Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Bloomin' Brands Fiscal Fourth 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.

begin. may You

Mark Graff

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

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

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

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

our call, of a update of for highlights, XXXX remarks, these an today's we we've for we quarter Once performance an completed brief guidance. will the company and fiscal recap open will overview up to provide XXXX, questions. the During fourth financial call

with to now to turn like that, I'd David And the call Deno. over

David Deno

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

challenges share events was up the than brand Combined the This compares and weather results. this earnings XX%. with double sales XXXX which morning's earnings release, sales, $X.XX positive in comparable the same-store were XXXX noted both per $X.XX QX U.S our As more of despite quarter. having XXXX, each in from adjusted to also beginning at is end up X.X% QX diluted

culmination We where a year successfully with inflation. QX the was of our results we were navigated it significant and pleased

to to fully value not offset preserve made During equation decision our and inflation. XXXX, we the raise prices

will decision the customers. for to have has our date, remained short-term While we resilient the long-term consumer believe benefits

In Fleming's XX% recognize double-digit especially I XXXX is sales an like the In Brazil. for comp XXXX, same-store for terms of comparable were consecutive This growth performance, up sales up to Brazil of Fleming's. year second XX%. were would year. sales the Fleming’s in impressive

not XXXX our without our employees possible would and results center. and have restaurant the been Finally, at talented support restaurants dedicated

the our Your makes restaurants commitment guests of to what serving levels experience with so hospitality successful. is highest

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

As key these and XXXX. good you'll to see priorities. our we our a in the are the will year be start objectives, our from achieve guidance off for quarter, To

First sales drive traffic. and healthy and foremost,

this and platform by remodeling of through sales We will leveraging introducing marketing technology, our accomplish improving new new frequency, drive products wrapping finally up consistency and execution layers, and the restaurants. to proven

completed and We've Let the talk improve we of investments our about technology me first execution servers. made consistency. for to rollout handheld the

In including ovens. grills we out to and addition, continue advanced roll new cooking technology

embedded in will This improve the preference plan. third the in productivity new complete our benefit technology experience further customer XXXX innovations is addition guest dollars These in leading and increasing We rollout quarter. the to frequency. will to of the

guests. more at is restaurants the we The second service, the food to to Rules, exceptional menu we back our brand It's we reenergize is our offerings, designed Rules, and marketing. ties great everyday new Right" It's more traffic sales and support Right" part our equity attitude. aimed with most Just and offer heritage. that back importantly, it just "No the highlighting to marketing But is Just than "No frequency. an how launch. our value Outback bringing this in of marketing and platform, targeted building XXXX, deploying Starting to drive and additional dollars build are is

complement to and being layers sales offerings sales wonderful element Outback. [indiscernible] our One the our be our to which at building food introduction new will brands social caters introduction of done the Fleming's drink example is work the of third the during all at strategy evening. The of early

and and also to piece to look business. forward from We business Fleming's our coming this the within continue innovation that's grow of events catering

It emphasis Another layers offerings strategy very the as brunch our returning providing provide is successful even with final financial I more is brought good driving at the want the and brands a in details and example is company. for to we progresses. to part better is We'll Bonefish. a XXXX. back sales food day additional while additional The sales of on year remodels highlight all return

developed traffic large variety touch assets of levels. as a bringing know pre-pandemic ongoing during the key pandemic We to our can to have a we element with the multiyear We at locations business. best percentage beginning to deploy that scopes keeping restaurants. our varying We back and based XXX traffic. their year our on of a to intend restaurant of relocation looking our a remodel paused efforts effort is of this program remodel over this since about our All is in along growing needs

in are beyond. deliver XXXX Importantly, growth layers to these platform and

for to well. on We'll is capabilities. our strong capitalize delivery XXXX expanding is very our priority continue carry out performing Second which off-premises and business

for business. lever and Importantly, channel margins in the brands. Catering are margins growing will profit comparable important of this remain our in-restaurant to the an

fantastic industry in an has done The this a and Carrabba’s job. team leader space remains

and We great see to knowing Outback catering. progress do in out job more of can Bonefish, both a expect

our a bundles and we off-premises Lastly, large to through our platform, we significant part expect offer of growing value business. remain

years a The to third maintain environment. last inflationary with have major progress priority made margin operating the is highly in X the we over and

discussed, and across in-restaurant off-premises growing As the traffic with healthy improvement channels. margin start

towards of on high and more targeted channels. promotional digital discounting We reliance return pivoted also advertising LTOs reduced spend

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

achieve despite X% inflation, committed persistent XXXX. operating well the discuss, long-term. growing margins will to been we've remain to Chris above over We As able our to margins

our off-premises become to the approximately our to sales past year, a through over digital progress the and online to support company. implemented we has were system ordering have more In business. Our digital channels. U.S capitalize digitally X expectations Both of new and outperformed fourth In a downloads. mobile new half million QX total savvy priority is app XX%

to activity offerings. more expect app and the digital as our and see improve of we can functionality features You

on grow Fleming's in XXX, intend and Brazil. significantly our our double footprint U.S goal restaurant is the more XX more And eye finally, keep for priority and returns. to see opportunities in where margins to have to from to restaurants, than expansion strong And profit Outback and is and major especially of base. our final brands We at build Each grow We plan these Outback, Brazil. Carrabba’s. offer great Fleming's sales in an

share on Before balance power say a improved. and turning And possible sheet. $XXX highlighting increase flow debt for of our expansion dividend million credit our significantly a reduced this repurchase I are today year would authorization, We XXXX just over the and Chris, new generation. to be major ratios good company. much want progress not without our to our we cash In summary, of announced XX% was a kind

focused on to building our thrive. are continue great that business will a We while goals, achieving XXXX

on who call I'll the turn that, year with XXXX. and more the And over QX will to Chris, detail full provide now

Chris Meyer

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

our Elliott November consistent in QX. before improving U.S QX, traffic than the an in impact industry Traffic in was hit last was in sales. consistently brands, sales better traffic XXXX lowest Winter approximate weeks the of in relatively our storm week fourth it December. In our and with was comp first fiscal had quarter the on trends, X softer down December. the Despite X% X.X% materially our of

over significantly trend the traffic our XXXX. Importantly, has weeks of X first improved

in X.X% XXXX. menu This consisted versus increase and up was of check menu price decrease in a X.X% Average X.X% mix. QX

what a mixing average. our but per lower-than-anticipated. change Our LTO in catering higher-than-expected, line call, offerings the with check of change business quarter's our activity a was last discussed in menu on our appetizer carries strength lower we changes product was which mix pricing and was person This in

was U.S lower sales, of off-premises slightly XX% At than QX. QX

we on in was tend this primarily from to migration expected a our the occasions see change QX and curbside special dining. in-restaurant and QX, was Given emphasis to business

business third-party QX flat was XX% at sales. from the delivery U.S incremental highly roughly of Importantly,

large terms success. part growth sales. In of key of XX% total a ongoing of mix sticky part was XX% brand off-premises performance, our was sales, our Outback be is moving Off-premises of strategy and forward. a will It remain Carrabba’s and of

lapping restrictions a fourth Brazil up of were quarter from operating note XXXX. XX.X% the COVID-related sales. on comps And QX QX versus Brazil's XXXX. final reflected

in levels. Brazil's XXXX of were comp was up key success quarter Importantly, versus component our a XX% sales fourth result QX.

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

Adjusted earnings diluted charges $X.XX, wage in and most that results This GAAP XXXX EPS worth XXXX. profitable adjusted certain and QX our cases result fourth QX adjustment versus doubled XXXX. $X.XX share our our collective restructuring-related of was share quarter more in adjusted hour primary and of The diluted of earnings was noting per adjusted represented XXXX was per It is in $X.XX. the than our company's difference history. an QX between for legal

which better levels versus was from was beef labor in X.X% QX, Margins margin by historically was mitigated earlier year-over-year basis contracting, XXXX. while high than QX in inflation Adjusted it inflation the QX. driven in X%, was in operating points Commodity income XXXX. X.X% favorability levels as some in XX in XX% inflation our was improved

than unfavorable inflation. addition, productivity from tight. on In benefits the remain impacts pricing, These costs incentive controls more our we Overall, from benefits compensation. and had offset

was better QX XXX XXXX. margin of it Our than operating points was basis in

points XXXX. restaurant was QX XXX basis XX.X% of better Our than margin

our We and as average and as benefit efficiencies continue check. international well menus simplified increased growth business in to operations, overhead from

expense year. XX%. infrastructure investments QX, general support QX and in increased up in levels administrative Depreciation our last This and spending rate were to capital growth. both consistent expense is tax our adjusted of Also in to with our relative and was

total capital at lease our below as our of to This was to down we of $XXX $XXX million. and puts leverage Xx. ratio end are current structure, today, adjusted the total million the year, of Turning debt debt

We have on debt tremendous our progress made since reducing XXXX.

$X.X the end perspective, For debt balance our was XXXX of billion. at

repurchased total we a repurchases, share shares $XXX in for of XXXX of million X.X million. terms In

$XXX authorization stock We have significant progress that Board to repurchased approved and XXXX. expect in our make of on we million has $XX year-to-date, another another million

in signal a of strength flow. have our about $X.XX investors to our provides is from and our increase We a cash $X.XX increased a to quarterly This XX% dividend yield our the strong very in also attractive free our share. dividend confidence a share

Returning shareholders. We to where cash story an we to second our year returned and expect consecutive XXXX $XXX to approximately mark XXXX of part in beyond. the shareholders have is million important

Importantly, debt either increase we're our available into able to down invest the invest or our and have initiatives buyback in to pay back stock, growth people. cash dividend, ample

certain by gross well as benefit for the This Before COFINS. provide relief to company. as is our Brazil In to pandemic. intended the of guidance, I taxes a turn wanted period unique for income corporate introduced a and will taxes legislation revenue years. discussing spend most a a industries on a minute enacted impacted X% PIS for our that both federal that severely This has last exemption X COVID-XX government action in impact XXXX, known Brazilian to legislative I rate as

for that Brazil eligible our Through exemption. a Brazilian this business the favorable determined is ruling, in courts

exemption we've prior an to The we this our this approximate X-year earnings benefit our material year, As impacts share. to significant and benefits XXXX estimate business exemption $X.XX Brazilian COVID-XX. negative our tax discussed will from of start from a impact earnings this period will had per provide that on calls,

this benefit will results. our I financial two in ways distinct As indicated, Brazilian in manifest

PIS and as we assessed COFINS taxes. and certain taxes goods revenue First, on services known

with is in will This million of PIS exempt for approximate to $XX tax approximately primarily credits income and million Brazil. paying is lost period benefit $XX split COFINS years. from a $XX and operating tax be by from an We benefit COGS, expected million, expenses. operating offset of The be income corporate X taxes exempt between income revenue in equally labor expense, operating increase to

is the partially will in on by multinational by X-year we our the Second, benefit companies. generate rate business. Brazilian income million be $X U.S of in this required from expected generated corporate corporate This have will tax tax by In exemption also a corporate minimum offset an total, Brazil to X% taxes on exemption additional XXXX. tax income

our in embedded represent each per exemption X $XX million benefit one-time The will share. benefit. not and combined of COFINS an years. benefit impacts next income million increase These financial corporate in tax the of our of the of will exemption million be earnings net PIS a $XX is approximate the of This $X.XX and $X or statements

included and As GAAP both such, our in will be they adjusted results.

Brazilian government guidance the alter earnings properly or for the disclose both future, release, or of this will impacts. be Should our the provided we earnings legislation eligibility this before corresponding of the we system benefits it share a court reconciliation exemption. our after per In to sure and our in

that In addition, keep XXXX XX-week XXXX. December will XX, a for in year. Brands December The XX, mind Bloomin' week will be XXrd fiscal XXXX through be

we the this in remaining Christmas, are on very volume closed XXrd sales days. days Although high are X week

EPS. week of impact the expect We the XXrd be $X.XX approximately to of

guidance. our to XXXX turning Now

XX-week a benefit Should we reflecting year, approximately a a U.S First, basis. traffic a be more X% more behave to there XXXX. consumer comparable the seen view earlier full traffic this on with between includes the average check macro uncertain what This on better X% in we X% restaurant environment. like sales of on expect outcome could year have be and

GAAP Next, diluted adjusted expect earnings share to per $X.XX earnings And $X. $X.XX and we be $X.XX. to diluted be between we and per between share expect

benefits the and the includes tax exemption guidance the week. EPS Brazil from Our XXrd

inflation labor single are the be Modeling digits and expected in to mid range.

locked We chicken Beef be and our is Oil, range. this are to mid dairy, Lobster, broader our expect commodity and grains be commodity be inflationary XX% beef we pork with locked, are single inflation and expected deflationary produce to on expected currently line the digits XXX% year. to are in basket. most categories. overall

slowly of the the that to the than wage with would down We've in come continue first of year. half seen and inflation year year-over-year we expect XXXX second better half the

inflation of the in history our year estimates Our company. make would second XXXX the most inflationary

identifying restaurants. For spent time productivity significant our this reason, in have opportunities we

and technology sourcing enhancements our utilization in in Outback we're chain, ideas at benefits targeting XXXX. From million the productivity to $XX product supply of

initiatives these expect the the progresses also year XXXX. benefits into We and incremental as provide ongoing from to build benefit

as expectation from a check of Given legislation operating from comes the well new margin both of benefits XXrd the average should XXXX XXXX. the week, as levels and despite be inflation. tax year This expansion productivity and the of Brazil benefits persistent

due new is million increase tax expected between restaurants $XXX Our expenditures of effective expected million. and additional and are towards XX% $XXX allocated our spend be between from XX%. income and dollars rate is Capital to be This $XXX remodels. to an XXXX to million

with expect domestic Outback We we Brazil. wide in strong complement XX to to Finally, already capabilities growth open system to XX mid and restaurant new restaurants. began emphasis on ramping XXXX our Fleming's in an our up

see restaurant we when new to the continues a be in number pipeline material of XXXX and opens. restaurants expect Our fill we to jump

weather traffic weeks be XXXX suggested. U.S in As comparable seen greater favorability and it unfavorable lapping first we benefits have relates what the expect have and from to X% to sales Through than restaurant up X%. X quarter, Omicron QX, between the we of would

QX our we lap expect from been sales Valentine's some with last to level out finish guidance. has year, begin our in do sales Day. to as to This beginning contemplated strength We

share adjusted between earnings We and This will the benefits $X.XX expect tax future be $X.XX. exemption the per guidance in and guidance Brazil. QX from include to

the final note open up call One I for before questions.

an my strategy Brands. years, our has For excellent to investors. been He been X the Mark past partner Bloomin' for has in communicating Graff ambassador

was to Development our many charged As you know, engine. Mark President igniting last of promoted of year, is with and Business development Vice Senior

his gains step that is Mark IR it aside task to for responsibilities. As from traction, time

to our announce Tammy efforts. investor lead that Dean I pleased day-to-day am now will relations

coverage and to the Relations next brands, the at to Brands IR be and Mark our introducing analysts Congratulations positions brings has dining casual to She of Tammy Mark choice years finance our is Corporate experience of and Director over held perfect Bloomin' our XX of Finance, both role. over at will moving Senior forward. the Investor several lead function weeks. all Tammy. Tammy As to

will this stronger And are and to the summary, company. up call our Brands becoming open was we operations better Bloomin' that, year well on way we for in successful focused with for So a questions. another

Operator

Instructions] first go Barclays. coming [Operator question today Bernstein from Jeffrey The ahead. Please is of

Jeffrey Bernstein

My just very is Great. to Thank and question Tammy. on congrats initial you comps. much Mark and

mentioned it For positive traffic point close pricing I XX, seem one even and had beyond guys headwind, had the had that. you looking weather the it Outback, you for think below up comp was for what to I know there fourth that you but a was quarter. fourth implied what quarter, would X% like seemingly a down even the shortfall hence like you looks X, was was street the

wondering did just end as was whether lower decision kind who I'm down accelerate a trends lot we or do if around to thus disruption. of And with the had I'm you the just like some shortfall was X%. being know to traffic there your context far and comp it that why the conscious value part and about can you lapse. perhaps this whether on I out So provide talk weren't then profitable if further year, follow-up. wondering shortfall, but has could Obviously, one weed consumers a

Chris Meyer

Good is Yes, Jeff, this sure. yes, Chris. morning.

know, skew relates last as So brands week from tend disproportionate that to the impact to special of occasion. we it weather do you in as a have QX, And fourth our quarter.

X% wasn't our contemplated a on obviously was when negative QX sales. And Elliott storm prepared winter we that guidance. So impact our that

the push of October, But the expected hadn't positive negative menu was to in positive But as said I'd certainly something that that change the remarks, In into November. mix strong byproduct most turned addition, the running mixing for better prepared catering in probably mix check been I some that from that with I we year, was into the of that as average, mix LTO say we've activity that think to a expected. negative manifest. push, going positive the as our than more of well certainly

in say it number drive I'd and week to taking But it got news finally, even from look, of we trajectory softer improved We hit. that in and the place pretty course, and that importantly, was even were then -- the initiatives of positive November our some in weather had as were building relates further last significantly trend We good traffic, that then, December, initiatives expanded in overall a And December. put in momentum But trends we in we're to November. January, traffic is, our momentum on, in those hold. December, better. had of

good look, pretty we But together. So, some context trajectory on on. comp QX I feel that think about hopefully the came we're how gives the

David Deno

better. Jeff are to would QX, improvements And speaking Omicron are trends what traffic better and than weather The the suggest.

things, that about talked about good are it. our think I layers we So prepared we our coming of brands. terrific the the the And trends in together certainly are remarks traffic all very feel and in

guide. So -- embedded that's and in the

So is the because the the momentum a December certainly softer last Omicron to just carry are in we weather. year January that traffic lapping and through and start seeing and increases February, beyond

Jeffrey Bernstein

And commodity the on for outlook. I year quarter, In think mid high you single-digit single-digit just full last the Understood. thought was to my 'XX. then follow-up maybe said you

which beef with commodities mid tempered coming in right least your Now overall single-digit in XXX% understand line that know surprise, And was that's basket. to I at you are us. think you're mentioned, locked easing. mid to you've I the on beef. But single-digit, most

there's with of Just that next the is issues in lots wondering to this whatnot. inflation provide around year I expectation accelerate year could supply and you beef into later if industry, easing chain that. short-term know, while into likely and context meaningfully any

'XX how year in the mid would as that just a likely 'XX, to XXX% are, of would Thank an therefore you. your in we towards that be into able what you that single-digit? and And you I'm whether where end move So wondering were inflation. see secure thoughts acceleration

David Deno

Yes. Sure.

and So we I'll on give you where some are beef. commodity think context on guide, the overall we

as could would on time. mid And do point that progresses, certain your locked inflation with be range. be to take a little the on that in We in reality there basket. prepared we and able is, the certain areas advantage probably Typically, overall in sort we want we line see be to the XX% year we in those. to upsides remarks, is at look, said of more are I locked, locked as said, the this But are commodity beef we XXX% single digits as the point, beef. of broader And is

going imbalance, put market time, to supply of pressure just to beef the is going talked on marketplace, this in hey, last about to Look, like moving sort there's that's We the pricing. see thought. available we product going less you're be look, a

and it December the doing started You've in January. spot markets prices seen into in as have increase

beef. guys, been movements like we about exactly in started you that we Like in tell having we thought. So conversations November, locking on

price we excellent have mid supply gives this marketplace, think in feel a that's is And like land. place gives assurance. us feel be. a like it We look, to single to great It I chain digits assurance, We in pretty an locking good place us team. supply

I think the this year. that's of other market, challenged we're soybean basket open on commodities, terms bread, pretty inflationary. oil, oils, like all Cooking certainly oil. cooking those things But will be grains, In

upside the we on some hopefully can So, that year progresses. as well have as

weather going very dependent. Produce is to be

better well. as ebb and And should be going freight that's flow. So to

as So we're single-digit pleased it you certainly look story at we've number, done. our beef work to relates that it when just the isn't a with basket. pretty mid But

Jeffrey Bernstein

very Thanks Understood. much.

Operator

question ahead. next coming Alex The you. Please Thank from go Jefferies. is Slagle of

Alex Slagle

Thanks. and congrats. morning Good

David Deno

Thank you.

Alex Slagle

of is called savings some opportunities, opportunity in dig pretty productivity million wanted in the future significant. Just into for an to which out $XX you 'XX,

bigger a Just could the of talk initiatives of couple few to for to see highlight there and wanted you if a us. kind

David Deno

they Chris expected. on over initiatives technology we about it financials. and now as a while time, come give to some to for with Yes, strokes, I'll talked have together of But the and the of talk some turn broader our

Outback ovens [indiscernible] third So out. are The the happen, and middle the quarter. Outback finished the the grills handhelds rolled the cooking and in of technology in and

chain us productivity job, for more food the compromising really great has to has course, do supply and importantly. a together for supply come without of team, in us. food led productivity So continued very and our And that there to has quality,

over So to for turn context the I it financials. other on Chris will any

Chris Meyer

Well, provide the initiatives, these a return. about technology they above as financial context I'd and that, we and have add only beyond talked would

And that's much you we the put $XX target, front doubled, of pretty we did the this million initiative year, the XXXX in so coming house. if the what from this productivity productivity back this think from chunk and our both perspective in place in a increase in biggest that is technology that about and of the house of

this in And in another keep this not of equipment middle to to thing that place to mind a just the as until thing. importantly, We're the relates have it not all year. is it's XXXX going

there in productivity. well going be as of good into to terms going is pretty a tail So XXXX

in over we're as is, of would add So sales well is, this gains I result certainly shape. a thing And Outback good as time. team pretty and we last the the knows this expect

turns that diminish as customer have our [ph] and metrics. boost our it operating sales improve, service recooks boosts table as our we will As improves, our and

us So it's productivity more expect in also for we sales the that a financial to It's just building activity than capture. P&L. upside a

Alex Slagle

Thank it. you. Got

Operator

Credit is Thank you. Please Suisse. next from Lauren coming ahead. Silberman go The question of

Lauren Silberman

Thank very much. you

just operating of expansion. one of XXXX margins, year guide you the on the being you takes Just puts Can and the first to for get there? through margin about a walk talked

Chris Meyer

Yes, sure.

So, well, this. me do let

apples-to-apples an for a on margins minute. basis talk Let's about

the this XXrd So of benefit week. exclude the exemption of Brazilian and tax benefit exclude the

more it makes clear. it So

news. bad the First,

had, of like it's inflationary really coming inflation we'll XXXX shaping up off have year's million. million levels, it, be of XXXX still with said, last even headwinds, as call inflationary If record So $XXX year. this to I $XXX

of That's from high. margin still to pretty, So inflation it's alone. just basis points close pretty pressure XXX

the traffic, should flip largely average all check as productivity And increase is in on going the to million simple. you offset pretty side, of It's story right, down to come from we the able inflation. have there, be $XX margin to discussed an then as right. X% that estimated But well that

outcome our margin assumption track into versus lead slightly negative macro plan, a by built this driven environment, largely we basis. an on XXXX op year to negative that uncertain Now XXXX apples-to-apples a an would on

the were doesn't year. manifest, to how where negative I if this started could margin better last outcome that Now, we compared traffic year, talked about have year, we we've a and

the versus keeping at though, my feel good restaurant last Importantly, restaurant to margin positive flat I level, pretty year. about slightly

depreciation And a bit I'm amount margin margin G&A. and why year. be on the that's lose this a Now little to going perhaps challenged small might more than a on op restaurant little my

rollover But, I not things that say, it's and we're important think have you're fast if to decent And 'XX, a going second, change, about XXXX, context initiatives. what looking again, okay, for of are and be to of to kind a forwarding right? should couple inflation these less. provide from amount just productivity First, going

target seems So reach. remarks, as Dave indicated X% far more that in in the prepared marching back to closer

as keep margin to XXrd as it exemption in is though, that week Brazilian accretive. also both well the tax this mind important, are Now,

XXXX. is going to margin So expansion those it you're reasonable include you to have that operating in expect when

David Deno

to XXXX. want to provide since gains margin And sustainable I we've context just it term a had longer is

expect continue laid to so out that Chris in and we If our eloquently. like going forward, you look history, back

there it's us, a and X% increase, all committed huge So where company a we're margin years it's the long-term, for we ago. which few to a were is as

Lauren Silberman

for Incredibly then on follow-up And the that traffic. expectation traffic negative piece just you. Thank Great. and a helpful.

Given or what Or you’re are on considering? levers the the that you that control opportunities your macro, implementing? are traffic that side in exist

David Deno

we things prepared have the during about is pandemic the important. a and that learned are XXXX. And few remarks in there's talked we that extremely sales also in Yes, layers us for

its more thinking marketing, that's it, layer one. and on number whole associated with it's whole "No about Just Rules, restaurants, a new So whether Right" Outback and in the its it's just attitude operations, or products at that than marketing,

early Fleming's us Carrabba's. We've we're big got we've brunch as restaurants reinvigorated opportunity in a got wine, coming layer for that two, evening, a time, -- that’s a putting seeing. at new nice sales Number wine got Bonefish. it social [indiscernible] at back a we're the that We've

we that control our sales control. of in -- All our these can are that’s within layers

Secondly, that of at as we inflation, our will we up our trends. for competitors. helpful And be look as priced much to traffic we have some as the for us think long-term and not very

we've has now things price. few Bonefish certain certain a third, about for at some learned dine price then point. And discover and on that are very some going a attractive right at price offering Outback consumers a things surety,

things some fear, bad see. as as is the the that to people quite Chris control those we'll upside as be we macro And So are have mentioned, over help traffic think some guide, our environment but drive to we if could traffic. there not

Chris Meyer

and just price that of that, offer. a offerings, about points necessarily Well, piggyback to talking you're deeply it's have when discounted importantly, off mean doesn't to on specific

able be In fact, can a a to price that we're at minimum margin steady. sort point at of offers hold do those

Lauren Silberman

much. you helpful. very Thank Very

Operator

Thank ahead. next go with The is Ivankoe question from JPMorgan. John coming you. Please

John Ivankoe

that, very Just Rules, Hi. "No mean, about just the Thank Right" you brand much. interesting It's kind to guess, of I I of return hear like promise.

is menu to it cost business a bring some kind more back will, well? mean, efficient at to mean, back the kind of LTO, back was of a because where I for others operation you of of versus for overall. that that advertising, in point we are bring the it the be I So, entering news of back simplification, a to kitchen, now XXXX kitchen doing as reduction Are slippery of entire need expansion new we reduction allowed if advertising? in -- the bring makes big are add sense items, to industry where start, part the of the [indiscernible] the kind the much margin

Chris Meyer

John. continued can we've simplification things, executed of that Just the "No Right" couple be with had. a Yes, menu Rules,

of bunch anticipate know and don't a the And in and new kitchen grills things new that at So the our kitchen. product complexity whole as with offerings you even we Outback more. simplifies

one. that's And how So Right" run number we slogan. "No Just more a than is Rules, It's our restaurants. marketing about

one. number that's So

not our spend. be it Number two, yes, XXXX. we are was in anywhere But increasing what near going it's to marketing

pandemic, So our how learned digital we've how the to a the opportunity, target to during customers. access lot customers,

going and advertising opportunity margin to build that as sales. So we is remain

at going just not during are slogan works heritage learned pandemic, to for so So going the so and back popular a We're us well benchmarks a fundamental that that Outback. John, was away. we

to build how that's So we're this thing. trying

John Ivankoe

And ask let about remodels. me

you credit in actually past that U.S big I time. system. a in money course, of takes don't been XXXX unless an of do a exterior the and especially interior mean, remodel. costs, for which of is you're of think remodel an lot said you said remodel pretty exterior I doing a you Outback get lot an XXX, the percent And it's

are going in be what add and kind a So capacity to really people potential will the and have of the back these you you gain expecting like, is that restaurant, people. about talk come to projects most remodels look dine obviously or to attract the you're if what which where

David Deno

Yes.

all, brands Fleming's. it's First two casual of dining plus Outback XX at other XX the and

So gets the that okay. to XXX,

but we light touch -- our So in really remodel. a a touch, touch sculpt a medium out heavy and

work we make we do to know what will go keeping Plus, fresh the do can as restaurant some talk we know. is piece about digital these have sure it touch we the marketing as exterior and interiors, markets that to interior into So important. do John, that we remodel. people a so we up is And,

scopes. three to financial up to I'll an certainly this all So measures, XX of any with at freshening the and it cash do about. our turn and separate And it We On basis, interior to capital talk the brands Outback. Chris have have over we it's involves flow restaurant.

Chris Meyer

add just Well, that, look, you're I right. yes,

but But an you more expecting amount not lift, sales X% when important remodel. pretty probably, us. on said, as you you lift for your interior do I good a But think assets a a don't could can slippery current, to from same-store per of a you more a as -- if if X% it's se. sales Herculean be that's about slope maintenance keep don't of You're lift Dave perspective. get

critical this do think keeping but going I to part be we forward. just that assets of the is current what So year, a not moving

David Deno

all it holistically. comes its And it's its together its with And, effort, what talk we're a that's holistic John, operations, about remodels, the trying sales layers. to marketing,

John Ivankoe

Thank I you. got it.

Operator

question ahead. Please Gordon next coming Farmer is of Thank Haskett. Jeff you. The from go

Jeff Farmer

I interest for Thanks. did year provide specifics missed full G&A you XXXX? guys Great. have expense or on might but it, dollars any

Chris Meyer

you of looking bit I can give And what G&A you're context. We didn't. you a is little said? D&A, that and But

Jeff Farmer

expense. interest and G&A

Chris Meyer

okay, yes. interest, and G&A

'XX So, of be $XX probably of couple in terms sales, IN a our G&A We thought dollars. and to And it'll the flat of though, That's development important. made million up, of now we additional percentage filled. reasons. to We made back team that yes, is in vacancies IT had in we will $XX going million have be a as investments was are probably that our up into a year very in a investments we 'XX. which full run number some rate people, for some

incentive And we also so had -- some and reload. comp

go there's going a make in year. G&A will So things on it up that this few

largely while down. up increasing And interest D&A, should expense here, consistent actually be be our then we're on with slightly year, will slightly down spending. to capital this Touch D&A flat

up, I we of the get has to some we these although year. did that -- think hedges retire rate interest do last gone

of obviously, been a benefits the benefit by be so think eaten slightly to would would heading flat down. expense rising we lot But rate of that kind up a And was interest into environment. XXXX. that But

Jeff Farmer

And of shifts relative channels? one little challenging, it. to helpful. as those of seeing has just touch across sort backdrop become your of the strained same-store for seen multiple guys Meaning consumer more But you are a three spending, delivery discretionary channels? and is, did performance just which channels on in some shifting That's one, more you the behaviors amongst any in-restaurant a sales go bit then additional

Chris Meyer

occasion, business consumer think QX, I quarter. was there, off-premises curbside busy in bit and we've in QX a no what real seen that's kind down a say, consumer a pretty but of it's first is in your kind And a our that in consumer. slightly Overall, would third-party QX But it's off-premises And hanging on you steady. is little a little tough of business, do read. a different because it's the we the of still we which really commentary between piece. an from perspective in back different or mix. it QX, when is into just is in-restaurant sort versus you're skew where decline here we in see this Well, trade that little the special But -- mostly

really is where So overall, like reflective is. the shifting consumer of a just It more significant between the think engineered driving of feels kind isn't we channel of channels amount what movement.

David Deno

And high-end. Jeff, the high-end that well well. continues do really Fleming's to really to continues And do within

And to the that's of about there. that I a so we're continue some sales consumer And pursue. talked to layers going

Jeff Farmer

Thank it. you. Got

Operator

you. Thank

difficulty]. question Please is ahead. next Sara from [technical coming go Our

Unidentified Analyst

Hi.

[ph], still just pricing thoughts any pricing. after tide? to January, in I just but of Senatore it's insight rising that about sort The your I inflation run, line is trends just this It quick then in could trends, given some ask will sure. you Sara sounds few could wanted have across follow-up been of to you, for think, in behind think, how traffic like kind a gap the relative your having are am want make talked if XXXX. So to a a performance, you about pretty seeing talk with I And question. XXXX, robust widely, think board. also ask on then I think much onto you if industry I seems I we're inflation curious and is, the be improved about? I Or of maintaining follow-up kind

guess, two about normalized are whether quality use between an of you that or to how quantity sort more price reinvest as relationship you food? Would Just sort thinking philosophy do I and a of that you have of inflation? So sit? those Thank about the you. where the in opportunity

David Deno

we part. and traffic in company in weekly February. the I'll take in our I'm remain happy our But can the to stand trends industry. for very comment for versus trends we quarter, I sure. say first on not detail Yes, going overall, the how with

that I'll leave it to second Chris. I'll the turn now. for part So at And over

Chris Meyer

pricing equation I see. have we take that little look, think are moving in really in in feel through. think price inflation balanced want equation, more our that I in part to commentary, very like value moving tremendous don't the any how about of didn't We a And we a it's terms year go in we you're look, that We Yes, and calculus our pricing forward the is your like We much right we to really, pricing year of ability more thoughtful. sensitive is, look, good take this news the this important think But XXXX. XXXX. that that is that and very the be very amount we a forward. we to pricing took

we've Given to way commodities have buying the be been advantageous. tended our

-- that to kind XXXX, were of industry is to to in even same So average check on relative the back we our where metric. were is go below

into I to like next put back of position, think traffic an is and I the like we that instead feel that as dividends that's we equation to a to able dollars the feel still being from move we So environment. start ourselves in going advantageous we pay while reinvesting year in, standpoint, throughout inflationary something those And offset just that year. think

our So we're just going to as to pricing. be a relates little more it guarded

QX, of have see approach just QX I do going took we a and in year to this falls and as we off we're pricing Now and take kind that that think wait the that to not. some or in of whether relates we love the it honest to have to year of pricing not with it to take be replicate balance the you. We'd

David Deno

there's thing each last our of another brands, in with there. trends about customer our I'd add our and continued to seeing get the we And we're way to levels talked good that's improve very to is our service value and restaurants, this

make value going happen is improve, to to value our levels invested technology an service that we've providing equation so And the that as part forward. and important our our customers of

Unidentified Analyst

much. very you Thank Understood.

Operator

Jon next Tower is The Citigroup. Please from ahead. you. Thank go of question coming

Jon Tower

Clarifications, taking Great. questions. for Thanks the questions.

hit the all see million in So run $XX Or first should productivity in we that expect gains, clarification, to is that rate? 'XX?

Chris Meyer

-- it'll -- up that's bit in the kitchen all progresses, don't yet into into a will as be quarter the third Ramp at ramp year of there. have done up the No, early all we in that Outback equipment XXXX. the because

will so year. ramp it'll the progresses. be all -- this up million And But it'll as $XX year be it

Jon Tower

the in Outback year, traffic a wrap at At head backdrop. particular, sounds of going I'm as Rules, same brand. guiding Just time, from store productivity level with to outlook marketing, the Got just macro lot like gains fairly the it "No incremental And traffic, throughput, around Right". to for initiatives on you're well got frankly, my because a trying conservative improve and/or the company it. the you've on including at the this the then And as

in you you've I conservatism traffic? seen the of of understand, to it's guidance traffic? the going Or or like the to you back get guys pre-COVID guess to just difficult be traffic for is business in are to there level And cadence in of I'm levels trying customer? feel something layer altered your So, fundamentally a your kind trying to that's for

David Deno

all. don't I think No, that it's difficult at

some that I of being we've think Jon, our laid very good, guidance, feel and And environment. what are very about priced we prudent we control we're our and also clearly today what trying out competitors we We the have in given to as done. done. macro not get can

of done us sense being recognize a what we less We the want got skis we've But -- don't -- we've environment to as But our any for us it. environment, so we're forward. not piece macroeconomic that's cetera. we feel traffic side But on in. we've the got go about the the just and about optimistic very et optimistic, to we get that we're why [ph]. of pacing pricing that's in good layers We macro so So and the sequencing, got is ahead

Chris Meyer

was if look this guide relative look, where does last pretty or XXXX. where and Yes, you increase in decent guide, from suggest to a traffic were at it traffic year our implied we traffic year,

Jon Tower

big even pretty upping maybe dividend, lastly, say the the hoping it. was David, further, to Board's can just you Got buyback than the the are numbers And increasing I rather decision today. then around speak on

discussions I'm to were. learn the So curious what

David Deno

debt. thing return cash power invest growth of cash the pay is shows of just our in the main That The shareholders, flow our opportunities down to and and company.

as looked So it, talked levers. various at about we we

new If -- down for of increase of thoughts like an gets prior less were architect that, the that on pandemic. we our surety level. to little where have back, and we This attractive dividend this since and the you any than back been prior other really shareholders, to turn debt. dividends, look we thing, basically looks for repurchase this And And as a are the we us pandemic, we bit it feel pay a Chris, big to a share issue. is I'll over continue such authorization share he's what

Chris Meyer

us with Well, the to ratio attractive a we're low offer dividend, an we're able I -- think payout a relatively that and able to just of gives is what yield, that and flexibility. still lot

just So believe we're it's also able to robust program. not a able additional debt We dividend, we down or, like, to not do question the but repurchase either of a share can year. put this we're pay in place

with especially -- rising environment, there's sense So the rate as interest down paying well. debt makes

It our we for think we but cash lot -- at looking do the say is important really, of just story again with can do there's things really, investors. I this, free really So that flexibility. always flow a

Jon Tower

very Got you it. Thank much.

Operator

from The coming you. Geiger go Please USB. is next Dennis of ahead. question Thank

Dennis Geiger

activity, the how Thank anything made. of you. thinking or progress How to wanted that trends back to latest commentary 'XX through on and promo lack you're you on discounts thoughts about the that discounting last there Is discounting share to can traffic year, Dave I you discounting? the come Chris, and more depending on in activity relative year?

David Deno

and a traffic a seen drive play foremost. a that to to of that we base to menu haven't such Yes, we make without discounting price are good for rely participate lot and of customers that, need we offerings and don't our our we surety. feel and -- on of -- trends, importantly We category with category a some because in first plans offer a continue we some discounts offering those lot Because accordingly.

that we're a you discounting to So bloom won't talking the to grow of push the lever random see traffic about.

Dennis Geiger

one I that. appreciate then And just Great. more.

about where and And can are operations be are Thank from you can sales? think you continuity kind enhancements now sort talk you about as perspective? to levels, of of an of team and traffic how training you. service much and the about we overall really a As continuing talk little service right staffing, where bit an and improve opportunity operations

David Deno

very blessed are with than team trends with tenured the turnover we industry. Yes, a less

the of was the that conscious made company people go. to decision not that during pandemic our Now part let

So to people when the trained restaurants group we had ready go a reopened. of

on leadership we so tenure intend lack speaking relatively me, excuse that turnover the and capitalize of in And industry, to company. in and our

ago. staffing -- Yes, ago Now nearly in X but challenges year a or it are is there some what was pockets? not years

our leadership to improve goal levels investments tenure our restaurants. in capitalize training and the in through technology, and is service on So and

Dennis Geiger

Sounds appreciate Thank I it. you. good.

Operator

Thank you.

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

Andrew Strelzik

and actually your term us the over to the business potential it Brazil. time as ask little on of talked Hey, you've targets consumer taking about nice the I'm I not behaviors, an operating perspective ultimately, you're Thanks. to contributor one a inflation, you a seeing quarter, of just think that the of terms to supply, there? build Thanks update online about? longer that wanted kind obviously the for we on maybe or margin trying love was coming of towards how build of hear -- on hoping good in What to I in kind environment And give morning. question. bit was I you can -- was

David Deno

Sure.

through behind is and the margins good it recover, in come the strong there, and and they've operating forward quarter. and But Our restaurant back forward, going recover the we to move And were of as environment COVID. and we what good The from the a the other quarter, through can businesses good have us a operating country went COVID. management good And a election in team were business look during we very and a the grow Brazil in a down team we hopefully our way. they've experienced come as lot very in way. businesses lot at during sales we continue really in

feel sales business and there, the down So and the growth it we provides. and good the our flow do about cash

Operator

Thank you.

from Raymond Our go of last question Vaccaro today ahead. Brian Please is coming James.

Brian Vaccaro

a the can package cooking I today many some full have more across color and Is back quantify how us could maybe And equipment? of labor Thanks remind there some mostly provide from it's throughput the equipment the you go ballpark and way can wanted or the see? to you expect expect you you units savings, KDS to any or Hi. handhelds, then or and waste of benefit, server sales the benefits yield even good [ph] you and to to morning. productivity, it? perhaps

David Deno

I the cooking in Sure. in handhelds restaurants half there. talk with will are the on equipment, go -- it'll productivity and and the done at underscore grills I the service I QX. Chris -- KDS be long-term just levels about and accurate more Outback. especially want about cooking in of were was that, financials once the all provide. and Like the some before greater [indiscernible] again, opportunities to they'll in

our to I'll Outback. restaurants build sales in at expect We traffic and Chris. And to over turn

Chris Meyer

The million, $XX probably and we went to most I'd chunk this be technology say look our by increase, to at said that you $XX a call it, -- million is restaurants. supply year. numbers, Yes, in if we've chain, of that productivity $XX that million and look going driven but the again, improvements of it's from,

as have putting a less right. in -- P&L, where up show And we when it it the meals to if restaurants, think the front the into point where bit labor in lives is the reduction a more those it's live little think relates sales. cost technology live I to there recooks, so line, to will of particularly we're your plays you kind of to that house going of out, going though, on complimentary be as a line, about it's the sales And in of the but

increase with So you will sales associated have an in this.

be probably show is assumptions, it but up It's to of enough going in meaningful. it's material your Now be comp sales to to going millions not dollars.

well. And be so as something that in it see to that's we'll going overtime

that's while the technology good really it that you're and had a all humming I the feed provide have over long-term And it think on the one that does cylinders. for in that time, that not is best units are put it news encouraging. It's is on in benefits. this hitting cylinders, all and day part something you now about immediately does

we where are. like we So

Brian Vaccaro

Could And take helpful. took would That's All to when embedded the few in like I pricing business? I guidance. no X% say what pricing? just average level the additional across pricing, over was around check back pricing, you cadence you you And your look quarterly heard quarters next the -- last you is if right. last think set, time the

Chris Meyer

we in should it, more Yes, until position to be we'd like about price of have to lap pricing don't any then we QX have quarters. that have to X% we where even the the we decision, over little some be the of year. couple get of like end first you talked then right maybe on of level want at that a how there's took back that we But like and X% our increases from it, to need I of through but the then if you in now in least in with be year would half a overall. of And a much have want that that. so And And big make annual last we we to less taken and the current we take think optionality here again, is or we're going call call point have increase we bit it, earlier. don't actually could numbers. place to pricing you negative if about pricing assume a price does to assuming, now year, that it to mix a X% And do guidance, those in the

Brian Vaccaro

Thanks very much. right. All

Operator

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

David Deno

you. such a us the make [indiscernible] I'm say And unit calling for thank partner, appreciate partner I opportunity company. that to She's to a to today. great want And that to And to for welcome going Graff important to want I Yes, is good we We all and of Relations Mark the to that Tammy new everybody fortunate I in happen. how team. in good have Investor leader be it. want the

fall to the more you be So in everybody. this and weeks. talking over to coming we'll space Thanks,

Operator

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

your this enjoy day. of at You rest lines and your the time may disconnect

Bloomin' Brands (BLMN) 16 Feb 232022 Q4 Earnings call transcript