Q1 Diluted EPS of $0.93 and Adjusted Diluted
EPS of $0.98 Q1 Combined U.S. Comparable Restaurant Sales
Growth of 5.1% Reaffirms All Fiscal Year 2023
Guidance
Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for
the first quarter 2023 (“Q1 2023”) compared to the first quarter
2022 (“Q1 2022”).
CEO Comments “The first
quarter was a strong start to the year, and I am pleased with the
progress of all our brands,” said David Deno, CEO. “Our Q1 results
reflected the work we are doing to elevate the customer experience
and drive healthy top-line growth. These efforts have resulted in
enhanced sales and profits, which set us up well to achieve our
2023 goals.”
Diluted EPS and Adjusted Diluted
EPS The following table reconciles Diluted earnings per
share to Adjusted diluted earnings per share for the periods
indicated:
Q1
2023
2022
CHANGE
Diluted earnings per share
$
0.93
$
0.73
$
0.20
Adjustments (1)
0.05
0.07
(0.02
)
Adjusted diluted earnings per share
(1)
$
0.98
$
0.80
$
0.18
___________________
(1) Adjustments for the periods presented
reflect consideration of our convertible note hedge, which offsets
the dilutive impact of the shares underlying the 2025 Notes. There
were no adjustments to Net income during the periods presented. See
Non-GAAP Measures later in this release.
First Quarter Financial
Results
(dollars in millions,
unaudited)
Q1 2023
Q1 2022
CHANGE
Total revenues
$
1,244.7
$
1,140.5
9.1
%
Operating income margin
9.7
%
9.4
%
0.3
%
Restaurant-level operating margin (1)
17.9
%
17.1
%
0.8
%
___________________
(1) See Non-GAAP Measures later in this
release.
- The increase in Total revenues was primarily due to: (i) higher
comparable restaurant sales, (ii) the net impact of restaurant
openings and closures, (iii) the benefit of Brazil value added tax
exemptions and (iv) the effect of foreign currency
translation.
- Operating income margin improved from Q1
2022 due to: (i) increases in comparable restaurant sales,
primarily driven by an increase in menu pricing and lapping the
impact of COVID-19 in Brazil and Hong Kong, (ii) the impact of
certain cost saving initiatives and (iii) the benefit of Brazil
value added tax exemptions. These increases were partially offset
by commodity, labor and operating expense inflation.
First Quarter Comparable Restaurant
Sales
THIRTEEN WEEKS ENDED MARCH 26,
2023
COMPANY-OWNED
Comparable restaurant sales (stores open
18 months or more):
U.S.
Outback Steakhouse
4.9
%
Carrabba’s Italian Grill
6.7
%
Bonefish Grill
5.2
%
Fleming’s Prime Steakhouse & Wine
Bar
3.6
%
Combined U.S.
5.1
%
International
Outback Steakhouse - Brazil (1)
14.3
%
_________________
(1) Excludes the effect of
fluctuations in foreign currency rates and the benefit of Brazil
value added tax exemptions. Includes trading day impact from
calendar period reporting.
Dividend Declaration and Share
Repurchases On April 18, 2023, our Board of Directors
declared a quarterly cash dividend of $0.24 per share, payable on
May 24, 2023 to stockholders of record at the close of business on
May 10, 2023.
Through April 26, 2023, we repurchased 1.1 million shares for a
total of $27 million. On February 7, 2023, our Board of Directors
approved a $125 million authorization (the “2023 Share Repurchase
Program”) that will expire on August 7, 2024. We have $113 million
of share repurchase authorization remaining under the 2023 Share
Repurchase Program.
Fiscal 2023 Financial
Outlook We are reaffirming all aspects of our full-year
financial guidance as previously communicated in our February 16,
2023 earnings release.
Q2 2023 Financial Outlook
The table below presents our expectations for selected fiscal Q2
2023 operating results:
Financial Results:
Q2 2023 Outlook
U.S. comparable restaurant sales
0.5% to 1.5%
GAAP diluted earnings per share (1)
$0.59 to $0.64
Adjusted diluted earnings per share
(2)
$0.62 to $0.67
_________________
(1) For GAAP purposes assumes weighted
average diluted shares of approximately 98 million.
(2) Assumes weighted average adjusted
diluted shares of approximately 93 million, which includes the
benefit of the convertible note hedge entered into in May 2020.
Conference Call The Company
will host a conference call today, April 28, 2023 at 8:15 AM EDT.
The conference call will be webcast live from the Company’s website
at http://www.bloominbrands.com under the Investors section. A
replay of this webcast will be available on the Company’s website
after the call.
Non-GAAP Measures In
addition to the results provided in accordance with GAAP, this
press release and related tables include certain non-GAAP measures,
which present operating results on an adjusted basis. These are
supplemental measures of performance that are not required by or
presented in accordance with GAAP and include: (i) Restaurant-level
operating income and the corresponding margin and (ii) Adjusted
diluted earnings per share.
Restaurant-level operating margin is a non-GAAP financial
measure widely regarded in the industry as a useful metric to
evaluate restaurant-level operating efficiency and performance of
ongoing restaurant-level operations, and we use it for these
purposes, overall and particularly within our two segments.
We believe that our use of non-GAAP financial measures permits
investors to assess the operating performance of our business
relative to our performance based on GAAP results and relative to
other companies within the restaurant industry by isolating the
effects of certain items that may vary from period to period
without correlation to core operating performance or that vary
widely among similar companies. However, our inclusion of these
adjusted measures should not be construed as an indication that our
future results will be unaffected by unusual or infrequent items or
that the items for which we have made adjustments are unusual or
infrequent or will not recur. We believe that the disclosure of
these non-GAAP measures is useful to investors as they form part of
the basis for how our management team and Board of Directors
evaluate our operating performance, allocate resources and
administer employee incentive plans.
These non-GAAP financial measures are not intended to replace
GAAP financial measures, and they are not necessarily standardized
or comparable to similarly titled measures used by other companies.
We maintain internal guidelines with respect to the types of
adjustments we include in our non-GAAP measures. These guidelines
endeavor to differentiate between types of gains and expenses that
are reflective of our core operations in a period, and those that
may vary from period to period without correlation to our core
performance in that period. However, implementation of these
guidelines necessarily involves the application of judgment, and
the treatment of any items not directly addressed by, or changes
to, our guidelines will be considered by our disclosure committee.
You should refer to the reconciliations of non-GAAP measures in
tables four, five and six included later in this release for
descriptions of the actual adjustments made in the current period
and the corresponding prior period.
About Bloomin’ Brands, Inc.
Bloomin’ Brands, Inc. is one of the largest casual dining
restaurant companies in the world with a portfolio of leading,
differentiated restaurant concepts. The Company has four
founder-inspired brands: Outback Steakhouse, Carrabba’s Italian
Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine
Bar. The Company owns and operates more than 1,450 restaurants in
47 states, Guam and 13 countries, some of which are franchise
locations. For more information, please visit
www.bloominbrands.com.
Forward-Looking Statements
Certain statements contained herein, including statements under the
headings “CEO Comments”, “Fiscal 2023 Financial Outlook” and “Q2
2023 Financial Outlook” are not based on historical fact and are
“forward-looking statements” within the meaning of applicable
securities laws. Generally, these statements can be identified by
the use of words such as “guidance,” “believes,” “estimates,”
“anticipates,” “expects,” “on track,” “feels,” “forecasts,”
“seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,”
“could,” “would” and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. These forward-looking
statements include all matters that are not historical facts. By
their nature, forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from the Company’s forward-looking statements. These risks and
uncertainties include, but are not limited to: consumer reaction to
public health and food safety issues; increases in labor costs and
fluctuations in the availability of employees; increases in
unemployment rates and taxes; competition; interruption or breach
of our systems or loss of consumer or employee information; price
and availability of commodities and other impacts of inflation; our
dependence on a limited number of suppliers and distributors; the
effects of a health pandemic and uncertainties about its depth and
duration, as well as the impacts to economic conditions, the
responses of domestic and foreign federal, state and local
governments to a pandemic and consumer behavior; political, social
and legal conditions in international markets and their effects on
foreign operations and foreign currency exchange rates; our ability
to address environmental, social and governance matters; local,
regional, national and international economic conditions; changes
in patterns of consumer traffic, consumer tastes and dietary
habits; the effects of changes in tax laws; costs, diversion of
management attention and reputational damage from any claims or
litigation; government actions and policies; challenges associated
with our remodeling, relocation and expansion plans; our ability to
preserve the value of and grow our brands; consumer confidence and
spending patterns; weather, acts of God and other disasters and the
ability or success in executing related business continuity plans;
the Company’s ability to make debt payments and planned investments
and the Company’s compliance with debt covenants; the cost and
availability of credit; interest rate changes; and any impairments
in the carrying value of goodwill and other assets. Further
information on potential factors that could affect the financial
results of the Company and its forward-looking statements is
included in its most recent Form 10-K and subsequent filings with
the Securities and Exchange Commission. The Company assumes no
obligation to update any forward-looking statement, except as may
be required by law. These forward-looking statements speak only as
of the date of this release. All forward-looking statements are
qualified in their entirety by this cautionary statement.
Note: Numerical figures included in this release have been
subject to rounding adjustments.
TABLE ONE
BLOOMIN’ BRANDS, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
(in thousands, except per share
data)
MARCH 26, 2023
MARCH 27, 2022
Revenues
Restaurant sales
$
1,228,234
$
1,123,575
Franchise and other revenues
16,512
16,960
Total revenues
1,244,746
1,140,535
Costs and expenses
Food and beverage
384,214
359,370
Labor and other related
341,542
312,511
Other restaurant operating
282,927
259,110
Depreciation and amortization
46,302
41,775
General and administrative
65,804
58,674
Provision for impaired assets and
restaurant closings
3,324
1,839
Total costs and expenses
1,124,113
1,033,279
Income from operations
120,633
107,256
Interest expense, net
(12,444
)
(13,633
)
Income before provision for income
taxes
108,189
93,623
Provision for income taxes
14,761
15,929
Net income
93,428
77,694
Less: net income attributable to
noncontrolling interests
2,117
2,183
Net income attributable to Bloomin’
Brands
$
91,311
$
75,511
Earnings per share:
Basic
$
1.02
$
0.85
Diluted
$
0.93
$
0.73
Weighted average common shares
outstanding:
Basic
89,116
89,355
Diluted
98,011
103,454
TABLE TWO
BLOOMIN’ BRANDS, INC.
SEGMENT RESULTS
(UNAUDITED)
(dollars in thousands)
THIRTEEN WEEKS ENDED
U.S. Segment
MARCH 26, 2023
MARCH 27, 2022
Revenues
Restaurant sales
$
1,080,569
$
1,023,635
Franchise and other revenues
12,427
12,772
Total revenues
$
1,092,996
$
1,036,407
International Segment
Revenues
Restaurant sales (1)
$
147,665
$
99,940
Franchise and other revenues
4,085
4,188
Total revenues
$
151,750
$
104,128
Reconciliation of Segment Income from
Operations to Consolidated Income from Operations
Segment income from operations
U.S.
$
133,243
$
132,226
International
24,508
8,884
Total segment income from operations
157,751
141,110
Unallocated corporate operating
expense
(37,118
)
(33,854
)
Total income from operations
$
120,633
$
107,256
________________
(1) Restaurant sales in Brazil
increased $9.6 million during the thirteen weeks ended March 26,
2023 in connection with value added tax exemptions resulting from
recent tax legislation.
TABLE THREE
BLOOMIN’ BRANDS, INC.
SUPPLEMENTAL BALANCE SHEET
INFORMATION
MARCH 26, 2023
DECEMBER 25, 2022
(dollars in thousands)
(UNAUDITED)
Cash and cash equivalents
$
94,441
$
84,735
Net working capital (deficit) (1)
$
(672,587
)
$
(632,290
)
Total assets
$
3,231,793
$
3,320,425
Total debt, net
$
767,969
$
833,292
Total stockholders’ equity
$
322,841
$
273,909
_________________
(1) We have, and in the future may
continue to have, negative working capital balances (as is common
for many restaurant companies). We operate successfully with
negative working capital because cash collected on restaurant sales
is typically received before payment is due on our current
liabilities, and our inventory turnover rates require relatively
low investment in inventories. Additionally, ongoing cash flows
from restaurant operations and gift card sales are typically used
to service debt obligations and to make capital expenditures.
TABLE FOUR
BLOOMIN’ BRANDS, INC.
RESTAURANT-LEVEL OPERATING
INCOME AND MARGIN NON-GAAP RECONCILIATIONS
(UNAUDITED)
Consolidated
THIRTEEN WEEKS ENDED
(dollars in thousands)
MARCH 26, 2023
MARCH 27, 2022
Income from operations
$
120,633
$
107,256
Operating income margin
9.7
%
9.4
%
Less:
Franchise and other revenues
16,512
16,960
Plus:
Depreciation and amortization
46,302
41,775
General and administrative
65,804
58,674
Provision for impaired assets and
restaurant closings
3,324
1,839
Restaurant-level operating income (1)
$
219,551
$
192,584
Restaurant-level operating margin
17.9
%
17.1
%
_________________
(1) The following categories of
revenue and operating expenses are not included in restaurant-level
operating margin because we do not consider them reflective of
operating performance at the restaurant-level within a period:
(a) Franchise and other revenues,
which are earned primarily from franchise royalties and other
non-food and beverage revenue streams, such as rental and sublease
income.
(b) Depreciation and amortization
which, although substantially all of which is related to
restaurant-level assets, represent historical sunk costs rather
than cash outlays for the restaurants.
(c) General and administrative expense,
which includes primarily non-restaurant-level costs associated with
support of the restaurants and other activities at our corporate
offices.
(d) Asset impairment charges and
restaurant closing costs, which are not reflective of ongoing
restaurant performance in a period.
U.S.
THIRTEEN WEEKS ENDED
(dollars in thousands)
MARCH 26, 2023
MARCH 27, 2022
Income from operations
$
133,243
$
132,226
Operating income margin
12.2
%
12.8
%
Less:
Franchise and other revenues
12,427
12,772
Plus:
Depreciation and amortization
38,163
34,758
General and administrative
25,505
23,445
Provision for impaired assets and
restaurant closings
3,324
58
Restaurant-level operating income
$
187,808
$
177,715
Restaurant-level operating margin
17.4
%
17.4
%
International
THIRTEEN WEEKS ENDED
(dollars in thousands)
MARCH 26, 2023
MARCH 27, 2022
Income from operations
$
24,508
$
8,884
Operating income margin
16.2
%
8.5
%
Less:
Franchise and other revenues
4,085
4,188
Plus:
Depreciation and amortization
5,919
5,536
General and administrative
7,673
4,928
Provision for impaired assets and
restaurant closings
—
1,775
Restaurant-level operating income
$
34,015
$
16,935
Restaurant-level operating margin
23.0
%
16.9
%
TABLE FIVE
BLOOMIN’ BRANDS, INC.
CONSOLIDATED RESTAURANT-LEVEL
OPERATING MARGIN NON-GAAP RECONCILIATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
FAVORABLE CHANGE YEAR TO
DATE
MARCH 26, 2023
MARCH 27, 2022
Restaurant sales
100.0
%
100.0
%
Food and beverage
31.3
%
32.0
%
0.7
%
Labor and other related
27.8
%
27.8
%
—
%
Other restaurant operating
23.0
%
23.1
%
0.1
%
Restaurant-level operating margin
17.9
%
17.1
%
0.8
%
TABLE SIX
BLOOMIN’ BRANDS, INC.
ADJUSTED DILUTED EARNINGS PER
SHARE NON-GAAP RECONCILIATIONS
(UNAUDITED)
THIRTEEN WEEKS ENDED
(in thousands, except per share
data)
MARCH 26, 2023
MARCH 27, 2022
Net income attributable to Bloomin’
Brands
$
91,311
$
75,511
Diluted earnings per share
$
0.93
$
0.73
Adjusted diluted earnings per share
(1)
$
0.98
$
0.80
Diluted weighted average common shares
outstanding
98,011
103,454
Adjusted diluted weighted average common
shares outstanding (1)
93,180
94,722
_________________
(1) Adjusted diluted weighted average
common shares outstanding was calculated excluding the dilutive
effect of 4,831 and 8,732 shares for the thirteen weeks ended March
26, 2023 and March 27, 2022, respectively, to be issued upon
conversion of the 2025 Notes to satisfy the amount in excess of the
principal since our convertible note hedge offsets the dilutive
impact of the shares underlying the 2025 Notes.
TABLE SEVEN
BLOOMIN’ BRANDS, INC.
COMPARATIVE RESTAURANT AND
OFF-PREMISES ONLY KITCHEN INFORMATION
(UNAUDITED)
Number of restaurants:
DECEMBER 25, 2022
OPENINGS
CLOSURES
MARCH 26, 2023
U.S.
Outback Steakhouse
Company-owned
566
1
(3
)
564
Franchised
127
—
—
127
Total
693
1
(3
)
691
Carrabba’s Italian Grill
Company-owned
199
—
—
199
Franchised
19
—
—
19
Total
218
—
—
218
Bonefish Grill
Company-owned
173
—
(1
)
172
Franchised
7
—
(2
)
5
Total
180
—
(3
)
177
Fleming’s Prime Steakhouse & Wine
Bar
Company-owned
65
—
—
65
Aussie Grill
Company-owned
7
—
—
7
U.S. total
1,163
1
(6
)
1,158
International
Company-owned
Outback Steakhouse - Brazil (1)
139
1
—
140
Other (1)(2)
36
—
—
36
Franchised
Outback Steakhouse - South Korea
86
5
(1
)
90
Other (2)
47
1
(1
)
47
International total
308
7
(2
)
313
System-wide total
1,471
8
(8
)
1,471
System-wide total - Company-owned
1,185
2
(4
)
1,183
System-wide total - Franchised
286
6
(4
)
288
____________________
(1) The restaurant counts for Brazil,
including Abbraccio and Aussie Grill restaurants within
International Company-owned Other, are reported as of November 30,
2022 and February 28, 2023, respectively, to correspond with the
balance sheet dates of this subsidiary.
(2) International Company-owned Other
and International Franchised Other each included four Aussie Grill
locations as of March 26, 2023.
Number of kitchens (1):
DECEMBER 25, 2022
OPENINGS
CLOSURES
MARCH 26, 2023
U.S.
Company-owned
1
—
—
1
International
Franchised - South Korea
35
—
(10
)
25
System-wide total
36
—
(10
)
26
____________________
(1) Excludes virtual concepts that
operate out of existing restaurants and sports venue locations.
TABLE EIGHT
BLOOMIN’ BRANDS, INC.
COMPARABLE RESTAURANT SALES
INFORMATION
(UNAUDITED)
THIRTEEN WEEKS ENDED
MARCH 26, 2023
MARCH 27, 2022
Year over year percentage change:
Comparable restaurant sales (restaurants
open 18 months or more):
U.S. (1)
Outback Steakhouse
4.9
%
9.2
%
Carrabba’s Italian Grill
6.7
%
11.5
%
Bonefish Grill
5.2
%
21.3
%
Fleming’s Prime Steakhouse & Wine
Bar
3.6
%
45.7
%
Combined U.S.
5.1
%
14.0
%
International
Outback Steakhouse - Brazil (2)
14.3
%
35.9
%
Traffic:
U.S.
Outback Steakhouse
(1.5
)%
(1.0
)%
Carrabba’s Italian Grill
1.7
%
3.0
%
Bonefish Grill
(0.5
)%
7.8
%
Fleming’s Prime Steakhouse & Wine
Bar
0.2
%
28.8
%
Combined U.S.
(0.7
)%
1.5
%
International
Outback Steakhouse - Brazil
2.2
%
28.7
%
Average check per person (3):
U.S.
Outback Steakhouse
6.4
%
10.2
%
Carrabba’s Italian Grill
5.0
%
8.5
%
Bonefish Grill
5.7
%
13.5
%
Fleming’s Prime Steakhouse & Wine
Bar
3.4
%
16.9
%
Combined U.S.
5.8
%
12.5
%
International
Outback Steakhouse - Brazil
11.6
%
7.6
%
____________________
(1) Relocated restaurants closed more
than 60 days are excluded from comparable restaurant sales until at
least 18 months after reopening.
(2) Includes trading day impact from
calendar period reporting. Excludes the effect of fluctuations in
foreign currency rates and the benefit of the Brazil tax
legislation.
(3) Includes the impact of menu
pricing changes, product mix and discounts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426006051/en/
Tammy Dean Sr. Director, Corporate Finance and Investor
Relations (813) 830-5311
Bloomin Brands (NASDAQ:BLMN)
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