Bloomin’ Brands(US:BLMN)2020-05-08 19:46Financial Performance - Total revenues decreased by 10.6% to $1 billion compared to the previous year [17] - GAAP diluted loss per share for the quarter was $0.44, down from earnings per share of $0.69 in 2019 [17] - Adjusted diluted earnings per share was $0.14 versus $0.75 last year, and adjusted restaurant level operating margin was 12.5% compared to 17.1% last year [17][19] - Weekly cash burn rate has been reduced to $6 million to $8 million due to immediate actions taken to minimize spending [20] Business Lines and Market Performance - Average off-premises sales have tripled since the beginning of March, allowing the company to keep most locations open [8] - Comparable sales at 23 Outback Steakhouse locations that reopened for dine-in were down 17% from the prior year [9] - As of May 3, 2020, 355 dining rooms were open across all brands with limited seating capacity [9] Company Strategy and Industry Competition - The company is focused on enhancing total shareholder return and has seen positive sales and traffic across all concepts prior to the pandemic [15] - The strategy includes maintaining off-premises gains while reopening dining rooms safely [10][15] - The company has ceased exploration of strategic alternatives to focus on responding to the COVID-19 pandemic [25] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in retaining off-premises market share gains and emphasized the importance of safety protocols during the reopening of dining rooms [7][10] - The company is optimistic about emerging stronger post-crisis, leveraging the lessons learned during the pandemic [30] - Management noted that it is too early to provide guidance for the remainder of the year due to ongoing uncertainties [44] Other Important Information - The company raised $200 million through convertible notes to strengthen liquidity and navigate economic uncertainty [14][24] - Brazil's operations faced challenges similar to the U.S., but the leadership team has successfully built a carryout business [26][27] - The company has not laid off or furloughed any employees during the crisis, maintaining a trained workforce ready for reopening [11][12] Q&A Session Summary Question: What is the confidence level in sustaining the recovery trend after reopening dining rooms? - Management highlighted the importance of safety protocols and a fully trained staff, which has contributed to sustained gains in states where dining rooms have reopened [32][33] Question: What led to the decision to issue convertible notes? - The convertible bond was chosen as it offered the lowest cost of capital, providing flexibility to capitalize on future opportunities [35][36] Question: What does optimizing the asset base mean? - Management clarified that optimizing the asset base involves strengthening the off-premise business and enhancing dining operations rather than closing more locations [40] Question: How is the company managing cash burn and rent payments? - The company is paying full rent as part of its cash burn rate but is in constructive discussions with landlords regarding deferrals and abatements [105] Question: What is the status of franchisee health? - Franchisee health varies, but the company has maintained strong relationships and only a handful of closures have occurred [80] Question: What are the learnings from the early reopening states? - Key learnings include prioritizing safety, managing table turns, and preserving off-premises business [84]