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Bloomin’ Brands(BLMN) - 2025 Q2 - Earnings Call Transcript
2025-08-06 13:00
Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $1 billion, slightly up from $999 million in the previous year [34] - U.S. comparable restaurant sales decreased by 10 basis points, while traffic declined by 200 basis points [35] - Adjusted diluted earnings per share for Q2 was $0.32, down from $0.45 in the previous year [36][37] - Adjusted operating margins were 3.5%, compared to 6% last year, primarily due to a decline in restaurant level margin and inflationary pressures [37] Business Line Data and Key Metrics Changes - Outback's off-premise sales accounted for 26% of total sales, while Carrabba's reached 35% [36] - Traffic performance at Outback improved throughout the quarter, driven by the introduction of the Aussie three-course offering [20][19] - Carrabba's experienced positive comparable sales growth, attributed to strong off-premise sales and experiential events [20][78] Market Data and Key Metrics Changes - U.S. traffic was down 2% in Q2, showing a sequential improvement from Q1 [19] - The company is still losing market share in the industry, as defined by Black Box, indicating ongoing challenges in the casual dining sector [20] Company Strategy and Development Direction - The primary focus is on turning around Outback, with a strategy centered on improving service quality, value, and menu simplification [5][6][25] - The company is implementing a new organizational structure to enhance operational efficiency and support the turnaround efforts [6][10] - Investments of approximately $3 million in 2025 are planned for expanding tests related to service quality and value [30][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need for time to reverse market share trends and emphasizes the importance of consistent execution in operations [20][32] - The company is committed to reducing debt leverage and returning capital to shareholders while maintaining healthy cash flow [32][40] - Future guidance for adjusted diluted earnings per share is set between $1 and $1.1, reflecting various operational challenges and investments [41] Other Important Information - The company has completed a repair and maintenance survey to prioritize remodels and improve asset conditions [88] - A quarterly dividend of $0.15 per share has been declared, payable on September 3, 2025 [40] Q&A Session Summary Question: Inquiry about Outback general managers' compensation structure - Management is assessing the compensation structure to ensure it aligns with market averages and drives growth in sales and profits [50][51] Question: Prioritization of Outback turnaround initiatives - Management believes they are in the early stages of the turnaround and emphasizes the importance of service model, steak quality, and value components [54][56] Question: Details on the Aussie three-course offering - The offering has led to increased traffic and value satisfaction, with many guests trading up to higher price points [59][60] Question: Insights from the initial Outback test restaurants - Management noted the brand's potential and the importance of consistency in service, quality, and ambiance [64][66] Question: Performance of Outback in various regions - Performance was consistent across all geographies in Q2, with no significant outliers [94][95]
Bloomin’ Brands(BLMN) - 2025 Q1 - Earnings Call Transcript
2025-05-07 13:32
Financial Data and Key Metrics Changes - Total revenues in Q1 2025 were $1,050 million, down 1.8% from 2024, primarily due to restaurant closures and a decrease in comparable restaurant sales [22][24] - U.S. comparable restaurant sales were negative 50 basis points, with traffic down 390 basis points, which was below the casual dining industry [22][23] - Q1 GAAP diluted earnings per share were $0.50 compared to negative $1 in 2024, while adjusted diluted earnings per share were $0.59 versus $0.64 in 2024 [24][25] - Adjusted operating margins were 6.1%, down from 7.8% last year, driven by a decline in restaurant level margin and inflationary pressures [25][26] Business Line Data and Key Metrics Changes - Positive comparable sales were noted at Carrabba's and Fleming's, but overall performance was below industry standards [8][10] - Off-premises sales accounted for 23% of total U.S. sales, with third-party delivery making up 11% [23] - Menu simplification efforts included reducing menu items by approximately 10% at Outback and 20% at Bonefish, aimed at improving execution and guest satisfaction [12][13][66] Market Data and Key Metrics Changes - The company experienced a disappointing February, including a weaker Valentine's Day week, and noted a consumer pullback during the Easter holiday [9][10] - Households earning under $100,000 were identified as the most pressured demographic, impacting overall sales [44][78] Company Strategy and Development Direction - The company is focused on three operating priorities: simplifying the agenda, delivering a great guest experience, and turning around Outback Steakhouse [10][17] - A third-party consulting firm has been hired to assist with strategy and cost-saving initiatives, with a commitment to reducing debt leverage post-Brazil transaction [20][27] - The company aims to reinvest in restaurants, reduce debt leverage to below 3.0 times, and return capital to shareholders [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with financial and market share results, acknowledging the need for improvement in the current choppy macro environment [9][10] - The outlook for the remainder of the year assumes continued challenges, particularly in consumer spending and holiday performance [38][39] - Management is committed to transparency regarding results and business progress throughout the year [10][19] Other Important Information - The Board declared a quarterly dividend of $0.15 per share, payable on June 4, 2025, with $97 million remaining under the share authorization program [28] - The company expects to be at the low end of its full-year adjusted diluted earnings per share range of $1.20 to $1.40, influenced by the extinguished Brazil tax benefit and cautious consumer behavior [29][30] Q&A Session Summary Question: Outlook for the remainder of the year - Management acknowledged underperformance compared to industry benchmarks and emphasized the need for improvement in value perception and operational execution [36][37] Question: Softer holiday trends - Management noted that while some brands performed well, overall results were below expectations, particularly among households earning under $100,000 [43][44] Question: Same store sales and traffic performance - Management indicated that the entire value proposition needs to be addressed, focusing on food quality, value, and consistency of execution [46][47] Question: Price and mix component of same store sales - Mix was relatively flat in Q1, with expectations for a slight decline in Q2 due to the impact of value offers [50][51] Question: Employee feedback on execution - Employees expressed a desire for simpler execution processes and less complexity in operations [60][61] Question: Test stores performance - Management reported positive feedback from test stores regarding food quality and guest experience, with plans for a deliberate rollout based on learnings [87][88] Question: Current value construct effectiveness - Management acknowledged the need to improve the value proposition, particularly at Outback, and emphasized the iterative nature of their approach [92][93]
Bloomin’ Brands(BLMN) - 2025 Q1 - Earnings Call Transcript
2025-05-07 13:32
Financial Data and Key Metrics Changes - Total revenues in Q1 2025 were $1,050 million, down 1.8% from 2024, primarily due to restaurant closures and a decrease in comparable restaurant sales [22][24] - U.S. comparable restaurant sales were negative 50 basis points, with traffic down 390 basis points [22] - Q1 GAAP diluted earnings per share were $0.50 compared to negative $1 in 2024, while adjusted diluted earnings per share were $0.59 versus $0.64 in 2024 [24][25] - Adjusted operating margins were 6.1%, down from 7.8% last year, driven by a decline in restaurant level margin and inflationary pressures [25][26] Business Line Data and Key Metrics Changes - Positive comparable sales were noted at Carrabba's and Fleming's, but overall performance was below industry standards [8][10] - Off-premises sales accounted for 23% of total U.S. sales, with third-party delivery making up 11% [23] - Menu simplification efforts included reducing menu items by approximately 10% at Outback and Carrabba's, with further reductions planned [12][13] Market Data and Key Metrics Changes - The company experienced a disappointing February, including a weaker Valentine's Day week, and noted a consumer pullback during the Easter holiday [9][10] - Households earning under $100,000 were identified as the most pressured demographic affecting sales [43][79] Company Strategy and Development Direction - The company is focused on three operating priorities: simplifying the agenda, delivering a consistent guest experience, and turning around Outback [10][18] - A third-party consulting firm has been hired to assist with strategy and cost-saving initiatives [20] - The company aims to reduce debt leverage below 3.0 times lease-adjusted net leverage and reinvest in restaurants [21][20] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with financial and market share results, acknowledging the need for improvement [9][10] - The outlook for the remainder of the year assumes a continuation of a choppy macro environment and cautious consumer behavior [38][30] - Management is committed to transparency regarding results and business progress throughout the year [10][19] Other Important Information - The Board declared a quarterly dividend of $0.15 per share, payable on June 4, 2025 [28] - The company expects to be at the low end of its full-year adjusted diluted earnings per share range of $1.20 to $1.40 [28][29] Q&A Session Summary Question: Outlook for the remainder of the year and learnings from recent weeks - Management acknowledged underperformance compared to industry benchmarks and emphasized progress on operational priorities [37][38] Question: Value mix at Outback and profitability of value offers - Management noted that Outback is currently priced higher than competitors and is working on improving the value proposition [40] Question: Softer holiday special occasion trends - Management indicated that while some brands performed well, results were below expectations, particularly among households under $100,000 [43][44] Question: Same store sales and traffic performance - Management stated that share trends are cumulative and require improvements in food quality, value, and execution consistency [46] Question: Price and mix component of same store sales - Management reported that mix was relatively flat in Q1 but expects a slight decline in Q2 due to promotional impacts [50] Question: Employee feedback on execution and complexity - Employees expressed a desire for simpler execution processes and less complexity in operations [61] Question: Test stores performance and rollout timing - Management is encouraged by results from test stores and is focused on learning before a full rollout [88] Question: Current value construct effectiveness - Management confirmed that the current value proposition needs to be addressed, especially at Outback, and will continue to iterate based on customer feedback [93]
Bloomin’ Brands(BLMN) - 2025 Q1 - Earnings Call Transcript
2025-05-07 13:30
Financial Data and Key Metrics Changes - Total revenues in Q1 were $1,050 million, down 1.8% from 2024, primarily due to restaurant closures and a decrease in comparable restaurant sales [21] - U.S. comparable restaurant sales were negative 50 basis points, with traffic down 390 basis points [22] - Q1 GAAP diluted earnings per share was $0.50, compared to negative $1 in 2024, while adjusted diluted earnings per share was $0.59, down from $0.64 in 2024 [23][24] - Q1 adjusted operating margins were 6.1%, down from 7.8% last year, driven by a decline in restaurant level margin and inflationary pressures [24] Business Line Data and Key Metrics Changes - Positive comparable sales were noted at Carrabba's and Fleming's, but overall performance was below industry standards [6] - Off-premises sales accounted for 23% of total U.S. sales, with third-party delivery making up 11% [22] Market Data and Key Metrics Changes - The company experienced a disappointing February, including Valentine's Day week, and noted a softer Easter holiday than anticipated [7] - The macro environment remains choppy, impacting consumer behavior and spending [8] Company Strategy and Development Direction - The company is focused on three operating priorities: simplifying the agenda, delivering a great guest experience, and turning around Outback Steakhouse [8][15] - Menu simplification is underway, with reductions in menu items across various brands to enhance execution and guest satisfaction [10][11] - A third-party consulting firm has been hired to assist with strategy and cost-saving initiatives [18] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with financial and market share results, acknowledging the need for improvement [7] - The outlook for the year assumes continued challenges in the macro environment, with cautious consumer behavior impacting sales [29] - The company anticipates being at the low end of its full-year adjusted diluted earnings per share range due to various factors, including the loss of a tax benefit from Brazil [27][28] Other Important Information - The Board declared a quarterly dividend of $0.15 per share, payable on June 4, 2025 [27] - The company aims to reduce debt leverage to below 3.0 times lease-adjusted net leverage [20] Q&A Session Summary Question: Outlook for the remainder of the year and learnings from recent weeks - Management acknowledged underperformance compared to industry benchmarks and emphasized progress on operational priorities [35][36] Question: Softer holiday special occasion trends - Management noted decent results but below expectations, particularly among households earning under $100,000 [42] Question: Price and mix component of same store sales - Mix was relatively flat in Q1, with expectations for a slight decline in Q2 due to value offers [49] Question: Employee feedback on execution and complexity - Employees desire a simpler execution process and have provided valuable insights on food quality and consistency [61] Question: Test stores performance and rollout timing - Encouraging results from test stores were reported, with a focus on learning and deliberate implementation of successful strategies [86][88] Question: Current value construct effectiveness - Management indicated the need to address the value proposition, especially at Outback, and emphasized the iterative nature of their approach [91][92]