Bloomin’ Brands(US:BLMN)2021-02-18 18:50Financial Data and Key Metrics Changes - In Q4 2020, total revenues decreased by 21% year-over-year to $813 million, with a GAAP diluted loss per share of $0.16 compared to earnings of $0.32 in 2019 [32][28] - Adjusted diluted earnings per share was $0.02, down from $0.32 in the previous year, and adjusted operating income margin was 1.3%, down from 4.2% in 2019 [32][32] - US comparable sales were down 17.7% in Q4, with a sequential decline driven by additional capacity restrictions [28][28] Business Line Data and Key Metrics Changes - Outback's comparable sales were down 15% in Q4, while Carrabba's saw a decline of 11%, both outperforming major competitive benchmarks [30][30] - Bonefish Grill's comparable sales decreased by 27%, and Fleming's experienced a 30% decline, with significant impacts from capacity restrictions [31][31] - Off-premises sales represented 40% of revenue at Outback and 46% at Carrabba's during Q4, highlighting the importance of this channel [30][30] Market Data and Key Metrics Changes - The Brazil business showed significant improvement, with comparable sales down 15% in Q4 compared to a 55% decline in Q3, aided by easing dining restrictions [33][33] - In the US, 99% of the portfolio was open for some level of in-restaurant dining as of January 2021, contributing to improved sales trends [39][39] Company Strategy and Development Direction - The company aims to leverage off-premises sales growth, with a focus on maintaining high volumes even as dining rooms reopen [10][10] - A national rollout of the virtual brand Tender Shack is expected to generate $75 million in incremental annual sales, enhancing the off-premises business [24][24] - The company is committed to margin improvement through operational efficiencies and cost-saving initiatives, targeting an adjusted operating margin of 6.3% to 6.8% once sales return to 2019 levels [53][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capture market share and improve profitability as consumer confidence returns and dining restrictions ease [21][21] - The company anticipates a strong start to 2021, driven by pent-up consumer demand and continued strength in off-premises sales [12][12] - Management highlighted the importance of adapting to the changing landscape and delivering exceptional customer experiences, both in-restaurant and off-premises [23][23] Other Important Information - The company expects commodity inflation to be flat in 2021, with labor inflation projected at 3% to 3.5% [44][44] - General and administrative expenses are expected to be between $225 million and $230 million, reflecting a modest increase from 2020 [45][45] - The company plans to open 20 to 25 new locations in 2021, primarily in Brazil, and will focus on debt reduction using excess cash flow [47][40] Q&A Session Summary Question: How does the company measure the opportunity to retain to-go sales? - Management indicated that the off-premises business has been built over years and is seen as largely incremental, with a focus on total revenue per channel [57][57] Question: What are the margins for the to-go versus in-restaurant sales? - Management noted that curbside sales margins are nearly as good as in-restaurant, while delivery margins are slightly lower but still healthy [59][59] Question: What is the current performance in various markets? - Management reported positive comparable sales in states like Georgia and Texas, while California has shown variability due to restrictions [78][78] Question: What is the outlook for the Brazil business? - Management expressed confidence in the Brazil market, noting strong market share and profitability, while considering all options for the business [82][82] Question: What are the conditions necessary to achieve the 7.5% margin target? - Management indicated that achieving the 7.5% margin target will depend on further efficiencies and higher average unit volumes, with a gradual approach expected [89][89]