Bloomin’ Brands(US:BLMN)2024-08-07 20:06Financial Performance - For the thirteen weeks ended June 30, 2024, Bloomin' Brands reported a decrease in total revenues of 2.9% compared to the second quarter of 2023, with operating income of $46.1 million, down from $89.4 million in the prior year[87]. - Diluted earnings per share for the second quarter of 2024 were $0.32, compared to $0.70 in the same quarter of the previous year[87]. - Net income attributable to Bloomin' Brands was 2.5% for the thirteen weeks ended June 30, 2024, compared to 5.9% in the prior year[105]. - Adjusted net income for the thirteen weeks ended June 30, 2024, was $45,026,000, down from $68,277,000 in the prior year, a decrease of 34%[131]. - The total income from operations adjustments for the thirteen weeks ended June 30, 2024, amounted to $17,225,000, compared to $30,180,000 for the same period in 2023[130]. Sales and Revenue - U.S. combined and Outback Steakhouse comparable restaurant sales were down 0.1% for the same period, reflecting challenges in customer traffic and sales volumes[87]. - Total revenues for the thirteen weeks ended June 30, 2024 were 100% from restaurant sales (98.6%) and franchise revenues (1.4%) [105]. - Restaurant sales for the U.S. segment for the twenty-six weeks ended June 30, 2024, were $1,993.0 million, down 3.9% from $2,074.0 million for the same period in 2023[117]. - System-wide sales for the thirteen weeks ended June 30, 2024, totaled $236 million, a decrease from $246 million for the same period in 2023, representing a decline of approximately 4.1%[135]. Restaurant Operations - The company operated 1,173 restaurants and franchised 292 restaurants across 46 states, Guam, and 13 countries as of June 30, 2024[87]. - The restaurant-level operating margin was reported at 14.3%, down from 16.4% in the second quarter of 2023, indicating a decrease in operational efficiency[87]. - The company experienced a decline in restaurant sales primarily due to the closure of 53 restaurants since March 26, 2023, and lower comparable restaurant sales[97]. - Restaurant-level operating income was $136,455,000 for the thirteen weeks ended June 30, 2024, down from $154,856,000 in the prior year, a decline of 11.9%[124]. - The restaurant-level operating margin for the twenty-six weeks ended June 30, 2024, was 15.2%, down from 17.2% for the same period in 2023[127]. Costs and Expenses - Food and beverage costs as a percentage of restaurant sales decreased to 30.5% for the thirteen weeks ended June 30, 2024, down from 30.9% in the prior year[105]. - Labor and other related expenses increased to 29.8% of restaurant sales for the thirteen weeks ended June 30, 2024, primarily due to wage rate inflation[105]. - The operating income margin decreased to 8.2% for the thirteen weeks ended June 30, 2024, compared to 10.2% for the same period in 2023[124]. Strategic Initiatives - Bloomin' Brands is exploring strategic alternatives for its Brazil operations, including a potential sale, with BofA Securities, Inc. retained as a financial advisor[88]. - The company expects to incur additional fees related to a strategic initiative for revenue growth management capabilities for Outback Steakhouse throughout the remainder of 2024[129]. Cash Flow and Capital Management - The company reported net cash provided by operating activities of $116.2 million for the twenty-six weeks ended June 30, 2024, down from $287.3 million for the same period in 2023, indicating a decrease of approximately 59.6%[147]. - As of June 30, 2024, Bloomin' Brands had $117.9 million in cash and cash equivalents, with $59.2 million held by foreign affiliates[137]. - The company declared a quarterly cash dividend of $0.24 per share, payable on September 4, 2024[143]. - Bloomin' Brands repurchased $188.5 million of its common stock in the first fiscal quarter of 2024 as part of its share repurchase program[146]. International Operations - International segment revenues for the thirteen weeks ended June 30, 2024, were $144.7 million, a decrease from $147.5 million for the same period in 2023[116]. - Loss from operations for the international segment for the thirteen weeks ended June 30, 2024, was $(0.9) million, compared to income of $20.5 million for the same period in 2023[116]. - The company is eligible for certain value-added tax exemptions under new Brazil tax legislation starting May 23, 2024[108]. Restaurant Closures - The company closed 51 U.S. and 2 international restaurants since March 26, 2023, impacting restaurant sales negatively[117]. - Provision for impaired assets and restaurant closings increased due to charges related to the closure of nine restaurants in Hong Kong and 36 underperforming restaurants in the U.S.[110].