lot But the look, means down for just markets to you're that right. think a opportunity into would that us, represent and running if in assurance come does right. spot spot definitely and represent price we as I a where have that markets – us. strategy the market we we're

way it. No approach than approach. necessarily that's just better way the so to And It's other. our is a different just

beef I we some we would together if have partners optionality upsides. you about is, you could do some we what there take we think these though, have as is in great and where part that with upsides put sometimes tell contracts so And beef

is beef us just for in market the this a the the if beef third early helps. potentially example, in some that better, about XXXX. to better as or second talk getting in to I get if for a in spot beneficial there overall when were we quarter So little not number going our be quarter, opportunity in little year maybe It's

Alex Slagle

Thanks. does. That

Operator

Credit Silberman Please Lauren Our Suisse. next your question with with is proceed from question.

Lauren Silberman

Thank about you. ask with you're wanted to customer what seeing I behavior.

with across what are trade respect look trends color channels? you you Any As Are the behavior, in any seeing across down, in changes customer seeing management? brand, check you differences to there?

David Deno

It's us positive see remarks, continue to Yes. mix see continued been prepared in menu as good and talked and a that's upon did QX Chris we for into to benefit July.

see consumers managing So to this don't checks their we point.

brands, our been some continued so In we're fact, seeing in up strong trade really us. that's for and of

And so reasons we some continue of marketing about the seeing. to our other behind why and we want that's one to business our value of trade and in invest to things we're that the up talk can the

in consumer there. So for the us is hanging

Lauren Silberman

of look Great. And have as you it in seasonality? much to sort at the think How do compares trends slowdown relative sounds do like improved. with the July June across industry, broader has macro it you normalized to

David Deno

a the seasonality, stressed what is company I'll thing we at the in look start our with but environment, macro most we that. but the with of challenging And trends more then Chris can some talk we do. about important

have good the business our trends which thing And Okay. also well. it. good things and I one legs and in I operations that do food, and some there's consumer as some to is to continues about did we talk mention, earlier And off-premises marketing to there want

color. a in go more I'll challenging macro Chris, we but stress we other the dealing and we're environment, for any to And things obviously, turn forward. over we So do you try that as

Chris Meyer

you give the context seasonality little Yes. I'll on a thought.

to fluctuations. this traditional the stimulus I and with seeing the much last closer year than seasonality year think COVID were you we're

we way, for of XXXX XXXX, our of the of guidance, more construct kind at look the come is you if in. fact, we a shape how guide patterns use In might our traffic

terms are a QX, the June and quarter June. and flow, July they like mean does holidays, P&L. that you back what excluding And to into the traffic so similar come of for pattern go way pretty in

then that and school. kids volumes And between that to little bit acceleration come then fact July did And August. encouraging. a the tick in again after up go we in course, So of the is traditionally back see pretty September down June they would back

along of so modeled our And thinking kind that pattern. we've

Lauren Silberman

much. so Thanks Great.

Chris Meyer

Thank you.

Operator

Stanley. Morgan proceed Our next Please with question John with is Glass your question. from

John Glass

morning. Good Thanks.

First, in is at can where you're might about probably seem this talk be would just you like staffing inflation, point easier, maybe turnover seeing labor what lower.

still line. that pressure on into some improving, you just think what's driven this I about wages cetera? think mandated market turnover and improving you're coming minimum et for state in perhaps you labor how seeing a going the retention by Is on quick states? and key Maybe

David Deno

Yes.

Last improve. are seeing time We staffing the difficult. it was environment this at

companies all for staffing we have got of be of Although, time, the time be our marketplace some you We're but company other that better. a cetera. to be we staff. faced didn't challenges the retention, it in good start our that that very John, has staffing, because et followed clearly turnover, metrics, long off it retained and a in our our at metrics, labor it gotten We seeing

And better. to environment's getting talk Chris to I'll the about the any turn of over And economics. so

Chris Meyer

levels and QX Overall inflation Yes. of QX. consistent between labor were pretty

QX. In fact, was a what down teeny tick had QX in we seen for

sort the to of year-over-year. that back in stability in just terms half similar just And cost of what validate math of So labor we're started just pure saying does see XXXX, what of we Dave seeing. the inflation goods was tick saw up. to then Again, terms of we in sold,

mid single-digits. then single-digits, slightly to QX, to range. to start start sort and see on you QX till maybe of of X%, even single-digits in should higher as just relief get you number, high lap you X%, And somewhere that sort QX, in the that more So of some X% to then mid, that, higher

John Glass

for year? or non-GAAP of And out maybe guidance for now for now, non-GAAP spell what just adding, there the maybe this. missed other the earnings guidance doubt, I avoidance any Chris, the simply is is it the you. is Thank unusuals just What's

Chris Meyer

so it's And to between difference then guidance the with guidance it non-GAAP guidance, convert $X.XX GAAP the look we the the what when non-GAAP, inherit The has at the the repurchasing to $X.XX. that. entire you and convertible, with GAAP in the by loss did the and adjusted the do

John Glass

Okay. Thank you.

Operator

JPMorgan. Ivankoe proceed your question next with is Please Our John from with question.

John Ivankoe

Hi, thank you.

spillover for could. units XXXX, you'll but capital, was guess new in, spend probably on aren't there's XXXX. XX on XXX if opened XXX in open in XXXX, I units Some to questions on that to some tweaked will but going obviously CapEx that to I be just,

in is to for what the in So number non-new unit CapEx CapEx what obviously unit And new is XXXX? is want I the question number your XXXX. solve

David Deno

Yes that We'll up real for pull here you. quick

XXXX, you about So if new capital. million it's at of units, $XX look

John Ivankoe

spending you're XX. new million on units $XX – On on

David Deno

million, lower. $XX units because the Brazil a are much, we're of these is lot that much they're and Yes, building so smaller investment their box

John Ivankoe

fine. right, All Okay.

think current. you excluding the the And right mean, remaining the of new – million run is really mean, units, I think the units? new just capital keeping of to right brand the is the of rate? necessary is term about do that I kind maintenance so on that longer repair, base not that rate business is what the like million, $XXX spent run intensity that number, investment, $XXX

David Deno

right. any we've and over turn I'll the as to John, big rollout past, forget, a now ovens, to Yes, more don't Chris provide details, the got, handheld we've got you've with in but right asked

transformational. that's So

our Naples in you I'd love the state to meet news fact, see there… out sometime and In across

John Ivankoe

in Dave. two No be do it. can tomorrow. it. problem. I'll Do We We do it can there hours,

David Deno

has the in kitchen, everything handheld, new new high has volume, has That it. Yes.

So that now level includes right that. of spending capital

bit Chris a about it's non-new capital, to but rest. the talk So over to I'll turn elevated on

Chris Meyer

Yes.

is maintenance that. So in

maybe I talked with year think range, is this little but $XX in $XX million to little inflation. year higher bit million before, a this maintenance about that a a we've

years call $XX $XX future deploying So new restaurants is you that won't IT that $XX $XX to in the technology. to $XX million, call year probably it for this we're biggest our million. million But the capital million same in that of it to million see delta degree

look down, the biggest IT beyond, as new as we XXXX capital would that our to point, pipeline the probably to Look into that's you grow. comes toggle. expect your and the – So

the So capital think number, you're get future But a going talking talking don't John. $XXX million. again, may $XXX about see to from this here. $XXX as start are to a as little you're we where If up it tick high in million about year, we're million bit I

John Ivankoe

Yes. did exactly wanted leading go. terms And I of to listen, where – in we're I

terms terms in of when talk we terms terms programs really and those numbers handheld, the For in I can what those kind how In and is KDS, XXXX of of of grill, about we start XXXX spending? can assume clamshell in the from future it's guess, benefits the point, how to circle of – the that be this in, probably biggest, the run I the your in how past. of most business to interested would versus in Dave, grill because run at most and I I'm mean, change substance point for is it's

David Deno

not by chain than I that complete volume you'll very most at all benefit lot are some some longer of restaurant. Naples, the year. bit back – the that's of And together. downplay XXXX, we'll for benefits supply complete it see Outback got the half we John. because then but ovens, the those that little it. of year. of of product our those We'll And quality, the a back service the a in labor, end we'll this expected of next restaurant of it's the large see house, times, the are a handhelds high at year, but Don't everything half in initiatives, handheld, Yes. back And And longer. it at restaurants coming mentioned things the It's in

And performing so very it's well.

talk about the So come you that from XXXX see that'll of our, can of the be point. in talk us, that benefits that of get kind And we moving that. some to and when those things forward. We'll with about are more some we John, financial

John Ivankoe

the And just timing updated so KDS? it, I on have

David Deno

leasing during XXXX. XXXX and a done That be bid into will

John Ivankoe

Okay. Thank you.

Operator

question Please Farmer next with your is Haskett. Gordon proceed with from Jeff Our question.

Jeff Farmer

good morning. Thanks and

a on couple up follow to things. wanted Just

be would July first, sales. So same-store

I think you trends sequential in guys in to improvement July. pointed

made or and referring to you you when if curious comment. Brazil, U.S. just both talking was I the that were So

David Deno

my top stronger. The so same, sequentially had the year gotten don't a been off of I U.S. which the head's way, have has terrific the great about has we by Brazil, far.

Jeff Farmer

And then further. just sort bit drilling a of little down

or is to the on improvement? the you July, June So sequential were referring that versus XQ

David Deno

where Versus June. versus has July June. were we in improved

Jeff Farmer

last And delivery one third-party margin one, you so then in call, some comments. Helpful. the made early Okay. just

where curbside in-restaurant margins off-premise is both do now? to right meaning question the So and delivery margins stand relative

David Deno

Well, curbs.

those the as we've in-restaurant like about margins. part is effectively the curbside margins said our same So good are

that our So overall we And of about really the good is right. mix, largest curbside. feel off-premises portion the again,

but of really in-restaurant In as attractive, margins, good they're third-party still as right. margins, terms they're not

because best we they So incremental are comfortable we've as very on incremental what are saying these the through about feel that that. sales, long is that flow sales part as, you and and talked is get better

seating you're don't the trading in-restaurant those get where visit an into between You benefits. get all P&L, your not you

really little still but bit again, So a good. lower,

Jeff Farmer

off-premise and you follow about on two a sales, of roughly of Right. the here terms in those quarter of XXXX, updated incremental off-premise nature up sustainability it's sit times half pre-COVID in quick sales for third And guys? thinking what's just as and those just last levels, we the thinking your

David Deno

the it's got growth, performance, that our down the in carry look and We doesn't a homes terrific and sure see think expect doing customer either are make Clearly, the And investors at they having people, Brazil ahead. to attention mention, it, the team I wanted thing wanting just sometimes or to to it delivery. out in the Jeff, sustainable. in continue you margins a And same-store get unit one And We've if just and on our PR and our terrific, there new is sales our to systems, you place. year with want but job. they're great our is grow years I could. we their process that last products then touched

in call to I wanted sure that make So today. I out our called

Jeff Farmer

Thank you. Fine.

Operator

proceed is question Jon with next from question. Please with your Tower Citi. Our

Jon Tower

for in taking consumers I I is, get in a little hitting past just Great. demand that Brazil it. Actually to seems that erratic. know on cycles, Thanks from topic, election market guess, that cycles

to demand you fall, around that some could bit? distracted So little chop a plans guys I'm bit hopefully in, with Are if doing an draw election have advertising they're even a that maybe what's curious doesn't any coming any this customers you by happening? do proactively ensure

David Deno

the year. yes, – of what want Yes, Brazil the strong we have in exactly those John, forward-looking me, question. a into ahead cycles through very to election it but about very talking has marketing with of Yes, in believe team well the done there to And get time planning. we ahead that we've deal are, the don't and of balance spent of been well are plans I and has job, that team down are a past lot we but great it. is

Jon Tower

the impacting prices. then later year but for going just want pretty dead come – to will There horse are that beef Okay. this significantly a to likely indications I XXXX. And the in U.S. here, back beat don’t down supply inflation year-over-year, outlook

also I’m the curious securing kind potentially you impact get would when timing lock? next pricing how So this just not of your thoughts year. to to curious you but think supply, I’m get for or on your thinking on that. about lock around Does

Chris Meyer

the have – some a I supply though, Yes. is negotiations don’t your you and again kind sure may then start variability your if contract But making be that There year. take assurance, conversations prioritize little in you we very the end less. timing normally don’t and little those September than of little lock shorter typically we a of until down would. we a anything longer, typically

that points correct. are foresee your changing, don’t I but So all

and talked very is for year. about supply been fluid next it’s there think good they’ve market a I now

out the all think on that just your is we I best all points decision But us. company. for and the keep of we’ll an all of top on, they’re what mind spot are eye for figure

Jon Tower

just Good. from closing quo? is And status obviously a then seen independents higher pace of kind gone bit industry’s where the some curious still any smaller in stores? of it of a accelerated just of Have last through chains level, pressures. Or the indications I’m markets from your you inflationary or me, quite have

Chris Meyer

get seeing but of think and a on think we’ve that’s any chains the are don’t discounting all side, smaller we’ve seen. aggressive about seen little that. I I mean, stores more No. I you

Jon Tower

Cool. Thank you.

Operator

Our next proceed with is your with question question. from Brian James. Vaccaro Please Raymond

Brian Vaccaro

terms seeing of but in a at Can to how give of circle ballpark wanted Outback. good that Can some of a you’re installed? the many quantify you the we it how to order benefits have end on many and Dave, how you status and us back rolled? package started I by some many just throughput, you accuracy, year the of Thanks morning. complete bit, And new Hi. – kind expect you rollout labor just fully little things? of touching the When those equipment this or on savings? the can update on

David Deno

yet savings and have those I about It’s things some of the into quarter, a the reasons, little and XXX. get installed competitive the other for the though, don’t by year of too some ballpark what we’ll the third labor we’re end because early of seeing – of to And by things. want to end

in order back me it, much accuracy a people this just but talk the improved. to the new takes work of Again, is The fewer it with let is this start. So equipment. broadly about house

far our scores. talked our things provide Outback don’t is out remarks, at But of So I service some scores, improvement our customer here, very too order turns accuracy. myself comes seeing because for good if look ahead the really about in in results. we’re those faster enthused our The by together table food And product get Brian. to want faster. then we’re I the you broadly scores, to are prepared coming

the we’ll year. back will of provide by see end And the done back Brian. handheld more finish update at equipment. be the of The XXXX an that, we’ll we’ll this So – of with our house on the half of

We have demonstrated achievement. more

house We’re to of labor seeing the it’s But customer a little measures. some it early in too we probably our about provide very real back specifics, it. but optimistic are and in

Brian Vaccaro

Thanks what spend Chris, ballpark. you spend sales But the what marketing, second that of And quarter? a embedded guide? ballpark as sorry was us And missed I it. in to Just take that. half, it I plan on that second marketing the help can the in for percent guess in Okay. if you’ve you where the

Chris Meyer

Yes.

QX. of I’ll back it’s think part where on that other range, And we landed have X% I in the what half, sales Mark of your the closer but question to the confirm about was probably Brian?

Brian Vaccaro

Yes.

marketing half investment I’m year. the of what in through Just the plans the quarter? in you said, gauge you increase spend your think level back what second trying the the embedded, to that you’ve versus just I seen of P&L to we’ve have

Chris Meyer

Yes.

QX in probably and and you QX, QX you’re relative between so in in guess would if $XX look up to it’s in year. or each think QX I probably last year-over-year, – million be my

Brian Vaccaro

in million each $XX roughly. quarter,

Chris Meyer

I telling spot me on, sales Correct. Yes. X% And Graff the – that QX. was in I is Mr. on of was

Brian Vaccaro

comment on one, just year trying that’s All be in then If Is to right. would XXXX? to versus where versus done July to quantify you Thank level last willing June? all relevant Well just a the you. that clarify All of one we commentary. and had. And the that. right. spirit set July then, are, I That’s

Chris Meyer

Yes.

the June wasn’t because an had July our of specific forget dipped But kind Not year where would been a let’s look, three a in get we’ve sales irrespective a value too – steady year. same-store of number and about encouraging. So improvement and a time pretty little improvement period, the the on negative, pretty we kind they if make July QX. going both though, landed three sense consistent talked or – there’s sales July same-store in of in just But in been in bit that’s number importantly, year it July, is of to the June. between I digit again, and of if of one point a clear, kind beginning is just which go back we both basis. comps pretty be has you it dip before double And that encouraging which consistently comps. we’ve you trends. progressed – an June that of has is CJ, That slow, as and given they’re Definitely three of year definitely improvement terms seen

Brian Vaccaro

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

Operator

Our Garber Please Jared question. with with your from Sachs. next Goldman proceed is question

Jared Garber

of to up marketing over million X.X% you discussed pushing Great. end wanted or for just swinging a sort quarters of looks to couple I year. little question. that that the the than quarter $XX flow actually higher of little like if bit. bit like by we Thanks a looks maybe the back that the in next the It a you’re

slowing then expect the building sustains as to and into X%, marketing with be that X.X% marketing can relates XXXX? than a you how that going forward? messaging see are maybe within levels that it backdrop higher that that a specifically, leverage pre-COVID thinking spend consumer us manifest to just know it or to be fair you maybe little to should How you Is the as we level bit And marketing help relates value assume I expect going think sales it below Thanks. to plan? targeting that. I to brand guys understand messaging how of maybe around you broader about the

David Deno

about our very some seeing. offerings it that talk line the have the other as the that you have at industry. down, up – is – about we in digital. other have just Outback we’ve that. We at values the look Yes. them thing tremendous combos And the we’re We learned earlier, if especially players toggle in when up have going with menu you we that can and of so that much And mentioned marketing compelling, or can with to are flexibility. on We depending our particular, on returns we I we’re

those So, returns the investments good look understanding there, we what like. have a very

be We very we’re going have what understanding marketing. good a to of

to offer But that discounting. a versus the will of doing menu we going We’re of value items Outback looking not at good very be at be some deep our competition. some

excellent I to spending understanding up of an we our of excellent an And we’re what have we returns depending where the on to said, ability have the that’s or be and flex we’re down, So money. seeing. going like understanding how

Chris Meyer

Yes.

of was XXXX X.X% in marketing sales. So

this, be when we X%. pretty feels know a good. I feels a QX, look, makes probably at bit percentage that’s to that. in pretty tick-up Well, It look, our reserve levels sales, little we’ve to And It’s good sense. pretty It but approaching mind right It and X.X% what so to better sales out X.X% going as not going feel we said, QX range. of of spend point. that that may like QX. we’re laid is to this we’ve of long-term was change this, as sales like X% to proxy. hey, X% at a margin we X% the to a think gotten it your And think on framework, But range our you decent I to learned we

David Deno

or depending real and with And seeing competition. and as up every environment, we’re we with what we what get that can consumer information time day how look at on we’re And down the we’re consumer doing. move seeing we the

So our I’m that returns the on have marketing very pleased with getting we space. flexibility this the we’re in and

Jared Garber

for color there. Thanks the

Just me. one for follow-up

contextualize, seeing would that time of the bulking, you’re some trading On the average Outback up versus about the benefit consumer’s and term down But traffic X.X% in in help to dip line, anything what over maybe period. just still that at quarter. we better increases versus you of so versus same lack you traffic sort Is in looks consumer XXXX the can I speak mentioned of suggest traffic XXXX? like mix checks it up as trend a see time XX.X% the the that is maybe that there for know lower?

David Deno

bulk. consumer not remind our change the spend. to And are seeing at want marketing I discounting versus Outback the marketing level far we the as we bit No, a that profile and quite XXXX, as investors of

the that. forward trends about that you in as benefits over trends at traffic at we’re some mind. like of Outback, And changing sequential on seeing at Outback. going the seeing turn of So the please of look But we’re rest our piece, we’re I’ll to keep the how We we’re marketing. seeing Chris that traffic talked no, improvement and and

Chris Meyer

still to in add mean, was now of And want drive points. or activity investments to emphasize more help and that by offers. ahead traffic, portion our black to basis to right? a marketing by was that’s over that relative I XXX point whatever traffic just Outback Outback little XXXX significant that making And use discounted And that traffic in from we’re measure context. Well, of you box replicate incentivized a traffic. additional not that keep mind, choosing will does also remove base

talked higher a ROI. carry they about this. We’ve So

to environment discounts maintain to back and had XXXX dynamic. we of the continues to in those remain that out deep change of keeping continue our But brand. strategy look, going the we’re So

Jared Garber

reminder. that Thanks Great. for

Operator

with Our next Bank. question is your from Mullan Please question. proceed with Deutsche Brian

Brian Mullan

you. Thank

on development. question Just

Just how there that the basis? you equipment X% it or development today, not, stands is As you delays, pause something And the this U.S. is in put to year? that on take just growth way pretty of up like a if then environment? about X% macro to think that unit growth net do build might if wondering due where what related next a to net rate could the cards, reasonable are in long it be think is regardless scenario a to outside committed any to of you to the on or would

David Deno

I’ll some involved career, answer tough. question when of in we companies that I’ve first. In the the best is little the been No. my second a move economy’s made

to in along on You more context can into to basis, et cost, net we X% do know or goes some that saving I basis, XXXX going growth maybe year On the point. X% a But on as sites provide really guides at the on headwind this we’ll make year. guides XXXX next or a cetera. net aren’t and get

pipeline pipeline that the some country especially that of parts the the seeing looking we’re real good estate sites is that our areas in great we right So developing, tell is to want growing. the and I can right build But continue team really returns ahead. at Outback, the you years with and in really trade to at

Mark you’re would expand But talk about years X% I but to X% continues about beyond that more calls, in ahead. net But a little we So anticipate us and future going the on see along to that to of premature to happen, in I’m part it’s that. world happen for why talking reasons a basis pipeline that we’ll of move go he’s over the our to the team. make going because that with up. that it that’s move asked the to one Graff to And make

Brian Mullan

rewards as a mentioned new you last converting a programs follow-up, points based. Okay. to Thanks. dine call And

elaborate you you that consumer? changed bit? little to the with so just that was of How’s Just you for change. the over could result as wondering the far Exactly going if Maybe time see a benefits what could that program? expect a about on talk

David Deno

faster. to points us – to lot our visit program, more a offers went which program lot to a gets a base reward a We from a based flexibility, customers Yes.

We We’re marketing at just signups, an seeing is more and in programs. the uptick this the can start. look

gets the of here there’s us, that and benefit going consumer for both, the quickly it’s the costly as think both partnership we’re It’s but to for the I more to the and not take company coming rewarded advantage quite consumer end magic the or opportunities together. of.

think going So greater we’re see signups. I to

going And see all You’re to that they’re valuable. and customers, greater to market, is to it which and going get information people so once more marketing, then sign more. to more up, use then we and our

dine program this our offers. and what it So future we about the rewards excited – are very of

Brian Mullan

fully Is transition the clarification? for Okay. just complete that

David Deno

Transition’s done.

Brian Mullan

Okay. Thank you.

Operator

question-and-answer the Dave And call We I’ll turn Deno now have reached of remarks. over for session. the end the closing to

David Deno

We forward QX and in you of Well, the to look company. some thank you to conclusion at everybody more thank you interest for talking October. your our in

Operator

Thank lines you for at and participation. may you time. today’s conference, disconnect concludes this your This your

Bloomin' Brands (BLMN) 29 Jul 222022 Q2 Earnings call transcript