Bloomin' Brands, Inc. Q1 FY2025 earnings call

• Simplify the agenda: Focused on fewer big bets, menu reduction across brands (Outback to reduce items by ~15% by end of 2025, Carrabba's 10% fewer items in May, Bonefish 20% fewer items in April, Fleming's ~10% reduction in summer menu), organizational design initiative realized more savings than forecasted, and G&A expected to be ~$10 million lower for the year.
• Consistent guest experience: Working with supplier partners on food quality, Ziosk rolled out across Outback restaurants with positive feedback, testing service models to enhance guest experience and throughputs, and repair and maintenance survey on track for completion by end of Q2.
• Outback turnaround: Focus on food quality, value, and consistent guest experience, working urgently on strategic plan with third-party consulting firm for strategy and cost-saving initiatives.

Total revenues in fiscal first quarter 2025 were $1.05 billion, down 1.8% from 2024. U.S. comparable restaurant sales were negative 50 basis points with traffic down 390 basis points. Average check for U.S. business was 3.4% in Q1, in line with expectations. Off-premises was 23% of total U.S. sales, and third-party delivery was 11% of total U.S. sales, consistent with last year. GAAP diluted earnings per share for Q1 was $0.50 vs. negative $1 in 2024. Adjusted diluted earnings per share was $0.59, within the guidance range of $0.55 to $0.60. Adjusted operating margins were 6.1% vs. 7.8% in 2024.

• Full year adjusted diluted earnings per share expected at the low end of $1.20 to $1.40 range due to Brazil tax benefit extinguishment (approximate $5 million to $7 million negative impact to earnings) and choppy macro environment. Q2 U.S. comparable restaurant sales expected between negative 250 basis points and negative 150 basis points. Q2 adjusted diluted earnings per share expected between $0.22 and $0.27. Tariff impact range of 20-40 basis points to restaurant level margins in 2025 not included in guidance.

• Choppy macro environment and cautious consumer impacting sales and margins.
• Volatile tariff situation with uncertain impact on margins, estimated to be between 20 and 40 basis points to restaurant level margins in 2025, primarily in the second half if implementation continues.
• Extinguishment of Brazil tax benefit leading to negative impact on earnings from Brazil ownership.

Q: Just a bigger picture question on the outlook for the remainder of the year, including where the inflection to positive comps might occur.

A: Mike Spanos mentioned they're not happy with performance vs Black Box, feel good about progress on operational priorities, outlook assumes choppy environment with Valentine's Day and Easter assumptions, and long-term work on righting the what you get vs what you pay for proposition.

Q: Expand on the softer holiday special occasion trends and why seeing that.

A: Mike Spanos said holidays had decent results but not as strong as anticipated, most pressure in households under $100,000, apps and desserts holding up, liquor, beer, wine ticking down due to cautious consumer.

Q: What was the price and mix component of same-store sales in the quarter and what to expect in Q2?

A: Mike Spanos said mix was relatively flat in Q1, expects check down in Q2 due to Aussie 3 Course promotion lapping last year's promotion, expecting 1%-2% mix impact in Q2.

Q: On the range of performance in the Outback brand, distinguishing well-performing vs low-performing stores.

A: Mike Spanos said tactically more softness in Texas, Florida, Southeast, Southwest, but really about consistency of execution and managing partners' continuity.

Q: Color on the test in 14 stores during the quarter in terms of traffic, guest intent, employee engagement, profitability, and timing for full rollout.

A: Mike Spanos said encouraged by test stores, learning stage, moving urgently to learn, and will be able to implement quickly once decision made.

Q: Share color on the Aussie 3 course pricing tiers and mix of guests.

A: Michael Healy said Aussie 3 Course had limited impact in Q1 due to lapping last year's promotion, but mix is in line with expectations, expects better momentum in Q2 and second half, and guests are trading up to higher tiers.