BLMN - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the Bloomin' Brands Fiscal Fourth Quarter 2024 Earnings Conference Call. (Operator Instructions.) Today's event is being recorded. It's now my pleasure to introduce your host, Tara Kurian, Vice President, Corporate Finance and Investor Relations. Thank you. Ms. begin. may you Kurian,

Tara Kurian

now, good our an Spanos, With and be to our Officer which XXXX President. Chief and our adjusted be measures access call Investors our An section. Throughout in this release fourth presenting website can presentation previously website results fiscal Michael measures on we call, and slides, are directly on Financial on our on quarter By found of as Vice Executive earnings Mike Chief GAAP the described. will release basis. and financial should explanation morning, in use you, have me the to and everyone. at conference non-GAAP earnings today's our Healy, appear you investor our Thank Executive comparable of www.bloominbrands.com of Officer most reconciliations both

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

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

Fiscal turn call open During now would the guidance. our XXXX, we'll the Spanos. on questions. With fiscal and Once to brief an highlights remarks, today's fourth we've for to these the overview recap we'll XXXX call a Mike financial that, call, thoughts like current quarter provide completed of performance for up of over I company

Michael Spanos

have I business to XXXX. even potential steps business more business. earnings about fourth future of you Thank observations we are I our first of good excited in become call. the Thanks, for and morning, everyone. my Tara, On results my months, call, today's discuss our six the quarter will In improve taking joining and

brands, calls our as our succeed. the will We us in is we know be we and on our of have holistic started quarters. What part transparent the at to stage earnings they strategy findings coming love want this and work consumers

improve and better We performance, experience. closed Brazil now company to will actions are actively our Michael XXXX. implementing on and our December key the to financials discuss guest our financial that transaction deliver XX, including understand operations how a

spent energized to in our team I've that As time teams restaurants, to the is with want win. that empowered have it and members clear we me

Our and and supplier communities. people, our beliefs our by result the of sales and state principles care and in taking of measured partners guests, that is a profits is success growth restaurant the its of

an teams to want work our it our experiences. want outstanding to team to is make win. Our deliver to them to with deliver and outstanding for guest easier job experience It

have categories. confidence have flow good and brands the make the to success iconic more in investments. strong as of company order that right long-term large-scale even on-trend a We balance I any in to have have succeed a strategic we in ample cash sheet

that is currently we succeeding. reality the However, not are

lost although As were expected sales share points range, XXX the basis basis as fourth guidance underperformed results in this and our by traffic. within release on by we morning, industry XXX the noted points Box defined Black our and quarter on

business. that with pleased to acknowledge the not are and of trajectory we need performance change We our the

leadership our can to field, immediate team our the in take to with are any or members of the our business my results results. of address Our work working indicative we near-term clear team that foundational brands. our also listening actions In not and in of there hard the way it's strength are partners

experience. value way the We are guest and by improving building sales focused restaurant growth comparable right on profitable and sustainable quality, traffic the

on forward, priorities. three move operating are we As we focusing

First is simplify the agenda.

experience. a guest deliver is great Second

our improve actions and will turnaround of Outback. now Third we of discuss each areas to these a are results. I is taking

First, simplify agenda. the

When become too so in focus and We the the as our our organization. the most complex support restaurant our this team restaurants. by and both on agenda simplify center guests. We fewer have take in people people serve that to simplify our the We we need for operations. important, refranchising started agenda of care can they are that things effort the our an we Brazil

We have in a tremendous to Vinci and business forward look that partner together. growing

business retained ownership a have the XX% remaining portion sell We the of and XXXX. in can

management having team that capacity franchisees. This partnership focus our business in company-owned our Brazil domestic U.S. focused the also Brazil gives is a Brazil based and partner to on in our and for derisks Importantly, growing entirely on model. international the business support our

our over royalty XX% stream volatility. as and earnings less steady will franchisees operate restaurants total of forward, Going with a

can continue support center. to and and continue We units our actions to sales. We've to also a our and at strong more comparable is franchise grow simple operation-centric restaurant new international restaurant become business organization believe taken that

flattening an off-premises and layers that implemented resources domestic cost the functions culinary, leadership with are brand structure approach. of an centralized have and teams training, drive teams marketing, speed organizational in for to and and housed our We integrated now brand empowering their is Previously the more more franchisee efficient dedicated of by business. presidents decision-making effective inside

have more We support resources maintained deliver center the within restaurant capability and to the brands. efficiency support that

of past be organization restructuring. acknowledge organizational due continue that members this percentage to will thank goal week as G&A team our want to and long-term to revenue. I X% our the exited Our a

was organization, excited potential. difficult, is and it is our growth future While and our that about we team the essential I it the know streamlined

operators all make simpler those member the it guest better. much We and fewer clear We to need the to restaurants. team for need inside but items from We of will coming and simplify experience. the loud make make our restaurants. aspects also I've agenda execute our heard to it

items in brands all XXXX. We to XX% our reducing menu in are XX% by

feedback low removing are complexity. and mix items We guest prep menu low labor based satisfaction on and

from We included presented strategy XX our menu away with noncore discounts to every are that items moving LTO XX weeks.

are our Aussie everyday offering. menu currently in both started simplified part value We as Carrabba's and testing everyday the with menus of and and will to at value abundant featured Bonefish. Outback that transition We've is X-Course

We dollars. profit on return, visitation to and success the based gross will guest building measure of intent frequency

deliver priority a operating we service experience. reassessing great a off-premises. a second quality satisfaction by excellent consistently with meal is experience. and both We We and at engaging started and win an menu the Our attentive of know guest great on value, guest items, to all

subpar. We replacing eliminating menu consider or guests that are improving, items our

quality We are guests retraining us. the our flavor procedures cooking our from to provide standards to and reevaluating recipes consistently expect and

and cold with is have do items product these we operators. cold We our Eliminating are improve critical or well satisfaction. We'll all will removing working channels. channel, our that enhance is operational In not our in food It low is off-premises supplier and food year satisfaction, to improved balance the quality improve execution out guest partners travel to menu of for create hot these are items specifications. also the hot roll specifications and and continue that throughout our our abundance. complexity center-of-the-plate

Additionally, we are our in-restaurant dinner demand to off-premises during hours and evaluating support experience. and to in-restaurant our capabilities peak better operators both ensure technology managing a great

will and faster to Outback can satisfaction entertainment, like table, and Ziosk. feedback at We simpler features We a shift. pay guests at through restaurant tap by with our partnership Outback the pay immediate With is offering by measure mobile guest and guest with experience. now wallet have

in We and restaurants, well experience as guests efficiencies restaurants. with April the our as are the at already will staff seeing have In Ziosk the of table. are XX% of improved rollout completed our end our using approximately guest those an by test pay

featuring standpoint menu food traffic focused promotional, that for messaging. and on staycation, standpoint. area At Another items generation to with through promotional our and we Outback, and compelling in created of digital a quality have were brand opportunity We marketing Steakmas and or from promotional like offer impressions. high-equity short failed is consumer items large-scale periods campaigns our we our core in value drive complexity operators, both

everyday dessert clear provide reverent entrees in it. guests our messaging strongest and a shifting are X-Course could Aussies value abundant was with We our operators traded resonated to approach and easily It craveable performing guests and up our our premium options. food, the highlights Many Outback's promotion fun. that XXXX. execute to

important third year, in time focused had at priority the we focus restaurant business. Last guest majority test a turnaround of Outback the to incubation largest is spend our experience. Our Outback and elements will and an the that on value focus on my with brand, at Steakhouse. and many most on is I quality,

by excited the now have that results are seen lab We restaurant and phase. in to test moved

of the As will end February, test. of in XX restaurants we have

and engagement success lift, Outback employee We intent by profitability. or are measuring to guest return, traffic

the real-time has we see that from our We teams, is Outback their growth our and people reminiscent with of I in the have brand. been and the The provide been am that encouraged by these the guests future test leveraging the in impact involved we highly personally for Ziosk in feedback. the our I to been its restaurants passion and at restaurants infectious improvements. Seeing Outbackers belief see best. our of enjoyment have from

is plan to we brand-wide restaurants be the order in learn to test expansion. continue Our as monitor ready for to

in on test share quarters. be more upcoming able the to investments, specific and will net the We results actions

While we new move make ensure our investments it us right the to down asset and invest pipeline. is XXXX, all of get the existing that unit to Beginning we and to at important fast, have have our slowing base in compelling we an a in urgency Outback. quality most need return. We for condition thing are

at but much slower new taking We We'll right existing will earn care open new to to again. restaurants our the pace. to a our focus and restaurants continue open shift of restaurants

of end We will of have maintenance our analysis by repair is completed inform that and QX, the restaurant underway survey scopes. a remodel on be current will state which the evaluating help and each

mid-January. as promoted he coupled pleased Bazile with high-performance has more to of Kelia improved scopes, to to lower Carrabba's most leadership. Pat Operations the will Carrabba's as will of President served employee our in most as that her of as of veteran yielding our as impact returns managing Her recently action, partner exceptional President earnest Pat. of a that experience Yum!, Operations an joined Operations. Outback as of goal operating the latter this capital food, at Pat's record returns Bell. capital Outback hourly people of another starting brand has announce energy half her President remodel develop of standards through for our a our a and including Vice execution financials better in role. serve and higher will and venture including After as for driven on progressed activity a of been the Remodel at an Outback our joint in take lead role, details roles, been in prudently give at year cook with from will dollars Additionally, the recently strong for operator, deep Hafner and well regional him each maintaining Carrabba's, Grill. restaurants by teams cash mindset spend, promoted has Bonefish for to high and using XXXX, partner forward. the register at He ideal expenditure. We and starts is leadership Vice additional operational career a served to begin role, Outbackers. I'm I'm current Outback, to XX-year high track high bias traffic. need Taco will for our Carrabba's. to successful very Keila started Michael and more XX-year leader operational this guest-centric reinforce excited and with of backfilling operator. operation moving passion true very serious proven standards an the makes President the to the He be starting He's President VP she

our to like on allocation. before I over would Lastly, update Michael, to capital provide turn it I an

into restaurants, our our returning transaction reinvesting Our the to shareholders. our back are post leverage priorities capital Brazil debt reducing and

well. the received committed be of We revolver to installment X.X to our our lease Brazil December XX, on the our the revolver received installment We intend to We net the leverage. XXXX, of and end proceeds this at December towards applied below back are balance. leverage getting a as use proceeds second adjusted the first year to to

our relates it transaction. first this post quarter dividend, our to the As is Brazil

the our dividend our the will of that ratio with therefore, such post in more based business payout dividend ratio adjusting earnings transaction. be on line our Brazil are, historical We payout the

per be that new to want actions will take Our previously. I know dividend need $X.XX we share our $X.XX results. annual improve to to compared to per clear we be share

also while are guest our on We everyday delivering brands driving within focused dining value experience. great a casual

Our will transparent We do, work believe will the way. have along the hard that the team take future. be know time, and in work we and we I but to

be first strategic need and our will and communicate my I my on results. With I and you in for grounded performance. to and review will would way, make. we operations Michael delivering to and transparent team path earnings now decisions committed team I As accountable like our call, call to and I turn myself to I a strong to over hold my the in progress financial that, our

Michael Healy

which sales Thank and provide restaurant a performance effect last fiscal negative how check from was financial negative This our providing in then down everyone. restaurant by and of to year, was lapping expectations. Brazil start about was was driven our sales line $XX.X was versus to and basis XXX in our will QX traffic basis QX comparable I under financials additional a QX XXX industry. revenues operations X% off-premises which total and XXXX, were dining points moving Mike, of up like XXrd points, X% net detail of and XXXX consolidated well billion, the which think fourth casual you, consolidated hello, I million basis, were closures. U.S. in U.S. by recap Average in with would the and the quarter XXXX. as U.S. the for on for from of was guidance sales. continuing as business, XX% openings entirely below almost $X.X total transaction our is week forward. On the

is of U.S. line Our XX% with third-party last business sales, delivery in total year.

quarter GAAP for share QX XXXX. diluted negative in per Our $X.XX versus $X.XX earnings the was

earnings XXXX. per versus adjusted to between The is $XX share sale of Our share and from adjustments diluted QX $X.XX the GAAP due earnings adjusted was diluted Brazil, including difference per as for primary in impairment interest expense deferred Brazil the million majority to of held $XX sale transaction. tax million related the assets well in acquiring the from since XXXX erosion for the FX as $X.XX in

with by was domestic last with basis operating experience inflationary impairments was million contracts $XX to higher XX in partially entered primarily million older impairment to the were a related low These underperforming currency a Additionally, forward and offset expenses connection driven digits points in with that $XX costs the offset on in charge basis we QX. wages. the approximately difference legal which continue were additional expenses. year week to our the restaurants expectations. was XXX restaurant foreign associated other single Labor gain there basis partially The into year. inflation the and on between profitable inflation and worth X.X% and adjusted XX overall margins is offset benefit, partially insurance Brazil level margin XXXX. reflected risk XXX installments Restaurant basis were as from inventory-related points declined was last expense X%, X.X% margin point with year remaining quarter Impairment expenses. on related line Brazil points. COGS previously by this XXX The on the closed operating to in transaction. QX quarter. by tax versus we by inflation X.X% a highly week XXrd the headwinds restaurants was was The pressure

the closing, first structure. net of was Brazil the applied transaction the million debt first to $XXX quarter. we proceeds installment revolver of our the at these balance QX. capital transaction $XXX Turning from in Subsequent [billion] of end cash to and the to received Total our refranchising

Our are above currently targeted leverage metrics our range.

of anticipate Mike received the and Brazil debt leverage We of are convertible at Xx. apply repurchased in of with of we of component approximately intend $XXX shares have our of end As allocation, shares for a approximately year the to proceeds to be portion next a included a This we committed leverage of balance. total less and million XX.X December to our the notes. in than revolver mentioned, our is repurchase connection primary a installment it be March lease-adjusted $XX to this reducing issued to capital million. the million Year-to-date,

million our share $XX program. remaining have under authorization We

quarterly Board dividend to setting XXXX. declared in a earnings March average. As Brazil Mike the on historical $X.XX and XX, a that of dividend from the payable mentioned, we is payout sale are our line updating our of reduced with share the reflect ratio

continuing year discontinued Now quarter. upcoming operations and guidance then our and first the turning and to for

where franchisees. to our a recorded This Brazil, stable in for long the revenue more is franchise we franchise transitioned royalty will the to it have consistent our of good which reflects line, As stream, the be a relates with in revenues term. third-party model XXX% company other

On received total revenue company's billion, basis contributed performance standards adjusted forward, recognized benefit line. The will million XXXX the is XXXX, full of income restaurant $X.XX was earnings operations, within for of eliminated revenue, We which has restaurant million operating and year This in for per the operations operating $X.XX adjusted $X.XX. in present royalty within margin Brazil continuing $XX revenues X.X% the X.X% equity Going diluted which revenue historical X% the $XX approximately was $XX and operations an a we or operations and as market discontinued included adjusted total was worth X.X% removed diluted had in of per remains adjusted the line. in terms tax results. approximately for diluted $X.XXX and in intercompany adjusted a and million share franchise revenue was in continuing margin GAAP share. historically our in Brazil in approximately operating franchise share. margin periods Brazil margin, royalty discontinued continuing per legislation financial earnings operations was adjusted within historical earnings was adjusted in in XX.X%, royalty consolidation XXXX, income

is using retained ownership, in remaining be income equity determine fair accounting our value still Our method flow-through Work will including Brazil. considerations equity recognized accounting. investment of XX% to ownership underway

contribution XXXX. meaningful our a contribution the to do in we However, income produce not that anticipate post-tax will net

compare guidance, our As about we to please think continuing operations. go-forward

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

commodity X.X% We be expect in driven and part to beef inflation. large inflation X.X%, between by

to expect between We inflation X% labor X%. be and

This end previously that be year by We to FICA X%. to historical lower tax due expect be historical to intercompany million accounting of revenue create published to royalty royalties of will X%, assumption will driven to our continuing rate operations royalty on future approximate full were credits. Brazil our is our X.XX% the GAAP requirements range and lower an comparing than $XX close rate mentioned. tip our headwind

mentioned This and Additionally, savings, million our $XX approximately in in investment earnings and product which annualized approximately per will bring realized action organizational enhancements Ziosk, work. initiative million Mike share of $XX design XXXX. includes million guidance G&A $XX infrastructure. savings IT in approximately of the will G&A be

We expect $XX approximately approximately million $XX total million for from to includes be of and G&A infrastructure $XXX and reloading XXXX, IT million compensation investments. which approximately

We will expenditures which payment income expected interest our net expense million from to will are earn second between year. on $XXX and interest Brazil transaction, for the million. Capital the lower the be $XXX

restaurant new We need to but for shifting business grow is our focus on and unit we from to to the growth our we existing more right before focus are for development We that can particularly opportunity we in getting operations. there remodels the believe investing base our brands, Outback, through create our experience from right maintenance value units. earn guest

new U.S. open our year dramatically to locations As will and decline year many XXXX. are approximately were we this planned committed, the this new we XX That plan number markets units about. excited of to in in restaurants in XX

partners. Brazil to XX open units new from other partner with franchise in units XX our franchise expect approximately We new

impact been first XXX impacts Combined, start and shifts from this of relates sales represent Day. included XXXX, point the offset to quarter our Year's the the and comparable of New by negative to negative comparable holiday we basis quarter has As Valentine's experienced year, on approximately weather industry, in rest in these of the guidance. the from similar sales it

comparable basis U.S. to We points. negative XX sales be expect points between restaurant basis and negative XXX

includes QX with adjusted up expect open be from the net shifts. And share we to and earnings We holiday that, weather per diluted negative questions. $X.XX, which will $X.XX between $X.XX and call for impact approximately

Operator

from comes Slagle (Operator first question Alex Instructions.) Jefferies. And with the

Alexander Slagle

A question for Mike Spanos. you,

these help do you can the the helping enjoy care expressed taking jobs highlighted of ensure And a this they on people of planned guess number the well get and want their I importance just front. and You've the guests. changes everything of and if time any and want to there's line to you look changes at you get kind of want I sense kind other to of to for where actions of big be? a

Michael Spanos

org to Yes. about on you're Alex, around just the I'm just simplifying so clear, your clear talking be agenda, question? structure

Alexander Slagle

Yes.

Sorry Simplifying about the that. agenda.

Michael Spanos

Got Yes. it.

I the that think and say, standpoint. obviously, with So quickly we leadership Pat the Keila with I'd -- with from operational mindset, started a with changes an

the organization, we structure, moved of to a to have on resources That's the empower but decision-making. and week on for that level quickly speed we And done. of at put us, The moved was simplify org Brazil, business. that. it moved and that very a derisk tough was de-layer Second, and for brand the the lot

on test have in end move getting towards XX% by On about our XX% to doing But menu the stated, that push number. at feel Outback Ziosk, thoughtful week-to-week. as and things work be we only of be and will stores, pace a front, higher menu as deliberate April. good will I'd three the mention really other of along. The That the will approximately place will I done looking right I brands base the as by a our that be in XX% May. reduction things the that we're is we'll number.

value, be In second lapse, more of calendar given terms that of abundant in benefit probably right big the after just rolling will with off right Valentine's The the now kicked we're half, that LTOs Day. of everyday X-Course. Aussie the but some

about all of dining brands, in they're Bonefish, two and execution. currently abundant elevation value other test rolling the are Fleming's Carrabba's, well. The out as And the casual is

be So, the offers. today doing and anything with other what typically Tuesday Tomahawk we beyond won't do day-to-day we

Alexander Slagle

trajectory in in the And to similar sales helpful. a should quarter? for certain for consider different thinking we there same-store think we That's saw first about the it. quarter, Is follow-up fourth the a reason range brands? Got by blended as trends a brand

Michael Spanos

by consistent the I saw the trend and meaning in quarter, terms first takeaway you that's Outback, is assume think Yes, in fourth quarter also of your what trends. you right, in should brand Alex, similar

Operator

Bernstein question with the Barclays. from Jeffrey And next comes

Jeffrey Bernstein

questions. Two Great.

The first more about comp one, trends. the talking just

I whether to you or think underlying questioning perhaps And is a get holiday the quarter. little weather in and the shifts basis the the consumer are shifts? and full talked there could about know their comp first year? sense in that impact if conservative But share within any And changes the most consumer XXX spending the is had quarter you that are of just beyond I for that, in you quarter a weather points and more do both spending. bit cautious components just then first you're one I assuming in follow-up. the holiday

Michael Spanos

Yes, Jeffrey. I got it,

So, the shift in I We I that a the seeing mean term. seeing more on quarter weather, inflation. we're with on short a some by from terms we QX, we're see definitely geopolitical we the Valentine's obviously, choosy short-term choppy that the that seeing shift is related with environment, in shifts. a Thanksgiving. that And impact and Friday. but some choppiness, to saw moving in consumer, what we fourth areas other saw And calendar to issues, Wednesday would say are of a

I start So, there.

a about we're little bit of seeing that households the in of lower mix, those appetizer that far as were with fourth we We terms the some quarter. than under what especially management consumer, beverage check saw attachments and seeing, As choosiness the desserts $XXX,XXX. are

Valentine's the where saw to and about very robust the continue We bullish still more sales finding really long-term the Thursday, really visit we good I As they're Friday, trends visit And abundant the trends, what consumer there. feel are at the Day. I it. far meet that we they'll with are when value, Saturday, be is right will away-from-home, frequently. on they make long-term as

think QX, And said, what we're what guide. them. the I last we've our consumer those is we're can -- So, year, The that where part numbers. at We're you controlling the choppiness we're I is was When I implied. think you included assumed as they're at. about we're where to of about in your meeting this control. question, that's think This we doing in full think engage

Jeffrey Bernstein

full that components the comp within clarify, and traffic versus pricing? in to quarter Just first year you're terms the of assuming

Michael Spanos

Yes.

the range, sales, to assuming average QX, is assume probably would that a -- X% mix. for That So, down at basis X% if to in as a points. between assuming look we're deal negative the an down we're the negative XX traffic approximately you quarter, Pricing a first in and running comp some that X.X% yield X% X%. of between check a X% the you would with

Michael bit the commodities probably X% good, being pretty said, seeing labor quarter for the first range, As we're quarter. little above the a X% about for

Jeffrey Bernstein

discussion it. follow-up is the bigger then and just the Got And activist. on my picture leadership with

you besides on besides, anything of there Board just how got and Outback strategic think to Just are oversight out Brazil, about your but brand, the want initiatives current relationship whether think whether with wondering similar we there? you the already on you to share team, focus spun the activists, early maybe said, everyone's you kind of vision other priorities, and like experience, management

Michael Spanos

Yes.

and -- Board You making me pushing better. the that board. the drives right that team fully the things the mentioned Starboard, sustainable very in all Board in constructive, right activists across Very doing profit way. terms aligned They're you on the collaborative. thing drives of bet. sales, the the thing right drives of and growth. The traffic and is the management terms that us We're focused And right

Operator

Harbour from Stanley. with question the And Brian comes Morgan next

Brian Harbour

think feedback great experience? guest guess, I of do kind guest there? of has a talked where the -- on sort what the is main about you biggest experience, suggested opportunity Or gap is When what you you today do

Michael Spanos

execution. consistency in of It's

Brian Harbour

it. Got

Michael Spanos

we you that, return to want a I if is of with and about And specifically, excited the component. that. that really out dollars is visitation. strong be I should intent that about means feel as profit have And matters. what want experience to leaves also growth them well. satisfaction experience guest We and team be We should I getting on is that out when That's that. that that, means And gross be good getting should be what of quality, members to value, what frequency to that. good of restaurant, of care me a what traffic double-click our is out great return means -- guest getting drive that

Brian Harbour

Okay.

going putting like? sort we're reimage the look some a is that existing think of broader capital on that on cohort of sort there Do you're be stores, -- If you timing? to you certain focusing investment? expect stores just about? And reimaging, Is is to majority a talking of would need there cycle? anything into What

Michael Spanos

Yes. -- touched on we in approximately the focus remodels being the We're Outback. and to three predominant in that assuming of terms would with to will two those next be work complete XX% want the years stores, across

Operator

And question with from Ivankoe the JPMorgan. comes next John

John Ivankoe

really customers terms question have that years. of of past certainly, items of your on is But what where understand really I the are look increases terms absolute variety over the couple of price ordering. your average ticket. I percent menu And The on landed in level in been want to the an we've

average drive is which ticket of average So, try fast casual brand, for home in sales at really there various opportunity lower this the dining of be an to specifically you? profitability question and see casual ticket the the is or context drive do alternatives what the as sales, whether right or is, to do to if I the understand Might to or have kind Outback consumers average eat first you very frame in what think difficult ticket and the to you lower the brand?

Michael Healy

Yes, John, thanks.

it's menu. I very the of we the set it's and heart think how it's revenue management, of the good question, and up a heart

be guests value to where and think of three The meet we're we everyday assumes and have And about they're have say that that we're able of we also to to be is of guest. about need need we're opening we as also mix the And into found, X-Course, guest business is to what going guidance mix in the also dining craveable to would assumptions. Aussie for that be a what mix, to your thinking what a value, And us negative that dollars and points healthy first that. It the we will I through a to our like we affordable the flows terms that how to the and brands. at, in to in innovation, our abundant point. price casual gross engages accomplish And orients there's going of about P&L. healthy in mix thoughtful terms with to be on in healthy PPA the the how in thoughtful year have going terms embedded all thing found because in that's believe what do of profit know and and terms we invest trade-offs we at I especially with

John Ivankoe

in penciling kind million kind And we're $X.X makes million tests, remodels talking if there than XXXX, think type XXXX? sales a for at conceptually something sense initial to know be the any of of least various that you Okay. of what packages we I model of lift are box, investment $X ratio more the brand? box, over don't that? a should And

Michael Spanos

and terms spending. spend, putting John, with the better Michael all, Yes. to lower is what first think stores. relevant is, can the start to new returns, And say seeing touch thoughtful higher do we're as Outback. satisfaction be I And we're We're as orientation. we're finding right need experience. and the out seeing finding we traffic buck that we really And before I'd we earn with to going that's that that's bang the of said, for a in especially what of guest

John Ivankoe

remodels. question kind correctly. Maybe the on I was ask of it So, didn't

of think the a of terms of of in kind remodel what broad terms expect in brush stroke per we going of touch. CapEx do should Just unit that just want XXXX, CapEx terms even in kind about level for you XX% into of XXXX, as broad we to that

Michael Spanos

Yes, John.

So, and in call I dollars, units XXXX down roughly, shift pull will think as we'll get million what we'll it, into is those remodels see the we see new forward. going into $XX

Operator

question Silberman from Deutsche the Bank. next comes And Lauren with

Lauren Silberman

lower-priced recent to management. back unpack more driving how different you've trade Can been seeing alcohol you go versus of what terms to the mix? much wanted quarters? And that the in in bit items, that little check I down, is attachment, a what's

Michael Spanos

appetizers areas. moves it's we're in meet we're making need is We from are other they're QX Yes. those the it XXX with and as think and XXX to of as What to attachments where doing beverage finding across basis etc., desserts well And well. guests to in liquor, mocktails We our at. that done movement the to point innovate we portfolio, saw as our going slight. We've already to about across our we're short alcohol, been also Lauren, wine, QX. and term. definitely that's so terms beer

Lauren Silberman

wanted bit embedding locked ask much beef that, little the Great. the you you're through X% also commodities what And us just mentioned thinking then the help is know outlook, to year? a just I rest for in of I how XQ. think you you're how Can in? about above about

Michael Spanos

Yes. were for full Commodities the year?

Lauren Silberman

specifically And beef as on the well. Yes.

Michael Spanos

Yes, I got it.

you hear didn't for I Yes. Just a minute.

about Michael in So, X.X% in between said, that locked X.X%, where XX% commodities, we're assuming, approximately range area. to we're

mid-single definitely beef That's expect to our digits. forecast. in guide specifically We in and in -- our be the included the in all

Operator

from Gordon Jeff the comes question Farmer And next with Haskett.

Jeffrey Farmer

certainly with guys today, traffic things bigger Outback at concept? you specifically lot term drive opportunity sort see greatest You on of of what core as do picture, near touched in Outback, that to untapped but the the a

Michael Spanos

And is. really It I'll this. speak execution. of consistency It's to

the as this go. address the -- point the Outback to great stress it know time. value. continue model. to articulating We're and business think the clarity fixable confident fix it's is know the going business. It a feels feel the we can around, And good consistent business. We're forward. It's on have the a And a It it We've we and we plan I turn got can I is you experience. want execution, We've we of we've get great We a but with if guest and to move sound to is got work fast, so, as right. of a going team it's address we've definitely very But I but is the fundamentals. going we want it's done. will moving be where business to to is right. important business highly in a to get elements we great I'm got to maybe where We're really more I that got you're quality, and There's terms on very plan know the way. the our it's Outback fine-tuning the we I change to -- to organization. of focus that we business. address need cultural team. take brand. trend of some It broader category.

Jeffrey Farmer

Okay. just then guidance, to And of sort unrelated, as questions going sales the it a back of XXXX couple same-store here.

just traffic So, dining segment how this. And then a what as assume that whole, touched does? casual does you on that about

in value sort of actually dining to market doing. guys up casual some ability against and addition same to So, peer that, going things a aggressively group are the share win doing your you of that's promoting

So, a traffic lot there, ability casual dining does but your XXXX in same-store and your looks of XXXX about assume guidance win like ultimately, questions share? the sales what what segment to

Michael Spanos

of we'll about traffic where dining casual obviously, see come expecting improves period as X%. down that and we're be this to say goes. And we it I'd out Yes. if choppiness

other of our the consistent sharp value marketing. about that share, doing It's It's really to frequency good and every basics visitation. to the really again, to As execution. It's as value, we every it's help to going great being It's, experience. on is we forward. brand traffic, that's into just well think to as trust, drive day just as foot winning and going far us quality, Aussie day. other is, And everyday we share like or abundant move value, go I I in that's thing continue -- X-course

Operator

comes with Sarah of from Bank And next America. Senatore question

Sara Senatore

start Just question. a clarification and maybe I'll the with

focusing on remodels. is about The you talked first

I is be estate. you in you're about the relocations. an the so, trade areas And of maybe the sort the that I It's interpretation could issue are confirm the my think not maybe first question. It being previously, fine, like that's the sounds locations I thought artifact the was of the what approach. are is physical, that guess maybe saying of guess historical optimal fine. -- just And there needed more because less locations about to of

set gets strategy do you're relocation margins. I of a okay If sort the with maybe then and question aside. And the quick locations have about

Michael Spanos

answer me one? to Do Sure. the first you want

Sara Senatore

Yes.

Michael Spanos

Okay, relos. and very sure. of Relocations get just we getting reality how the much part program. them can are We done. the It's still many like done of

relocations is remodels. So, plus it

Sara Senatore

we But the was goods of like cost of I lower look the I actually at And on question talked about if complexion, expected. the you Okay. margins, then it looks value I a had and X-Course. quite the guess Aussie margin strength than were bit the

the think ideally of but restaurant level forward, labor of going about higher with other? is should cost perhaps and changing on So, complexion the sales, margins we maybe leverage

Michael Healy

Yes.

will -- lot the your far as into have think majority think built relatively through the we stable. I as our -- be a Ultimately, comes about we is chain. the COGS productivity our supply that of as that plan, of

to able COGS. And so we're maintain

leverage with a and inflation that continues there around. tick do bit stable. our throughout continues think traffic. the turns declining opportunities in with COGS the to Ultimately, driving down we comes But relatively to benefits labor Labor would probably COGS of I be expect little now, the right restaurants, Aussie have think just to are I the traffic X-Course when pressure that traffic year.

Sara Senatore

say, time expect maybe goods you lower in Okay. percentage structurally you need that of goods to of over higher wouldn't cost be or of cost But as reinvest structurally, structurally a line? revenues, value should your as I the

Michael Healy

drive don't of up sort think said, but plus our No, I our other so. pick value. supports that COGS. certainly be we think also we'll costs, like productivity, I I mean cost to I components traffic able There's ancillary with some ultimately, there,

Operator

with Raymond And from the next comes James. Vaccaro question Brian

Brian Vaccaro

investment obviously, pieces clarify the in could to just the of the on you did XXXX some embed could a part you on of hoping was And and store expectations moving lot guardrails you turnaround? here, guidance year. question guidance level your for but your was I of My what margin as provide

Michael Spanos

is And as is I'll returns. that's you the The to I of And why what as which traffic, I compelling can And would very purpose it. and the seen, productivity. through tests, -- start return, between you've our we're and doing our to work started the we posted. engagement to through go going say anything of is part, going Brian, satisfaction, What everyone Yes. this first the the can piece. ahead the guest keep the self-fund intent what we in we've there is profit also have sharp already absolutely year do we're be That's dollars. gross tell we is with test. we'll Outbacker investment measures

Michael Healy

level we our restaurant Yes. other pressure the And inflation and about restaurant there think as is margins add thing going from will only operating I'd labor have forward.

Brian Vaccaro

it's nitty-gritty Okay. to restaurant, we made you've the elaborate some lab have just that the improved would or on that. could back-of-house early one guest What's changes And most the notice? changes of some either on of I could. curious promising? gears to Outback but of know that on more I still you efficiency that. proving days, Could if Just some sort just guess, you just shifting also be

Michael Spanos

say What is we're said, pumped especially guest in results the really into more But dialing very We're frequency going on we are encouraging, for traffic in Yes. loyals. dialing into about of get from often. our our They And the visitation initial as gets and especially the into experience. into I'm and are And is value, on test. what I details to excited really is I are coming reasons. me this. the I are what seen not I've competitive Outbackers quality. we're know will dialing what this,

very And we transparent And into are they the the be more, as restaurant. as right excited guests results the at that's our phase. Our moving leave learn why we're we'll in time. test

Brian Vaccaro

could. one then one, And I if Okay. last

the where on prepared talked your -- highlight? have making of quality our specifically in to there where think, are that Can steak investing category? higher changes you'd steak I You or are sight you and speak perceptions satisfaction guest you're line And you specifically do about on core specs, menu in remarks.

Michael Spanos

and our tolerances. a terms size therefore, what consistency, steak translate our supplier working what staying good. specs in of accuracy, we're the cook known standards, and platform, got we guest there. the time. better just the close that's think steak that the about good feel There's then That's very specifically, to seasoning, mean And how and we're cow of size terms we really of cooking that does partners. our the in in every means expectations. that what menu I type. how we're of look We always therefore, doing. the getting by SAT meet we at We scores. and do the perfecting into And we constant everything, a look at of with out we [ECRA] that with We're lot loins. our the but consistency our So, technology protein And do scores, at our scores. it We look

Brian Vaccaro

Okay.

And sorry, one. Mike, just one more quick

million said the Just think me just but I wrong guidance, for you on year. I'm $XXX if the G&A walking that. on Correct that, through

reduction, So, IT get right? partially million Did you $XX that all bonuses being offset reloading have then savings from from by workforce I Brazil and have and that's of investments. the but savings then you

Michael Spanos

That's correct.

million $XX the there's reload. of investments. IT So, infrastructure of $XX million bonus There's

Ziosk from by $XX is the million design. offset and there's savings then that the org of Some

Operator

And Piper Sandler. Brian question comes the next with Mullan from

Brian Mullan

north put X% Just would that to question. you this sales I that up on G&A follow probably year. of of believe

strategic some after you there you've how So is And take sales have of that dollars to get would your plan here more going entirely Or that perhaps all more can goal through time then we referenced? growth? that's to right, one, two, to be work? out down X% right? if do you of Is revenue that doing you from had

Michael Spanos

Yes.

is We're The year. to the We're it both now. right. you X%. to it there right, pack this get X.X% about a And range got got I in to is probably best it X.X% ways. goal not But mean You investments. thoughtful efficient to always and more to going in sales we're just and more drive we're become our really and the our profitable going to be productive, way be assets. spending leverage prudent and in

Brian Mullan

think and and more balance payout about is the if you dividend change, we capital execute And the maintaining In the reducing as try understanding this question should right, you is, that to think, mostly this on and further Or remodels else. a now? as related also anything reducing on question dividend, on Okay. look a regard forward framed I dividend permanent is to sale than to table? then Brazil allocation. My sheet leverage, ratio, I'm the

Michael Spanos

Yes.

consistent of strategy And it's, about, dividend cash part to is in we focus to our allocation. talked it's So, going let we're is the shareholders. predictive, that and holistic third changes, stay number to shareholders. we're to leverage we'll way thought the going most think the to said, ratio. to that to base at that. And the we're of lease and then we're Two, if the going X.X cash on reliable, And get go the debt bring capital we That's return And we to Michael as one. And back you one, dividend, going to know. business. terms with

Operator

next from with Geiger UBS. the comes And Dennis question

Dennis Geiger

I ask strategy. on another you're value how to just envisioning Outback one wanted the

away in customer just with value more your and else of As the you there? that sort years? LTO how to offer? value how add transition from strategy kind Outback's answer guess the that, customer and recent on trending maybe X-Course there maybe how you've behavior you the the seeing related move value of if feedback I and shortfall Any other addresses anything around three position And to seemingly the envisions of course or on late, what sort of from abundant that are promotion is Aussie to as been anything incidence the there, levels

Michael Spanos

Yes, got it.

our And of trust trust, What found finding choppiness. So, visitation, with meeting they're years, and short all with and everyday they're I I more this guests. brand we're term, frequency at in X-Course, period think guest over especially this one better just visit right you we're create out in about where all the especially it's abundant it's visiting value and many guests about more Aussie of often. of the getting now,

As been is got X-Course, me really encouraging the to the think far the experience, $XX.XX. you what's you $XX.XX, $XX.XX, the about as the Aussie

on trading we works the to of and that we're leading sirloin seeing $XX.XX up P&L. $XX.XX, the the guests with that at or are that X-ounce Although amount at a significant $XX.XX, really well sirloin X-ounce

the up guests dessert, the but is works. I price important. our seeing execute everyday the what is terms a a it another benefit works with of other mean offering. this we we And to It's Style want. to Cheesecake, shows thunder get the significant amount you dessert it equation New offer when trading me, And is thing And $X to of the York seeing in thing The chocolate part that's of other value of they or are guests. we're spend menu

experience. Instead of bringing more back can groove Our of execute creates guests it's going new the teams They great It it XX it. creating item the it teams confusing for execute in well. to and prep labor. well and know of our house, of back the get the get house and in deliver it XX a the the to guest complexity our a as weeks, they're really every frustrating becomes in for and

to monitor feel good like offer. really I continue obviously So, We'll any about to it. need it

P&L. price whether items, in, bring craveable we're points innovation guests, work, items. works there's now. the team. we think think items that works and going and always it's the right opening I on or the be for for works periods you our But do need to right traffic-driving hero It it of these finding I It

Operator

next question And Christine Goldman the with from comes Sachs. Cho

Christine Cho

more how thinking importantly, including wondering the some maintaining marketing to kind the you proposition. year of traffic renewing need the the was are reduction areas tech of of menu you at compelling that full operations, labor, with across I firstly, and achieve I that kind So, What goal? reduction baking and would XX% of kind store of how optimization menu of balancing momentum you're in about XX% the of a be the think value would guidance? to investment that And level or simplification into impact

Michael Spanos

our board item thing. prep it I mix we increasing costs, found the If labor start subpar found with the is the menu. start across you then it's it's we that's and what a If what perceived want when by creating to on low guest complexity, simplifying the the Christine, not it's be item, and menu, you good a guest. don't a

find complementary. them very to I be So,

simplify experience down the the in and morale costs quality the guest, much back we're menu, with of in our it We're the better of we brings labor consistency the of enhances and it the much As the house. and sharper. terms

we've brands. this, the that's we'll So, attack continue been it how attacking to and across all

Operator

from comes question Citi. the And Tower next with Jon

Jon Tower

Maybe dovetailing that to on Yes. Great. question.

provide you about investment the particularly In do off some how terms this that like you're place into in necessary needing menu the to equipment that term do spend more to the see on looking up feel pull stores, And yourselves is transformation? have of get experience to you to for? thinking employees you're in near business, training the of Outback, to money guest snuff

Michael Spanos

have and as a that have easier equipment guest their them -- restaurant experience Ziosk technology was that that do absolutely, the that we need as and at great looking a And We jobs We're experience. also guest deliver an the -- the helps we to obviously Outbackers. support well. great example, faster, simpler, delivers to always

got also training of XX LTOs remember, a you LTOs. lot weeks. We go that ramp to important point to there's costs for into is We about have driving found an because -- this everybody up XX --

everyday a when at abundant, So, you in this groove. you're value get

means Saturdays and about We're consistent got as that's They're restaurants. and dividend coaching doing in to well. them and you're They're leaders. in training shifts. you be to and to We nailing going that mid are leading, dollars. leaders, to repurpose be on operational those doing the execution execution, our can going we're training, that leaders because be You're all a and be free just going Fridays also going the to

Jon Tower

everyday spend? a abundance necessarily value going that, stale? communicate the following Or Maybe back feel how cut just to with of even on to around I marketing like consumers you your little able a the flipping on basis you kind maybe you'll be on to bit, up guess, LTOs that point growing throughout Do perhaps here that that without are Okay. year. consistent message of the

Michael Spanos

found good usually get Yes, tired with with offer. before folks far I less tired first, get Well, consumers offers question. usually the company

So, there. I'll start

doing a LTOs, probably $XX message. in drives finding there. are a because nonworking all costs with just you're we right, out save got you're It about million you're creative, Second, that new putting you've marketing from nonworking,

profitable about beauty going spend with there the great feel don't we going that's can we traffic. the to decide, more So, across there. reinvest money that into to And if marketing are that, that don't we drives we is all be returns And the brands. back good

Operator

the And BMO. comes Strelzik next with from Andrew question

Andrew Strelzik

two. had I

the existing kind of of initiatives base, remodels I'm whether that's the in of as And You touched second store seems we how half, think question, But perspective. a about taking should midpoints first set the just into if the dug the really just curious, the and line place you time up some but year, annual you'd the the be a in it half reflect doesn't XQ for of top from I use at of guide, least on XXXX beyond? based a from that. like relocations, closures, line on back guide the it perspective, then or better and comp

are to Are that, there back ranges better half? you're up you implicitly there? Or caught just am offsets So, a some I assuming? getting assuming in that

Michael Healy

Andrew. it, Got Yes.

the base. -- me remodels Let I'll with and store start

decide piece. You focus. get not. might it's execution, assets, that, hitting if continue underperforming We'll there there's the would holistic good a plans have growth, What the a not to we're action And leadership we're traffic we or we traffic of got the did to renew leases going point is and got to part strategy. and and moving, on be assess to if feeling improve about some then impairment we've profitable as them a I say profit

piece first the remodels stores. that's the the and on underperforming some of So

momentum, more trends. X-Course second believe is I assuming the we guide the the second is -- going and guiding given And we half. around gains more that had, said on traction. I'm way, the will around is posted Bonefish hopefully, give Secondly, momentum said, But other well, which And choppiness Carrabba's And do the don't choppiness your in -- abundant as part recent better appropriately I we QX Aussie we're feel we that of and on subsides, I get the hopeful and I'm your point then latter us as keep QX really into think We earlier, seen going everyday half. Aussie year. by and we X-Course. as there's is be value If you there to that hopeful the we'll we to the are we've that. throughout short-term point

Operator

And this over like concludes remarks. our to Mike closing CEO, question-and-answer session. would to I Spanos, turn any the conference back for

Michael Spanos

again our further look and we to earnings a appreciate on day. call. Have the great forward We updates Thanks time, engagement. for your really next

Operator

Thank you. now Thank for has you presentation. concluded. The attending conference today's

your disconnect now may You lines.

Bloomin' Brands (BLMN) 26 Feb 252024 Q4 Earnings call transcript