Bloomin' Brands, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Observations and Progress: Mike Spanos discussed progress against operational priorities, including simplifying the agenda (refranchising Brazil, streamlining corporate structure, reducing menu SKUs), delivering a great guest experience (introducing value offers, installing Ziosk at Outback, using guest feedback for coaching), and turning around Outback (listening to Outbackers, focusing on peak hours, testing menu simplification/innovation).
• Third Quarter Results: Total revenues were $929 million. U.S. comparable restaurant sales up 120 basis points, traffic down 10 basis points. GAAP diluted loss per share was $0.54, adjusted diluted loss per share was $0.03. Q3 adjusted operating margins 0.8%.
• Strategy Update: Outlined a turnaround strategy with four platforms: deliver a remarkable dine-in experience (invest in steak quality, service, consistency), drive brand relevancy (reassert steak-centric positioning, revamp marketing), reignite a culture of ownership and fun (invest in leadership and compensation), and invest in restaurants (refresh nearly all Outback restaurants by 2028).

Segment Performance

• Outback: Comp sales up 40 basis points with traffic flat. Brand trust increased by 6 points year-over-year, and guest scores across food, service, value, and atmosphere improved. The Aussie 3-Course offering is resonating with guests.
• Carrabba's: Comp sales up 410 basis points with positive traffic of 60 basis points. Growth was led by in-restaurant value offers like Dinner and Dolce for two for $45, experiential wine dinners, lunch, and off-premises sales.
• Bonefish: Comp sales up 80 basis points, the first positive comp since Q2 2023. Driven by day-of-the-week offers (e.g., $5 Martini Margarita Mondays, $7 Bang Wednesdays) and pre-fixed lunch offerings.
• Fleming's: Comp sales up 120 basis points, with traffic down 120 basis points. Maintained sales momentum via experiential events, elevated service, and events/catering platforms.

Guidance

• Raised U.S. comp sales guidance range for full year to flat to positive 50 basis points.
• Adjusted diluted earnings per share range raised to $1.10 to $1.15.
• Fourth quarter 2025 U.S. comparable restaurant sales expected between positive 50 basis points and positive 150 basis points.
• Q4 adjusted diluted earnings per share expected between $0.23 and $0.28, including an estimated negative impact from Brazil ownership of approximately $1.5 million.

Risks

• Forward-looking statements subject to numerous risks and uncertainties, including factors like beef inflation, tariff impacts, and execution risks related to the turnaround strategy.

Question and Answer

Q: Can you expand on whether the strong Q3 momentum carried into October across all brands and what factors contributed to sustaining that performance?

A: Q3 trends continued into Q4. Meeting the consumer where they're at with affordable entry price points and value, like the Aussie 3-Course, contributed. Traffic improvements and growth were consistent across brands and income/age groups.

Q: How did the company materially outperform Q3 same-store sales guidance, specifically the factors contributing to that better result?

A: Predominantly due to more consistent execution with leaders out in restaurants, and marketers/operators focusing on meeting guests where they are economically with value offers across brands.

Q: Can you give color on how you're planning on communicating the business turnaround with consumers to drive trial at Outback, particularly with lapsed guests?

A: Focus on steak-centric brand positioning, leveraging marketing channels (40% linear TV, 60% digital) to target retention and recruitment, and ensuring consistent execution of operational platforms to align with brand roots.