Bloomin’ Brands Announces 2021 Q3 Financial Results and Strong Operating Margin Expansion

Q3 Diluted EPS of $0.03 and Adjusted Diluted EPS of $0.57

Q3 Comparable Restaurant Sales Growth of 18.3% at Outback Steakhouse and 25.5% Combined U.S.

Fourth Quarter-to-Date U.S. Comp Sales Trends Ahead of Industry

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the third quarter 2021 (“Q3 2021”) compared to the third quarter 2020 (“Q3 2020”).

CEO Comments

“Q3 represented another quarter of strong results with significant sales, margin and earnings growth,” said David Deno, Chief Executive Officer. “This performance is a result of the great work by our employees in the restaurants and the restaurant support center. Recently, we have seen inflationary pressures in our business and have levers available to combat these headwinds and achieve our margin targets. We remain confident in our strategy and are well positioned to deliver our long-term goals of growing healthy sales, optimizing margins, and increasing cash flow.”

Diluted EPS and Adjusted Diluted EPS

The following table reconciles Diluted earnings (loss) per share attributable to common stockholders to Adjusted diluted earnings (loss) per share for the periods indicated:

Third Quarter Financial Results

• The increase in Total revenues was primarily due to: (i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales, (ii) the net impact of restaurant openings and closures and (iii) higher franchise revenues.

• GAAP restaurant-level operating margin decreased primarily due to: (i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation and (iii) higher utilities, rent and operating expense. These decreases were partially offset by higher comparable restaurant sales and lower advertising expense.

• GAAP operating income margin increased primarily due to higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales, and higher franchise revenues.

• Adjusted restaurant-level operating margin and adjusted operating income margin exclude the impact of the Carrabba’s Italian Grill royalty termination and are up significantly on a two-year basis to 2019.

Third Quarter Comparable Restaurant Sales

Third quarter U.S. comparable restaurant sales results were positive on a two-year basis given strong retention of off-premises sales. In August 2021, sales began decelerating due to traditional seasonality and concerns over the Delta variant. In addition, there was significant promotional activity during 2019 at Outback Steakhouse that we chose not to replicate in 2021 given the evolving consumer environment, including offers tied to the launch of our third party delivery channel. Despite these headwinds in Q3, U.S. comparable restaurant sales increased 9.5% when compared to Q3 2019.

The following table includes Company-owned comparable restaurant sales for the third quarter ended September 26, 2021 relative to 2019 and 2020:

Recent Sales Results - U.S.

The following tables include quarter-to-date U.S. Company-owned comparable restaurant sales for the four-week period ended October 24, 2021 and weekly U.S. comparable average unit volumes for the periods indicated. During this period the Company chose not to replicate 2019 marketing activities and promotions at Outback Steakhouse given the evolving consumer environment. This had a significant impact on 2021 comparable restaurant sales as compared to 2019.

Recent Sales Results - Brazil

Brazil’s fourth quarter-to-date comparable restaurant sales have continued to strengthen due to an increase in in-restaurant dining capacity for a majority of the country as COVID-19 case counts decline and vaccination rates increase. In São Paulo, which represents our largest market with 46% of stores, in-restaurant dining capacity increased to 80% on August 1, 2021, providing optimism about the continued recovery. The following tables include Brazil fourth quarter-to-date Company-owned comparable restaurant sales for the eight-week period ended October 24, 2021 and weekly comparable average unit volumes for the periods indicated:

Q4 2021 Financial Outlook

The table below presents our expectations for selected fiscal Q4 2021 operating results. Our outlook assumes no significant business interruptions related to COVID-19 and contemplates the following:

• Continuing U.S. sales trends and includes a level of traditional Q4 seasonality;
• Achieving ongoing operating efficiencies from simplification efforts, waste reduction and lower advertising;
• Impact from Florida minimum wage increases due to legislative changes that went into effect in September, higher wage pressures and retention efforts, as well as increased commodity inflation; and
• Q4 Adjusted diluted earnings per share guidance of at least $0.50 represents growth of 56% versus Q4 2019.

Fiscal 2021 Financial Outlook

We are updating our 2021 financial outlook for the following items:

• Increased commodity inflation reflecting increases in protein costs, primarily chicken and seafood, as we acquired additional supply outside of our contracted terms due to higher sales volumes and strategic contract pricing to secure next year's supply; and
• Higher labor inflation from increased wage pressures, training costs, and retention efforts.

All other aspects of our previously provided financial outlook remain unchanged. See the table below for more details.

We will discuss current inflationary trends and preliminary thoughts on 2022 on our third quarter conference call.

Conference Call

The Company will host a conference call today, November 2, 2021 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.

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 the following: (i) Adjusted restaurant-level operating margin, (ii) Adjusted income (loss) from operations and the corresponding margin, (iii) Adjusted net income (loss), (iv) Adjusted diluted earnings (loss) per share, (v) Adjusted segment restaurant-level operating margin, (vi) Adjusted segment income (loss) from operations and the corresponding margin and (vii) Earnings before interest, taxes, depreciation and amortization (“EBITDA”).

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 five, six, seven and ten included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.

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 operates more than 1,450 restaurants in 47 states, Guam and 19 countries, some of which are franchise locations. For more information, please visit www.bloominbrands.com.

Forward-Looking Statements

Certain statements contained herein, including statements under the headings “CEO Comments”, “Q4 2021 Financial Outlook” and “Fiscal 2021 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; the effects of the COVID-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions and consumer behavior, including, among others: the inability of workers, including delivery drivers, to work due to illness, quarantine, or government mandates, temporary restaurant closures and capacity restrictions due to reduced workforces or government mandates, the unemployment rate, the extent, availability and effectiveness of any COVID-19 stimulus packages or loan programs, the ability of our franchisees to operate their restaurants during the pandemic and pay royalties, and trends in consumer behavior and spending during and after the end of the pandemic; competition; increases in labor costs and fluctuations in the availability of employees; price and availability of commodities; government actions and policies; increases in unemployment rates and taxes; local, regional, national and international economic conditions; consumer confidence and spending patterns; the effects of changes in tax laws; challenges associated with our remodeling, relocation and expansion plans; interruption or breach of our systems or loss of consumer or employee information; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to preserve the value of and grow our brands; the seasonality of the Company’s business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the cost and availability of credit; interest rate changes; and compliance with debt covenants and the Company’s ability to make debt payments and planned investments. 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.

Restaurant-level Operating Margin Adjustments - Following is a summary of (favorable) unfavorable adjusted restaurant-level operating margin adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in table six of this release for the periods indicated:

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