Bloomin' Brands, Inc. Q4 FY2024 earnings call

• Simplify the agenda: Refranchised Brazil operations, streamlined restaurant support center structure, reduced menu items by 10-20%, transition to abundant everyday value.
• Deliver a great guest experience: Reassessed menu satisfaction, improved cooking procedures, rolled out Ziosk at Outback, shifted promotional messaging to highlight craveable food and value.
• Turnaround at Outback: 14 restaurants in test, focused on quality, value, guest experience; Pat Hafner promoted to Outback President; slowed new unit pipeline, started repair and maintenance survey for remodels.
• Leadership changes: Pat Hafner promoted to Outback President, Kelia Bazile promoted to Carrabba's President.
• Capital allocation: Priorities include reinvesting in restaurants, reducing debt leverage, returning capital to shareholders; dividend adjusted to $0.60 per share.

Consolidated total revenues in fiscal fourth quarter 2024 were $1.1 billion, down 8% from 2023. US comparable restaurant sales were negative 110 basis points with traffic down 510 basis points. Q4 GAAP diluted earnings per share was negative $0.93 vs $0.45 in 2023; adjusted diluted EPS was $0.38. Adjusted operating margins were 4.4% vs 7.5% last year. COGS inflation was 2%, labor inflation 3.2%. Total debt net of cash was $957 billion at Q4 end. Brazil refranchising transaction impacted financials, with royalty revenue now recognized differently.

• Full year 2025 US comparable restaurant sales expected down 2% to flat.
• Adjusted diluted EPS between $1.20 and $1.40.
• Commodities inflation 2.5%-3.5%, labor inflation 4%-5%.
• G&A savings of $22 million annualized, with $17 million realized in 2025.
• Capital expenditures $190-210 million, shifting focus to maintenance and remodels.
• First quarter 2025 US comparable restaurant sales between negative 50 basis points and negative 150 basis points, adjusted EPS between $0.55 and $0.60.

• Market uncertainties and economic conditions affecting consumer spending.
• Inflationary pressures on COGS, labor, and operating expenses.
• Competition in the casual dining sector impacting market share and traffic.
• Execution risks related to implementing menu changes, remodels, and operational improvements.

Q: Alex Slagle asks about timeline for simplifying agenda and brand trends A: Mike Spanos mentions timeline for menu reductions, Ziosk rollout, and similar trends in Q1 Q: Jeffrey Bernstein asks about comp trends and consumer spending A: Mike Spanos discusses choppy consumer environment, weather/holiday impacts, and focus on abundant everyday value Q: Brian Harbour asks about guest experience gaps A: Mike Spanos states consistency of execution is the main gap Q: John Ivankoe asks about average ticket and remodels A: Mike Spanos talks about meeting guests at their value level and remodels focusing on Outback Q: Lauren Silberman asks about check management and beef costs A: Mike Spanos discusses short-term check management trends and beef cost assumptions Q: Jeff Farmer asks about Outback's untapped traffic opportunity A: Mike Spanos emphasizes consistency of execution and Outback's potential Q: Sara Senatore asks about remodels and margins A: Mike Spanos mentions relocations and remodels, and margin considerations Q: Brian Vaccaro asks about store margins and Outback lab restaurant A: Mike Spanos talks about investment returns and lab restaurant progress Q: Brian Mullan asks about G&A and dividend A: Mike Spanos discusses G&A guidance and dividend stability Q: Dennis Geiger asks about Outback's value strategy A: Mike Spanos talks about brand trust and frequency from the Aussie 3-Course Q: Christine Cho asks about menu simplification and investment A: Mike Spanos discusses menu simplification complementing operations Q: Jon Tower asks about equipment and training A: Mike Spanos talks about equipment readiness and training related to LTOs Q: Andrew Strelzik asks about remodels and guide expectations A: Michael Healy discusses store assessments and guide alignment with trends