Bloomin’ Brands Announces Q3 2023 Financial Results

Q3 Diluted EPS of $0.45, up 32% from Q3 2022

Q3 Adjusted Diluted EPS of $0.44, up 26% from Q3 2022

Updates 2023 Guidance for U.S. Comparable Restaurant Sales and EPS

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the third quarter 2023 (“Q3 2023”) compared to the third quarter 2022 (“Q3 2022”).

CEO Comments

“We saw strong earnings per share growth in the quarter,” said David Deno, CEO. “We remain focused on driving traffic and maintaining margins as we navigate the near-term sales environment. We are confident that the investments we made in food, service and technology will elevate the guest experience and lead to sustainable, long-term sales and profit 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):

 

Q3

 

 

 

 

2023

 

 

 

2022

 

 

CHANGE

Diluted earnings per share

$

0.45

 

 

$

0.34

 

 

$

0.11

 

Adjustments (1)

 

(0.01

)

 

 

0.01

 

 

 

(0.02

)

Adjusted diluted earnings per share (1)

$

0.44

 

 

$

0.35

 

 

$

0.09

 

 

 

 

 

 

 

 

___________________

(1) 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.

Third Quarter Financial Results

(dollars in millions, unaudited)

Q3 2023

 

Q3 2022

 

CHANGE

Total revenues

$

1,079.8

 

 

$

1,055.8

 

 

2.3

%

 

 

 

 

 

 

GAAP operating income margin

 

5.4

%

 

 

4.9

%

 

0.5

%

Adjusted operating income margin (1)

 

5.3

%

 

 

4.9

%

 

0.4

%

 

 

 

 

 

 

Restaurant-level operating margin (1)

 

13.8

%

 

 

13.1

%

 

0.7

%

Adjusted restaurant-level operating margin (1)

 

14.0

%

 

 

13.1

%

 

0.9

%

___________________

(1) See non-GAAP Measures later in this release. Also see Tables Four and Six for details regarding the nature of Q3 2023 restaurant-level operating income margin adjustments and operating income margin, respectively.

    
  • The increase in Total revenues was primarily due to: (i) the benefit of Brazil value added tax exemptions, (ii) the effect of foreign currency translation and (iii) the net impact of restaurant openings and closures.
  • GAAP operating income margin improved from Q3 2022 primarily due to an increase in restaurant-level operating margin as described below and a lease termination gain partially offset by higher depreciation expense.
  • Restaurant-level operating margin improved from Q3 2022 primarily due to: (i) an increase in average check per person, (ii) the impact of certain cost saving and productivity initiatives and (iii) the benefit of Brazil value added tax exemptions. These increases were partially offset by: (i) labor, operating expense and commodity inflation and (ii) higher advertising expense.

Third Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED SEPTEMBER 24, 2023

 

COMPANY-OWNED

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

 

 

U.S.

 

 

Outback Steakhouse

 

(1.1

)%

Carrabba’s Italian Grill

 

3.0

%

Bonefish Grill

 

(0.5

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(4.1

)%

Combined U.S.

 

(0.5

)%

 

 

 

International

 

 

Outback Steakhouse - Brazil (1)

 

4.1

%

___________________

(1) 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 October 17, 2023, our Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on November 29, 2023 to stockholders of record at the close of business on November 14, 2023.

During 2023, we repurchased 2.4 million shares for a total of $61 million through October 31, 2023. On February 7, 2023, our Board of Directors approved a $125 million authorization (the “2023 Share Repurchase Program”) that will expire on August 7, 2024. We have $79 million of share repurchase authorization remaining under the 2023 Share Repurchase Program.

Fiscal 2023 Financial Outlook

The table below presents our updated expectations for the 2023 fiscal year. We are updating assumptions for U.S. comparable restaurant sales, diluted earnings per share and effective income tax rate. This change is primarily driven by a reduction in traffic assumptions across our portfolio due to a softer casual dining environment. We are also updating our capital expenditure expectation due to the acceleration of project spend into Fiscal 2023 from Fiscal 2024. We are reaffirming all other aspects of our full-year financial guidance as previously communicated in our February 16, 2023 earnings release.

Financial Results:

 

Prior Outlook

 

Current Outlook

U.S. comparable restaurant sales

 

2% to 4%

 

1.5% to 2%

 

 

 

 

 

GAAP diluted earnings per share (1)

 

$2.80 to $2.89

 

$2.70 to $2.79

 

 

 

 

 

Adjusted diluted earnings per share (2)

 

$2.91 to $3.00

 

$2.80 to $2.90

 

 

 

 

 

Effective income tax rate

 

12% to 13%

 

10% to 11%

 

 

 

 

 

Capital expenditures

 

$240M to $260M

 

$260M to $280M

________________

(1) For GAAP purposes assumes diluted weighted average shares of approximately 98 million.
(2) Assumes adjusted diluted weighted average shares of approximately 93 million, which includes the benefit of the convertible note hedge entered into in May 2020.

Q4 2023 Financial Outlook

The table below presents our expectations for selected fiscal Q4 2023 operating results:

Financial Results:

 

Q4 2023 Outlook

U.S. comparable restaurant sales

 

Flat to 1%

 

 

 

GAAP diluted earnings per share (1)

 

$0.60 to $0.69

 

 

 

Adjusted diluted earnings per share (2)

 

$0.64 to $0.74

___________________

(1) For GAAP purposes assumes diluted weighted average shares of approximately 98 million.
(2) Assumes adjusted diluted weighted average shares of approximately 92 million, which includes the benefit of the convertible note hedge entered into in May 2020.

Conference Call

The Company will host a conference call today, November 3, 2023 at 8:00 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 47 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 2023 Financial Outlook” and “Q4 2023 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; the effects of a health pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions, the responses of domestic and foreign federal, state and local governments to a pandemic and consumer behavior; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to address environmental, social and governance matters; 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; 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

 

THIRTY-NINE WEEKS ENDED

(in thousands, except per share data)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,064,413

 

 

$

1,040,375

 

 

$

3,429,977

 

 

$

3,272,868

 

Franchise and other revenues

 

15,420

 

 

 

15,388

 

 

 

47,296

 

 

 

48,592

 

Total revenues

 

1,079,833

 

 

 

1,055,763

 

 

 

3,477,273

 

 

 

3,321,460

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage

 

321,865

 

 

 

332,939

 

 

 

1,057,305

 

 

 

1,056,768

 

Labor and other related

 

314,432

 

 

 

303,244

 

 

 

981,908

 

 

 

924,514

 

Other restaurant operating

 

281,084

 

 

 

267,944

 

 

 

837,349

 

 

 

790,583

 

Depreciation and amortization

 

47,998

 

 

 

42,171

 

 

 

141,865

 

 

 

125,203

 

General and administrative

 

62,246

 

 

 

56,089

 

 

 

191,408

 

 

 

174,009

 

Provision for impaired assets and restaurant closings

 

(6,008

)

 

 

2,067

 

 

 

(857

)

 

 

4,099

 

Total costs and expenses

 

1,021,617

 

 

 

1,004,454

 

 

 

3,208,978

 

 

 

3,075,176

 

Income from operations

 

58,216

 

 

 

51,309

 

 

 

268,295

 

 

 

246,284

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

 

 

 

(107,630

)

Loss on fair value adjustment of derivatives, net

 

 

 

 

 

 

 

 

 

 

(17,685

)

Interest expense, net

 

(12,843

)

 

 

(12,696

)

 

 

(38,248

)

 

 

(38,877

)

Income before (benefit) provision for income taxes

 

45,373

 

 

 

38,613

 

 

 

230,047

 

 

 

82,092

 

(Benefit) provision for income taxes

 

(58

)

 

 

5,563

 

 

 

21,186

 

 

 

33,028

 

Net income

 

45,431

 

 

 

33,050

 

 

 

208,861

 

 

 

49,064

 

Less: net income attributable to noncontrolling interests

 

903

 

 

 

1,064

 

 

 

4,745

 

 

 

5,202

 

Net income attributable to Bloomin’ Brands

$

44,528

 

 

$

31,986

 

 

$

204,116

 

 

$

43,862

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.50

 

 

$

0.36

 

 

$

2.30

 

 

$

0.49

 

Diluted

$

0.45

 

 

$

0.34

 

 

$

2.08

 

 

$

0.44

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

88,707

 

 

 

89,192

 

 

 

88,794

 

 

 

89,149

 

Diluted

 

98,548

 

 

 

94,736

 

 

 

97,987

 

 

 

99,609

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

U.S. Segment

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

901,138

 

 

$

910,679

 

 

$

2,975,145

 

 

$

2,920,241

 

Franchise and other revenues

 

11,834

 

 

 

11,842

 

 

 

36,052

 

 

 

37,314

 

Total revenues

$

912,972

 

 

$

922,521

 

 

$

3,011,197

 

 

$

2,957,555

 

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales (1)

$

163,275

 

 

$

129,696

 

 

$

454,832

 

 

$

352,627

 

Franchise and other revenues

 

3,586

 

 

 

3,546

 

 

 

11,244

 

 

 

11,278

 

Total revenues

$

166,861

 

 

$

133,242

 

 

$

466,076

 

 

$

363,905

 

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income from operations

 

 

 

 

 

 

 

U.S.

$

68,014

 

 

$

68,501

 

 

$

304,265

 

 

$

305,347

 

International

 

22,034

 

 

 

15,849

 

 

 

67,028

 

 

 

38,859

 

Total segment income from operations

 

90,048

 

 

 

84,350

 

 

 

371,293

 

 

 

344,206

 

Unallocated corporate operating expense

 

(31,832

)

 

 

(33,041

)

 

 

(102,998

)

 

 

(97,922

)

Total income from operations

$

58,216

 

 

$

51,309

 

 

$

268,295

 

 

$

246,284

 

________________

(1) Restaurant sales in Brazil increased $10.9 million and $30.1 million during the thirteen and thirty-nine weeks ended September 24, 2023, respectively, in connection with value added tax exemptions resulting from tax legislation.

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

 

SEPTEMBER 24, 2023

 

DECEMBER 25, 2022

(dollars in thousands)

(UNAUDITED)

 

 

Cash and cash equivalents

$

86,579

 

 

$

84,735

 

Net working capital (deficit) (1)

$

(658,696

)

 

$

(632,290

)

Total assets

$

3,350,910

 

 

$

3,320,425

 

Total debt, net

$

789,356

 

 

$

828,507

 

Total stockholders’ equity

$

395,919

 

 

$

273,909

 

_________________

(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

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Income from operations

$

58,216

 

 

$

51,309

 

 

$

268,295

 

 

$

246,284

 

Operating income margin

 

5.4

%

 

 

4.9

%

 

 

7.7

%

 

 

7.4

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

15,420

 

 

 

15,388

 

 

 

47,296

 

 

 

48,592

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

47,998

 

 

 

42,171

 

 

 

141,865

 

 

 

125,203

 

General and administrative

 

62,246

 

 

 

56,089

 

 

 

191,408

 

 

 

174,009

 

Provision for impaired assets and restaurant closings

 

(6,008

)

 

 

2,067

 

 

 

(857

)

 

 

4,099

 

Restaurant-level operating income (1)

$

147,032

 

 

$

136,248

 

 

$

553,415

 

 

$

501,003

 

Restaurant-level operating margin

 

13.8

%

 

 

13.1

%

 

 

16.1

%

 

 

15.3

%

Adjustments:

 

 

 

 

 

 

 

Partner compensation program changes

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Total restaurant-level operating income adjustments

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Adjusted restaurant-level operating income

$

148,926

 

 

$

136,248

 

 

$

555,309

 

 

$

501,003

 

Adjusted restaurant-level operating margin

 

14.0

%

 

 

13.1

%

 

 

16.2

%

 

 

15.3

%

_________________

(1) The following categories of revenue and operating expenses are not included in restaurant-level operating 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

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Income from operations

$

68,014

 

 

$

68,501

 

 

$

304,265

 

 

$

305,347

 

Operating income margin

 

7.4

%

 

 

7.4

%

 

 

10.1

%

 

 

10.3

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

11,834

 

 

 

11,842

 

 

 

36,052

 

 

 

37,314

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

39,829

 

 

 

34,432

 

 

 

117,368

 

 

 

102,735

 

General and administrative

 

24,868

 

 

 

22,339

 

 

 

72,809

 

 

 

69,432

 

Provision for impaired assets and restaurant closings

 

(6,008

)

 

 

2,068

 

 

 

(857

)

 

 

2,317

 

Restaurant-level operating income

$

114,869

 

 

$

115,498

 

 

$

457,533

 

 

$

442,517

 

Restaurant-level operating margin

 

12.7

%

 

 

12.7

%

 

 

15.4

%

 

 

15.2

%

Adjustments:

 

 

 

 

 

 

 

Partner compensation program changes

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Total restaurant-level operating income adjustments

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Adjusted restaurant-level operating income

$

116,763

 

 

$

115,498

 

 

$

459,427

 

 

$

442,517

 

Adjusted restaurant-level operating margin

 

13.0

%

 

 

12.7

%

 

 

15.4

%

 

 

15.2

%

International

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Income from operations

$

22,034

 

 

$

15,849

 

 

$

67,028

 

 

$

38,859

 

Operating income margin

 

13.2

%

 

 

11.9

%

 

 

14.4

%

 

 

10.7

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

3,586

 

 

 

3,546

 

 

 

11,244

 

 

 

11,278

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

6,231

 

 

 

5,882

 

 

 

18,275

 

 

 

17,438

 

General and administrative

 

7,725

 

 

 

5,828

 

 

 

22,033

 

 

 

16,087

 

Provision for impaired assets and restaurant closings

 

 

 

 

 

 

 

 

 

 

1,775

 

Restaurant-level operating income

$

32,404

 

 

$

24,013

 

 

$

96,092

 

 

$

62,881

 

Restaurant-level operating margin

 

19.8

%

 

 

18.5

%

 

 

21.1

%

 

 

17.8

%

 

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments

 

 

 

 

 

 

 

 

 

 

 

Adjusted restaurant-level operating income

$

32,404

 

 

$

24,013

 

 

$

96,092

 

 

$

62,881

 

Adjusted restaurant-level operating margin

 

19.8

%

 

 

18.5

%

 

 

21.1

%

 

 

17.8

%

TABLE FIVE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

FAVORABLE

(UNFAVORABLE) CHANGE IN ADJUSTED QUARTER TO DATE

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

 

REPORTED

 

ADJUSTED (1)

 

REPORTED

 

ADJUSTED

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

30.2

%

 

30.2

%

 

32.0

%

 

32.0

%

 

1.8

%

Labor and other related

29.5

%

 

29.4

%

 

29.1

%

 

29.1

%

 

(0.3

)%

Other restaurant operating

26.4

%

 

26.4

%

 

25.8

%

 

25.8

%

 

(0.6

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

13.8

%

 

14.0

%

 

13.1

%

 

13.1

%

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

THIRTY-NINE WEEKS ENDED

 

FAVORABLE (UNFAVORABLE) CHANGE IN ADJUSTED YEAR TO DATE

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

 

REPORTED

 

ADJUSTED (1)

 

REPORTED

 

ADJUSTED

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

30.8

%

 

30.8

%

 

32.3

%

 

32.3

%

 

1.5

%

Labor and other related

28.6

%

 

28.6

%

 

28.2

%

 

28.2

%

 

(0.4

)%

Other restaurant operating

24.4

%

 

24.4

%

 

24.2

%

 

24.2

%

 

(0.2

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

16.1

%

 

16.2

%

 

15.3

%

 

15.3

%

 

0.9

%

_________________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margin 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 expenses.

TABLE SIX

BLOOMIN’ BRANDS, INC.

ADJUSTED INCOME FROM OPERATIONS NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

Consolidated

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Income from operations

$

58,216

 

 

$

51,309

 

 

$

268,295

 

 

$

246,284

 

Operating income margin

 

5.4

%

 

 

4.9

%

 

 

7.7

%

 

 

7.4

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Restaurant and asset impairments and closing costs (2)

 

(6,586

)

 

 

 

 

 

(6,586

)

 

 

 

Other (3)

 

3,436

 

 

 

 

 

 

3,436

 

 

 

 

Total income from operations adjustments

 

(1,256

)

 

 

 

 

 

(1,256

)

 

 

 

Adjusted income from operations

$

56,960

 

 

$

51,309

 

 

$

267,039

 

 

$

246,284

 

Adjusted operating income margin

 

5.3

%

 

 

4.9

%

 

 

7.7

%

 

 

7.4

%

 

 

 

 

 

 

 

 

U.S. Segment

 

 

 

 

 

 

 

Income from operations

$

68,014

 

 

$

68,501

 

 

$

304,265

 

 

$

305,347

 

Operating income margin

 

7.4

%

 

 

7.4

%

 

 

10.1

%

 

 

10.3

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

1,894

 

 

 

 

 

 

1,894

 

 

 

 

Restaurant and asset impairments and closing costs (2)

 

(6,586

)

 

 

 

 

 

(6,586

)

 

 

 

Other (3)

 

1,147

 

 

 

 

 

 

1,147

 

 

 

 

Total income from operations adjustments

 

(3,545

)

 

 

 

 

 

(3,545

)

 

 

 

Adjusted income from operations

$

64,469

 

 

$

68,501

 

 

$

300,720

 

 

$

305,347

 

Adjusted operating income margin

 

7.1

%

 

 

7.4

%

 

 

10.0

%

 

 

10.3

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

Income from operations

$

22,034

 

 

$

15,849

 

 

$

67,028

 

 

$

38,859

 

Operating income margin

 

13.2

%

 

 

11.9

%

 

 

14.4

%

 

 

10.7

%

 

 

 

 

 

 

 

 

Total income from operations adjustments

 

 

 

 

 

 

 

 

 

 

 

Adjusted income from operations

$

22,034

 

 

$

15,849

 

 

$

67,028

 

 

$

38,859

 

Adjusted operating income margin

 

13.2

%

 

 

11.9

%

 

 

14.4

%

 

 

10.7

%

_________________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding the restaurant-level operating income adjustments.
(2) Includes a lease termination gain and related restaurant closure costs.
(3) Primarily includes professional fees, severance and other costs not correlated to our core operating performance during the period.

TABLE SEVEN

 

BLOOMIN’ BRANDS, INC.

 

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

 

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(in thousands, except per share data)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Net income attributable to Bloomin’ Brands

$

44,528

 

 

$

31,986

 

 

$

204,116

 

 

$

43,862

 

Adjustments:

 

 

 

 

 

 

 

 

 

Income from operations adjustments (1)

 

(1,256

)

 

 

 

 

 

(1,256

)

 

 

 

Loss on extinguishment and modification of debt (2)

 

 

 

 

 

 

 

 

 

 

107,630

 

Loss on fair value adjustment of derivatives, net (2)

 

 

 

 

 

 

 

 

 

 

17,685

 

Total adjustments, before income taxes

 

(1,256

)

 

 

 

 

 

(1,256

)

 

 

125,315

 

Adjustment to provision for income taxes (3)

 

(2,650

)

 

 

 

 

 

(2,650

)

 

 

1,322

 

Net adjustments

 

(3,906

)

 

 

 

 

 

(3,906

)

 

 

126,637

 

Adjusted net income

$

40,622

 

 

$

31,986

 

 

$

200,210

 

 

$

170,499

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.45

 

 

$

0.34

 

 

$

2.08

 

 

$

0.44

 

Adjusted diluted earnings per share (4)

$

0.44

 

 

$

0.35

 

 

$

2.15

 

 

$

1.84

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

98,548

 

 

 

94,736

 

 

 

97,987

 

 

 

99,609

 

Adjusted diluted weighted average common shares outstanding (4)

 

93,181

 

 

 

91,046

 

 

 

92,920

 

 

 

92,877

 

_________________

 
(1) See Table Six Adjusted Income from Operations Non-GAAP Reconciliations above for details regarding Income from operations adjustments.
(2) The thirty-nine weeks ended September 25, 2022 includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.
(3) Includes a $2.9 million adjustment during the thirteen and thirty-nine weeks ended September 24, 2023 related to a Brazil federal income tax exemption on certain state value added tax benefits. Also 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 the thirty-nine weeks ended September 25, 2022, the primary difference between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.
(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,367 and 3,690 shares for the thirteen weeks ended September 24, 2023 and September 25, 2022, respectively, and 5,067 and 6,732 shares for the thirty-nine weeks ended September 24, 2023 and September 25, 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

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

 

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Labor and other related

$

1,894

 

 

$

 

 

$

1,894

 

 

$

 

General and administrative

 

3,534

 

 

 

 

 

 

3,534

 

 

 

 

Provision for impaired assets and restaurant closings

 

(6,684

)

 

 

 

 

 

(6,684

)

 

 

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

 

 

 

107,630

 

Loss on fair value adjustment of derivatives, net

 

 

 

 

 

 

 

 

 

 

17,685

 

Provision for income taxes

 

(2,650

)

 

 

 

 

 

(2,650

)

 

 

1,322

 

Net adjustments

$

(3,906

)

 

$

 

 

$

(3,906

)

 

$

126,637

 

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT AND OFF-PREMISES ONLY KITCHEN INFORMATION

(UNAUDITED)

Number of restaurants:

JUNE 25, 2023

 

OPENINGS

 

CLOSURES

 

SEPTEMBER 24, 2023

U.S.

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

 

 

 

Company-owned

562

 

 

 

 

(5

)

 

557

 

Franchised

127

 

 

 

 

 

 

127

 

Total

689

 

 

 

 

(5

)

 

684

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

199

 

 

 

 

 

 

199

 

Franchised

19

 

 

 

 

 

 

19

 

Total

218

 

 

 

 

 

 

218

 

Bonefish Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

170

 

 

 

 

 

 

170

 

Franchised

5

 

 

 

 

 

 

5

 

Total

175

 

 

 

 

 

 

175

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

 

 

 

Company-owned

64

 

 

 

 

 

 

64

 

Aussie Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

7

 

 

 

 

 

 

7

 

U.S. total

1,153

 

 

 

 

(5

)

 

1,148

 

International

 

 

 

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (1)

148

 

 

5

 

 

 

 

153

 

Other (1)(2)

36

 

 

1

 

 

 

 

37

 

Franchised

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - South Korea

92

 

 

4

 

 

(4

)

 

92

 

Other (2)

46

 

 

1

 

 

 

 

47

 

International total

322

 

 

11

 

 

(4

)

 

329

 

System-wide total

1,475

 

 

11

 

 

(9

)

 

1,477

 

System-wide total - Company-owned

1,186

 

 

6

 

 

(5

)

 

1,187

 

System-wide total - Franchised

289

 

 

5

 

 

(4

)

 

290

 

____________________

 
(1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of May 31, 2023 and August 31, 2023, respectively, to correspond with the balance sheet dates of this subsidiary.
(2) International Company-owned Other and International Franchised Other included four and three Aussie Grill locations, respectively, as of September 24, 2023.

Number of kitchens (1):

JUNE 25, 2023

 

OPENINGS

 

CLOSURES

 

SEPTEMBER 24, 2023

U.S.

 

 

 

 

 

 

 

 

 

 

Company-owned

1

 

 

 

 

 

 

1

 

International

 

 

 

 

 

 

 

 

 

 

Franchised - South Korea

9

 

 

 

 

(3

)

 

6

 

System-wide total

10

 

 

 

 

(3

)

 

7

 

____________________

 
(1) Excludes virtual concepts that operate out of existing restaurants and sports venue locations.

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

 

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

 

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

 

SEPTEMBER 24, 2023

 

SEPTEMBER 25, 2022

Year over year percentage change:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

U.S. (1)

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(1.1

)%

 

2.3

%

 

1.6

%

 

3.4

%

Carrabba’s Italian Grill

 

3.0

%

 

0.7

%

 

4.4

%

 

3.6

%

Bonefish Grill

 

(0.5

)%

 

(0.9

)%

 

2.2

%

 

5.9

%

Fleming’s Prime Steakhouse & Wine Bar

 

(4.1

)%

 

1.3

%

 

(0.9

)%

 

15.7

%

Combined U.S.

 

(0.5

)%

 

1.4

%

 

1.9

%

 

4.8

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (2)

 

4.1

%

 

30.1

%

 

7.3

%

 

48.7

%

 

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(6.1

)%

 

(6.8

)%

 

(4.3

)%

 

(5.5

)%

Carrabba’s Italian Grill

 

(0.1

)%

 

(8.4

)%

 

0.3

%

 

(4.4

)%

Bonefish Grill

 

(5.7

)%

 

(8.3

)%

 

(3.1

)%

 

(3.3

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(4.4

)%

 

(4.8

)%

 

(2.1

)%

 

5.8

%

Combined U.S.

 

(4.7

)%

 

(7.2

)%

 

(3.1

)%

 

(4.7

)%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

 

(1.0

)%

 

16.7

%

 

(1.0

)%

 

32.1

%

 

 

 

 

 

 

 

 

 

Average check per person (3):

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

5.0

%

 

9.1

%

 

5.9

%

 

8.9

%

Carrabba’s Italian Grill

 

3.1

%

 

9.1

%

 

4.1

%

 

8.0

%

Bonefish Grill

 

5.2

%

 

7.4

%

 

5.3

%

 

9.2

%

Fleming’s Prime Steakhouse & Wine Bar

 

0.3

%

 

6.1

%

 

1.2

%

 

9.9

%

Combined U.S.

 

4.2

%

 

8.6

%

 

5.0

%

 

9.5

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

 

5.1

%

 

13.1

%

 

8.3

%

 

16.5

%

____________________

(1) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.
(2) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions. Includes trading day impact from calendar period reporting.
(3) Includes the impact of menu pricing changes, product mix and discounts.

 

Contacts

Tara Kurian

VP, Corporate Finance and Investor Relations

(813) 830-5311

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