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Bloomin' Brands Inc

Bloomin’ Brands Announces 2024 Q3 Financial Results

Q3 Diluted EPS of $0.08 and Q3 Adjusted Diluted EPS of $0.21

Updates Full Year 2024 Guidance

Announces Strategic Re-Franchise of Brazil Operations

TAMPA, Fla.--(BUSINESS WIRE)--Nov. 8, 2024-- Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the third quarter 2024 (“Q3 2024”) compared to the third quarter 2023 (“Q3 2023”).

CEO Comments
“In my first 60 days, I have been impressed with the resiliency and capabilities of our team during two hurricanes, as well as the potential that I see in our iconic brands,” said Mike Spanos, CEO. “As I continue listening and learning during this evaluative period, it is clear to me that our path to sustainable sales and profit growth will be enabled by our team members executing a consistent and elevated guest experience, focusing first on Outback Steakhouse. Our full year guidance has been updated to reflect our results and near term trends. We are committed to improving our performance.”

Spanos continued, “I am excited to announce our Brazil franchise partnership with Vinci Partners. I am confident that our scale and brand leadership in Brazil, combined with Vinci’s local expertise, will maximize future growth potential.”

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

 

 

 

2024

 

2023

 

CHANGE

Diluted earnings per share

$

0.08

 

$

0.45

 

 

$

(0.37

)

Adjustments (1)

 

0.13

 

 

(0.04

)

 

 

0.17

 

Adjusted diluted earnings per share (1)

$

0.21

 

$

0.41

 

 

$

(0.20

)

 

 

 

 

 

 

_______________
(1) Adjusted diluted earnings per share for Q3 2023 has been recast to remove the previously included non-GAAP adjustment of 5.4 million diluted weighted average common shares outstanding related to the convertible note hedge contracts entered into at the issuance of the 2025 Notes. 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 2024

 

Q3 2023

 

CHANGE

Total revenues

$

1,038.8

 

 

$

1,079.8

 

 

(3.8

)%

 

 

 

 

 

 

GAAP operating income margin

 

1.7

%

 

 

5.4

%

 

(3.7

)%

Adjusted operating income margin (1)

 

3.0

%

 

 

5.3

%

 

(2.3

)%

 

 

 

 

 

 

Restaurant-level operating margin (1)

 

12.5

%

 

 

13.8

%

 

(1.3

)%

Adjusted restaurant-level operating margin (1)

 

12.5

%

 

 

14.0

%

 

(1.5

)%

_______________

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

  • The decrease in Total revenues was primarily due to: (i) lower comparable restaurant sales, (ii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar and (iii) the net impact of restaurant closures and openings.
  • GAAP operating income margin decreased from Q3 2023 primarily due to: (i) a decrease in restaurant-level operating margin, as detailed below, (ii) lapping of a lease termination gain in Q3 2023 and closure costs in Q3 2024 from the closure of nine restaurants in Hong Kong, (iii) higher general and administrative expense primarily from executive transition costs and strategic initiative related professional fees and (iv) higher depreciation and amortization expense.
  • Restaurant-level operating margin decreased from Q3 2023 primarily due to lower restaurant sales, as discussed above and higher labor, operating and commodity costs, primarily due to inflation. These decreases were partially offset by an increase in average check per person and the impact of certain cost-saving and productivity initiatives.
  • Adjusted income from operations primarily excludes: (i) the Q3 2023 lease termination gain and Q3 2024 closure costs in Hong Kong and (ii) executive transition costs and strategic initiative related professional fees.

Third Quarter Comparable Restaurant Sales

THIRTEEN WEEKS ENDED SEPTEMBER 29, 2024

 

COMPANY-OWNED

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

 

 

U.S. (1)

 

 

Outback Steakhouse

 

(1.3

)%

Carrabba’s Italian Grill

 

(1.5

)%

Bonefish Grill

 

(4.1

)%

Fleming’s Prime Steakhouse & Wine Bar

 

1.2

%

Combined U.S.

 

(1.5

)%

 

 

 

International

 

 

Outback Steakhouse - Brazil (2)

 

(3.6

)%

_______________
(1) For Q3 2024, comparable restaurant sales compare the thirteen weeks from July 1, 2024 through September 29, 2024 to the thirteen weeks from July 3, 2023 through October 1, 2023. See Table Ten for details regarding our fiscal and comparable basis calendars.
(2) 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 22, 2024, our Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on December 11, 2024 to stockholders of record at the close of business on November 25, 2024.

Year to date we repurchased 10.1 million shares for a total of $265.7 million during 2024 and have $96.8 million of share repurchase authorization remaining under the 2024 Share Repurchase Program.

Fiscal 2024 Financial Outlook
The table below presents our updated expectations for selected 2024 financial operating results. We are reaffirming all other aspects of our full-year financial guidance as previously communicated.

Financial Results:

 

Prior Outlook

 

Current Outlook

U.S. comparable restaurant sales

 

Down 1% to Flat

 

(1.0%) to (0.5%)

 

 

 

 

 

Commodity inflation

 

2% to 3%

 

Approx. 1%

 

 

 

 

 

GAAP effective tax rate (1)

 

26% to 28%

 

NM

 

 

 

 

 

Adjusted effective tax rate

 

8% to 10%

 

6% to 7%

 

 

 

 

 

GAAP diluted earnings per share (1)(2)

 

$0.25 to $0.45

 

($0.26) to ($0.16)

 

 

 

 

 

Adjusted diluted earnings per share (3)

 

$2.10 to $2.30

 

$1.72 to $1.82
_______________

NM Not meaningful.
(1) Guidance does not include estimates of impairments, gain or loss on sale or transaction-related costs of the Brazil transaction.
(2) For GAAP purposes assumes diluted weighted average shares of approximately 86 million.
(3) Assumes diluted weighted average shares of approximately 89 million, considering the expected adjusted net income position.

Q4 2024 Financial Outlook
The table below presents our expectations for selected fiscal Q4 2024 financial operating results.

Financial Results:

 

Q4 2024 Outlook

U.S. comparable restaurant sales

 

(2.0%) to (1.0%)

 

 

 

GAAP diluted earnings per share (1)(2)

 

$0.31 to $0.41

 

 

 

Adjusted diluted earnings per share (2)

 

$0.32 to $0.42

_______________
(1) Guidance does not include estimates of impairments, gain or loss on sale or transaction-related costs of the Brazil transaction.
(2) Assumes diluted weighted average shares of approximately 86 million.

Strategic Re-Franchise of Brazil Operations
On November 6, 2024, we entered into a Purchase Agreement with Vinci Partners to sell 67% of our Brazil operations for R$1.4 billion Brazilian Reais (approximately $243 million in U.S. dollars based on the current exchange rate). This reflects a total enterprise value of R$2.06 billion Brazilian Reais or 6.5x trailing twelve months EBITDA, net of royalties. This strategic re-franchise includes an on-going royalty stream. The purchase price will be paid in two installments: 52% on the closing date and 48% on the first anniversary of the closing date. We have an option to sell our remaining stake in 2028.

BofA Securities, Inc. acted as exclusive financial advisor to the Company.

Conference Call
The Company will host a conference call today, November 8, 2024 at 8:30 AM EST. 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’s restaurant portfolio includes 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 46 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 2024 Financial Outlook” and “Q4 2024 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; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to complete the Brazil franchise partnership transaction and the impact of such transaction on our future results; our ability to address corporate citizenship and sustainability matters and investor expectations; 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; the effects of a health pandemic, 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 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,025,090

 

 

$

1,064,413

 

 

$

3,308,142

 

 

$

3,429,977

 

Franchise and other revenues

 

13,681

 

 

 

15,420

 

 

 

44,822

 

 

 

47,296

 

Total revenues

 

1,038,771

 

 

 

1,079,833

 

 

 

3,352,964

 

 

 

3,477,273

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage

 

304,285

 

 

 

321,865

 

 

 

998,177

 

 

 

1,057,305

 

Labor and other related

 

312,968

 

 

 

314,432

 

 

 

985,083

 

 

 

981,908

 

Other restaurant operating

 

280,018

 

 

 

281,084

 

 

 

851,111

 

 

 

837,349

 

Depreciation and amortization

 

50,208

 

 

 

47,998

 

 

 

149,015

 

 

 

141,865

 

General and administrative

 

68,485

 

 

 

62,246

 

 

 

196,413

 

 

 

191,408

 

Provision for impaired assets and restaurant closings

 

5,597

 

 

 

(6,008

)

 

 

32,731

 

 

 

(857

)

Total costs and expenses

 

1,021,561

 

 

 

1,021,617

 

 

 

3,212,530

 

 

 

3,208,978

 

Income from operations

 

17,210

 

 

 

58,216

 

 

 

140,434

 

 

 

268,295

 

Loss on extinguishment of debt

 

(225

)

 

 

—

 

 

 

(136,022

)

 

 

—

 

Interest expense, net

 

(15,953

)

 

 

(12,843

)

 

 

(44,371

)

 

 

(38,248

)

Income (loss) before (benefit) provision for income taxes

 

1,032

 

 

 

45,373

 

 

 

(39,959

)

 

 

230,047

 

(Benefit) provision for income taxes

 

(6,509

)

 

 

(58

)

 

 

5,159

 

 

 

21,186

 

Net income (loss)

 

7,541

 

 

 

45,431

 

 

 

(45,118

)

 

 

208,861

 

Less: net income attributable to noncontrolling interests

 

629

 

 

 

903

 

 

 

3,439

 

 

 

4,745

 

Net income (loss) attributable to Bloomin’ Brands

$

6,912

 

 

$

44,528

 

 

$

(48,557

)

 

$

204,116

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.08

 

 

$

0.50

 

 

$

(0.56

)

 

$

2.30

 

Diluted

$

0.08

 

 

$

0.45

 

 

$

(0.56

)

 

$

2.08

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

85,063

 

 

 

88,707

 

 

 

86,258

 

 

 

88,794

 

Diluted

 

86,164

 

 

 

98,548

 

 

 

86,258

 

 

 

97,987

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

U.S. Segment

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

877,052

 

 

$

901,138

 

 

$

2,870,036

 

 

$

2,975,145

 

Franchise and other revenues

 

10,273

 

 

 

11,834

 

 

 

34,566

 

 

 

36,052

 

Total revenues

$

887,325

 

 

$

912,972

 

 

$

2,904,602

 

 

$

3,011,197

 

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

148,038

 

 

$

163,275

 

 

$

438,106

 

 

$

454,832

 

Franchise and other revenues

 

3,408

 

 

 

3,586

 

 

 

10,256

 

 

 

11,244

 

Total revenues

$

151,446

 

 

$

166,861

 

 

$

448,362

 

 

$

466,076

 

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income from operations

 

 

 

 

 

 

 

U.S.

$

38,853

 

 

$

68,014

 

 

$

216,014

 

 

$

304,265

 

International

 

15,608

 

 

 

22,034

 

 

 

30,496

 

 

 

67,028

 

Total segment income from operations

 

54,461

 

 

 

90,048

 

 

 

246,510

 

 

 

371,293

 

Unallocated corporate operating expense

 

(37,251

)

 

 

(31,832

)

 

 

(106,076

)

 

 

(102,998

)

Total income from operations

$

17,210

 

 

$

58,216

 

 

$

140,434

 

 

$

268,295

 

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

 

SEPTEMBER 29, 2024

 

DECEMBER 31, 2023

(dollars in thousands)

(UNAUDITED)

 

Cash and cash equivalents

$

83,632

 

 

$

111,519

 

Net working capital (deficit) (1)

$

(587,912

)

 

$

(659,021

)

Total assets

$

3,433,609

 

 

$

3,424,081

 

Total debt, net

$

1,092,189

 

 

$

780,719

 

Total stockholders’ equity

$

244,971

 

 

$

412,003

 

_______________
(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 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Income from operations

$

17,210

 

 

$

58,216

 

 

$

140,434

 

 

$

268,295

 

Operating income margin

 

1.7

%

 

 

5.4

%

 

 

4.2

%

 

 

7.7

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

13,681

 

 

 

15,420

 

 

 

44,822

 

 

 

47,296

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

50,208

 

 

 

47,998

 

 

 

149,015

 

 

 

141,865

 

General and administrative

 

68,485

 

 

 

62,246

 

 

 

196,413

 

 

 

191,408

 

Provision for impaired assets and restaurant closings

 

5,597

 

 

 

(6,008

)

 

 

32,731

 

 

 

(857

)

Restaurant-level operating income (1)

$

127,819

 

 

$

147,032

 

 

$

473,771

 

 

$

553,415

 

Restaurant-level operating margin

 

12.5

%

 

 

13.8

%

 

 

14.3

%

 

 

16.1

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Partner compensation (2)

 

—

 

 

 

1,894

 

 

 

—

 

 

 

1,894

 

Total restaurant-level operating income adjustments

 

—

 

 

 

1,894

 

 

 

434

 

 

 

1,894

 

Adjusted restaurant-level operating income

$

127,819

 

 

$

148,926

 

 

$

474,205

 

 

$

555,309

 

Adjusted restaurant-level operating margin

 

12.5

%

 

 

14.0

%

 

 

14.3

%

 

 

16.2

%

_______________
(1) The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding 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.

(2) Costs incurred in connection with the transition to a new partner compensation program.

U.S.

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Income from operations

$

38,853

 

 

$

68,014

 

 

$

216,014

 

 

$

304,265

 

Operating income margin

 

4.4

%

 

 

7.4

%

 

 

7.4

%

 

 

10.1

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

10,273

 

 

 

11,834

 

 

 

34,566

 

 

 

36,052

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

41,922

 

 

 

39,829

 

 

 

122,506

 

 

 

117,368

 

General and administrative

 

27,945

 

 

 

24,868

 

 

 

79,853

 

 

 

72,809

 

Provision for impaired assets and restaurant closings

 

1,868

 

 

 

(6,008

)

 

 

14,939

 

 

 

(857

)

Restaurant-level operating income

$

100,315

 

 

$

114,869

 

 

$

398,746

 

 

$

457,533

 

Restaurant-level operating margin

 

11.4

%

 

 

12.7

%

 

 

13.9

%

 

 

15.4

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges

 

—

 

 

 

—

 

 

 

434

 

 

 

—

 

Partner compensation (1)

 

—

 

 

 

1,894

 

 

 

—

 

 

 

1,894

 

Total restaurant-level operating income adjustments

 

—

 

 

 

1,894

 

 

 

434

 

 

 

1,894

 

Adjusted restaurant-level operating income

$

100,315

 

 

$

116,763

 

 

$

399,180

 

 

$

459,427

 

Adjusted restaurant-level operating margin

 

11.4

%

 

 

13.0

%

 

 

13.9

%

 

 

15.4

%

_______________
(1) Costs incurred in connection with the transition to a new partner compensation program.

International

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Income from operations

$

15,608

 

 

$

22,034

 

 

$

30,496

 

 

$

67,028

 

Operating income margin

 

10.3

%

 

 

13.2

%

 

 

6.8

%

 

 

14.4

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

3,408

 

 

 

3,586

 

 

 

10,256

 

 

 

11,244

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

6,184

 

 

 

6,231

 

 

 

20,140

 

 

 

18,275

 

General and administrative

 

9,098

 

 

 

7,725

 

 

 

22,240

 

 

 

22,033

 

Provision for impaired assets and restaurant closings

 

3,728

 

 

 

—

 

 

 

17,791

 

 

 

—

 

Restaurant-level operating income

$

31,210

 

 

$

32,404

 

 

$

80,411

 

 

$

96,092

 

Restaurant-level operating margin

 

21.1

%

 

 

19.8

%

 

 

18.4

%

 

 

21.1

%

TABLE FIVE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

FAVORABLE
(UNFAVORABLE)
ADJUSTED CHANGE
QUARTER TO DATE

 

SEPTEMBER 29, 2024

 

SEPTEMBER 24, 2023

 

 

REPORTED

 

ADJUSTED

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

29.7

%

 

29.7

%

 

30.2

%

 

30.2

%

 

0.5

%

Labor and other related

30.5

%

 

30.5

%

 

29.5

%

 

29.4

%

 

(1.1

)%

Other restaurant operating

27.3

%

 

27.3

%

 

26.4

%

 

26.4

%

 

(0.9

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

12.5

%

 

12.5

%

 

13.8

%

 

14.0

%

 

(1.5

)%

 

 

 

 

 

 

 

 

 

 

 

THIRTY-NINE WEEKS ENDED

 

FAVORABLE
(UNFAVORABLE)
ADJUSTED CHANGE
YEAR TO DATE

 

SEPTEMBER 29, 2024

 

SEPTEMBER 24, 2023

 

 

REPORTED

 

ADJUSTED (1)

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

30.2

%

 

30.2

%

 

30.8

%

 

30.8

%

 

0.6

%

Labor and other related

29.8

%

 

29.8

%

 

28.6

%

 

28.6

%

 

(1.2

)%

Other restaurant operating

25.7

%

 

25.7

%

 

24.4

%

 

24.4

%

 

(1.3

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

14.3

%

 

14.3

%

 

16.1

%

 

16.2

%

 

(1.9

)%

_______________
(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins 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 expense.

TABLE SIX

BLOOMIN’ BRANDS, INC.

ADJUSTED INCOME FROM OPERATIONS AND MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

Consolidated

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Income from operations

$

17,210

 

 

$

58,216

 

 

$

140,434

 

 

$

268,295

 

Operating income margin

 

1.7

%

 

 

5.4

%

 

 

4.2

%

 

 

7.7

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

—

 

 

 

1,894

 

 

 

434

 

 

 

1,894

 

Asset impairments and closure-related charges (2)

 

5,127

 

 

 

(6,586

)

 

 

33,873

 

 

 

(6,586

)

Executive transition costs (3)

 

4,121

 

 

 

—

 

 

 

4,121

 

 

 

—

 

Strategic initiative fees (4)

 

3,000

 

 

 

—

 

 

 

4,000

 

 

 

—

 

Transaction-related expenses (5)

 

1,490

 

 

 

—

 

 

 

1,490

 

 

 

—

 

Other (6)

 

—

 

 

 

3,436

 

 

 

—

 

 

 

3,436

 

Total income from operations adjustments

 

13,738

 

 

 

(1,256

)

 

 

43,918

 

 

 

(1,256

)

Adjusted income from operations

$

30,948

 

 

$

56,960

 

 

$

184,352

 

 

$

267,039

 

Adjusted operating income margin

 

3.0

%

 

 

5.3

%

 

 

5.5

%

 

 

7.7

%

 

 

 

 

 

 

 

 

U.S. Segment

 

 

 

 

 

 

 

Income from operations

$

38,853

 

 

$

68,014

 

 

$

216,014

 

 

$

304,265

 

Operating income margin

 

4.4

%

 

 

7.4

%

 

 

7.4

%

 

 

10.1

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

—

 

 

 

1,894

 

 

 

434

 

 

 

1,894

 

Strategic initiative fees (4)

 

3,000

 

 

 

—

 

 

 

4,000

 

 

 

—

 

Asset impairments and closure-related charges (2)

 

—

 

 

 

(6,586

)

 

 

13,858

 

 

 

(6,586

)

Other (6)

 

—

 

 

 

1,147

 

 

 

—

 

 

 

1,147

 

Total income from operations adjustments

 

3,000

 

 

 

(3,545

)

 

 

18,292

 

 

 

(3,545

)

Adjusted income from operations

$

41,853

 

 

$

64,469

 

 

$

234,306

 

 

$

300,720

 

Adjusted operating income margin

 

4.7

%

 

 

7.1

%

 

 

8.1

%

 

 

10.0

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

Income from operations

$

15,608

 

 

$

22,034

 

 

$

30,496

 

 

$

67,028

 

Operating income margin

 

10.3

%

 

 

13.2

%

 

 

6.8

%

 

 

14.4

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closure-related charges (2)

 

5,127

 

 

 

—

 

 

 

19,227

 

 

 

—

 

Transaction related expenses (5)

 

288

 

 

 

—

 

 

 

288

 

 

 

—

 

Total income from operations adjustments

 

5,415

 

 

 

—

 

 

 

19,515

 

 

 

—

 

Adjusted income from operations

$

21,023

 

 

$

22,034

 

 

$

50,011

 

 

$

67,028

 

Adjusted operating income margin

 

13.9

%

 

 

13.2

%

 

 

11.2

%

 

 

14.4

%

_______________
(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding restaurant-level operating income adjustments.
(2) The thirteen and thirty-nine weeks ended September 29, 2024 include asset impairment, closure costs and severance primarily in connection with the Q2 2024 decision to close nine restaurants in Hong Kong, within the international segment. The thirty-nine weeks ended September 29, 2024 also includes asset impairment, closure costs and severance in connection with the Q4 2023 decision to close 36 older, predominately underperforming U.S. restaurants. The thirteen and thirty-nine weeks ended September 24, 2023 include a lease termination gain and related restaurant closure costs within the U.S. segment.
(3) Compensation costs and professional fees related to our CEO transition and severance related to other executive level changes.
(4) Represents fees incurred in connection with a project-based strategic initiative. The costs incurred represent third-party consulting fees related to a strategic initiative to develop revenue growth management capabilities for Outback Steakhouse and are included in General and administrative expense. We expect to incur additional fees for this project for the remainder of 2024. Given the magnitude and scope of this initiative and that it is not expected to recur in the foreseeable future after 2024, we consider these incremental expenses to be distinct from other consulting fees that we incur in the ordinary course of business and not reflective of the ongoing costs to operate our business or operating performance in the period.
(5) Costs incurred in connection with the strategic review and agreement to sell the majority ownership of our Brazil operations and pending franchise partnership transaction.
(6) 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 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Net income (loss) attributable to Bloomin’ Brands

$

6,912

 

 

$

44,528

 

 

$

(48,557

)

 

$

204,116

 

Adjustments:

 

 

 

 

 

 

 

Income from operations adjustments (1)

 

13,738

 

 

 

(1,256

)

 

 

43,918

 

 

 

(1,256

)

Loss on extinguishment of debt (2)

 

—

 

 

 

—

 

 

 

135,797

 

 

 

—

 

Total adjustments, before income taxes

 

13,738

 

 

 

(1,256

)

 

 

179,715

 

 

 

(1,256

)

Adjustment to provision for income taxes (3)

 

(2,498

)

 

 

(2,650

)

 

 

(4,466

)

 

 

(2,650

)

Net adjustments

 

11,240

 

 

 

(3,906

)

 

 

175,249

 

 

 

(3,906

)

Adjusted net income

$

18,152

 

 

$

40,622

 

 

$

126,692

 

 

$

200,210

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

$

0.08

 

 

$

0.45

 

 

$

(0.56

)

 

$

2.08

 

Adjusted diluted earnings per share (4)(5)

$

0.21

 

 

$

0.41

 

 

$

1.41

 

 

$

2.04

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding (5)

 

86,164

 

 

 

98,548

 

 

 

86,258

 

 

 

97,987

 

Adjusted diluted weighted average common shares outstanding (4)(5)

 

86,164

 

 

 

98,548

 

 

 

90,057

 

 

 

97,987

 

_______________
(1) See Table Six Adjusted Income from Operations and Margin Non-GAAP Reconciliations above for details regarding Income from operations adjustments.
(2) Includes losses in connection with the partial repurchase of the 2025 Notes.
(3) 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 all periods presented. The difference between GAAP and adjusted effective income tax rates during the thirty-nine weeks ended September 29, 2024 primarily relates to nondeductible losses and other tax costs associated with the partial repurchase of the 2025 Notes. The thirteen and thirty-nine weeks ended September 24, 2023 include a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state VAT benefits.
(4) Adjusted diluted weighted average common shares outstanding for the thirteen weeks ended September 29, 2024 and September 24, 2023 and the thirty-nine weeks ended September 29, 2024 and September 24, 2023 were calculated including the effect of 0.7 million, 5.4 million, 2.0 million and 5.1 million dilutive securities, respectively, for outstanding 2025 Notes and the effect of 0.3 million, 3.8 million, 1.4 million and 3.4 million dilutive securities, respectively, for the Warrant Transactions, as defined below. In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”). If our stock price is in excess of the conversion price of the 2025 Notes ($10.79 and $11.26 as of September 29, 2024 and September 24, 2023, respectively), the Convertible Note Hedge Transactions deliver shares to offset dilution from the 2025 Notes, which, in combination with the Warrant Transactions, effectively offset dilution from the 2025 Notes up to the strike price of the Warrant Transactions ($15.11 and $15.77 as of September 29, 2024 and September 24, 2023, respectively). Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the thirteen and thirty-nine weeks ended September 24, 2023 have been recast to remove the 5.4 million and 5.1 million share benefit, respectively, of the Convertible Note Hedge Transactions which was previously included as a non-GAAP share adjustment.
(5) Due to a GAAP net loss, antidilutive securities are excluded from diluted weighted average common shares outstanding for the thirty-nine weeks ended September 29, 2024. However, considering the adjusted net income position, adjusted diluted weighted average common shares outstanding incorporates securities that would have been dilutive for GAAP.

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

 

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

(dollars in thousands)

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024

 

SEPTEMBER 24,
2023

Labor and other related

$

—

 

 

$

1,894

 

 

$

434

 

 

$

1,894

 

General and administrative

 

10,006

 

 

 

3,534

 

 

 

13,980

 

 

 

3,534

 

Provision for impaired assets and restaurant closings

 

3,732

 

 

 

(6,684

)

 

 

29,504

 

 

 

(6,684

)

Loss on extinguishment of debt

 

—

 

 

 

—

 

 

 

135,797

 

 

 

—

 

Provision for income taxes

 

(2,498

)

 

 

(2,650

)

 

 

(4,466

)

 

 

(2,650

)

Net adjustments

$

11,240

 

 

$

(3,906

)

 

$

175,249

 

 

$

(3,906

)

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants:

JUNE 30, 2024

 

OPENINGS

 

CLOSURES

 

SEPTEMBER 29, 2024

U.S.

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

 

 

 

Company-owned

549

 

 

2

 

 

(1

)

 

550

 

Franchised

125

 

 

—

 

 

(2

)

 

123

 

Total

674

 

 

2

 

 

(3

)

 

673

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

192

 

 

—

 

 

—

 

 

192

 

Franchised

18

 

 

—

 

 

—

 

 

18

 

Total

210

 

 

—

 

 

—

 

 

210

 

Bonefish Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

162

 

 

—

 

 

—

 

 

162

 

Franchised

4

 

 

—

 

 

—

 

 

4

 

Total

166

 

 

—

 

 

—

 

 

166

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

 

 

 

Company-owned

63

 

 

—

 

 

—

 

 

63

 

Aussie Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

4

 

 

—

 

 

—

 

 

4

 

Franchised

2

 

 

—

 

 

—

 

 

2

 

Total

6

 

 

—

 

 

—

 

 

6

 

U.S. total

1,119

 

 

2

 

 

(3

)

 

1,118

 

International

 

 

 

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (1)

165

 

 

7

 

 

—

 

 

172

 

Other (1)

38

 

 

1

 

 

(9

)

 

30

 

Franchised

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - South Korea

93

 

 

1

 

 

—

 

 

94

 

Other

50

 

 

—

 

 

(1

)

 

49

 

International total

346

 

 

9

 

 

(10

)

 

345

 

System-wide total

1,465

 

 

11

 

 

(13

)

 

1,463

 

System-wide total - Company-owned

1,173

 

 

10

 

 

(10

)

 

1,173

 

System-wide total - Franchised

292

 

 

1

 

 

(3

)

 

290

 

_______________
(1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of May 31, 2024 and August 31, 2024, respectively, to correspond with the balance sheet dates of this subsidiary.

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

 

THIRTEEN WEEKS ENDED

 

THIRTY-NINE WEEKS ENDED

 

 

SEPTEMBER 29,
2024 (1)

 

SEPTEMBER 24,
2023

 

SEPTEMBER 29,
2024 (1)

 

SEPTEMBER 24,
2023

Year over year percentage change:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

U.S. (2)

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(1.3

)%

 

(1.1

)%

 

(0.9

)%

 

1.6

%

Carrabba’s Italian Grill

 

(1.5

)%

 

3.0

%

 

0.4

%

 

4.4

%

Bonefish Grill

 

(4.1

)%

 

(0.5

)%

 

(3.7

)%

 

2.2

%

Fleming’s Prime Steakhouse & Wine Bar

 

1.2

%

 

(4.1

)%

 

(0.8

)%

 

(0.9

)%

Combined U.S.

 

(1.5

)%

 

(0.5

)%

 

(1.1

)%

 

1.9

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)(4)

 

(3.6

)%

 

4.1

%

 

(1.9

)%

 

7.3

%

 

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(3.9

)%

 

(6.1

)%

 

(4.0

)%

 

(4.3

)%

Carrabba’s Italian Grill

 

(3.4

)%

 

(0.1

)%

 

(2.7

)%

 

0.3

%

Bonefish Grill

 

(8.5

)%

 

(5.7

)%

 

(6.7

)%

 

(3.1

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(7.3

)%

 

(4.4

)%

 

(6.7

)%

 

(2.1

)%

Combined U.S.

 

(4.4

)%

 

(4.7

)%

 

(4.2

)%

 

(3.1

)%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

(7.7

)%

 

(1.0

)%

 

(4.9

)%

 

(1.0

)%

 

 

 

 

 

 

 

 

 

Average check per person (5):

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

2.6

%

 

5.0

%

 

3.1

%

 

5.9

%

Carrabba’s Italian Grill

 

1.9

%

 

3.1

%

 

3.1

%

 

4.1

%

Bonefish Grill

 

4.4

%

 

5.2

%

 

3.0

%

 

5.3

%

Fleming’s Prime Steakhouse & Wine Bar

 

8.5

%

 

0.3

%

 

5.9

%

 

1.2

%

Combined U.S.

 

2.9

%

 

4.2

%

 

3.1

%

 

5.0

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

3.4

%

 

5.1

%

 

2.4

%

 

8.3

%

_______________
(1) For Q3 2024, U.S. comparable restaurant sales, traffic and average check per person compare the thirteen weeks from July 1, 2024 through September 29, 2024 to the thirteen weeks from July 3, 2023 through October 1, 2023, and for the thirty-nine weeks from January 1, 2024 through September 29, 2024 to the thirty-nine weeks from January 2, 2023 through October 1, 2023. See Table Ten for details regarding our fiscal and comparable basis calendars.
(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.
(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions.
(4) Includes trading day impact from calendar period reporting.
(5) Includes the impact of menu pricing changes, product mix and discounts.

TABLE TEN

BLOOMIN’ BRANDS, INC.

FISCAL AND COMPARABLE CALENDAR CALCULATION DATES

(UNAUDITED)

FISCAL CALENDAR BASIS

 

 

COMPARABLE CALENDAR BASIS

Q1

January 1, 2024 - March 31, 2024

 

 

January 1, 2024 - March 31, 2024

vs.

 

 

vs.

December 26, 2022 - March 26, 2023

 

 

January 2, 2023 - April 2, 2023

Q2

April 1, 2024 - June 30, 2024

 

 

April 1, 2024 - June 30, 2024

vs.

 

 

vs.

March 27, 2023 - June 25, 2023

 

 

April 3, 2023 - July 2, 2023

Q3

July 1, 2024 - September 29, 2024

 

 

July 1, 2024 - September 29, 2024

vs.

 

 

vs.

June 26, 2023 - September 24, 2023

 

 

July 3, 2023 - October 1, 2023

Q4

September 30, 2024 - December 29, 2024

 

 

September 30, 2024 - December 29, 2024

vs.

 

 

vs.

September 25, 2023 - December 31, 2023

 

 

October 2, 2023 - December 31, 2023

Total Year

January 1, 2024 - December 29, 2024

 

 

January 1, 2024 - December 29, 2024

vs.

 

 

vs.

December 26, 2022 - December 31, 2023

 

 

January 2, 2023 - December 31, 2023

_______________
Note: Financial statements for 2024 are reported on a Fiscal Calendar Basis. Due to the 53rd week in Fiscal Year 2023, our financial statement comparisons are one week different year over year. Comparable restaurant sales are reported on a Comparable Calendar Basis. We believe this provides the most accurate assessment of comparable sales.

 

Tara Kurian
VP, Corporate Finance and Investor Relations
(813) 830-5311

Source: Bloomin’ Brands, Inc.