BLMN - Earnings call 4 2023 | Bloomin' Brands, Inc.

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Operator

Greetings and welcome to the Bloomin' Brands Fiscal Fourth 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, Ms. 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 fourth 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, Throughout adjusted this results an will we conference presenting be on basis. described.Before directly remarks, use on appear measures in including like earnings release our trends. of measures recent everyone of of GAAP GAAP explanation that financial formal reconciliations discussion a will our comparable and website we as to remind discussion previously our of An statements, I'd include non to begin the most part looking forward our today way and statements that differ actual could from subject looking cause material to our statements. numerous These forward are risks uncertainties results a to in

these company questions.With we've for of quarter fiscal which completed over Deno. www.sec.gov.During an are discussed overview in we'll release. the our Some are Once XXXX like now up remarks, provide financial available call turn recap the our highlights mentioned performance fiscal filings, earnings fourth on of David to a the in SEC of XXXX, Others call open I risks brief these guidance. our we'll today's call, are would that, to thoughts current and for

David Deno

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

XX% $X.XX. of in noted growth to compares This $X.XX down was combined diluted this reflecting XX in sales share a were As morning's XXXX points. per earnings XXXX release, U.S. QX earnings basis QX that's comparable adjusted year-over-year,

with and largely line expectations. results were quarter fourth XXXX Our in

significant by Steakhouse by improving and we would holiday QX. positive like continues points. in a traffic And the growth with off their Brazil. They traffic recognize Carrabba's we share Carrabba's sandwiches channel wide and and launched Bistro, that of the or in this comp restaurant comp year. Outback's October to In XXX into strength, sales, lapping great comp specifically our of impressive basis to The had Carrabba's catering I growth demand demonstrate either Carrabba's outperformed plans another lunch is posted more as season.Before and sales by the restaurant up traffic expectations.Brazil within show was had QX a in results the now year basis ending within softer businesses continue Carrabba's we growth array had in Importantly, offered premises catering in focused with a Italian heritage U.S. is our a offer sales industry. pent to-go. business. to in given in at featuring in in option points and XXXX. X.X% XXXX XXXX X growth to Carrabba's XX from sales growing sequential outperform that reflect the which of QX, specifically compelling the lunch profits especially and discuss progressively a sales take continues outstanding XXXX. for versus offset is XXXX strong improvement industry

we growth store excellent remains company. in that centered operations center. sales a stronger to are forward to we restaurants remain priorities for footprint and on us without service to support been our our our at country and priorities include making throughout leading our coming on XXXX. have new hospitality outstanding doubling look strategic years.Our would capitalizing top results guests.As XX in the continue possible opened We Thank great priority, which especially forward restaurant restaurants same in business We restaurant our the the this XXXX and our the delivering first, Outback. focused position restaurants teams you not These and move expand driving leaner in in

while restaurant Second, existing assets. openings our refreshing new increasing

to technology digitally our driven Fourth, margins.My Outback. better sales investing of understand momentum. evolving improve infrastructure at while primary traffic customer premises lot to focus growth off more brand a restaurant idea improving a result becoming remains and our work And COVID drive is. [indiscernible] post a maintaining and better Third, in company. preserving done who our And We've we we customer, ever as of continue our to have positioning. sharpen finally, we a believe

like step was our the in to irreverence improve as customers.In and of "Just has food The reinforces it the brand competitive first in adventure it Right" and back of Rules XXXX I to this in launch and and that as addition, advertising campaign. our and No service from highly Outback's Outback. spent Right voice heritage a on bring marketing phrase part promise share our we to of built the more This marketplace. effort especially Just expected equity

During innovation, utilizing of voice and QX, build price approximately to the spending million. recognize We also increase response discretionary be additional accessible high-return plan XXXX spend. consumer a careful great positive and share will of tactics. blend television The our [ marketing our $XX more with investment digital we their points ] saw highlights to spending. advertising a improve domain This value.We by our may and traffic,

for LTO, the current value. $XX.XX Our a a great X-course offers customer Aussie dinner

to coming are marketing quarters.Since start must are work The underway to operations marketing to we the on We more in our will and our the pricing thoughtful in be spend are at sure at approach best-in-class. more we Outback our and continue discounting. at No the investments XXXX unveil be Rules overall going in Right Outback, Outback. the strategy make Just of campaign of to just There'll

We great continue experience, on service focus will delivering consistently a guest differentiated to specifically improved food. and

focusing ovens technologies operational as new behaviors. this such well and relentlessly through solving on We investments as grills key and as in server handhelds are

A track our and couple this customer measures have leading that work, of accuracy improved. experience. As meaningfully result internal of a consistency steak of we key indicators are

have and basis are points industry experience beaten XXX the of XX and our sales to are last the XXX OpEx up quality casual steak weeks, which continued see our basis and in of to dining year, working. we last Friendly is This further Outback the our above on consistency our asset is strategy in XXX metrics, in respectively.We development points trends, basis expect service ahead XXX reads XX is Based casual and by and accuracy In the at has second the now peers, progress growth. Over perform confident to guidance.On Outback, validated points. improving improve. up is this and industry, dining reflected new it industry of comp and is base. priority, unit food

in that through is upgrading We remains pipeline a nearly at big development robust. to Outback.Our assets openings, restaurants. XXXX. remodeling are and our relocating domestic that trends, are relocations very of in our upgrading our part Know traffic track new restaurants We and assets new X and units XXXX on improving new for opened especially triple

our We we'll in in to green work are continue outsized to and XXXX, on lift XXXX. through sales successfully continue the on relocations miles see these system and investments. opportunistic over XXX completed way We

and key strategy.The The Our priority provide of a offer today last I'll development our incremental our sales. efforts is leading discuss since space, of runway see are doubled demand growth, in to our U.S. we the has We business returns and XXXX pioneers this a channel. than were robust location. and for part continue highly future represents good in to-go currently XX% more off-premises

and to Carrabba's, success comment periodically with to closure growth.Next, confidence decision XXXX. runway on XX hard It's remains a and including base let and and of the to team business review, underperforming a new addition, provides considered as closures factors, add in improve our XX members. promising the portfolio this would we We investment of high potential. not decision for a we the traffic, catering sales early areas the review be plan initiative. our me of but asset at are trade In the in the across with to have older restaurant our XX particularly trade This reflection made these to our system of our majority that variety made Despite were that future of XXXXs. brands, are all initiative, restaurants. these restaurants open locations. work latest our 'XXs our great the our assets close restaurants from The areas These to of critical in leases

asset a this to delivering the ability have continue his the the years wanted X-K I regarding various made business you the financial The come.Before while thrive continue a and me; partner that over everything from unit our I role experience and to his and guests to transition.Chris, We while the considering the will Brands. company just morning Chris' do for great has as I to robust restaurant to out to retirement comment will described Chris, been not.Importantly, technology call invest years is dedicated our with contributions to and building our meeting Bloomin' remain many, balance to healthy last company, food great many gives are who has X CFO. for for He on he many and and initiatives many be growth me missed. sent we done solid in otherwise take our current strength by This a supported performance margins, transfer and his sales replacement. cash thank assist in guidance. you always, Chris strong is those XXXX to the Chris to for a us the over turn for care enhancements development, severance of another commitments. our expected such As time for strong successor you people, to named until to in for foundation to offering company discuss is and we options will flow opportunity a sheet. improvements

Christopher Meyer

translation the and privilege our by recap years. the in view a X.X%, point quarter I versus down for like fourth was XXX from CFO which our a in X% below up basis check financial improvement QX providing sales expectations was the a driven XXrd XX start of to the and X Thanks, in favorable up exchange kind been comparable reflects just revenue foreign X.X% billion, of versus net and performance $XX.X as It's XXXX. you primarily revenues million working in Total for last was for closures. from our was Dave, $X.XX which QX would restaurant a This impact of traffic at openings by an words. with XXXX. slightly comparable additional restaurant were XX-week This basis from Average week, represented fiscal negative came serving in XXXX. our points. U.S. XXXX. QX. QX Traffic of

the decreased throughout very the mentioned as that chose pricing, we average in our check remain in at prior steadily replicate pricing been off-premises approximately We menu XX% about As cautious of we taken not taking sales. additional calls, benefit U.S. Outback. QX XXXX. particularly menu was to amount of year total had

catering. in business third-party up total in sales, XX% was incremental driven delivery our highly XX% of U.S. was from the growth QX, Importantly, by which

restaurant related was to performance, of to per a financial difference relates between of per costs $X.XX margins diluted GAAP share was versus is share and diluted our per quarter and for earnings versus aspects it level our XX.X% versus in adjusted other diluted As of restaurant adjusted margin the XXXX. earnings was share impairment earnings year. year restaurant were share reduction due XXXX. of closing $X.XX The per in operating QX diluted in The last couple primary XX.X% $X.XX driven earnings earnings factors. $X.XX per adjusted initiative.QX GAAP by asset last diluted share restaurant to from Adjusted closure

benefit not we up from in the call, did This QX, X somewhat we beef QX as line we last the XXXX. remain First, favorability drove were lapping, EPS elevated smaller from on diluted first to results. of we includes some relates to XXXX.Second, the the EPS throughout structure. margin lapping from in margin leverage estimate growth.As week, COGS and capital reflected the of were rent levels like week significant had depreciation us and with coupled normal quarters average X.X% and was The our adjusted week.Turning allow expenses because this X.X% allocated and Total Year's check benefit QX spending to monthly our $X.XX The mentioned of a expense inflation the as our the from the year-over-year QX, year, were XXXX. Depreciation in fixed was expense XXrd Total both week. week in on a support margin capital inflation it our in X.X%. in company and our additional QX basis to recorded QX. debt operating operating operating up are income the than X.X% general that the was higher of to our restaurant expense Labor was margin and consistent $XXX infrastructure the of with such compared and up levels New unfavorability. to inflation amount XXrd increased in administrative large to in worth XXrd is Christmas and extra not week busiest at and this between million was of days end for our many XXXX of investments is operating

of very our and have goal coming worked leverage adjusted liquidity. debt levels lease with levels is COVID hard We to our our ratio out are solidly Xx that of reduce significant below pleased of

In shares the this indicated the authorization of for than we Board XXXX. approved in of X.X normally the $XXX would terms million earnings This of The $XX of twofold. August put a larger repurchases, expiring in repurchased in million.As in a release, new share we authorization has purpose existing $XXX authorization million is is and XXXX morning's million place. authorization canceled stock

the repurchase typical XX to continue us over First, volume months. million $XXX shares allows this next of to of authorization a

of are our to principal a $XXX convert in dividend the adjusted related also retire us flexibility remaining March and our in dilution calculation.The of we these bond of Second, the the million payable May a in exists allows on There convert currently our assuming are now EPS of The the $X.XX structure share to our remaining convert XXXX declared count. shares that and included for share matures sometime quarterly million remove flexibility a In to to approximately a the ways from Board next on the XX. $XXX are dollars X the potential convert give number guidance, XXXX. authorization of million and retire additional convertible transaction, May. between this

our share $X.XX Brazil benefit benefits I XXrd guidance. our the I The include that to to week year the QX wanted XXXX basis, tax full adjusted tax XXXX, Brazil Before approximately remind everyone legislation per XXXX approximately turning $X.XX.Now in our worth and to result diluted the was earnings results adjusted XXrd turn $X.XX. from legislation was comparative was worth XX-week a week. XXXX and the On

We expect are diluted share expected on $X.XX. restaurant X% the and be be Adjusted a $X.XX basis. to to full sales flat per year comparable calendar U.S. to comparable earnings between

inflation expect X%, XX%. full expect by inflation.We X% and to million and year commodities to driven between expected assumption tax large to expenditures We part be Capital our rate beef be in and be between between $XXX are million. XX% $XXX

help including XXrd pipeline of capital late the XX year-over-year XXXX funding complexity comparing in capital ongoing as morning in as week dollars week of better comparable you quarter. weather the release shift. sales from our weeks it represents especially a industry, and negative X the XXXX the that This similar first impacts year. fiscal first includes few XXXX new new has fiscal XXXX openings, to remodel, XXXX be relocation a grown. in and by to earnings infrastructure both openings for the fiscal table first well includes the quarter. will this XX significant of of in level XXXX is for in our provided The experienced to accelerated refer calendar our to approximately full and shift restaurant the to QX impactful to dates comparing Please Our spending plan to projects.The rest as we XXXX headwind to creates This quarter, Each quarter the quarter results, in from the spending X.X% support year a calendar.As comparable relates some of quarter. restaurant understand

this We comparable in have included sales thinking our guidance.

sales restaurant on seen comparable of the to XXX growth comparable sales points industry. we've The basis. XX U.S. and news expect is we calendar such, As good ahead between basis down a be basis points continued

This are company's $X.XX and in the shift included at weather of per be first trend, represented QX calendar the earnings weather addition, expect our week impact $X.XX, approximate the $X.XX and adjusted which diluted including weeks In to in week includes our X $X.XX our an guidance.We a to share history. between from negative due the from quarter. the impact strongest the beginning impact Day Valentine's

the $X.XX of is QX successfully In a versus XXXX. In headwind challenging Brazil in addition, a environment the navigated QX. we tax removal summary, exemption in of

emerge We stronger XXXX company.And we executing better, our up will the questions. will open in call with against will operations-focused remain and for in a strategy disciplined that,

Operator

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

Jeffrey Bernstein

consumer is broader environment. question on My the

obviously, consumer or in you multiple good and a curious then you perspective. change impacting recent Just with brands, mix of in Any pretty in have months, the risk consumer traffic behavior slowing mentioned XXXX. a

the I strong weeks a So the downtimes to downtimes they're had of I Or strength that the just trend January trying then day, seeing you And you've fourth since now think to recent what to you the follow-up. you recent say gauge few how gauge quarter? just to week. And would clarify, very weather, first more But more Chris, back would in that you or with a said seen the momentum? months. inclement broadly, close one were

David Deno

consumer the hanging see we Yes, in there.

strength about but of Our the outperformed XX Carrabba's pleased talked the really X XX really but then business, I'm we've with moved stronger and then first and And got weeks. had that the the some we seen as finished at I last quarter weeks they we're October, had strong. Outback seeing along especially on weak industry. we call, trends, as trends has in the weather, of Outback we And a returned. the of the our

continue. to guidance. We we've all expect tried that And of incorporate that trend to our in

the brands we see trend. and hanging well consumer our doing we and in pretty there, see So [indiscernible]

Christopher Meyer

been asked and would about show that add numbers you the still in the some catering it very successful. negative seeing mix Yes. been time, the I thing engineered, -- calls, you has up has said The same LTO mix trends. growth a mix activity of lot -- significant. the saw is at I still to last at only we're in as in and the that's couple in And that we're think the financials. of trends Carrabba's But Yes. No, we've

engineered else. I than So think more it's that been anything

isn't check that's not there what don't management the we've to been that I going Now some seeing. say that's think lion's share on, but of

Jeffrey Bernstein

through wondering, anything the activist there's priorities just you've broadly, perspective in follow-up investor if changed or seen, And look Boardroom. to of that and business whether or XXXX? just then you has Dave, I'm change any how in recent wondering my kind I'm that There's more is just involvement. as impacts your the or in months any, quarters?

David Deno

positive part welcomed Yes. optimistic very good they've and And forward, about partnership. a a We've in members, ideas, They've it's how a helping our Board and very good and you I Boardroom, we're been saw. had as interaction think X us been new we of our we of company, big year. the our understand can the businesses move part been good

Operator

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

Alexander Slagle

sort need how do there's core invested experience, that. in much you service and way Chris, miss think but you that? this about I but know we just the to much step you even specific you there, congrats great I amounts you've you I spectrum to And think to Outback the we'll and a about to position share investing all around in any along brand know for of and think and I mean on do at what the And to the to have the need gone quality quarters you to think how I how of come, experience in food all far that about you've and more improving you made thoughts to dollar back we'll efforts a sure. I hear career guest a the guess, don't gainer. if wanted ask, simplification, have wanted remodels. as as have better

David Deno

Sure.

sharpen this done consumer at in analogy don't But trends, made have we've we've scale -- and end done. look X work to year especially give of I We're our should this the if quarter it at of our when a but made and last think which to I a think more football Outback. we've or understand to been seeing the progress, I but year our know first COVID and XX, we progress. positioning, you the post environment I do. that's in at

I Just more Right, to think Rules at positioning you if started, the, No started, look that do there. work we've

and in service think, at the spending invested we in We've in, up even but that. we're the look have we've going new the XXXX. of seeing restaurants, talked XX some X to do, of I return on service We elements and then We're to you we're If marketing about that open XX the food more on we've in additional food invested some opened and up And some, and remodeling. to elements. some elements XXXX.

we more to it's we're the do. it's beginning And it but Alex, business. in -- in I So think the change to have started, trend see

Alexander Slagle

as profile was these been the like -- how effectively of I closures, relocations? it mean relocation have that look? the Or how those many those the And would of thoughts any pipeline the cash-on-cash of does And new maybe before? sort Is on return still same units.

David Deno

Yes.

So relocation I'll give opportunities." perspective. be, of No, so. X probably the you think I year or these have none would "considered relocations some another we'll this

cadence the in Outback, significant a to like to time piggyback we about lift. relocate think that think -- we question terms of sales relocations. Every that the that Dave on of I see sort And we the new Outback. I we have

is why brand and relocation such every we results. see fully of the a the believe that positive and reasons that, when the one relocation we we do Outback we the we strength think the see time of relevance because I do what in

I from use pretty returns We're are capital perspective, need Now were mean, think elsewhere. the what good investing so seeing in returns. opportunities dollars of They demographics. a getting we weren't cash-on-cash would perspective, you get obviously, I justify we getting if would capital. obviously, allocation returns asked are new to say solid units. unit on new new from then we're think we allocation is We seeing that units. a why the we an with that markets infill a investment, And strong these those I strong in about like much We lot,

and capital. about good the feel we're deploying we kind of strategy really how whole So

Operator

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

John Ivankoe

reduction I guess some couple around And in another Obviously, The far reduced you menu reduced come that come costs. question cases significant complexity menu at how down is things. are I actually mean, one, would in journey Outback. with yet items of that a of may with in this simplification. terms

of there sense So including there where lot prices your you on the opportunities guys how longer-term menu be? some kind then opportunities see closer the opportunity I big to that of mean, maybe more investments I the cases, regularly little secondly, on just peers actually first to menu the for them of where wanted in certain price you are. of a Outback priced any of an could the a sell are lowering are bit to get And and that foods, foods That's brand? of are kind menu question. bringing some

David Deno

John. Yes,

it's menu on than we make. at. because have the at that want we a -- at. you've I that on And that's are the you make be an the competitive if on our us. serve think to for point we're something about of easier with looked don't navigate that I the make that talked hit I think And reasons, it on for side, if And that I some at, that opportunity making. we're can technology work in the continuing operators always looking simplification the for the think further and product we're and something the we're progress to that's get could and improved works And good look looking I of marketplace. we we operations, call to any and menu, doing brings something but with it customers easier to can

if is that, about Number pricing, to way try two look at John, versus get something our looking combo at competitors. attractive is this, that's that's -- one. number very we're we So the you

some a If potentially you that at be look the high-quality with Outback, And at meal, pricing offset would pricing that items what some Aussie perceptions very at looking also the little of bit help to $XX.XX, well. menu the we we're Outback. price that on menu some we're lower introduce works doing the of at X-course may

advertising looking It's combo that some we're So a also pricing. bring can looking and the those point doing offer in our quality. at we're that high looking doing. are things of and adds the some that we're place at but We're that. And menu LTOs be little high we that might the of at price value lower against

Operator

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

Sharon Zackfia

around revenue Can those Grill. closures give And the fact and of any about that but I what than we the impact were Aussie concepts margins older. other were us besides more do that were 'XX? some you then closures the texture know commonality locations, as think how impacted and they think they older on we about

David Deno

They're across split the Yes. portfolio.

it's this reason of to add this move. we're probably year to part about other of But -- going related the out $X So company million about bottom million of but We're mostly Outback, There the to come well. impact, those was the why there revenue right? closures. of of a the as was there talked handful line results as result EBIT That's we would in -- profit accretive, the concepts actually, making revenue sort a the about $XXX closures. of of actual

Christopher Meyer

Sharon across far The be new more to those attractive, we're other visible, XX to restaurants opening the is thing restaurants XX bring will portfolio. higher in performing

And so that well. will help really as

Sharon Zackfia

And can I of in the kind maybe alluded acceleration the commentary if the case? that in Is a development correctly. I'm as of CapEx XXXX, you triangulating And kind of XX get in and cadence to you year, growth of new you beyond? from into maintain this -- think kind do what what mean, XX 'XX locations further I 'XX, think you there to

David Deno

pipeline. love our I Yes, Sharon,

has team Our job. great done a real estate

as we raise You're cadence and the correct. like We the would forward. to cadence improve go

our make in always that As that on returns Chris But top markets are the especially is very a southeast. great. very, mentioned, strong, we of have stronghold sure returns the building pipeline in to we're our

Christopher Meyer

maybe capital to just a on guide bit. the little give Yes. that little context how And you and together a comes

restaurant technology. in So to that going that XXXX have an XXXX, new then to the going That one in off we of spend in about increase numbers. in you going in the spending to are capital to you're million that see the But we fall is the going have had XXXX. of dynamics of units is are $XX number

So just and new really the it's a units. the trade of between increasing the technology number restaurants,

Operator

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

Jeffrey Farmer

to you're relates it the across future. luck to XXXX? A you sort going of to pricing, questions traffic, to of on mix flat component assumptions the guidance Anything Chris as for be everything that the for of pursuing offer couple with you. sales can Best X% in same-store

Christopher Meyer

perspective. you I'll Yes, give sure. some

can going around X% to much I if think new. COVID, lot I anywhere think anything is that's down down of there's which the to a category. every to going said you XXXX. don't maybe down traffic range would that category the there's perspective. going or then possible on calling external of traffic, generally of category, I And X%, traffic at I also that little But but depend environment. pretty speaking, outcomes I say, as I So a have on outside choose to hole Box look here years from things wide doable, quite remember back it's measured of candidly, year worth of you because X%. pretty it's couple certainly I likely think outlook bit a for of however mean weather a like I a couple first, KNAPP, Look, And a the negative I going out a out been to way. think we're A flat, Black think about mean, a the that. also of sort in from the QX here. start to by of in to

in perspective, it to traffic things X be traffic the commitment and is category the flat in down this those X% is range. that year, to our is if our think X% I taken to outperform our going goal try category So down to which in is is to X%, why

of be have outperform consumer some to we in it. does there. We then a upside The little expect better to hanging to have seems because category course, opportunity there,

think about I how would that's traffic. So

benign average so check that's increase some again, X% I mix. the comprised of say, activity, it of pricing, I'd that full then mean, so mix, cetera, by of, of guide, over of the to pricing is The talked terms benign, is in or And balance things it, then going going Now to have to check the call environment driven one And terms about the Again, of or market. I is be year not to somewhat be and average like growth, where but catering assumption is beef et average pricing X% with the year. an the in X.X% start of going the negative and commodity in in things incremental assumes pricing some area that. negative LTO about, pricing check small X%. it's amount about of a rollover

have And -- going we're to inflation again this so significant beef year. this year against

that be of incremental that. so meant going pricing And some to is to offset

Jeffrey Farmer

should ongoing How build. the And effort part slowly of first sort across a sort to media out then and of to of of voice you going of as this we it to, implemented have is just level into the that thinking a about stronger increased as the share of Or of QX sort follow-up, media, there? relates be again, sort fully get XQ?

David Deno

at ideas think Yes, always will will we coming Jeff, up couple to build, and One, X balance about year. the the I'm the it pretty And a of of excited ways we look ideas have. about it.

And ideas. -- the funding follow ideas so will the will the

that will voice. ideas So strong build we They during fully of support we the see year, then share our and of there. will

Operator

of with Sara Senatore question of Our next comes line the America. from Bank

Sara Senatore

I'm you relos trying but in or capital the something OpEx, a a is thought. the could relocations you where CapEx a could -- like marketing individuals, the by labor it obviously looks in get scenario or the elsewhere, I understand that, capital, helped think returns. to return guidance, not I high guess you I But thinking had maybe think heavier across you allocation money the as obviously just if more because system maybe where little even you there reinvested we on mean that about than about are see which have how

of kind the different P&L I question. the clarifying wondering And ROI And uses capital so CapEx? compare just have you of or across how a then within in

David Deno

investments, look also our P&L, investments that We carefully then very across and our Sure. look at labor food at CapEx. we the

And excuse where area. that remodels concentration. tried have in we new, One -- benefit of assets, at is instance, traffic the and ways our in refreshment XXXX, our for them, or of we trade relocations our as did older did we Outback, the we we me, growth, relocations to concentrate Florida, really that and saw will especially a uplift entire and strong to unlock assets the of

in cash-on-cash But P&L, at the So look we in traffic look strong we we at look we make we want to know uplift look entire and the as it the received our as it want also, does that in at investments labor. capital, for the but our food, for marketplace and then across we advertising. we does then and to We assets. make we investments then return what what was

Christopher Meyer

brands areas mean like Yes. increasing decisions there have -- it's of we sense. in portion back second side, the past. some have we reinvestments And we've in or sizes whether makes where made I our that at been think certainly it adding a

one the cash really having these advantages flow significant free and to in certainly, of leave make standpoint. investments shape is a structure we yourself decisions kind So that still and a a have from of amount of you're good able capital like of

Sara Senatore

clarify broader has say, of what you're to the for Just to as doing implications you trade area. some

trade Is or the the throughout remodel the that may trade So area of area? reverberate customers relo fair? perception in that from

David Deno

to trade think and Yes. prototypes, city very attractive. are There's Outback a new people in which attract say, a that," our or nothing "Wow, two especially -- look we new in in area a at like

of for as part the entire traffic well building the trade that's So area.

Christopher Meyer

with come factor in new and factor when up We cannibalization restaurant we the for investments. we'll returns in

where if into there's making and in decisions. a potential to area a a model the we trade we're that if So we cannibalization our sure right going factor a make -- restaurant entering we're already significant presence, have in

Sara Senatore

repurchase -- convert. that the technical dilution Is the And from correctly, just question. a a pretty just much the then offset would Am I understanding wash? just is it of sort

David Deno

yes. Well,

we're And try repurchase The me here. complicated. frame important let But trying share million the to -- convert let me it's what do because authorization. pretty so million to $XXX of the just $XXX part an gets so

million There's event. sense. of The count the in can real share between the would the much normal million. et optionality. did repurchases normal from -- of just be May the share do million now million $XXX the $XX just $XXX that timing the that using would pretty million you there's million, next issuing I'm adjusted $XXX it say right, a because if just us into of is aside We the million, there. are that $XXX The my would X in that timing would $XXX course put That's just remainder is because The it, again, kind XXXX. $XXX it repurchases, the too convert be currently really to per my be And can much just those some X principal the gives count, would some is, just of of shares, remaining comes funds for be and to and adjusted of of about you buybacks to million sitting convert, to not count, business. months. million, I what come another share share that some So have business. got the We shares that's sitting course shares $XXX cetera. would on you million the the going day, of refinancing next in share, what that when out performed anywhere more the But shares are makes count have get earnings the of outcome end share That's arbitrage maturity. can I share options likely at impact between how currently XX share

Operator

question comes the Harbour Brian with from of Morgan Stanley. Our line next

Brian Harbour

And Chris to you. of luck best

Just this did to [ stores or think like broader of kind think a year? you reinvest to be as you add labor, do a question labor ] what building saw you about a wage I question to -- And you kind in traffic of expect some there's feel inflation on need year? about this

David Deno

Yes.

to invested enable I our We've very service technology of servers. we are think model technology it. cooking our We've back behind the house. models and strong, enable about established, feel very the invested our labor well good The is in well run. to

really the is labor hours, good the So at in level et restaurant shape. cetera, of number spending

Christopher Meyer

you ask about Did inflation?

Brian Harbour

Yes.

Christopher Meyer

in just anytime future, in X.X%. call since it It a of And anywhere Look, and wage. I the raising going range inflation, Florida X% seems sticky. yes particularly is through Florida, to I don't the mean, is yes, like just have I inflation pretty we X% it, think stage minimum that going presence of such see their

need of think like initiatives how to market. part we just productivity I look, some that So offsets. That's the because become that's why so and things go important you

And You the just take making that. amounts much do unlimited can't productivity. right why so on thing pricing of with focus to offset we we that's sure

Brian Harbour

key insights of your What's work of from changed, I some was you've your with what the about done Or take comment your that bait I'll the you've on guess? customer. kind done? Maybe work

David Deno

other explorers last such of is that I a categories adventurous think those to there Aussie long our much few support pick Steakhouse and things. do again get is reasons, look continue the loves to for if can from has some reinforcement of too things that. be is Outback beside competitive steakhouse. the steak, as And a thing they Outback some might Outback One, an research. permission again the of out think do again. Yes, et but of our want at at don't our but couple we of is into detail core. that categories how cetera, the heritage permission to continue heritage, some Right light for our have came all of we a other No on and core we And or to interest, focus have we and that lot to I explorers -- I say And Just Rules looking And the the

Operator

the Our next of line Deutsche from Silberman comes Bank. with Lauren question

Lauren Silberman

terms XXXX, of more more in I want advertising see? to to think approach there type your ask we What to in how need bit advertising, about On messaging just a And then much going lean you how the to step-up value we do of on are spend. into, marketing. into

David Deno

it'll I'm about. optimistic do I we that Yes, the said I think ideas have, year. which -- it -- like move will up it'll before, very during be I But with importantly, more

you can can don't I do good along -- the to think really into the I get if of love, we value. and detail with that want here, products if consumers combo

magic and awareness that the that's excitement. our and think I traffic our grow bring we especially help Outback, and together consumer at advertising to can

that. I that heritage do because that's have a we we something of think clearly can

said, like is, that forward. the talked We've And versus see need we'll thing to as as versus can ideas other understanding. a fruition. to about I return year second you'll we better come go I think And mix lastly, have we way advertise, around to as look track and we calls spending also The on be during the continue of step-up network at we the much things in digital change to. Those that television. the it are the

track with the doing investment, we and continue advertising those are and can the So our forward. we're to do what that going things we returns

Lauren Silberman

the the we And throughout year? then how of just just on margin be margin, the you thinking about embedded restaurant cadence talk this can And about guide should in year? what's

Christopher Meyer

Yes.

you we'll about as with margins restaurant we'll at talk start at same think margins I time. and operating the look --

XX and the think of was but finished I our the exemption. to -- line XXrd of XXXX. in basis week that perspective, driven Brazil by tax give we at X.X% points margin op

So those in XXXX. have to you're not going

your guidance our above and it, those I'd as be we to where depending so, starting were look, So and where to down, again, XXXX within persistent if reminder, XXX or op X% exclude is, inflation. gave, continues probably your X say to which slightly with up despite in guide be point X.X%, -- expect around points it's land you is at on what we margin slightly flattish in basis very a we call range the

on category productivity and restaurant from the and cost think will I goods perspective, of it a a of given the given that the the is that's when is one some talked little just other piece keep margin likely you think most land So where about and of dollars chance inflation. X% inflation a category that spend. flat OpEx, to the to year-over-year. year. be just inflation sold depreciation in favorable about, categories, terms have a this is a COGS probably then the categories Labor further both those inflation Those down higher going we'd P&L, the capital to that less those little G&A, the X% but basis, dollar And go decent -- seeing a with is I margin higher, to year-over-year in somewhat you we're bit be be to probably like obviously, one,

higher So I revenues as would well. a depreciation to be expect total as of percentage

you little sense pieces a So parts. how bit that gives of the of about I think

Operator

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

Brian Vaccaro

Chris, you. luck to best Congrats, of

comps just that a be swings on So few unusual as improved set also for how industry look the over you've more the normalized. on versus recently seen? the circling degree your back second. of Outback has has the Could given you U.S. much Or on last the level how comps in just little you January, months? could any weather improvement spread specific the a more weather And way

David Deno

December per we can have X that and hopefully the doing weeks weeks, want that think about price pleased get the place don't that and But sales want in work I ahead, about behind that. you going was But weather, don't from growth and just is the I now. few into see to the the the We've of industry of trend December into well. a Outback of the and doing, that's the shown and result that. point the seen consistently continue -- we're After I a the the say very last right get points in the I Yes. specific we're help resume se. then we're some me to forward strengthen. points pretty percentage we've all same-store Brian. industry, in when to in QX, first saw that's gone that. to -- beginning of beginning trend we I know we're hope understand fall versus in can into work especially And the

guidance our so tried all to for into And we that bundle quarter. the

Brian Vaccaro

is to that basis? and And is that positive it traffic a on both that, say spread, spread comp on fair

David Deno

Yes.

Christopher Meyer

Yes.

David Deno

if I get a hasn't we thing that a you sales. couple brand on has I they're both to And great Carrabba's the forward. want I And one look about before to next team, knocking just versus they're but about at attention just investment the just park, in trends Brian, feel to doing. call, question, mention lot in out of it very and that their of things going and this a something good how it's gotten the traffic say need opportunities industry, of

you, interrupting just mention wanted I that. for me excuse So to but

Brian Vaccaro

drove we just XXX Could No, on over other saw quarter points in other store the And you absolutely I think that's Labor were and give just a fourth on year-on-year. dynamics. and was pressure, reinvested My what to quarter? hours little a the guess, some basis on definitely what you that? margin noted. than of expecting. service OpEx moved I little And color differently degree labor, you in question or

Christopher Meyer

wouldn't I so Well, Yes. say in for much service. hours reinvestment

the labor related some expenses that did the relative XXrd week. was see to but related have QX dynamic we -- to to last additional I specifically inflation, think compensation in year, mostly you

we what line that because QX. that to we year up just the line But the wasn't lapping I we the broadly line. we ago. because were a just had just big. from leverage I we performance it think was speaking, that that As buckets. COGS tried But from we kind to pay a way talked the that big idea some ago did leveraging QX perspective the into the stuff then year those margin onetime we about lost a people weren't pretty mean it tune was some going that percentage partners COGS a on cash had we and going flow, was that our activity until of beef really some Brian, the are as leverage -- to of just fact of that move that margin restaurant outsized XXrd week been -- on the favorably And of

had was little but think to just labor dynamic. I the that kind was and that week of biggest came lot But dynamics So a higher, do the it how probably that yes, with of together. XXrd a

Brian Vaccaro

did 'XX? the on savings XXXX of specifics you achieve if one. you be? of And in what could the last some more of topic in just I provide level productivity, will could, a key drivers And efficiency of few on What

Christopher Meyer

Yes.

at saw in we're in A So opportunities work going because a in million is that that it things that another be by piece of we is But of be put chain as menu we've supply well restaurant Dave as driven technology place. looking about. the of there the big to to about related at buckets there's going and lot some talked million think lot this I $XX the that in going that XXXX going year. or $XX buckets another see we think be ended of XXXX. largely of so Again, I again, And productivity productivity we up XXXX. the we would after are to been

it's to pretty broadly labor, and weighted So spread a to more COGS the going et we'll be goods of but across little between maybe cost cetera. Again, sold, P&L see.

David Deno

our levels. and great products I Brian, getting a productivity we food manner. the do efficient touch just underscore people will not pure to quality too, our not in service and touch more It's want service our to

important that's extremely to us. So

Operator

Sandler. of from Piper next the line Our question Mullan comes Brian with

Brian Mullan

Can could I to if front environment own is current restaurants been on And for you action you your just guidance this related the for to the expect but year? many current to that the there right just longer to future? together if just now? as know on Brazil. down Just and you you've those on conducive times the term operating touch put thinking desire then What environment a foreseeable your in the do that, you question see the taking give past, any on asked

David Deno

Cup. interest are this sales World improvement Sure. probably high down of has last rates shape. had time, The the is the good. good still Inflation but because there, environment at year We a down, remains consumer in come tremendous pretty

able very a do. which we to were was difficult that So lap,

fantastic. the And new so are openings

is position one. number unparalleled, Our

we so operating to environment, really, believe, continues be strong. really And the

-- is So that that's important.

second may we just be from business business. looked that as The look we may a is having franchise environment the or it about past forward. not the at in We'll get then continue is consider. move we've business and still the the value piece That to something potentially and that we

now, at continue a optionality So right continue to business. great down there. is our job we look to But build to

Brian Mullan

that a brand? recently? on question What year same-store as on you the brand of Maybe the next to the just over be focused some priorities just going then And with follow-up, are few a that years? Just on trends on? for the Can Bonefish. this sales what's key touch team what's going

David Deno

for I us, think have work to more some we do there.

the we our COVID is this of work quite frankly, Some in customer Outback, environment. at that of understanding better get did a post

as X-pronged continue do. our customer both and to work focus service wine focusing Bonefish, mixing we such food in trends a key work We'll get us. to in for do bar menu a vehicle on. our of continue looking And It's on such we also kind something is And improve. now. menu dining. measures the liquor, and operations business in our can opportunities that's beer, to there. to because casual it think of assets in that refresh but a the to that growth and I strategy need we and centered highest We've continue the to we'll that invested not bar at upgrade and simplification It's investment concept. our assets at brand Is doing right it's that We're there technology we're speed that. for

Operator

question next with UBS. line from Geiger Our comes the of Dennis

Dennis Geiger

continuing customer progress that about experience and customer some recently. attest the the the positive benefits then the see you're cetera. server operations satisfaction et some the I handhelds hear across to of scores, Encouraging in can to personally And visits from to Outback

Where talk about think the long most I to a are do sort you've there's consistency as opportunities think, of levels speed, you you it best-in-class And wondering biggest takes for sort lie? I how guess, the Where that to a identified -- more the it So is of target? operations to, importantly, get you just little spoke if that of could gains. opportunity food?

David Deno

operating Yes. significant progress measures. our We're making in

as to but we as we'll progress each we a for that all we're So every our continue something soon specific other I'm operating with externally. over. of goal to the in Technomic internal lot don't but we're want and And people make and us that certainly, very externally work pleased a month. I make with can, it's is prediction, And are measures also making, do progress seeing both the

is So that a great thing really see. to

more So and we thing it's continue that's the we first make progress our restaurant do -- variety the to Can work. at the is think menu I the there trade-off around second simplification. between as

more there's technology. coming back our work really So there. Number two leveraging is out

the the That's Grills benefit been a of clearly handheld. saw have happening. The success. You big

at then our and to those reorders our teams help year, casual be just a as that great If continue strong. will steak that's very, the we to been our to And as and you we're look reinforcement satisfaction, traffic. in things we've chances do Xx at. building And looking offer got are continue That at service, recooks, or partners a and make very to here. look this, we progress comes managing then dining to customer X

Dennis Geiger

And a then just second question.

Just that relates traffic of bunch a the work the doing. of of as you've it to some the the been spoken has drivers bunch to that team

there a on most out break are most kind for maybe can and the that impactful there are be think you multiyear this are then As if that year of you'd drivers a some this biggest of about think that impactful kind year. there couple If anything would we some there? basis, of be

David Deno

how our And we're those up. and I spending doing it ideas. marketing and love our of coming the how ideas we're I at to looking some support Yes. like advertising fact product we're dollars that

So continuing in term, term, near something the the work menu about that's we'll longer looking hopeful some really of is that with very clearly positioning be talked and our for at important. we

and things investment the it. our in term, place them a are things to long-term along work. into I that term, asset and going our Florida longer remodeled think longer term our I live most asset short-term can now, help of balance us, think longer to are with operations some we some you if gains, go you really strong have menu want been in see Those upgrades, We Outback, which are of the possible, at Outback.

Operator

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

Jon Tower

you value luck. menu something a best to And $XX.XX I'm do on Chris, thoughts your about And curious you today? how option on maybe everyday over your do get have over launch Curious, of just can Look time? forward you for and/or Aussie to everyday X-course what the time to that to you next. an continue meal, like feel seeing own value on is consumers that decent evolve think

David Deno

Yes.

something point. at We continue the as first we're opportunities. great step, our may mentioned return a still certainly company, really but to I that and great it's the Jon, look But lower are to think various limited-time great also products think -- earlier customer. value have some can good also I then There look at products we'll it's a that on the offer price are offer for to that. I the call, looking at

work the have we in with well, value that the spend combos right selected on brand. through opportunity through to of So side marketing as LTOs our doing and we're drive the but menu the some

Jon Tower

do see those or the items speak you permanent LTO? you of, In menu as

David Deno

earn the would We to have to their menu. they be they but are thinking on permanent, that right

Jon Tower

I a guess X% had kind margin EBIT at and of zooming a just out business. now for exceeded toward then so target years, know thinking or we're step aiming And that little bit it a few bit and taking of one back. a been and you've about point the I

and that over your we going company about more a as a get to see that. for is on 'XX So so next think you ability evolving how it or I years. several just I'm to 'XX to beyond But the your should thoughts get 'XX, to back would target? curious be year into assume, obviously, difficult how X%

David Deno

Yes.

benign very to exception, Before things I I one turn there's a want just it that's to -- beef. over basket with commodity Chris, mention,

don't entirely. we price want cost so cover to that up to And beef

at that to what means I how to looking that to make point and before means over at Chris. we to to continue it our want I it But So our it first look have customer. margins broad for turn

Christopher Meyer

target. Well, think operating an margin still Yes. term, think X% we good I feel longer about using that, I look, as

balancing think had for been massive us, that's who's hanging despite the kind are leverage, candidly, news the trying everyone period really between problem dynamic. time look, margins to is I for not been be inflation, and there. and thoughtful of I has tough XXXX, XXXX about this we've that just the inflation pricing in to the but good think and in things menu that And

continue you path first progress be, in say I'd make at traffic ultimately because to what's And as traffic going on need progress continue have and leverage areas in so we XXXX think the that you're we Outback to like order to the to make be to a is progress going to on to moving foremost, forward forward, probably would need about key lever make margins. to

thing the beef Second, then on up, situation new restaurants margins. to that you'll make And begin landscape and from you'll more once in the once you'll on see improves, makings I et think progress to last better the is to ramp start a the have you that inflation progress standpoint XXXX. of cetera, an much make leverage depreciation,

looking So I beyond, to are signs I And XXXX think some think ahead reasons that to and there's the encouraging. believe.

Operator

A Strelzik final Andrew this morning the question comes BMO from Capital line Markets. of with

Andrew Strelzik

had just the on X side. I cost

back the marketing spend. The on first one is

going mentioned through to ramp You year. the that's

if be So going is think XXXX of hold assume in that you at And about think right, that you'd state pre percent exiting level would but a at year than where it we I'm sales, a that importantly, as a of like more should maybe looking at level? steady higher trending. more to kind so this of a this higher I were curious well? a to from fair how are you maybe gap bit be kind X.X%, just still COVID bit of little that,

Christopher Meyer

marketing, higher. was and honest, year to quarter, be every start, Dave. it QX think be about going in XXXX turn I'll it It's will to over think a I ago. be I'll I than probably Yes, way to yes, So even it higher the

increases marketing there's in spend. So to going be

-- hey, on marketing about about, is in for marketing X% of We to think the talked recognize low spend We think range. -- out to even always we down a when the we X.X% marketing. that in terms this I we we've Xs. that we've to years for got we've look, about X.X% talked of used of spot sweet couple margin sales ago, look, "Hey, probably we of that framework years laid talked said, sales

year to probably going as if long our think of would up that, But really term this think a I that's that say increase. well." thought in we we as for think where then So range, can of X.X% obviously, sales that's I kind X% moving ramp forward. sort good to be spending us it's land I that the

So I a good sales. as we think feel about percentage it of

David Deno

and ideas continue just supported, And we'll in and Yes. money to like the that good our the company, get have I'd ideas discipline. follows to say

Andrew Strelzik

And on It basis able that this on beef outlook. been then I'm years. commodity that the curious Were an to last of one sounds couple just you've other and has annual the you problem on a of year? again beef my lock visibility the to able out just do commodity really was like there, only outlook.

Christopher Meyer

XX% XX% years, market of can upside. Yes. hopefully, the as it there. take And somewhere for is does, XX%, XXX% Same Obviously, thing. our that make locked. we Beef some of continues probably progress. locked We're we're basket in to though, on year, if in advantage the hopeful prior that

Operator

to session. and Mr. Deno back floor Ladies turn gentlemen, for you. final the Thank concludes comments. that I'll question-and-answer any our

David Deno

morning. you've this Chris, QX everybody, forward time on everything We later done our you And for thank our you your Thank company. you, to year. for for look this updating call

Christopher Meyer

everybody. Thanks, you. Thank

Operator

Thank you. This today's conference concludes call.

at You lines may participation. disconnect Thank this for your time. you your

Bloomin' Brands (BLMN) 23 Feb 242023 Q4 Earnings call transcript