Bloomin’ Brands(BLMN) - 2025 Q1 - Earnings Call Transcript

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]