BLMN Bloomin Brands Inc

Q2 Diluted EPS of $0.32 and Q2 Adjusted Diluted EPS of $0.51

Updates Full Year 2024 Guidance

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the second quarter 2024 (“Q2 2024”) compared to the second quarter 2023 (“Q2 2023”).

CEO Comments “In the second quarter, the casual dining industry was softer than anticipated,” said David Deno, CEO. “While our comparable sales growth outpaced the industry in Q2, we did not meet our expectations. We are very focused on developing a path to sustainable growth at Outback and are making progress in improving the guest experience, providing meaningful value, and enhancing customer and digital capabilities. Our full year guidance has been updated to reflect current industry trends and our teams remain focused on delivering long-term sustainable growth.”

Diluted EPS and Adjusted Diluted EPS The following table reconciles Diluted earnings per share to Adjusted diluted earnings per share for the periods indicated (unaudited):

 

Q2

 

 

 

2024

 

2023

 

CHANGE

Diluted earnings per share

$

0.32

 

$

0.70

 

$

(0.38

)

Adjustments (1)

 

0.19

 

 

—

 

 

0.19

 

Adjusted diluted earnings per share (1)

$

0.51

 

$

0.70

 

$

(0.19

)

 

 

 

 

 

 

_______________

(1) Adjusted diluted earnings per share for the thirteen weeks ended June 25, 2023 has been recast to remove the previously included non-GAAP adjustment of 5.0 million diluted weighted average common shares outstanding related to the convertible note hedge contracts entered into at the issuance of the 2025 Notes. See non-GAAP Measures later in this release. Also see Tables Four, Six and Seven for details regarding the nature of diluted earnings per share adjustments for the periods presented.

Second Quarter Financial Results

(dollars in millions, unaudited)

Q2 2024

 

Q2 2023

 

CHANGE

Total revenues

$

1,118.9

 

 

$

1,152.7

 

 

(2.9

)%

 

 

 

 

 

 

GAAP operating income margin

 

4.1

%

 

 

7.8

%

 

(3.7

)%

Adjusted operating income margin (1)(2)

 

5.7

%

 

 

7.8

%

 

(2.1

)%

 

 

 

 

 

 

Restaurant-level operating margin (2)

 

14.3

%

 

 

16.4

%

 

(2.1

)%

_______________

(1) See Table Six for details regarding the nature of operating income margin adjustments.

(2) See non-GAAP Measures later in this release.

• The decrease in Total revenues was primarily due to: (i) lower comparable restaurant sales, (ii) the net impact of restaurant closures and openings, and (iii) the benefit from the Brazil value added tax exemptions during 2023.

• GAAP operating income margin decreased from Q2 2023 primarily due to: (i) a decrease in restaurant-level operating margin, as detailed below, (ii) higher impairment and closure costs, and (iii) higher depreciation and amortization expense.

• Restaurant-level operating margin decreased from Q2 2023 primarily due to: (i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) unfavorable product mix and (iv) higher advertising expense. These decreases were offset by an increase in average check per person and the impact of certain cost-saving and productivity initiatives.

• Adjusted income from operations primarily excludes impairment and closure costs primarily in connection with the decision to close nine restaurants in Hong Kong and the Q4 2023 decision to close 36 older, predominately underperforming restaurants.

Second Quarter Comparable Restaurant Sales(1)

THIRTEEN WEEKS ENDED JUNE 30, 2024

 

COMPANY-OWNED

Comparable restaurant sales (stores open 18 months or more):

 

 

U.S.

 

 

Outback Steakhouse

 

(0.1

)%

Carrabba’s Italian Grill

 

2.0

%

Bonefish Grill

 

(2.0

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(1.1

)%

Combined U.S.

 

(0.1

)%

 

 

 

International

 

 

Outback Steakhouse - Brazil (2)

 

(1.1

)%

_______________

(1) For Q2 2024, comparable restaurant sales compare the thirteen weeks from April 1, 2024 through June 30, 2024 to the thirteen weeks from April 3, 2023 through July 2, 2023. See Table Ten for details regarding our fiscal and comparable basis calendars.

(2) Excludes the effect of fluctuations in foreign currency rates and the benefit of Brazil value added tax exemptions. Includes trading day impact from calendar period reporting.

Dividend Declaration and Share Repurchases On July 23, 2024, our Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on September 4, 2024 to stockholders of record at the close of business on August 20, 2024.

Year to date through August 2, 2024, we repurchased 9.9 million shares for a total of $263.1 million during 2024 and had $99.4 million of share repurchase authorization remaining under the 2024 Share Repurchase Program.

Fiscal 2024 Financial Outlook The table below presents our updated expectations for selected 2024 financial operating results. We are reaffirming all other aspects of our full-year financial guidance as previously communicated.

Financial Results:

 

Prior Outlook

 

Current Outlook

U.S. comparable restaurant sales

 

Flat to +2%

 

Down 1% to Flat

 

 

 

 

 

Capital expenditures

 

$270M to $290M

 

$260M to $270M

 

 

 

 

 

GAAP effective tax rate

 

29% to 31%

 

26% to 28%

 

 

 

 

 

Adjusted effective tax rate

 

14% to 16%

 

8% to 10%

 

 

 

 

 

GAAP diluted earnings per share (1)

 

$0.79 to $0.94

 

$0.25 to $0.45

 

 

 

 

 

Adjusted diluted earnings per share (1)

 

$2.51 to $2.66

 

$2.10 to $2.30

_______________

(1) Assumes diluted weighted average shares of approximately 90 million.

Q3 2024 Financial Outlook The table below presents our expectations for selected fiscal Q3 2024 financial operating results.

Financial Results:

 

Q3 2024 Outlook

U.S. comparable restaurant sales

 

Down 2% to Flat

 

 

 

GAAP diluted earnings per share (1)

 

$0.15 to $0.23

 

 

Adjusted diluted earnings per share (1)

 

$0.17 to $0.25

_______________

(1) Assumes diluted weighted average shares of approximately 87 million.

Conference Call The Company will host a conference call today, August 6, 2024 at 8:15 AM EDT. The conference call will be webcast live from the Company’s website at http://www.bloominbrands.com under the Investors section. A replay of this webcast will be available on the Company’s website after the call.

About Bloomin’ Brands, Inc. Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. The Company owns and operates more than 1,450 restaurants in 46 states, Guam and 13 countries, some of which are franchise locations. For more information, please visit www.bloominbrands.com.

Non-GAAP Measures In addition to the results provided in accordance with GAAP, this press release and related tables include certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include: (i) Restaurant-level operating income, adjusted restaurant-level operating income and their corresponding margins, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted segment income from operations and the corresponding margin, (iv) Adjusted net income and (v) Adjusted diluted earnings per share.

Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments.

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board of Directors evaluate our operating performance, allocate resources and administer employee incentive plans.

These non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. We maintain internal guidelines with respect to the types of adjustments we include in our non-GAAP measures. These guidelines endeavor to differentiate between types of gains and expenses that are reflective of our core operations in a period, and those that may vary from period to period without correlation to our core performance in that period. However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. You should refer to the reconciliations of non-GAAP measures in Tables Four, Five, Six and Seven included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.

Forward-Looking Statements Certain statements contained herein, including statements under the headings “CEO Comments”, “Fiscal 2024 Financial Outlook” and “Q3 2024 Financial Outlook” are not based on historical fact and are “forward-looking statements” within the meaning of applicable securities laws. Generally, these statements can be identified by the use of words such as “guidance,” “believes,” “estimates,” “anticipates,” “expects,” “on track,” “feels,” “forecasts,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company’s forward-looking statements. These risks and uncertainties include, but are not limited to: consumer reaction to public health and food safety issues; increases in labor costs and fluctuations in the availability of employees; increases in unemployment rates and taxes; competition; interruption or breach of our systems or loss of consumer or employee information; price and availability of commodities and other impacts of inflation; our dependence on a limited number of suppliers and distributors; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; the impact of the strategic review process for our Brazil operations or any resulting action or inaction; our ability to address corporate citizenship and sustainability matters and investor expectations; local, regional, national and international economic conditions; changes in patterns of consumer traffic, consumer tastes and dietary habits; the effects of changes in tax laws; costs, diversion of management attention and reputational damage from any claims or litigation; government actions and policies; challenges associated with our remodeling, relocation and expansion plans; our ability to preserve the value of and grow our brands; consumer confidence and spending patterns; the effects of a health pandemic, weather, acts of God and other disasters and the ability or success in executing related business continuity plans; the Company’s ability to make debt payments and planned investments and the Company’s compliance with debt covenants; the cost and availability of credit; interest rate changes; and any impairments in the carrying value of goodwill and other assets. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Note: Numerical figures included in this release have been subject to rounding adjustments.

TABLE ONE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,103,565

 

 

$

1,137,330

 

 

$

2,283,052

 

 

$

2,365,564

 

Franchise and other revenues

 

15,301

 

 

 

15,364

 

 

 

31,141

 

 

 

31,876

 

Total revenues

 

1,118,866

 

 

 

1,152,694

 

 

 

2,314,193

 

 

 

2,397,440

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage

 

336,063

 

 

 

351,226

 

 

 

693,892

 

 

 

735,440

 

Labor and other related

 

328,913

 

 

 

325,934

 

 

 

672,115

 

 

 

667,476

 

Other restaurant operating

 

280,821

 

 

 

273,338

 

 

 

571,093

 

 

 

556,265

 

Depreciation and amortization

 

49,525

 

 

 

47,565

 

 

 

98,807

 

 

 

93,867

 

General and administrative

 

61,152

 

 

 

63,358

 

 

 

127,928

 

 

 

129,162

 

Provision for impaired assets and restaurant closings

 

16,261

 

 

 

1,827

 

 

 

27,134

 

 

 

5,151

 

Total costs and expenses

 

1,072,735

 

 

 

1,063,248

 

 

 

2,190,969

 

 

 

2,187,361

 

Income from operations

 

46,131

 

 

 

89,446

 

 

 

123,224

 

 

 

210,079

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

(135,797

)

 

 

—

 

Interest expense, net

 

(14,802

)

 

 

(12,961

)

 

 

(28,418

)

 

 

(25,405

)

Income (loss) before provision for income taxes

 

31,329

 

 

 

76,485

 

 

 

(40,991

)

 

 

184,674

 

Provision for income taxes

 

1,698

 

 

 

6,483

 

 

 

11,668

 

 

 

21,244

 

Net income (loss)

 

29,631

 

 

 

70,002

 

 

 

(52,659

)

 

 

163,430

 

Less: net income attributable to noncontrolling interests

 

1,228

 

 

 

1,725

 

 

 

2,810

 

 

 

3,842

 

Net income (loss) attributable to Bloomin’ Brands

$

28,403

 

 

$

68,277

 

 

$

(55,469

)

 

$

159,588

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.33

 

 

$

0.77

 

 

$

(0.64

)

 

$

1.80

 

Diluted

$

0.32

 

 

$

0.70

 

 

$

(0.64

)

 

$

1.63

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

86,688

 

 

 

88,559

 

 

 

86,856

 

 

 

88,838

 

Diluted

 

88,632

 

 

 

97,401

 

 

 

86,856

 

 

 

97,706

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

962,088

 

 

$

993,438

 

 

$

1,992,984

 

 

$

2,074,007

 

Franchise and other revenues

 

12,085

 

 

 

11,791

 

 

 

24,293

 

 

 

24,218

 

Total revenues

$

974,173

 

 

$

1,005,229

 

 

$

2,017,277

 

 

$

2,098,225

 

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales (1)

$

141,477

 

 

$

143,892

 

 

$

290,068

 

 

$

291,557

 

Franchise and other revenues

 

3,216

 

 

 

3,573

 

 

 

6,848

 

 

 

7,658

 

Total revenues

$

144,693

 

 

$

147,465

 

 

$

296,916

 

 

$

299,215

 

Reconciliation of Segment Income (Loss) from Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income (loss) from operations

 

 

 

 

 

 

 

U.S.

$

79,677

 

 

$

103,008

 

 

$

177,161

 

 

$

236,251

 

International

 

(874

)

 

 

20,486

 

 

 

14,888

 

 

 

44,994

 

Total segment income from operations

 

78,803

 

 

 

123,494

 

 

 

192,049

 

 

 

281,245

 

Unallocated corporate operating expense

 

(32,672

)

 

 

(34,048

)

 

 

(68,825

)

 

 

(71,166

)

Total income from operations

$

46,131

 

 

$

89,446

 

 

$

123,224

 

 

$

210,079

 

_______________

(1) Includes $9.6 million and $19.2 million of Restaurant sales during the thirteen and twenty-six weeks ended June 25, 2023, respectively, in connection with value added tax exemptions resulting from Brazil tax legislation.

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

 

JUNE 30, 2024

 

DECEMBER 31, 2023

(dollars in thousands)

(UNAUDITED)

 

 

Cash and cash equivalents

$

117,919

 

 

$

111,519

 

Net working capital (deficit) (1)

$

(567,059

)

 

$

(659,021

)

Total assets

$

3,394,168

 

 

$

3,424,081

 

Total debt, net

$

1,001,982

 

 

$

780,719

 

Total stockholders’ equity

$

289,693

 

 

$

412,003

 

_______________

(1) We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.

TABLE FOUR

BLOOMIN’ BRANDS, INC.

RESTAURANT-LEVEL AND ADJUSTED RESTAURANT-LEVEL OPERATING INCOME AND MARGINS NON-GAAP RECONCILIATIONS

(UNAUDITED)

Consolidated

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Income from operations

$

46,131

 

 

$

89,446

 

 

$

123,224

 

 

$

210,079

 

Operating income margin

 

4.1

%

 

 

7.8

%

 

 

5.3

%

 

 

8.8

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

15,301

 

 

 

15,364

 

 

 

31,141

 

 

 

31,876

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

49,525

 

 

 

47,565

 

 

 

98,807

 

 

 

93,867

 

General and administrative

 

61,152

 

 

 

63,358

 

 

 

127,928

 

 

 

129,162

 

Provision for impaired assets and restaurant closings

 

16,261

 

 

 

1,827

 

 

 

27,134

 

 

 

5,151

 

Restaurant-level operating income (1)

$

157,768

 

 

$

186,832

 

 

$

345,952

 

 

$

406,383

 

Restaurant-level operating margin

 

14.3

%

 

 

16.4

%

 

 

15.2

%

 

 

17.2

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Total restaurant-level operating income adjustments

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Adjusted restaurant-level operating income

$

157,768

 

 

$

186,832

 

 

$

346,386

 

 

$

406,383

 

Adjusted restaurant-level operating margin

 

14.3

%

 

 

16.4

%

 

 

15.2

%

 

 

17.2

%

_______________

(1) The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (a) Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income. (b) Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants. (c) General and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices. (d) Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period.

U.S.

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Income from operations

$

79,677

 

 

$

103,008

 

 

$

177,161

 

 

$

236,251

 

Operating income margin

 

8.2

%

 

 

10.2

%

 

 

8.8

%

 

 

11.3

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

12,085

 

 

 

11,791

 

 

 

24,293

 

 

 

24,218

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

40,616

 

 

 

39,376

 

 

 

80,584

 

 

 

77,539

 

General and administrative

 

26,112

 

 

 

22,436

 

 

 

51,908

 

 

 

47,941

 

Provision for impaired assets and restaurant closings

 

2,135

 

 

 

1,827

 

 

 

13,071

 

 

 

5,151

 

Restaurant-level operating income

$

136,455

 

 

$

154,856

 

 

$

298,431

 

 

$

342,664

 

Restaurant-level operating margin

 

14.2

%

 

 

15.6

%

 

 

15.0

%

 

 

16.5

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Total restaurant-level operating income adjustments

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Adjusted restaurant-level operating income

$

136,455

 

 

$

154,856

 

 

$

298,865

 

 

$

342,664

 

Adjusted restaurant-level operating margin

 

14.2

%

 

 

15.6

%

 

 

15.0

%

 

 

16.5

%

International

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

(Loss) income from operations

$

(874

)

 

$

20,486

 

 

$

14,888

 

 

$

44,994

 

Operating (loss) income margin

 

(0.6

)%

 

 

13.9

%

 

 

5.0

%

 

 

15.0

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

3,216

 

 

 

3,573

 

 

 

6,848

 

 

 

7,658

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

6,695

 

 

 

6,125

 

 

 

13,956

 

 

 

12,044

 

General and administrative

 

5,313

 

 

 

6,635

 

 

 

13,142

 

 

 

14,308

 

Provision for impaired assets and restaurant closings

 

14,126

 

 

 

—

 

 

 

14,063

 

 

 

—

 

Restaurant-level operating income

$

22,044

 

 

$

29,673

 

 

$

49,201

 

 

$

63,688

 

Restaurant-level operating margin

 

15.6

%

 

 

20.6

%

 

 

17.0

%

 

 

21.8

%

TABLE FIVE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

FAVORABLE (UNFAVORABLE) CHANGE QUARTER TO DATE

 

JUNE 30, 2024

 

JUNE 25, 2023

 

 

REPORTED AND ADJUSTED

 

REPORTED AND ADJUSTED

 

Restaurant sales

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

Food and beverage

30.5

%

 

30.9

%

 

0.4

%

Labor and other related

29.8

%

 

28.7

%

 

(1.1

)%

Other restaurant operating

25.4

%

 

24.0

%

 

(1.4

)%

 

 

 

 

 

 

Restaurant-level operating margin

14.3

%

 

16.4

%

 

(2.1

)%

 

 

 

 

 

 

 

TWENTY-SIX WEEKS ENDED

 

FAVORABLE (UNFAVORABLE) CHANGE YEAR TO DATE

 

JUNE 30, 2024

 

JUNE 25, 2023

 

 

REPORTED AND ADJUSTED (1)

 

REPORTED AND ADJUSTED

 

Restaurant sales

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

Food and beverage

30.4

%

 

31.1

%

 

0.7

%

Labor and other related

29.4

%

 

28.2

%

 

(1.2

)%

Other restaurant operating

25.0

%

 

23.5

%

 

(1.5

)%

 

 

 

 

 

 

Restaurant-level operating margin

15.2

%

 

17.2

%

 

(2.0

)%

_______________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding restaurant-level operating margin adjustments. All restaurant-level operating margin adjustments for the periods presented were recorded within Labor and other related expense.

TABLE SIX

BLOOMIN’ BRANDS, INC.

ADJUSTED INCOME FROM OPERATIONS AND MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

Consolidated

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Income from operations

$

46,131

 

 

$

89,446

 

 

$

123,224

 

 

$

210,079

 

Operating income margin

 

4.1

%

 

 

7.8

%

 

 

5.3

%

 

 

8.8

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Asset impairments and closure-related charges (2)

 

16,225

 

 

 

—

 

 

 

28,746

 

 

 

—

 

Strategic initiative fees (3)

 

1,000

 

 

 

—

 

 

 

1,000

 

 

 

—

 

Total income from operations adjustments

 

17,225

 

 

 

—

 

 

 

30,180

 

 

 

—

 

Adjusted income from operations

$

63,356

 

 

$

89,446

 

 

$

153,404

 

 

$

210,079

 

Adjusted operating income margin

 

5.7

%

 

 

7.8

%

 

 

6.6

%

 

 

8.8

%

 

 

 

 

 

 

 

 

U.S. Segment

 

 

 

 

 

 

 

Income from operations

$

79,677

 

 

$

103,008

 

 

$

177,161

 

 

$

236,251

 

Operating income margin

 

8.2

%

 

 

10.2

%

 

 

8.8

%

 

 

11.3

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Asset impairments and closure-related charges (4)

 

2,173

 

 

 

—

 

 

 

13,858

 

 

 

—

 

Strategic initiative fees (3)

 

1,000

 

 

 

—

 

 

 

1,000

 

 

 

—

 

Total income from operations adjustments

 

3,173

 

 

 

—

 

 

 

15,292

 

 

 

—

 

Adjusted income from operations

$

82,850

 

 

$

103,008

 

 

$

192,453

 

 

$

236,251

 

Adjusted operating income margin

 

8.5

%

 

 

10.2

%

 

 

9.5

%

 

 

11.3

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

(Loss) income from operations

$

(874

)

 

$

20,486

 

 

$

14,888

 

 

$

44,994

 

Operating (loss) income margin

 

(0.6

)%

 

 

13.9

%

 

 

5.0

%

 

 

15.0

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges (5)

 

14,051

 

 

 

—

 

 

 

14,100

 

 

 

—

 

Total income (loss) from operations adjustments

 

14,051

 

 

 

—

 

 

 

14,100

 

 

 

—

 

Adjusted income from operations

$

13,177

 

 

$

20,486

 

 

$

28,988

 

 

$

44,994

 

Adjusted operating income margin

 

9.1

%

 

 

13.9

%

 

 

9.8

%

 

 

15.0

%

_______________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding restaurant-level operating income adjustments.

(2) Includes asset impairment, closure costs and severance primarily in connection with the Q2 2024 decision to close nine restaurants in Hong Kong and the Q4 2023 decision to close 36 older, predominately underperforming U.S. restaurants.

(3) Represents fees incurred in connection with a project-based strategic initiative. The costs incurred represent third-party consulting fees related to a strategic initiative to develop revenue growth management capabilities for Outback Steakhouse and are included in General and administrative expense. We expect to incur additional fees for this project for the remainder of 2024. Given the expected magnitude and scope of this initiative and that it is not expected to recur in the foreseeable future after 2024, we consider these incremental expenses to be distinct from other consulting fees that we incur in the ordinary course of business and not reflective of the ongoing costs to operate our business or operating performance in the period.

(4) Includes asset impairment, closure costs and severance in connection with the Q4 2023 decision to close 36 older, predominately underperforming restaurants.

(5) Includes asset impairment and closure costs primarily in connection with the decision to close nine restaurants in Hong Kong.

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Net income (loss) attributable to Bloomin’ Brands

$

28,403

 

 

$

68,277

 

$

(55,469

)

 

$

159,588

Adjustments:

 

 

 

 

 

 

 

Income from operations adjustments (1)

 

17,225

 

 

 

—

 

 

 

30,180

 

 

 

—

 

Loss on extinguishment of debt (2)

 

—

 

 

 

—

 

 

 

135,797

 

 

 

—

 

Total adjustments, before income taxes

 

17,225

 

 

 

—

 

 

 

165,977

 

 

 

—

 

Adjustment to provision for income taxes (3)

 

(602

)

 

 

—

 

 

 

(1,968

)

 

 

—

 

Net adjustments

 

16,623

 

 

 

—

 

 

 

164,009

 

 

 

—

 

Adjusted net income

$

45,026

 

 

$

68,277

 

 

$

108,540

 

 

$

159,588

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

$

0.32

 

 

$

0.70

 

 

$

(0.64

)

 

$

1.63

 

Adjusted diluted earnings per share (4)(5)

$

0.51

 

 

$

0.70

 

 

$

1.18

 

 

$

1.63

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding (5)

 

88,632

 

 

 

97,401

 

 

 

86,856

 

 

 

97,706

 

Adjusted diluted weighted average common shares outstanding (4)(5)

 

88,632

 

 

 

97,401

 

 

 

92,004

 

 

 

97,706

 

_______________

(1) See Table Six Adjusted Income from Operations and Margin Non-GAAP Reconciliations above for details regarding Income from operations adjustments.

(2) Includes losses in connection with the partial repurchase of the 2025 Notes.

(3) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. The difference between GAAP and adjusted effective income tax rates during the thirteen weeks ended June 30, 2024 primarily relates to asset impairment and closure costs in Hong Kong with no corresponding tax benefit as a result of a full valuation allowance against deferred tax assets in that jurisdiction. The difference between GAAP and adjusted effective income tax rates for the twenty-six weeks ended June 30, 2024 primarily relates to nondeductible losses and other tax costs associated with the partial repurchase of the 2025 Notes.

(4) Adjusted diluted weighted average common shares outstanding for the thirteen weeks ended June 30, 2024 and June 25, 2023 and the twenty-six weeks ended June 30, 2024 and June 25, 2023 were calculated including the effect of 1.0 million, 5.0 million, 2.7 million and 4.9 million dilutive securities, respectively, for outstanding 2025 Notes and the effect of 0.6 million, 3.3 million, 1.9 million and 3.2 million dilutive securities, respectively, for the Warrant Transactions, as defined below. In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”). If our stock price is in excess of the conversion price of the 2025 Notes ($10.94 and $11.37 as of June 30, 2024 and June 25, 2023, respectively), the Convertible Note Hedge Transactions deliver shares to offset dilution from the 2025 Notes, which, in combination with the warrant transactions, effectively offset dilution from the 2025 Notes up to the strike price of the Warrant Transactions ($15.32 and $15.92 as of June 30, 2024 and June 25, 2023, respectively). Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the thirteen and twenty-six weeks ended June 25, 2023 have been recast to remove the 5.0 million and 4.9 million share benefit, respectively, of the Convertible Note Hedge Transactions which was previously included as a non-GAAP share adjustment.

(5) Due to a GAAP net loss, antidilutive securities are excluded from diluted weighted average common shares outstanding for the twenty-six weeks ended June 30, 2024. However, considering the adjusted net income position, adjusted diluted weighted average common shares outstanding incorporates securities that would have been dilutive for GAAP.

Following is a summary of the financial statement line item classification of the net income (loss) adjustments:

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 30, 2024

 

JUNE 25, 2023

 

JUNE 30, 2024

 

JUNE 25, 2023

Labor and other related

$

—

 

 

$

—

 

$

434

 

 

$

—

General and administrative

 

1,547

 

 

 

—

 

 

 

3,974

 

 

 

—

 

Provision for impaired assets and restaurant closings

 

15,678

 

 

 

—

 

 

 

25,772

 

 

 

—

 

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

135,797

 

 

 

—

 

Provision for income taxes

 

(602

)

 

 

—

 

 

 

(1,968

)

 

 

—

 

Net adjustments

$

16,623

 

 

$

—

 

 

$

164,009

 

 

$

—

 

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants:

MARCH 31, 2024

 

OPENINGS

 

CLOSURES

 

JUNE 30, 2024

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

Company-owned

544

 

5

 

—

 

 

549

Franchised

125

 

 

—

 

 

—

 

 

125

 

Total

669

 

 

5

 

 

—

 

 

674

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

Company-owned

192

 

 

—

 

 

—

 

 

192

 

Franchised

18

 

 

—

 

 

—

 

 

18

 

Total

210

 

 

—

 

 

—

 

 

210

 

Bonefish Grill

 

 

 

 

 

 

 

Company-owned

162

 

 

—

 

 

—

 

 

162

 

Franchised

4

 

 

—

 

 

—

 

 

4

 

Total

166

 

 

—

 

 

—

 

 

166

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

Company-owned

64

 

 

—

 

 

(1

)

 

63

 

Aussie Grill

 

 

 

 

 

 

 

Company-owned

4

 

 

—

 

 

—

 

 

4

 

Franchised

2

 

 

—

 

 

—

 

 

2

 

Total

6

 

 

—

 

 

—

 

 

6

 

U.S. total (1)

1,115

 

 

5

 

 

(1

)

 

1,119

 

International

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (2)

159

 

 

6

 

 

—

 

 

165

 

Other (2)(3)

37

 

 

1

 

 

—

 

 

38

 

Franchised

 

 

 

 

 

 

 

Outback Steakhouse - South Korea (1)

92

 

 

2

 

 

(1

)

 

93

 

Other (3)

48

 

 

2

 

 

—

 

 

50

 

International total

336

 

 

11

 

 

(1

)

 

346

 

System-wide total

1,451

 

 

16

 

 

(2

)

 

1,465

 

System-wide total - Company-owned

1,162

 

 

12

 

 

(1

)

 

1,173

 

System-wide total - Franchised

289

 

 

4

 

 

(1

)

 

292

 

_______________

(1) Excludes three off-premises only kitchens as of June 30, 2024. One location was Company-owned in the U.S. and all others were franchised in South Korea as of June 30, 2024.

(2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of February 29, 2024 and May 31, 2024, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) International Company-owned Other and International Franchised Other included two and six Aussie Grill locations, respectively, as of June 30, 2024.

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

 

 

JUNE 30, 2024 (1)

 

JUNE 25, 2023

 

JUNE 30, 2024 (1)

 

JUNE 25, 2023

Year over year percentage change:

 

 

 

 

 

 

 

 

Comparable restaurant sales (restaurants open 18 months or more):

 

 

 

 

 

 

 

 

U.S. (2)

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(0.1

)%

 

0.6

%

 

(0.7

)%

 

2.8

%

Carrabba’s Italian Grill

 

2.0

%

 

3.5

%

 

1.2

%

 

5.1

%

Bonefish Grill

 

(2.0

)%

 

0.5

%

 

(3.5

)%

 

3.4

%

Fleming’s Prime Steakhouse & Wine Bar

 

(1.1

)%

 

(2.5

)%

 

(1.5

)%

 

0.4

%

Combined U.S.

 

(0.1

)%

 

0.8

%

 

(0.9

)%

 

3.1

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)(4)

 

(1.1

)%

 

4.1

%

 

(1.0

)%

 

9.1

%

 

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(4.1

)%

 

(5.4

)%

 

(4.1

)%

 

(3.5

)%

Carrabba’s Italian Grill

 

(1.8

)%

 

(0.8

)%

 

(2.3

)%

 

0.5

%

Bonefish Grill

 

(4.8

)%

 

(4.4

)%

 

(6.0

)%

 

(2.0

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(8.2

)%

 

(2.3

)%

 

(6.5

)%

 

(1.1

)%

Combined U.S.

 

(3.8

)%

 

(4.2

)%

 

(4.1

)%

 

(2.4

)%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

(2.7

)%

 

(4.0

)%

 

(3.3

)%

 

(0.9

)%

 

 

 

 

 

 

 

 

 

Average check per person (5):

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

4.0

%

 

6.0

%

 

3.4

%

 

6.3

%

Carrabba’s Italian Grill

 

3.8

%

 

4.3

%

 

3.5

%

 

4.6

%

Bonefish Grill

 

2.8

%

 

4.9

%

 

2.5

%

 

5.4

%

Fleming’s Prime Steakhouse & Wine Bar

 

7.1

%

 

(0.2

)%

 

5.0

%

 

1.5

%

Combined U.S.

 

3.7

%

 

5.0

%

 

3.2

%

 

5.5

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

1.0

%

 

8.5

%

 

1.8

%

 

10.0

%

_______________

(1) For Q2 2024, comparable restaurant sales, traffic and average check per person compare the thirteen weeks from April 1, 2024 through June 30, 2024 to the thirteen weeks from April 3, 2023 through July 2, 2023, and for the twenty-six weeks from January 1, 2024 through June 30, 2024 to the twenty-six weeks from January 2, 2023 through July 2, 2023. See Table Ten for details regarding our fiscal and comparable basis calendars.

(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions.

(4) Includes trading day impact from calendar period reporting.

(5) Includes the impact of menu pricing changes, product mix and discounts.

TABLE TEN

BLOOMIN’ BRANDS, INC.

FISCAL AND COMPARABLE CALENDAR CALCULATION DATES

(UNAUDITED)

Fiscal Calendar Basis

 

 

Comparable Calendar Basis

Q1

January 1, 2024 - March 31, 2024

 

 

January 1, 2024 - March 31, 2024

vs.

 

 

vs.

December 26, 2022 - March 26, 2023

 

 

January 2, 2023 - April 2, 2023

Q2

April 1, 2024 - June 30, 2024

 

 

April 1, 2024 - June 30, 2024

vs.

 

 

vs.

March 27, 2023 - June 25, 2023

 

 

April 3, 2023 - July 2, 2023

Q3

July 1, 2024 - September 29, 2024

 

 

July 1, 2024 - September 29, 2024

vs.

 

 

vs.

June 26, 2023 - September 24, 2023

 

 

July 3, 2023 - October 1, 2023

Q4

September 30, 2024 - December 29, 2024

 

 

September 30, 2024 - December 29, 2024

vs.

 

 

vs.

September 25, 2023 - December 31, 2023

 

 

October 2, 2023 - December 31, 2023

Total Year

January 1, 2024 - December 29, 2024

 

 

January 1, 2024 - December 29, 2024

vs.

 

 

vs.

December 26, 2022 - December 31, 2023

 

 

January 2, 2023 - December 31, 2023

_______________

Note: Financial statements for 2024 are reported on a Fiscal Calendar Basis. Due to the 53rd week in Fiscal Year 2023, our financial statement comparisons are one week different year over year. Comparable restaurant sales are reported on a Comparable Calendar Basis. We believe this provides the most accurate assessment of comparable sales.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240802403354/en/

Tara Kurian VP, Corporate Finance and Investor Relations (813) 830-5311