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Bloomin’ Brands Announces 2023 Q4 Financial Results

Q4 Diluted EPS of $0.45 and Q4 Adjusted Diluted EPS of $0.75

Announces $350 Million Share Repurchase Authorization

Provides Full Year 2024 Financial Outlook

Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the fourth quarter 2023 (“Q4 2023”) and fiscal year ended December 31, 2023 (“Fiscal Year 2023”) compared to the fourth quarter 2022 (“Q4 2022”) and the fiscal year ended December 25, 2022 (“Fiscal Year 2022”). In 2023, the fourth quarter and fiscal year included an additional operating week (“53rd week”) compared to Fiscal Year 2022.

CEO Comments

“The fourth quarter was a good finish to 2023, especially the holiday season,” said David Deno, CEO. “As we head into 2024, we remain focused on elevating the guest experience that in turn will drive sales and profit growth at Outback Steakhouse and all of our brands.”

Diluted EPS and Adjusted Diluted EPS

The following table reconciles Diluted earnings per share to Adjusted diluted earnings per share for the periods indicated (unaudited):

 

Q4

 

 

 

FISCAL YEAR

 

 

 

2023

 

2022

 

CHANGE

 

2023

 

2022

 

CHANGE

Diluted earnings per share

$

0.45

 

$

0.61

 

$

(0.16

)

 

$

2.56

 

$

1.03

 

$

1.53

 

Adjustments (1)

 

0.30

 

 

0.07

 

 

0.23

 

 

 

0.37

 

 

1.49

 

 

(1.12

)

Adjusted diluted earnings per share (1)

$

0.75

 

$

0.68

 

$

0.07

 

 

$

2.93

 

$

2.52

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

 

 

____________________

(1) See non-GAAP Measures later in this release. Also see Tables Four, Six and Seven for details regarding the nature of diluted earnings per share adjustments for the periods presented.

Fourth Quarter Financial Results

(dollars in millions, unaudited)

Q4 2023

 

Q4 2022

 

CHANGE

Total revenues (1)

$

1,194.2

 

 

$

1,095.0

 

 

9.1

%

 

 

 

 

 

 

GAAP operating income margin

 

4.8

%

 

 

7.7

%

 

(2.9

)%

Adjusted operating income margin (2)

 

7.5

%

 

 

8.2

%

 

(0.7

)%

 

 

 

 

 

 

Restaurant-level operating margin (2)

 

16.4

%

 

 

16.3

%

 

0.1

%

Adjusted restaurant-level operating margin (2)

 

15.9

%

 

 

16.8

%

 

(0.9

)%

____________________

(1) Includes $83.5 million from the 53rd week. 

(2) See non-GAAP Measures later in this release. Also see Tables Four and Six for details regarding the nature of restaurant-level operating income margin adjustments and operating income margin adjustments, respectively.

  • The increase in Total revenues was primarily due to: (i) restaurant sales during the 53rd week of 2023, (ii) the effect of foreign currency translation and (iii) the net impact of restaurant openings and closures. This increase in Total revenues was partially offset by the benefit of Brazil value added tax exemptions during Q4 2022.
  • GAAP operating income margin decreased from Q4 2022 primarily due to impacts of the 2023 Closure Initiative, as detailed below.
  • Restaurant-level operating margin improved slightly from Q4 2022 primarily due to: (i) an increase in average check per person, (ii) the impact of certain cost saving and productivity initiatives, (iii) the favorable settlement of certain collective action wage and hour lawsuits and (iv) lease remeasurement gains in connection with the 2023 Closure Initiative. These increases were partially offset by: (i) commodity and labor inflation and (ii) higher advertising expense.
  • Adjusted income from operations excludes: (i) impairment and closure costs in connection with the 2023 Closure Initiative, net of lease remeasurement gains, (ii) the benefit of the favorable settlement of certain collective action wage and hour lawsuits and (iii) other costs not correlated to our core operating performance. Adjusted restaurant-level operating margin excludes the benefits of the lawsuit settlements and lease remeasurement gains.

Fourth Quarter Comparable Restaurant Sales(1)

FOURTEEN WEEKS ENDED DECEMBER 31, 2023

 

COMPANY-OWNED (1)

Comparable restaurant sales (stores open 18 months or more):

 

 

U.S.

 

 

Outback Steakhouse

 

(0.3

)%

Carrabba’s Italian Grill

 

2.5

%

Bonefish Grill

 

(3.0

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(0.3

)%

Combined U.S.

 

(0.2

)%

 

 

 

International

 

 

Outback Steakhouse - Brazil (2)

 

0.6

%

____________________

(1) Comparable restaurant sales compare the 14 weeks from September 25, 2023 through December 31, 2023 to the 14 weeks from September 26, 2022 through January 1, 2023.

(2) 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 February 13, 2024, our Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on March 20, 2024 to stockholders of record at the close of business on March 6, 2024.

On February 13, 2024, our Board of Directors canceled $57.5 million of remaining authorization under our existing share repurchase program and approved a new $350.0 million authorization. The 2024 Share Repurchase Program includes capacity above our normal share repurchases activity to provide flexibility in retiring our convertible senior notes at or prior to their May 2025 maturity. The 2024 Share Repurchase Program will expire on August 13, 2025.

2023 Closure Initiative

In Q4 2023, we made the decision to close 36 predominantly older, underperforming restaurants and three U.S. and two international Aussie Grill restaurants. In connection with these closures, we recognized asset impairments and net closure charges of $32.3 million during Q4 2023. We expect to complete these closures during Q1 2024 and incur charges of between $8 million and $11 million.

In 2024, we plan to open 40 to 45 system-wide restaurants.

Fiscal 2024 Financial Outlook

Please note, fiscal 2024 adjusted diluted earnings per share will exclude the Brazil tax legislation benefit and the 53rd week that were included in the 2023 financial results.

The tables below present our expectations for selected 2024 financial and operating results.

Financial Results:

 

2024 Guidance

U.S. comparable restaurant sales

 

Flat to +2%

 

 

 

GAAP diluted earnings per share (1)

 

$2.27 to $2.46

 

 

 

Adjusted diluted earnings per share (2)

 

$2.51 to $2.66

 

 

 

Effective income tax rate

 

14% to 16%

 

Other Selected Financial Data:

 

2024 Guidance

Commodity inflation

 

3% to 4%

 

 

 

Capital expenditures

 

$270M to $290M

 

 

 

Number of new system-wide restaurants

 

40 to 45

____________________

(1) For GAAP purposes assumes diluted weighted average shares of approximately 95 to 96 million.

(2) Includes adjustments related to the 2023 Closure Initiative and assumes adjusted diluted weighted average shares of approximately 90 to 91 million, which includes the benefit of the convertible note hedge entered into in May 2020.

The following table is a comparable view of our 2023 adjusted diluted earnings per share to our 2024 adjusted diluted earnings per share outlook.

Comparable Adjusted Diluted Earnings Per Share

 

 

2023 Adjusted diluted earnings per share

 

$2.93

 

 

 

Less: Impact of the Brazil tax legislation

 

Approx. (0.26)

 

 

 

Less: Impact of the 53rd week

 

Approx. (0.16)

 

 

 

2023 Adjusted diluted earnings per share on a comparable 52-week basis

 

$2.51

 

 

 

2024 Adjusted diluted earnings per share outlook

 

$2.51 to $2.66

Q1 2024 Financial Outlook

The table below presents our expectations for selected fiscal Q1 2024 operating results.

Please note, Q1 2024 results will be impacted by the following factors:

  • Due to the 53rd week in Fiscal Year 2023, our financial statement comparisons will be one week different year over year. Q1 2024 does not include the December holiday week, including New Year’s Eve. We estimate this shift in weeks to be worth approximately $0.06.
  • The first three weeks of the quarter were negatively impacted by weather. We estimate this impact to be approximately 1.3% to our U.S. comparable sales for the quarter, and $0.05 to our adjusted earnings per share.
  • We will be lapping the Brazil tax legislation benefit, which is a $0.08 headwind.

Financial Results:

 

Q1 2024 Outlook

U.S. comparable restaurant sales

 

Down 0.5% to Down 2%

 

 

 

GAAP diluted earnings per share (1)

 

$0.56 to $0.62

 

 

 

Adjusted diluted earnings per share (2)

 

$0.70 to $0.75

____________________

(1) For GAAP purposes assumes diluted weighted average shares of approximately 96 to 97 million.

(2) Includes adjustments related to the 2023 Closure Initiative and assumes adjusted diluted weighted average shares of approximately 90 to 91 million, which includes the benefit of the convertible note hedge entered into in May 2020.

We will report our financial statements for 2024 on a Fiscal Calendar Basis. Due to the 53rd week in Fiscal Year 2023, our financial statement comparisons will be one week different year over year. We expect the largest impacts from this shift to occur in Q1 2024 as well as Q4 2024.

We will report our comparable restaurant sales on a Comparable Calendar Basis. The following table provides a comparison of the calendar days included in both our 2024 fiscal and comparable restaurant sales calendars. We believe this will provide the most accurate assessment of comparable sales.

Fiscal and Comparable Calendar Calculation Dates

Fiscal Calendar Basis

 

 

Comparable Calendar Basis

Q1

January 1, 2024 - March 31, 2024

 

 

January 1, 2024 - March 31, 2024

vs.

 

 

vs.

December 26, 2022 - March 26, 2023

 

 

January 2, 2023 - April 2, 2023

Q2

April 1, 2024 - June 30, 2024

 

 

April 1, 2024 - June 30, 2024

vs.

 

 

vs.

March 27, 2023 - June 25, 2023

 

 

April 3, 2023 - July 2, 2023

Q3

July 1, 2024 - September 29, 2024

 

 

July 1, 2024 - September 29, 2024

vs.

 

 

vs.

June 26, 2023 - September 24, 2023

 

 

July 3, 2023 - October 1, 2023

Q4

September 30, 2024 - December 29, 2024

 

 

September 30, 2024 - December 29, 2024

vs.

 

 

vs.

September 25, 2023 - December 31, 2023

 

 

October 2, 2023 - December 31, 2023

Total Year

January 1, 2024 - December 29, 2024

 

 

January 1, 2024 - December 29, 2024

vs.

 

 

vs.

December 26, 2022 - December 31, 2023

 

 

January 2, 2023 - December 31, 2023

Conference Call

The Company will host a conference call today, February 23, 2024 at 8:00 AM EST. 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.

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.

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, adjusted restaurant-level operating income and their corresponding margins, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted segment income from operations and the corresponding margin, (iv) Adjusted net income and (v) 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, Six and Seven included later in this release for descriptions of the actual adjustments made in the current period and the corresponding prior period.

Forward-Looking Statements

Certain statements contained herein, including statements under the headings “CEO Comments”, “Fiscal 2024 Financial Outlook” and “Q1 2024 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; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to address corporate citizenship and sustainability matters and investor expectations; 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; the effects of a health pandemic, 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

 

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

 

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

(in thousands, except per share data)

(UNAUDITED)

 

(UNAUDITED)

 

(UNAUDITED)

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,177,431

 

 

$

1,079,827

 

 

$

4,607,408

 

 

$

4,352,695

 

Franchise and other revenues

 

16,766

 

 

 

15,221

 

 

 

64,062

 

 

 

63,813

 

Total revenues

 

1,194,197

 

 

 

1,095,048

 

 

 

4,671,470

 

 

 

4,416,508

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage

 

352,344

 

 

 

326,864

 

 

 

1,409,649

 

 

 

1,383,632

 

Labor and other related

 

343,431

 

 

 

301,946

 

 

 

1,325,339

 

 

 

1,226,460

 

Other restaurant operating

 

288,774

 

 

 

275,079

 

 

 

1,126,123

 

 

 

1,065,662

 

Depreciation and amortization

 

49,306

 

 

 

44,414

 

 

 

191,171

 

 

 

169,617

 

General and administrative

 

69,062

 

 

 

60,743

 

 

 

260,470

 

 

 

234,752

 

Provision for impaired assets and restaurant closings

 

34,431

 

 

 

1,865

 

 

 

33,574

 

 

 

5,964

 

Total costs and expenses

 

1,137,348

 

 

 

1,010,911

 

 

 

4,346,326

 

 

 

4,086,087

 

Income from operations

 

56,849

 

 

 

84,137

 

 

 

325,144

 

 

 

330,421

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

 

 

 

(107,630

)

Loss on fair value adjustment of derivatives, net

 

 

 

 

 

 

 

 

 

 

(17,685

)

Interest expense, net

 

(13,921

)

 

 

(14,322

)

 

 

(52,169

)

 

 

(53,199

)

Income before (benefit) provision for income taxes

 

42,928

 

 

 

69,815

 

 

 

272,975

 

 

 

151,907

 

(Benefit) provision for income taxes

 

(2,625

)

 

 

9,676

 

 

 

18,561

 

 

 

42,704

 

Net income

 

45,553

 

 

 

60,139

 

 

 

254,414

 

 

 

109,203

 

Less: net income attributable to noncontrolling interests

 

2,283

 

 

 

2,094

 

 

 

7,028

 

 

 

7,296

 

Net income attributable to Bloomin’ Brands

$

43,270

 

 

$

58,045

 

 

$

247,386

 

 

$

101,907

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.50

 

 

$

0.66

 

 

$

2.84

 

 

$

1.15

 

Diluted

$

0.45

 

 

$

0.61

 

 

$

2.56

 

 

$

1.03

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

86,918

 

 

 

87,937

 

 

 

87,230

 

 

 

88,846

 

Diluted

 

96,226

 

 

 

95,221

 

 

 

96,453

 

 

 

98,512

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

 

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(dollars in thousands) 

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

U.S. Segment

(UNAUDITED)

 

(UNAUDITED)

 

(UNAUDITED)

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,029,908

 

 

$

942,775

 

 

$

4,005,053

 

 

$

3,863,016

 

Franchise and other revenues

 

12,494

 

 

 

11,540

 

 

 

48,546

 

 

 

48,854

 

Total revenues

$

1,042,402

 

 

$

954,315

 

 

$

4,053,599

 

 

$

3,911,870

 

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales (1)

$

147,523

 

 

$

137,052

 

 

$

602,355

 

 

$

489,679

 

Franchise and other revenues

 

4,272

 

 

 

3,681

 

 

 

15,516

 

 

 

14,959

 

Total revenues

$

151,795

 

 

$

140,733

 

 

$

617,871

 

 

$

504,638

 

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income from operations

 

 

 

 

 

 

 

U.S.

$

73,269

 

 

$

102,513

 

 

$

377,534

 

 

$

407,860

 

International

 

16,920

 

 

 

18,474

 

 

 

83,948

 

 

 

57,333

 

Total segment income from operations

 

90,189

 

 

 

120,987

 

 

 

461,482

 

 

 

465,193

 

Unallocated corporate operating expense

 

(33,340

)

 

 

(36,850

)

 

 

(136,338

)

 

 

(134,772

)

Total income from operations

$

56,849

 

 

$

84,137

 

 

$

325,144

 

 

$

330,421

 

____________________

(1) Restaurant sales in Brazil includes $30.2 million during fiscal year 2023 and $7.7 million during the thirteen weeks and fiscal year ended December 25, 2022, of value added tax exemptions resulting from tax legislation.

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

 

DECEMBER 31, 2023

 

DECEMBER 25, 2022

(dollars in thousands)

(UNAUDITED)

 

 

Cash and cash equivalents

$

111,519

 

 

$

84,735

 

Net working capital (deficit) (1)

$

(659,021

)

 

$

(632,290

)

Total assets

$

3,424,081

 

 

$

3,320,425

 

Total debt, net

$

780,719

 

 

$

828,507

 

Total stockholders’ equity

$

412,003

 

 

$

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 AND ADJUSTED RESTAURANT-LEVEL OPERATING INCOME AND MARGINS NON-GAAP RECONCILIATIONS

(UNAUDITED)

Consolidated

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(dollars in thousands)

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Income from operations

$

56,849

 

 

$

84,137

 

 

$

325,144

 

 

$

330,421

 

Operating income margin

 

4.8

%

 

 

7.7

%

 

 

7.0

%

 

 

7.5

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

16,766

 

 

 

15,221

 

 

 

64,062

 

 

 

63,813

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

49,306

 

 

 

44,414

 

 

 

191,171

 

 

 

169,617

 

General and administrative

 

69,062

 

 

 

60,743

 

 

 

260,470

 

 

 

234,752

 

Provision for impaired assets and restaurant closings

 

34,431

 

 

 

1,865

 

 

 

33,574

 

 

 

5,964

 

Restaurant-level operating income (1)

$

192,882

 

 

$

175,938

 

 

$

746,297

 

 

$

676,941

 

Restaurant-level operating margin

 

16.4

%

 

 

16.3

%

 

 

16.2

%

 

 

15.6

%

Adjustments:

 

 

 

 

 

 

 

Legal and other matters (2)

 

(3,650

)

 

 

5,900

 

 

 

(3,650

)

 

 

5,900

 

Asset impairments and closing costs (3)

 

(2,450

)

 

 

 

 

 

(2,450

)

 

 

 

Partner compensation (4)

 

 

 

 

 

 

 

1,894

 

 

 

 

Total restaurant-level operating income adjustments

 

(6,100

)

 

 

5,900

 

 

 

(4,206

)

 

 

5,900

 

Adjusted restaurant-level operating income

$

186,782

 

 

$

181,838

 

 

$

742,091

 

 

$

682,841

 

Adjusted restaurant-level operating margin

 

15.9

%

 

 

16.8

%

 

 

16.1

%

 

 

15.7

%

____________________

(1) The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding 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.

(2) Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.

(3) Lease remeasurement gains in connection with the 2023 Closure Initiative.

(4) Costs incurred in connection with the transition to a new partner compensation program.

U.S.

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(dollars in thousands)

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Income from operations

$

73,269

 

 

$

102,513

 

 

$

377,534

 

 

$

407,860

 

Operating income margin

 

7.0

%

 

 

10.7

%

 

 

9.3

%

 

 

10.4

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

12,494

 

 

 

11,540

 

 

 

48,546

 

 

 

48,854

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

40,510

 

 

 

36,435

 

 

 

157,878

 

 

 

139,170

 

General and administrative

 

26,090

 

 

 

23,969

 

 

 

98,899

 

 

 

93,401

 

Provision for impaired assets and restaurant closings

 

33,526

 

 

 

2,103

 

 

 

32,669

 

 

 

4,420

 

Restaurant-level operating income

$

160,901

 

 

$

153,480

 

 

$

618,434

 

 

$

595,997

 

Restaurant-level operating margin

 

15.6

%

 

 

16.3

%

 

 

15.4

%

 

 

15.4

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closing costs (1)

 

(2,450

)

 

 

 

 

(2,450

)

 

 

 

Partner compensation (2)

 

 

 

 

 

 

 

1,894

 

 

 

 

Total restaurant-level operating income adjustments

 

(2,450

)

 

 

 

 

 

(556

)

 

 

 

Adjusted restaurant-level operating income

$

158,451

 

 

$

153,480

 

 

$

617,878

 

 

$

595,997

 

Adjusted restaurant-level operating margin

 

15.4

%

 

 

16.3

%

 

 

15.4

%

 

 

15.4

%

____________________

(1) Lease remeasurement gains in connection with the 2023 Closure Initiative.

(2) Costs incurred in connection with the transition to a new partner compensation program.

International

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(dollars in thousands)

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Income from operations

$

16,920

 

 

$

18,474

 

 

$

83,948

 

 

$

57,333

 

Operating income margin

 

11.1

%

 

 

13.1

%

 

 

13.6

%

 

 

11.4

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

4,272

 

 

 

3,681

 

 

 

15,516

 

 

 

14,959

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

7,155

 

 

 

5,959

 

 

 

25,430

 

 

 

23,397

 

General and administrative

 

6,783

 

 

 

7,268

 

 

 

28,816

 

 

 

23,355

 

Provision for impaired assets and restaurant closings

 

905

 

 

 

(238

)

 

 

905

 

 

 

1,537

 

Restaurant-level operating income

$

27,491

 

 

$

27,782

 

 

$

123,583

 

 

$

90,663

 

Restaurant-level operating margin

 

18.6

%

 

 

20.3

%

 

 

20.5

%

 

 

18.5

%

 

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments

 

 

 

 

 

 

 

 

 

 

 

Adjusted restaurant-level operating income

$

27,491

 

 

$

27,782

 

 

$

123,583

 

 

$

90,663

 

Adjusted restaurant-level operating margin

 

18.6

%

 

 

20.3

%

 

 

20.5

%

 

 

18.5

%

TABLE FIVE

BLOOMIN’ BRANDS, INC.

CONSOLIDATED RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

FOURTEEN WEEKS ENDED

DECEMBER 31, 2023

 

THIRTEEN WEEKS ENDED

DECEMBER 25, 2022

 

FAVORABLE

(UNFAVORABLE)

CHANGE IN

ADJUSTED

QUARTER TO DATE

 

 

 

 

REPORTED

 

ADJUSTED (1)

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

29.9

%

 

29.9

%

 

30.3

%

 

30.3

%

 

0.4

%

Labor and other related

29.2

%

 

29.2

%

 

28.0

%

 

28.0

%

 

(1.2

)%

Other restaurant operating

24.5

%

 

25.0

%

 

25.5

%

 

24.9

%

 

(0.1

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

16.4

%

 

15.9

%

 

16.3

%

 

16.8

%

 

(0.9

)%

 

 

 

 

 

 

 

 

 

 

 

FISCAL YEAR

 

FAVORABLE

(UNFAVORABLE)

CHANGE IN

ADJUSTED

YEAR TO DATE

 

2023

 

2022

 

 

REPORTED

 

ADJUSTED (1)

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage

30.6

%

 

30.6

%

 

31.8

%

 

31.8

%

 

1.2

%

Labor and other related

28.8

%

 

28.7

%

 

28.2

%

 

28.2

%

 

(0.5

)%

Other restaurant operating

24.4

%

 

24.6

%

 

24.5

%

 

24.3

%

 

(0.3

)%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin

16.2

%

 

16.1

%

 

15.6

%

 

15.7

%

 

0.4

%

____________________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding restaurant-level operating margin adjustments. Operating margin adjustments of $1.9 million for fiscal year 2023 were recorded within Labor and other related expenses. Operating margin adjustments of ($6.1) million for the fourteen weeks and fiscal year ended December 31, 2023 and all operating margin adjustments for the thirteen weeks and fiscal year ended December 25, 2022, were recorded within Other restaurant operating expense.

TABLE SIX

BLOOMIN’ BRANDS, INC.

ADJUSTED INCOME FROM OPERATIONS NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

Consolidated

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Income from operations

$

56,849

 

 

$

84,137

 

 

$

325,144

 

 

$

330,421

 

Operating income margin

 

4.8

%

 

 

7.7

%

 

 

7.0

%

 

 

7.5

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

(6,100

)

 

 

5,900

 

 

 

(4,206

)

 

 

5,900

 

Asset impairments and closing costs (2)

 

34,822

 

 

 

 

 

 

28,236

 

 

 

 

Other (3)

 

4,110

 

 

 

 

 

 

7,546

 

 

 

 

Total income from operations adjustments

 

32,832

 

 

 

5,900

 

 

 

31,576

 

 

 

5,900

 

Adjusted income from operations

$

89,681

 

 

$

90,037

 

 

$

356,720

 

 

$

336,321

 

Adjusted operating income margin

 

7.5

%

 

 

8.2

%

 

 

7.6

%

 

 

7.6

%

 

 

 

 

 

 

 

 

U.S. Segment

 

 

 

 

 

 

 

Income from operations

$

73,269

 

 

$

102,513

 

 

$

377,534

 

 

$

407,860

 

Operating income margin

 

7.0

%

 

 

10.7

%

 

 

9.3

%

 

 

10.4

%

Adjustments:

 

 

 

 

 

 

 

Total restaurant-level operating income adjustments (1)

 

(2,450

)

 

 

 

 

 

(556

)

 

 

 

Asset impairments and closing costs (2)

 

33,360

 

 

 

 

 

 

26,774

 

 

 

 

Other (3)

 

 

 

 

 

 

 

1,147

 

 

 

 

Total income from operations adjustments

 

30,910

 

 

 

 

 

 

27,365

 

 

 

 

Adjusted income from operations

$

104,179

 

 

$

102,513

 

 

$

404,899

 

 

$

407,860

 

Adjusted operating income margin

 

10.0

%

 

 

10.7

%

 

 

10.0

%

 

 

10.4

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

Income from operations

$

16,920

 

 

$

18,474

 

 

$

83,948

 

 

$

57,333

 

Operating income margin

 

11.1

%

 

 

13.1

%

 

 

13.6

%

 

 

11.4

%

Adjustments:

 

 

 

 

 

 

 

Asset impairments and closing costs (2)

 

905

 

 

 

 

 

 

905

 

 

 

 

Adjusted income from operations

$

17,825

 

 

$

18,474

 

 

$

84,853

 

 

$

57,333

 

Adjusted operating income margin

 

11.7

%

 

 

13.1

%

 

 

13.7

%

 

 

11.4

%

____________________

(1) See Table Four Restaurant-level and Adjusted Restaurant-Level Operating Income and Margins Non-GAAP Reconciliations for details regarding restaurant-level operating income adjustments.

(2) Includes asset impairment, closure costs and severance in connection with the 2023 Closure Initiative. Fiscal year 2023 also includes a lease termination gain, net of related asset impairments, of $6.7 million.

(3) Primarily includes professional fees, severance and other costs not correlated to our core operating performance during the period.

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(in thousands, except per share data)

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Net income attributable to Bloomin’ Brands

$

43,270

 

 

$

58,045

 

 

$

247,386

 

 

$

101,907

 

Adjustments:

 

 

 

 

 

 

 

Income from operations adjustments (1)

 

32,832

 

 

 

5,900

 

 

 

31,576

 

 

 

5,900

 

Loss on extinguishment and modification of debt (2)

 

 

 

 

 

 

 

 

 

 

107,630

 

Loss on fair value adjustment of derivatives, net (2)

 

 

 

 

 

 

 

 

 

 

17,685

 

Total adjustments, before income taxes

 

32,832

 

 

 

5,900

 

 

 

31,576

 

 

 

131,215

 

Adjustment to provision for income taxes (3)

 

(8,151

)

 

 

(1,585

)

 

 

(10,801

)

 

 

(263

)

Net adjustments

 

24,681

 

 

 

4,315

 

 

 

20,775

 

 

 

130,952

 

Adjusted net income

$

67,951

 

 

$

62,360

 

 

$

268,161

 

 

$

232,859

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.45

 

 

$

0.61

 

 

$

2.56

 

 

$

1.03

 

Adjusted diluted earnings per share (4)

$

0.75

 

 

$

0.68

 

 

$

2.93

 

 

$

2.52

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding

 

96,226

 

 

 

95,221

 

 

 

96,453

 

 

 

98,512

 

Adjusted diluted weighted average common shares outstanding (4)

 

91,160

 

 

 

91,059

 

 

 

91,386

 

 

 

92,423

 

____________________

(1) See Table Six Adjusted Income from Operations Non-GAAP Reconciliations above for details regarding Income from operations adjustments.

(2) Includes losses primarily in connection with the repurchase of $125 million of our outstanding 2025 Notes, as well as the settlements of the related convertible senior note hedges and warrants (the “2025 Notes Partial Repurchase”).

(3) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. For 2023, also includes a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state value added tax benefits. For 2022, the primary difference between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.

(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,066 and 4,162 shares for the fourteen weeks ended December 31, 2023 and the thirteen weeks ended December 25, 2022, respectively, and 5,067 and 6,089 shares for fiscal years 2023 and 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.

Following is a summary of the financial statement line item classification of the net income adjustments:

 

FOURTEEN WEEKS ENDED

 

THIRTEEN WEEKS ENDED

 

FISCAL YEAR

(dollars in thousands)

DECEMBER 31, 2023

 

DECEMBER 25, 2022

 

2023

 

2022

Labor and other related

$

 

 

$

 

 

$

1,894

 

 

$

 

Other restaurant operating

 

(6,100

)

 

 

5,900

 

 

 

(6,100

)

 

 

5,900

 

General and administrative

 

4,732

 

 

 

 

 

 

8,266

 

 

 

 

Provision for impaired assets and restaurant closings

 

34,200

 

 

 

 

 

 

27,516

 

 

 

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

 

 

 

107,630

 

Loss on fair value adjustment of derivatives, net

 

 

 

 

 

 

 

 

 

 

17,685

 

Provision for income taxes

 

(8,151

)

 

 

(1,585

)

 

 

(10,801

)

 

 

(263

)

Net adjustments

$

24,681

 

 

$

4,315

 

 

$

20,775

 

 

$

130,952

 

TABLE EIGHT

BLOOMIN’ BRANDS, INC.

COMPARATIVE RESTAURANT INFORMATION

(UNAUDITED)

Number of restaurants:

SEPTEMBER 24, 2023

 

OPENINGS

 

CLOSURES

 

DECEMBER 31, 2023

U.S.

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

 

 

 

Company-owned

557

 

 

5

 

 

 

 

562

 

Franchised

127

 

 

 

 

(1

)

 

126

 

Total

684

 

 

5

 

 

(1

)

 

688

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

199

 

 

 

 

(1

)

 

198

 

Franchised

19

 

 

 

 

 

 

19

 

Total

218

 

 

 

 

(1

)

 

217

 

Bonefish Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

170

 

 

 

 

 

 

170

 

Franchised

5

 

 

1

 

 

 

 

6

 

Total

175

 

 

1

 

 

 

 

176

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

 

 

 

Company-owned

64

 

 

 

 

 

 

64

 

Aussie Grill

 

 

 

 

 

 

 

 

 

 

Company-owned

7

 

 

 

 

(3

)

 

4

 

Franchised

 

 

1

 

 

 

 

1

 

Total

7

 

 

1

 

 

(3

)

 

5

 

U.S. total (1)

1,148

 

 

7

 

 

(5

)

 

1,150

 

International

 

 

 

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (2)

153

 

 

2

 

 

 

 

155

 

Other (2)(3)

37

 

 

1

 

 

(2

)

 

36

 

Franchised

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse - South Korea (1)

92

 

 

2

 

 

(2

)

 

92

 

Other (3)

47

 

 

1

 

 

(1

)

 

47

 

International total

329

 

 

6

 

 

(5

)

 

330

 

System-wide total

1,477

 

 

13

 

 

(10

)

 

1,480

 

System-wide total - Company-owned

1,187

 

 

8

 

 

(6

)

 

1,189

 

System-wide total - Franchised

290

 

 

5

 

 

(4

)

 

291

 
____________________  

(1) Excludes five off-premises only kitchens as of December 31, 2023. One location was Company-owned in the U.S and all others were franchised in South Korea as of December 31, 2023.

 

(2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of August 31, 2023 and November 30, 2023, respectively, to correspond with the balance sheet dates of this subsidiary.

 

(3) International Company-owned Other and International Franchised Other included two and four Aussie Grill locations, respectively, as of December 31, 2023.

 

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

 

FOURTEEN WEEKS

ENDED

 

THIRTEEN WEEKS

ENDED

 

FISCAL YEAR

 

 

DECEMBER 31, 2023 (1)

 

DECEMBER 25, 2022

 

2023 (1)

 

2022

Year over year percentage change:

 

 

 

 

 

 

 

 

Comparable restaurant sales (restaurants open 18 months or more):

 

 

 

 

 

 

 

 

U.S. (2)

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(0.3

)%

 

0.9

%

 

1.1

%

 

2.8

%

Carrabba’s Italian Grill

 

2.5

%

 

2.8

%

 

3.9

%

 

3.4

%

Bonefish Grill

 

(3.0

)%

 

0.5

%

 

0.8

%

 

4.5

%

Fleming’s Prime Steakhouse & Wine Bar

 

(0.3

)%

 

3.1

%

 

(0.7

)%

 

12.0

%

Combined U.S.

 

(0.2

)%

 

1.4

%

 

1.4

%

 

4.0

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

0.6

%

 

15.3

%

 

5.5

%

 

38.3

%

 

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

(4.3

)%

 

(8.7

)%

 

(4.3

)%

 

(6.3

)%

Carrabba’s Italian Grill

 

0.4

%

 

(3.8

)%

 

0.3

%

 

(4.3

)%

Bonefish Grill

 

(4.0

)%

 

(7.2

)%

 

(3.3

)%

 

(4.2

)%

Fleming’s Prime Steakhouse & Wine Bar

 

(1.9

)%

 

(4.0

)%

 

(2.0

)%

 

3.0

%

Combined U.S.

 

(3.1

)%

 

(7.3

)%

 

(3.1

)%

 

(5.3

)%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

(0.9

)%

 

3.3

%

 

(1.1

) %

 

23.6

%

 

 

 

 

 

 

 

 

 

Average check per person (4):

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

Outback Steakhouse

 

4.0

%

 

9.6

%

 

5.4

%

 

9.1

%

Carrabba’s Italian Grill

 

2.1

%

 

6.6

%

 

3.6

%

 

7.7

%

Bonefish Grill

 

1.0

%

 

7.7

%

 

4.1

%

 

8.7

%

Fleming’s Prime Steakhouse & Wine Bar

 

1.6

%

 

7.1

%

 

1.3

%

 

9.0

%

Combined U.S.

 

2.9

%

 

8.7

%

 

4.5

%

 

9.3

%

International

 

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

 

1.2

%

 

11.7

%

 

6.5

%

 

14.6

%

____________________

(1) For Q4 2023, comparable restaurant sales, traffic and average check per person compare the 14 weeks from September 25, 2023 through December 31, 2023 to the 14 weeks from September 26, 2022 through January 1, 2023. For 2023, comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.

(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions. Includes trading day impact from calendar period reporting.

(4) Includes the impact of menu pricing changes, product mix and discounts.

 

Contacts

Tara Kurian

VP, Corporate Finance and Investor Relations

(813) 830-5311

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