Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Bloomin' Brands Fiscal Second Quarter 2023 Earnings Conference Call [Operator Instructions].

It is now my pleasure to introduce your host, Tara Kurian, Vice President, Corporate Finance and Investor Relations. Thank you, Mrs. Kurian, you may begin.

Tara Kurian

Thank you, and good morning, everyone. call Meyer, Deno, Chief Executive today's Officer; Chief Financial on Chris and Vice me are our David Executive Officer. With President and second you XXXX now, should access our By have earnings fiscal release. to quarter be also section. Investors in can website at found It www.bloominbrands.com the our on call, Through adjusted this results an will we conference presenting be on basis.

described. comparable use on in appear our release and our of and of measures financial explanation measures to GAAP reconciliations website as previously our An non-GAAP the most directly earnings

to remind including Before that formal recent we I'd like will statements, begin our of forward-looking trends. today a everyone discussion remarks, part of include discussion

These differ statements to in and forward-looking risks to way could material uncertainties our from that are subject a statements. results cause actual numerous

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

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

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

David Deno

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

sales. compares As X%. $X.XX with noted morning's adjusted which release, XXXX last earnings our casual XX of in each positive per sales $X.XX, store was year having earnings diluted up for comparable same Combined share points U.S. QX up this to basis brands dining

QX. basis reflected XXX points out industry performance this in versus Importantly, traffic on the

effectiveness capabilities, sales as U.S. off-premises digital includes with leading framework pleased am leveraging to and growing This of improving efficiencies. results outlined layers, the our continue year. we strategic addition business, validate the I operational they and the for operational and our

Brazil our up we simply business, had unit store led This exceptional openings, tax to new revenues XX% were benefit, international and the same QX sales was business. strong an our growth. to Brazil quarter. due put, Turning by

up significantly year margins and ago. versus Additionally, operating a profits were

with Our of growth strong international business lots ahead. is very

serving thank to I'd their and our the asset our a center guests. restaurants in is to like international casual the unique us, restaurant commitment teams For for dining. support and continued

to so service experience dedication what great our is company Your and hospitality makes successful.

you we are As full-year the ahead focused guidance of on our objectives. rest and the look achieving year, to

customer sustainable strategy and We continue to profit the growth. have sales in while achieving competence our elevate experience to

at our the priorities become be to Sustainable is Improving sales same the progress growth approach. margins, As a reminder, to primary company, are a momentum, especially multifaceted driven same restaurant new growth, sustain and in continues store made strategic more sales key drive we've outback, off-premises digitally focus. a increase maintain operating growth, store traffic openings.

in We process goal. have several initiatives to achieve our

I mentioned our last and allows them Outback consistency guest deliver differentiated improve As in innovative to and time restaurants. utilizing quarter, with are use handheld technology, execution now a to more experience. servers guests which technology spend we

of the Our completely new be the including house, to the track ovens, advanced third back in rolled in cooking grills on quarter. and technology is out

meal Our experience and guests quality improved overall pacing. will product

six Recently, dividends. emerged are in customer in dining, moving This is making in clearly XXXX accomplishment. the Study a as the ACSI investments satisfaction number released annual number industry we are leader XXXX. was has from Outback Restaurant paying in casual The one to of tremendous Steakhouse

actions improve overall taking we the the guest recognize guests are Our to experience.

term, we long Over drive the growth. expect to sustainable traffic this

our No rules, It's and everyday to leaning just our Outback platform right Complementing no marketing. our rules we how targeted that menu goes brought reenergize exceptional to leverage ties with build and back food year, beyond just drive equity. new the great restaurants and guest value. importantly, marketing attitude offerings, designed highlights service, our Aussie an back our is it restaurant past. this is operations heritage, Earlier frequency, roots. brand more into our This just

price XXXX menu new feature an acceptable offerings seasonal current our example, that at point. For innovation start

our The introducing building third is element sales sales layers. to additional strategy

that their For captures quality early highlight social hour. they drink is the At our has This offerings positive this weekend have known food Carrabba's, and launched example, year. during value seeing These Bonefish these earlier wine evening. introduced the early we dinners. has creative Fleming's for, a and reintroduced Hour Social their enhanced and and brunch to offerings and are Carrabba's The great been success. response successful

a restaurants. driving scopes spent We sales years that asset touch different The can base. to dependent final This our now the developing multi-year deployed effort beginning is a last percentage of of strategy on two our is restaurant's the need. be a improving large

our locations and a traffic this on hundred accelerate track in over just build I growth remodel long described are are years All the to sales will year and pace now initiatives term. and to the remodel sustainable We over designed come. to

Turning and priority, XX% continued on third-party second to leading was U.S. to in QX our business. capitalize our business sales off-premises off-premises our of continues to well. Total perform delivery

of opportunity Carrabba's [ph], to margins wide growing Catering sandwiches of that in-restaurant a launched a in margins Italian is continues our Bistro the team profit Carrabba's industry off-premises brands. for is Importantly, variety focus a space. lunch featuring an business. be option, comparable recently We to represents The which leader Carrabba's heritage. are this catering

and growth seeing opportunities excited the We're momentum strong both very in the catering. believe are catering pleased we very Outback are at could early We Bonefish. beyond results by by this and also represent

off-premises result our of a remain expect the part above, business. all we large to a of As

XX% QX sales Consistent become third year. The QX, progress last U.S. digitally to This XX% is sales company. channels. more QX our of total to were with approximately to through driven digital U.S. in priority off-premises a off-premises on total capitalize approximately of compares

and million users. app, results system our continue ordering positive see which new to mobile has online with three We

in priority operating margins a significant in fourth over maintain progress inflationary the is last years to four the Our environment. highly

the margin with restaurant X.X% time, on P&L to and across starts spend healthy reliance more We X.X% this This advertising adjusted channels. reduce grew the During and pursuing efficiencies from We traffic disciplined aggressively QX our in we overhead. to reallocate commodity in operating today. targeted middle high our growing and XXXX in off-premises in the channels. digital LTOs promotional and labor and of return are discounting managing remain

on is And Outback, in at and each to footprint. our have for our in we in XXX build growth first the in margins have In geographies. great and profit have we expect the with more In have opportunity XXXX. are and expect the priority of meaningful new XXXX. but strong XXX on new summary, Outbacks significant restaurants, Brazil, to returns. in More more we we by quarters Fleming’s especially we Fleming's to double offer than development to calls, XXXX. unit have new pleased Domestically, two sales and increase and nearly a development core final come restaurant Outback Brazil, future business success in can Today, Outbacks Brazil

are We a come. building on to our that goals achieving great business continue will annual years many focused to for while thrive

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

Chris Meyer

X.X% Average was QX Benefits pricing QX. Brazil. by as we increased a continue In X% move U.S. versus this a off-premises from QX of recap importantly QX I was start well down Total basis basis from the outperformed in fiscal which and little is menu for We intend quarter Dave, comparable providing industry by would points replicate comp average the in to sales, financial XXX This off. year check good line were up to in XX% a progresses points. to traffic a up do not as as the menu like took our of level we same was and rolls the performance $X.XX check revenues Thanks, expectations year XXXX. from pricing XXXX, U.S. everyone. At increase XXXX. will by lower in in billion, sales in X.X% our QX. sales in XXXX. X.X% U.S. X% with of brands as restaurant XXX morning, second as increase of driven

the delivery was sales remains business in XX% QX. Importantly, incremental third-party of U.S. healthy highly and

sales, of Catering business X% strong was sales Carrabba's was by terms of was Carrabba's QX. Carrabba’s performance, over supported consistent of Outback growth of mix sales. total In and brand XX% catering. already in XX% been has off-premises in off-premises

also portfolio emphasize across continue catering are We will brands layer to and forward. sales our other success in at seeing moving our this

other to the of the QX, a adjusted quarter driven XXXX per diluted earnings diluted $X.XX convertible share difference $X.XX per for earnings per adjusted was versus of our of almost was for required XXXX. notes. $X.XX negative earnings GAAP was financial and GAAP diluted share performance share in our between repurchase XXXX results of diluted XXXX. treatment relates accounting versus the earnings $X.XX of our it As QX portion Adjusted per aspects large share by The entirely in in

an was up QX. that favorability half, back offset beef to in to our Domestically, levels. year. our into were We relates QX which is dairy we are initiatives inflation helped expect lower lapped our overall versus some positive X.X% commodities in realize. inflation, to from the it margins continue inflation we inflation. the do as productivity produce, XX.X% last be operating pricing in impact level we XXXX increasingly particularly The on Restaurant restaurants having commodity the We and to putting and higher benefits technology XX.X% to margins had as were favorability able

X.X%. operating guidance This be We digits. to in expect expectations expense was Labor R&M, This year line mid-single and inflation with full inflation was driven remained X.X%. mid-single by still elevated advertising, utilities. up inflation total digits. Restaurant at was year our higher of

Brazil in Also, Brazil and company in restaurant international in the capital were our was Depreciation income restaurant with Total basis benefit. up operating driven up expense from well in investments as tax X.X% continued spending business last increased margins margin relates the consistent XXX worth of our our levels segment was it noting as exemption by flat was year. as This margins, QX infrastructure. to growth QX points.

well good levels. our remain above and Overall, we we pre-pandemic feel about margins

QX. debt capital million at our end to Turning the structure, of was total $XXX

leverage current below X adjusted Our times. ratio remains lease

have authorization quarterly board declared remaining Xth. we of $X.XX payable In that the $XX terms a X.X million. year-to-date, stock on on million February new board repurchases $XX XXth. the share have of for still dividend a approved shares million repurchased We share of The also August on

debt with share will and dollars against our are deployment free balanced and of our repurchases, We pleased pay cash to continue additional down, flow dividend. deploy

as the it guidance, turn eligibility earnings I to on Before an to call. tax relates February our in update in discussed for our developments Brazil wanted exemption, Brazil the I we to latest our provide

call, X% Brazilian of benefit certain rate in income for order corporate legislation a enacted our During period that our taxes government I as gross this and a court we years. well began five both revenue financial A Brazilian this taxes as results. our realize eligibility for reinforced for exemption introduced the February mentioned to federal

this from tax companies, Recently, the impacting Brazilian our the the eliminated This law legislature will Brazil. many financial unexpectedly statements. passed for restaurant exemption in new benefit business change that on businesses a our many impacts ability including have following to

had X a our time to assets. First, statements we we had financial QX as revalue certain million to Brazil benefit deferred $X tax tax

to will reduce in quarter we subject now revenue Second, Brazil million. our fourth approximately income will taxes This of by the $X be fourth year. operating beginning this gross quarter

impact largely of tax offset the our our legislation this and new year QX full ability downside QX the Given tax guidance. impact XXXX upside the to not EPS attain should

Finally, XXXX, approximate full once paying at will corporate income subject rate. again tax XX% beginning be to in Brazil an

cash track are latest tax significant approximate development, XXXX our $X.XX tax exemption benefit in savings. we disappointed to remain we statement this Although EPS income from an representing on with receive this

and XXXX Now our turning guidance. to QX

we XXth are earnings our our our reported call, change aspects XXXX on First, full-year in from previously February tax assumption. a aside all guidance reaffirming rate of

and QX to XX%. have and between our in we tax quarter, Xtime relates be expect share second adjusted per tax benefit to earnings we $X.XX. And third the restaurant assumption full-year expect rate sales to quarter, be lowered between X.X%, X.X% and second, we U.S. it comparable as be XX% $X.XX to Given to received the the we

focused to quarter a for was In well company. Brands and stronger, better, summary, this Bloomin' operations on another becoming way successful our we are

And open for call up the we'll with that, questions.

Operator

Instructions]. [Operator

go sir from first Bernstein Please ahead. came question - Our Jeff Barclays.

Jeffrey Bernstein

you, very Two much. Thank Great. questions.

broadly were your much I line had of changes apply pretty presumably about industry. the your It follow-up. I'm more you expectation of seeing trends that wondering kind with any any thinking like of behavior just or comp then in just all would one the if one, any brands softening. And First seems consumer. and in you're ahead

David Deno

see look our the you is Jeff. reports Good consumer and consumer well. that we just high brands, morning, Sure. at if else in at the end look see well about economy, there. casual dining hanging We the everything and we're and economic the seeing hanging doing And there you the as in

Jeffrey Bernstein

anything over change traffic there's relatively no mix trajectory, or it's or past it's stable. seems months whether So, like that. the It been noticeable like few in

David Deno

No. Yeah.

So line, hundred turned said, QX. like in mix. mix if were you QX last QX basis we of mix, couple couple like in until it of a year, to we be a trend the look as middle in throughout I hundred in points the I to at expect the we think, negative basis laugh down down we middle of start in still QX. of We points negative somewhat that year head consistent mix kind

So, it's negative. still look,

I think mix engineered. on But consumer is our small probably a number. trade that is in that some of lot part believe of there inherent element we

no. that, than other But

QX, up in were at tick look can and think QX mean, traffic I from that, QX. you I if apply a you you look, if in at up in guide traffic look in we actually tick another where QX, implies our

So, hang our to improve in things continue the as do continues trends the that to there there, is trends. to an we to we consumer improve expectation do our that need

Jeffrey Bernstein

And thoughts think follow-up you whether inflation. just from your to your But what which specific Understood. attention change. garner commodities, mid-single any are to then beef, I commentary, pretty still seems just to I'm commodity much digit said and the pricing wondering expect you outside related

I ‘XX. about flip year, half aggressive to XX, that start this you as think but I the you for protected you're as and think won't the pricing in be think your of on of pretty second said that, well

third pricing and So, if to quarter will the in clarify just what those Thank the you. fourth mitigate you be pressures. inflationary could

David Deno

in is Well, I good you're news exposure standpoint, beef. to sure. things. year the mitigating a we've Yeah, beef mean, I couple that done a One, a think job from right. excellent this

did I commodity that fourth last call lap think take have perspective the the to I out that to a we last upside in thing advantage back have some we QX. of particularly that the called quarter because challenging do is favorability, we beef would quarter out able in I year, continue and more half, one of were of a from that

be to range So, QX. that you X% in saw our versus X.X% little the X% commodities elevated that QX more X% will or in here and a

balance as So our things is think about pretty of that's But be something to find in commodities, to relates keep to I uncertain We this we the environments to the it's same in the that performance year. mind you navigate talking see shown that. but the early too that landscape, a XXXX. for do thing, it way one look, we year commodity that has way and feel good about obviously

pricing, In let's would terms of start just -- if I check expect, said, average. I like you with look

through I to work kind average the the continue through of way of you tick year, check As expect balance down. your to would

closer, QX, the then, little than a that, in kind in in QX, range. or If average me of maybe even surprise you in check it Wouldn't X% range X% in lower know, was range. so if it's saw QX, in our that QX. And X% the you and range. X% that landed bit

expect tick would that largely continue down. check I I think driven by to menu that's to So, And pricing. average

our in menu I that X% half X.X% year. pretty the was to the pricing range consistent first over of think

preserve optionality would I tick think relates would we as we're down tick in little even then QX, down trying year. to in and it the farther Again, pricing. exit a to would probably it QX it bit

half know, exit in fourth of we're to pricing. year, range nothing marry for if going that, the to a additional not ourselves the four number were in you you percent four pricing and the So, but we quarter, year to, to the you'd know, do a balance

of year. able because is year, our we've environment the been effectively we're we're, the such But sticking again, why commodity is, that intention not laid had pretty, the success navigate for the out so with the productivity pricing we've one for balance additional reasons to you guidance which and take to we've full because of to being the know,

Jeffrey Bernstein

Thank you.

Operator

Our from sir. next go Please sir ahead. ahead. Alex Jefferies. question Slagle from Please Go came

Alex Slagle

growth still ask any still morning. next that's your your ‘XX ‘XX. material from plan getting Thank brand that in Brazil a coming sounds are for Good where Hi. XXX that mean, there and the looking view at on years, like, Or kind near ahead, you. comments or all altering if years of or changes ’XX, the sort comments years further on all? the altered at the then on by of it units ahead, by to line? and for Wanted accelerating is the increase development expectations remodels on is And few and region? in in just any I

David Deno

months future about we'll very to But call, into in the greater what development in our a similar sure. provide prior plan. talked coming it's We'll we Yeah, visibility calls.

a lot up ahead development and Outback very core of we'll brands which especially space We step in markets. excited we're them, of about next will meaningful year, cause in Fleming’s it see both and seeing and in a white have,

So, continue we our and the restaurants. as upgrade with plans U.S. our in remodel we'll

be growth a in and something provided will new time, the to So, we returns we the see, haven't will unit it got development pipeline prove well. you'll we've to investors some and quite as the in be

the get market Brazil position doing one. they're And two, number we now with that's the in cash margins, XXX at to Brazil. we enough down Outback’s sales, could own can't a get XXX. say about importantly point one it think got thought to the flow. Number It's there. we So can an their I We business, unprecedented

by the they're Abbraccio, share we to Italian new have development Outback a there is Outback. So, business. business led in cash but of lion's call build Brazil. primarily It's down generating do the down We

can well. within capital to returning long-term think shareholders, cash But on to and extremely then in all perform to strategy this we yet down spend and future I lastly, distribution still about. those So, our calls. cash plans that paying just talked debt, business follow more And just do maintain continues I

Alex Slagle

the margin, year it I And in just mean, million the was and year base but over basis. the up if of international could really Thanks. as exemption mean, year, I through the underlying tax know that second here how margin bit in that, strong. I seems know, first on a benefit, follow-up break of don't a read a margins further to I of $XX year quarter, are you And another doing million sort know Brazil there's And over operating quarter. like there it like some the a just trend's $X down the you

David Deno

Yes. tax No, if going continue, pulled even the they out you be it's to and benefit, again, outsized.

average you at is point tax Particularly the from it really that driving traffic of relates getting you receiving and international to impact quarters. your the exemption on it material the benefit like upside. goods that, where tax sold, benefits pretty or look outside their If certainly segment, when pretty that in we're check day from business several that favorable call cost margins. last been benefit the the look the But a having been of we've we've over margin as to are from, at lines the positive their pretty,

traffic the day think business. been carrying as line here trends to businesses inflation and for ability the really in I sales inflationary what's kind to volumes But seeing them given volumes Brazil that Their U.S. growth, generate seeing that's we've in of somewhat the the still with that high it and generate, inflation. they're that the those the again, is same relates

Alex Slagle

you. Thank

Operator

you. Thank

John came Morgan. Please from JP Our next go ahead. sir Ivankoe, question

John Ivankoe

A couple, may. if I

a question it's COGs. First, on

store rules balance of expanding same really U.S. new yet, a But no think that kind about number gross gross understand point. traffic that's -- How same we're guys to that least big negative. drive company. store in price we of quarter, with margin restaurant declining margin margin sales? which kind menu, a ability how And is XXX-basis reinvest second -- the just do just just decline is at right to you right gross traffic I showed starts declining same Does do rule of if -- for when you store philosophically, obviously in the I year-over-year a at some traffic? -- maybe that's is XXXX mean, the You point

David Deno

margin the all, I the you industry, when And agree, sure the the beautiful Well that. Yes. John. well, trends talked But Well, that we've ask business is know we we're so so first traffic of on going outperformed And on some you the with I back performance, our can completely business. thing margin traffic got you important. right? in initiative improvement? we about clear things to reinvest the productivity that our make yourself seeing so, cost other trade-off this and have in why so want Managing strong ovens we've of sales about as are of it's

team and of sales. great supply has managing the chain So, job a done cost

So that's seeing what we're at John.

the we about as the think building use rest you, to don't that's of talked assure and some some build philosophy. reinvest Chris year, the the we I details, can I business those to how traffic into about we're want traffic get initiatives but of But of in our to dollars expect and to back our going offerings. margin

John Ivankoe

Understood. Alright. Okay.

XXXX, how pretty X% the I year the is the is the Brazil second over there market? that mean, in Secondly, X%, off kind the between first in second and Brazil? between pretty is quarter a just the Brazil fall one your and consistent expansion consumer versus mean quarter a but quarter happy of first and big actually that quarter, that consumer and looked does is to absorbing what overall, you're with how obviously number Brazil traffic, is

David Deno

projections consumer a Brazil is development their The away. they I down because our us, blow they time give team tease we And John, them that each build doing restaurant, well. there new

development businesses. thing possible. is, player, outside you think the other when have when other also were that in we've some new main businesses in didn't cities, the restaurant then saw expectations. build exceeding big are as So, towns markets, start going is other We other it And into every you and that we you seen the opportunities smaller you

and flow So shape. consumer's good the capital are is strong in Brazilian cash returns strong,

David Deno

last the Brazil only that the John, on U.S. that, in the item item year, here COVID different saw housekeeping pattern only housekeeping obviously, is a on we that than is, had and Yeah,

they're And of first so, first the absent COVID the saw of big where those some they're we maybe QX quarter. laps quarter is that kind in

more be moving So to little a trend that's normalized going forward.

John Ivankoe

we there that can ticket a And pricing? comment is we're on know so make you just Brazil

David Deno

the have head, it that, my can of to But off don't sorry. we I'm get top I we get investors. certainly that can

John Ivankoe

year fine least to that's final remodels. and question if And understand but No, kind and will about, don't guidance point, at think CapEx follow-up is what give us Can XXX us give Okay. to then. number, XXX. the specific ‘XX? ‘XX the of for this to to you you point, a this development want it's Alex's Directionally, what a a at CapEx sense, I be think I directionally you

David Deno

should the John. It ballpark, be in

as year the slight of spending the a we we increase, uptick but lot one think had that's to is, of of we of about see remodels, sure and quite think coming a it things things yet. ovens that's handhelds this we're our because I not one off. and might But the the coming

I we'll that slight be think, call. So, but up uh, it it's a uptick, range. early see might to We in too to is,

John Ivankoe

you. Thank Okay.

Operator

Our next William Please go Blair. Sharon came Zackfia question from ahead.

Sharon Zackfia

on to where of sell prior alternatives just looking recall Brazilian I philosophically kind for sell the But are you the pandemic, to Difficulty]. strategic business. Brazil? were you [Technical I'm potentially key wondering

David Deno

as we that based it's to now. right is And Yeah. But business. heard right now, with we're and always we'll direction. no but goal market market thrilled prior rapidly our market open more keep Sharon, in optionality possible, sale as a from isn't now about grow are really it as it for our But there's IPO the you for -- There comment, an last Brazil. or right

Sharon Zackfia

in expect Thank it Okay. planned you the know then of kind to is we Outback and in lag don't that of question you comp of lead strengthen of concepts, one would you – different to year and I would between you domestically a perspective, saw Fleming's wise about taper Kind another of the from how half kind anything is the things half the concept there the Bonefish second maybe and progress? second Carrabba's and in first off? initiative and or second you. sounds like the year, to have half And talk expect Or normally but where

David Deno

talk about concepts. a Well, let me couple

fine First even of If because though Fleming's category and high business. dining look at in category. And fine were all That's the trends negative they all, Fleming's dining trends are last didn't very had in private very we strong, we performed year. And we quarter. the we week very a spending is a in business to I that their see to that talk to the script, also which strong. add about see nice business, be dining the

high office back that have is the for hopes work other We come to and people come and things. back done if to

So, Fleming’s, that for us is something that we'll continue to see moving along.

balance we as have of think But we change some in far as comps in the remember, So, think about what that's we're that to year would the first piece trend I see business of laughing. go.

reflect are with brand catering some, well. I a they're catering line and they that doing stress have introduced And great. just Carrabba’s Carrabba's restaurant to encourage that business. extremely we And heritage and want just I to terrific Second the dining sandwiches of opportunity it's think thing business one And our an to job Italian they continue get think is investors a cause is in their beyond and terrific main the those really off-premise. we sandwiches I'd

I'd Fleming. Sharon, Carrabba’s right So, what is say and call now out I'll

Sharon Zackfia

Okay. Thank you.

Operator

go Haskett, ahead. came go Gordon please from question ahead. Jeff Please Next Farmer

Jeff Farmer

morning. Good thanks. Great,

guys know, street legislation. that every early Brazil that as operating the estimates basically income, guidance EPS, guys the to in February provided revenue, tax focusing as line you on Just it legislation, reflect across you item relates does

in implied this at models just our said, should point? release beyond was impacts percent but terms be line unwinding we this XXXX those strongly in the of and in hundred not guys what So, in essentially of bottom you a is, only

Chris Meyer

so me, That a give Yeah, more is let little context you I'll on that. correct.

So, would paying back in Brazil. full resume in taxes XXXX, we

the way tax what value quarter. fourth starting the that of works is So, this in portion year is goes it that added that the away

little a split three operating first So, million of quarters you'd for then first sales relatively the profit over call million reduction the in have if it million out you a increase to lumpy, the in spread out of million first year. over XXXX, reduction the in call evenly. It's it it call three basically $XX $XX going to Then next quarters And well. quarters all three $XX corresponding, as quarters worth have, more expense you're calling but specificity. look at tax over, not a all taxes, any in four $XX bit

starting next it So year. unwind that's how would

Jeff Farmer

just of so And little about bit, might've expense like the it's I down you looks year? color inflation half operating missed are one you little a on bit helpful. operating but come in you thinking I think the follow-up, guys That's the inflation back X.X%. gave it, of a said Alright. expense us how

Chris Meyer

in mid-single start digits It'll front kind Operating half. in the year back the so digits elevated low expense of the as kind off range to start it utility to mitigate, mid-single should some, improve get you lap year, now. lower lapping and the inflation more right? more little as half the of bit because should it’s So, you're you in that lower, digits, half to the took been of that be in more of X% probably mid-single maybe we're to X% back to that than, a to

Jeff Farmer

Alright, thank you.

Chris Meyer

step But it'll down QX. to QX down, it'll step from

Jeff Farmer

it. Appreciate Alright.

Operator

Bank question, of next came America. next our from Sara question Our Senatore,

Sara Senatore

that guess from you of of context, talked in trying if in your traffic, interested kind be intentionally traffic I a discounting Is more visits towards, Is And solely about broad the to since, of the wanted guess reducing traditional might, to who you it you talk I your and bringing from as of traffic consumers customers? traffic I in as about, growth. reducing, you. in Thank move having offerings. understand you could the where, I'm about, price positive reach. that point new I reliance replace how the advertising customers? perhaps ask Hi. those, advertising core having strategy think that sort goal on shift typically

digital the do the to you're presumably as to and reach how these that changes to of with in try ability advertising So, pivoting big some particular, you're thinking you new of make about to? kind customers, Outback that

David Deno

lot you're of customers excuse planned. Sure. Well, a that's coming our stop to discounting, the restaurants, use some and discounting promotions and right. you, our our remove was that got our did yes, we me, of that but and We

to or replacing we be that that Outback our in right forward. ACSI talked and with service, ratings how was With the back I in reinvest to gets our moving are So, we going products, And that what number we will you how can performance, are at earlier. saw now? one, that traffic our margin replace sustainable it about

to invest our we trying we're as do that's behind So, business. what

to very Now Chris we've be prudent we've about, got talked got on as be, to our pricing.

make price than and and that to consumer great and with rather discount we'd comes rather on service. So, be value try way, along and our sure food great pricing up prudent back, that the

and at to we is dollars that kind lot a in marketing as and during And we of really spend continue target to reach learned especially may where be to you our a broad those to we consumers. bring traffic, the margin top spending for we the those of dollars back back we're Now, the and we space learned Yes, Outback. go lot do as advertising pandemic see continue some group to to business. people some additional of reach, forward but to can advertising with of with we want reinvest we that We the the take advertising. some a We'll new -- customers digital broadcast consumers as funnel, but that's that build the about pan thing. reach with more about going the and loyal want of to key talked about the of

Sara Senatore

of higher what again, then of seeing an already of as where leading you maybe improved -- and some from sense you do about [Indiscernible] increase and is how just any the kind from, it's coming increase indicators new on you -- there that to see an talked in terms envision traffic just digital sort you And that kind Are traffic Is of we, are and Understood. here, frequency? that? should membership. think seeing help suggest about in we Okay. frequency, also whether give guests, of

David Deno

third-party where an incremental gas which we're dining reach our delivery, and our traffic occasion. more from and guests gains. is the frequency from Improved That's seeing carryout

Sara Senatore

you. Thank

Operator

Morgan Harbour Stanley. ahead. from Our next from please Brian go came questions sir

Brian Harbour

what as EPS well. fourth Any kind to can think pressure to we you're quarter? perspective just or Chris, drivers you're any an just was of of there see pressure EPS other you for of implying? kind -- change Brazil start as Is from about more quarter implying the we here alluded about being the what it the commodities XQ fourth being in

Chris Meyer

Those from between thing how in the the of hadn't just in of in blocks on full-year lose yes, other is the commodity piece the the there a think quarter. obviously, quarter. sort for a $X somewhat so QX fact, is the It few fully the were, a point million. all a should a benefit The out talked the of in interplay about fourth from way year. housekeeping other But yes, QX, -- but a exemptions bit piece that one page, pieces. about of ago being patterns terms big is the for tax is QX, little neutral XX-week that maybe terms it is overall think fourth where would the so our you folks change, piece probably the is realized for we building we're bit months is guidance, of we I So are and that an same some I two you the

result the going we're to quarter clear, on fourth XX-week make comp just for So, to our report it a sales basis.

we'd of that extra way And of the basis, on challenge year Christmas. The is able XX-week well. the we'll provide we the report because shift the holiday were to timing a that with XX one this in basis day have operating weeks XX-week be if to a as

So, for out are those a we're together. only going how there. would QX same terms the have no, little more Brian, that to days But little so makes two just But in years, comp a report number of both and the in XX-week you. you operating housekeeping normalized that point come on a basis of the pieces I'd

Brian Harbour

to the of starting in of in cost? Like see kind Are how is that's you see you. like extent etcetera, in that of ovens, should form your thank to that reduced to impact actually around some are most see -- to we things we food it grills, new in, waste? we to cost, actually of -- in starting Do think then are got And seeing, some handhelds, P&L? the just we you? that see of new in maybe more Okay labor front starting in

David Deno

it quarter. in that's us margins so right I now, good. look more be the we're why of ovens the seeing still done look and why got the reasons so this of front And are we the one some and rolling out Yeah, good margins we've that'll because think

So, but of part XXXX as been talk benefit. investments we about too that this overlap as ovens But and well. in way see in XXXX, into think the to it's productivity big our of early about these XXXX, a some have we'll handhelds margin year

Brian Harbour

Thanks.

Operator

Our next Raymond Please Vaccaro question go from sir - James. Brian comes ahead.

Brian Vaccaro

my assume at guess package. that new had of on just the in to say for wanted equipment that reached also metrics, is you any back months, tech Well, in place time even just question you circle thanks, How end of months any you're operating of in seeing the I your have six efficiency morning. the it's or labor it had on have And place just the could QX? of ballparks level units a the of stakes stores and good I waste nine thinking benefits to it, package there. many back sent savings, provide some or average on could I'd percent just or quantify about if and ticket range, key

David Deno

of Meyer. through we So, the the are about Chris three-quarters way

Chris Meyer

had quarter the so Outbacks or hundred and XXX about we're we remaining. Yeah, a then heading we into

David Deno

during system. the be much pretty We'll we're Brian, that done, So, Outback time. through

reasons, want we're it as We're labor manage For pieces, P&L, improved get the We're it, the into the efficiency don't seeing that. -- seeing costs seeing --. but see in here's we're P&L. parts Brian, food where in in very in less I you it broad competitive to in of we seeing it it

P&L, in those improvement. items service of demonstrable most talk can most handhelds. important So, with but And we're about the all the P&L the the the three line thing better important thing, gets customer we is seeing

We lead to traffic, got we get seeing We're the don't better too fast, sure almost better greater okay? but we're to manage. see too product, seeing customers service. and to we We like, we table turns, table don't go fast, the will go turns make want better they're we they're which can seeing getting

reports food that to the anymore. some the And do most that's [ph], in the labor, customer have and side, So, thing. side, we things then the it's P&L on it's important of and cost, don't

the see. are So, areas those we broadly that

Chris Meyer

that these of as would new can be tails us and thing I I like add some configure that we're look we this the look and gives XXXX optionality just into labor the equipment model, the kitchen to think the on at one reason of Then top how that, you on optimistic why productivity initiatives, there that. does things and really it is some

model and So, opportunity overall weak to operating there's and an forward. enhance value, to moving provide two continue us for the

David Deno

then, you'd lastly, CEO. getting ahead far expect too here, I of then And but I'm and out a think don't this

Outback's walk we've that, Carrabba’s there say, Is Carrabba’s what You I to in well, Outback things? learned to too we do to It's done. know, and but at other a can business early over it's similar way obvious. about look brands. I to lot opportunity that apply talk

Brian Vaccaro

also And helpful. in That's noted the right. All Dave, satisfaction guest some improvements Outback score. significant you

improved of know, guest have areas within from out? what that there but number Going and what number that provides, detail. experience not most? the survey level level curious, you to I'm that If six what that any survey, level one, Is what stood survey, the areas that detail of that sure you I'm of

David Deno

we to we're stake out our talking it's servers want well, improving. to know, accuracy want want you I engage, our customers, service the we data, and see in and through restaurant own but and our partners internal see our accuracy the Yeah, cooking our levels the service managing Brian to response level see, of how attentiveness it’s we We steak customers. to and as steaks and have detail own to satisfaction regarding customer our and

Brian Vaccaro

All embed in quarter? questions. OpEx, other then second quick then half second that what could how in of terms to advertising the right. last remind what compared year, on Maybe two us was Chris share your And spent numbers you just guidance does spend? and the

David Deno

total, million Yeah, it call spent last million. $XX in $XX we you we look so if in QX, international. year spent, And including at advertising

on year year think had we going So, still in can that of to don't know, year advertising. about over year the a expect TBD that, million you're QX pickup. see to see, would up that you I be to over And of increases and kind say in QX. I going we're you're $X I but level

Brian Vaccaro

just but remind take year? your Okay. And actions earlier, second-half about to pricing, on additional any quarter I second that or And just talked the of took no the guidance also you us wanted can then you in the of confirm from it you pricing then you first pricing assumes here. half

David Deno

took Yeah, bit a little we second quarter. the in

low It of QX. the of pretty some QX So need pricing to pricing. take that obviously takes or away in levels was

from think of in I guidance certainly, think year provided, material we the terms pricing. minds, yeah, QX to But kind we point. in right our take contemplating in of still back about the levels that not this of we're at pricing that or half increased retain over the we're all or how change going of QX, to the

Brian Vaccaro

you All much. Thank very right.

David Deno

you, Brian. Thank

Operator

Our Dennis UBS. came for Geiger from next question

Dennis Geiger

expected you another and ask to want strength about in traffic and I the the satisfaction that trends one improvement spoke you. Thank scores the to.

touch your Just how kind there customers based year. little think that you on improving strength if could might sort visits, of of that based what you satisfaction per be on lag to bit of about times number converting that, the that of Curious visit on survey. a the and

little but a of to probably and provide more starting could that, you that. see on the curious just timing You're benefit color of some that perhaps if

David Deno

month times that a times that come will people Yeah, because a that. or XX has, business every come year. something They we, like few not a year, a build, we're

Our trends. something ambiance that obviously but And improve to remodels, it, our top a the put this kind of frequent is users you will so, this going then when with build they'll have sustainably see improvement on come more with is often, sustainable improvement. traffic it, in of This right?

good is be we're it it thing able see country. the And because by to of the sections remodeling we're then to going about

in So, going so something business. to we'll adjust of the we're Florida, our be over of we'll that to that's see so and able guest looks, how what, is But time, our frequency starting able accordingly. strategy to build this be because

Dennis Geiger

talk helpful, a a and just you. within And the restaurant, just then, you thank more Very things one on more, off-premise little here, opportunities good going but of and from can lot about bit delivery curious the there sort for sort how that's opportunity the in looking about and results you're quarter, you. the of sell thinking how you're of capitalize those but to opportunities forward on out still going

David Deno

And around and convenience in make we're our to Yes, and to-go the rooms. technology, technology our built significant progress our consumer our wants our strategy convenience. our rooms continuing that capital customers. providing delivery ordering for to And we've ease through

to carry in restaurant, continue that so, between because in customer heavily there's for but third-party in customers out, occasion, lot with incremental therefore, delivery, do and eat invest especially that carry opportunity a that's an of that's either right? and overlap, And in us. a delivery, out The to come a we'll business or

going we boy, that, And responding an developed I'm got line then finally, but way their sandwiches in catering we're to seeing Again, that it, it’s into beyond Carrabba's the being think and the get we've just consumer on it's restaurant. our customer's is in our that, leading off-premise loves opportunity. details business. opportunity and of catering they not

of can example and our and in help, business there the a can likes convenience deliver business. and the we're we innovation business was in restaurant customer places clear, to other it. in off-premise is how use this great an So, It

Dennis Geiger

you. Great thank

Operator

Please Our Market. can Andrew from BMO Strelzik from Capital questions next be go ahead.

Andrew Strelzik

maybe especially optimism unit the Fleming's take been think, if years, play very would And you in much. Carrabba's more talked outback would know about outlook optimistic My more which the thank around there. it meaningful it's about Good Carrabba's I morning, very there? consistent. be would of development. is or kind given and great. color opportunity for and kind new you've within coming over there's has an Any your question you that driven, really the don't role, talked to of a think markets. growth you've What off-premises, I and catering of formats first

David Deno

has great opportunity or Carrabba's. like a terrific. it. Carrabba's. we that, performance about there's the continue Clearly, little Yes, have more, I looking doing with something The there's opportunity at generally it pipeline can an on talk bit, don't we're to until little thinking but until go anything and But back the a but team to an built, I been I'll it's hold certainly job. is public build further, we in pipeline a about some and a

up filling Having Flemings, very said that, strong. pipeline at Brazil, and every Outback the day looks is and

come to on the more Carrabba's The certainly earned So, expansion. right to development. more

Andrew Strelzik

guess what be was category mean, concern might the off, more kind my Okay, across roll seeing? and on great. activity other I just to pricing efforts pretty And over question there within are with of that competitive still mean? might the any Does category. most you rational traffic it expecting that what and feel I driving

David Deno

rational this that. been don't want we Other play comment our play about a been things intend to going We in, And but very want we any like the we don't like way don't and business. call, we've do we really it's categories on about very it's in other very it's in certainly areas, environment the on value to in discounting don't rational been build rational. ways, section I talked a to of to Yeah, business. because really, parts, those but

Operator

at like for sir, to go time. question over further Please, comments. this I ahead. turn to would no Deno Mr. back is There the floor closing

David Deno

your everybody, to business, our for and and October in listening you, talking Take in forward you Thank care. QX our and call. to we look interest

Operator

This today's teleconference. concludes

time. nice disconnect Have may lines your this at day. You participation. for your Thank you a

Bloomin' Brands (BLMN) 1 Aug 232023 Q2 Earnings call transcript