Bloomin’ Brands(US:BLMN)2020-02-18 19:49Financial Performance - Adjusted Q4 2019 diluted earnings per share was $0.32, a 19% increase compared to the previous year [8][22] - Total revenues increased by 0.9% to $1 billion in Q4, driven by higher comp sales and the net impact of restaurant openings and closures [23] - US comp sales rose by 1.9%, with traffic up by 0.9% and average check increasing by 1% [24][25] - Adjusted operating margin expanded by 60 basis points for the year, with Q4 marking the fifth consecutive quarter of margin growth [10][34] Business Line Performance - Outback's comp sales increased by 2.7%, marking its 12th consecutive quarter of growth [27] - Carrabba's comp sales rose by 1.4%, with off-premise sales accounting for 21% of total sales in Q4, up 32% year-over-year [30] - Bonefish Grill's comp sales improved by 0.5%, while Fleming's comp sales increased by 0.9% [31] - Brazil's comp sales grew by 4.9%, with traffic up by 8.2%, driven by successful promotions [32] Market Performance - Combined US comp sales were up 1.9%, outperforming the industry by 380 basis points [8][24] - Traffic growth in Q4 was the best since Q4 2017, indicating strong market performance [24] Company Strategy and Industry Competition - The company plans to focus on sustainable top-line growth through various initiatives, including enhancing food quality and service, and investing in off-premise sales [13][18] - A strategic pivot towards a more tempered pricing approach aims to enhance value relative to competitors [16] - The company is exploring strategic alternatives, including a potential sale, with significant interest in its Brazilian operations [36][37] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in maintaining top-line momentum into 2020, supported by strategic investments in digital and off-premise channels [9][19] - The company anticipates a challenging Q4 2020 due to potential impacts from the election, but remains optimistic about overall performance [62] Other Important Information - The company plans to double its annual dividend from $0.40 to $0.80 per share, reflecting a commitment to returning cash to shareholders [43] - Capital spending is expected to be between $175 million and $190 million, focusing on new locations primarily in Brazil [57] Q&A Session Question: Can you provide insights on comps and how they relate to the industry? - Management indicated a strong start to 2020, with traffic trends improving and a goal to outperform the industry [70][73] Question: What is the Board's stance on cash usage and the Brazil business? - The Board decided to double the dividend while also considering share repurchases and debt paydowns, with ongoing discussions about the Brazil business [76][77] Question: Can you elaborate on the interaction between DoorDash and internal delivery? - Management reported positive incrementality from both DoorDash and internal delivery, contributing to strong sales growth [81] Question: What is the status of the strategic review process? - The strategic review is ongoing, with no compelling offers yet, but management is focused on creating a stronger company regardless of the review's outcome [86][87] Question: Can you clarify the expected restaurant margins and cost savings? - Management did not provide specific guidance on restaurant margins but indicated that cost savings would come from infrastructure improvements and operational efficiencies [90][91]