Bloomin' Brands Announces 2022 Q2 Financial Results

Q2 Diluted EPS of $(0.72) and Adjusted Diluted EPS of $0.68

Reiterates Full Year Adjusted Profit and EPS Expectations

Raises Full Year Guidance for Total Revenues

Declares Quarterly Cash Dividend of $0.14 per share

Bloomin' Brands, Inc. BLMN today reported results for the second quarter 2022 ("Q2 2022") compared to the second quarter 2021 ("Q2 2021").

CEO Comments

"We delivered another solid quarter of results that highlights the strength of our portfolio," said David Deno, CEO. "Importantly, we achieved this performance despite increased inflationary headwinds and a softening macro environment in June. The ability to leverage our leading off-premises business, capitalize on growing digital capabilities, and improve operational efficiencies has enabled us to deliver on our commitments. We remain focused on executing against our strategy to elevate the guest experience while driving sustainable sales and profits to thrive in this challenging environment."

Diluted EPS and Adjusted Diluted EPS

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

 

Q2

 

 

 

2022

 

2021

 

CHANGE

Diluted (loss) earnings per share

$

(0.72

)

 

$

0.75

 

$

(1.47

)

Adjustments (1)

 

1.40

 

 

 

0.06

 

 

1.34

 

Adjusted diluted earnings per share (1)

$

0.68

 

 

$

0.81

 

$

(0.13

)

 

 

 

 

 

 

___________________
(1) Adjustments for Q2 2022 primarily relate to the repurchase of $125 million of our outstanding convertible notes (the "2025 Notes"), as well as the settlements of the related convertible senior note hedges and warrants (the "2025 Notes Partial Repurchase"). See Non-GAAP Measures later in this release.

Second Quarter Financial Results

(dollars in millions, unaudited)

Q2 2022

 

Q2 2021

 

CHANGE

Total revenues

$

1,125.2

 

 

$

1,077.4

 

 

4.4

%

 

 

 

 

 

 

Restaurant-level operating margin

 

15.5

%

 

 

20.3

%

 

(4.8

) %

 

 

 

 

 

 

GAAP Operating income margin

 

7.8

%

 

 

11.6

%

 

(3.8

) %

Adjusted operating income margin (1)

 

7.8

%

 

 

11.0

%

 

(3.2

) %

___________________
(1) See Non-GAAP Measures later in this release.

  • The increase in Total revenues was primarily due to: (i) higher comparable restaurant sales primarily in Brazil, (ii) the net impact of restaurant openings and closures and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.
  • Restaurant-level operating margin decreased primarily due to: (i) commodity inflation, (ii) higher operating expenses including utilities, (iii) increased labor costs primarily due to wage rate inflation and (iv) higher advertising expense. These decreases were partially offset by: (i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil and (iii) the impact of certain cost saving initiatives.
  • Operating income margin decreased due to a decrease in restaurant-level operating margin as described above and benefits from value-added tax court rulings in Brazil during 2021, partially offset by lower incentive compensation.

Second Quarter Comparable Restaurant Sales

The following table includes Company-owned comparable restaurant sales for the second quarter ended June 26, 2022 as well as performance relative to 2019 for improved comparability to pre-COVID-19 restaurant sales:

 

THIRTEEN WEEKS ENDED

 

JUNE 26, 2022

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

COMPARABLE TO 2021

 

COMPARABLE TO 2019

U.S.

 

 

 

Outback Steakhouse

(1.1) %

 

10.1 %

Carrabba's Italian Grill

(1.0) %

 

15.6 %

Bonefish Grill

(1.1) %

 

3.3 %

Fleming's Prime Steakhouse & Wine Bar

6.0 %

 

31.8 %

Combined U.S.

(0.4) %

 

11.7 %

International

 

 

 

Outback Steakhouse - Brazil (1)

95.7 %

 

27.6 %

_________________
(1) Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting.

The following table includes Company-owned average restaurant unit volumes for the periods indicated:

 

THIRTEEN WEEKS ENDED

Average restaurant unit volumes (weekly):

JUNE 26, 2022

 

JUNE 30, 2019 (1)

U.S.

 

 

 

Outback Steakhouse

$

77,941

 

$

69,497

Carrabba's Italian Grill

$

66,016

 

$

56,285

Bonefish Grill

$

64,113

 

$

60,018

Fleming's Prime Steakhouse & Wine Bar

$

112,900

 

$

81,754

International

 

 

 

Outback Steakhouse - Brazil (2)

$

61,210

 

$

66,829

_________________
(1) Presented for comparability to pre-COVID-19 average restaurant unit volumes.
(2) Translated at average exchange rates of 4.89 and 3.91 for the thirteen weeks ended June 26, 2022 and June 30, 2019, respectively. Brazil average restaurant unit volumes for the thirteen weeks ended June 26, 2022 are up 14% on a constant currency basis versus the comparable period in 2019.

Dividend Declaration and Share Repurchases

On July 19, 2022, our Board of Directors declared a quarterly cash dividend of $0.14 per share to be paid on August 24, 2022 to all stockholders of record as of the close of business on August 10, 2022.

On February 8, 2022, our Board of Directors approved a $125 million share repurchase program. Through July 28, 2022, we repurchased 3.2 million shares for a total of $62 million and had $63 million remaining under this authorization. This authorization will expire on August 9, 2023.

Fiscal 2022 Financial Outlook

The table below presents our updated expectations for selected 2022 financial operating results. We have increased our full year outlook for total revenues and expect the profit benefits from the increased revenues to be offset by higher than expected inflation. We are reaffirming all other aspects of our full-year financial guidance as previously communicated in our April 29, 2022 earnings release, including adjusted EBITDA and adjusted diluted earnings per share.

Financial Results:

 

Prior Outlook

 

Current Outlook

Total revenues

 

$4.35B to $4.40B

 

$4.40B to $4.45B

 

 

 

 

 

GAAP diluted earnings per share (1)

 

$2.23 to $2.32

 

$1.11 to $1.22

 

 

 

 

 

GAAP effective income tax rate (2)

 

16.5% to 17.5%

 

28% to 29%

 

 

 

 

 

Other Selected Financial Data:

 

 

 

 

Commodity inflation

 

11% to 13%

 

13% to 14%

 

 

 

 

 

Capital expenditures

 

$225M to $240M

 

$200M to $210M

 

 

 

 

 

Weighted average adjusted diluted shares (3)

 

Approx. 95 million

 

Approx. 93 million

_________________
(1) For GAAP purposes assumes weighted average diluted shares of approximately 99 million. The total change in GAAP earnings per share is due to the impact of losses related to the 2025 Notes Partial Repurchase.
(2) Increase in the GAAP effective income tax rate primarily related to the 2025 Notes Partial Repurchase in Q2 2022.
(3) Reflects the impact of the partial repurchase of the 2025 Notes.

Q3 2022 Financial Outlook

The table below presents our expectations for selected fiscal Q3 2022 financial operating results:

Financial Results:

 

Q3 2022 Outlook

Total revenues

 

$1.05B to $1.07B

 

 

 

GAAP diluted earnings per share (1)

 

$0.30 to $0.35

 

 

 

Adjusted diluted earnings per share (2)

 

$0.31 to $0.36

_________________
(1) For GAAP purposes assumes weighted average diluted shares of approximately 96 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, July 29, 2022 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 the following: (i) Adjusted income from operations and the corresponding margin, (ii) Adjusted net income, (iii) Adjusted diluted earnings per share and (iv) Adjusted segment income from operations and the corresponding margin.

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.

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 operates more than 1,500 full-service restaurants and off-premises only kitchens in 47 states, Guam and 15 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 2022 Financial Outlook" and "Q3 2022 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; the effects of the COVID-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions and consumer behavior, including, among others: the inability of workers, including delivery drivers, to work due to illness, quarantine, or government mandates, temporary restaurant closures and capacity restrictions due to reduced workforces or government mandates, the unemployment rate, the extent, availability and effectiveness of any COVID-19 stimulus packages or loan programs, the ability of our franchisees to operate their restaurants during the pandemic and pay royalties, and trends in consumer behavior and spending during and after the end of the pandemic; increases in labor costs and fluctuations in the availability of employees; increases in unemployment rates and taxes; price and availability of commodities and other impacts of inflation; competition; local, regional, national and international economic conditions; our ability to preserve the value of and grow our brands; interruption or breach of our systems or loss of consumer or employee information; 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; government actions and policies; the effects of changes in tax laws; changes in patterns of consumer traffic, consumer tastes and dietary habits; challenges associated with our remodeling, relocation and expansion plans; consumer confidence and spending patterns; the seasonality of the Company's business; weather, acts of God and other disasters; compliance with debt covenants and the Company's ability to make debt payments and planned investments; 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

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,108,918

 

 

$

1,055,227

 

 

$

2,232,493

 

 

$

2,034,678

 

Franchise and other revenues

 

16,244

 

 

 

22,139

 

 

 

33,204

 

 

 

30,161

 

Total revenues

 

1,125,162

 

 

 

1,077,366

 

 

 

2,265,697

 

 

 

2,064,839

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage costs

 

364,459

 

 

 

312,102

 

 

 

723,829

 

 

 

603,972

 

Labor and other related

 

308,759

 

 

 

294,999

 

 

 

621,270

 

 

 

569,637

 

Other restaurant operating

 

263,529

 

 

 

233,450

 

 

 

522,639

 

 

 

462,743

 

Depreciation and amortization

 

41,257

 

 

 

40,539

 

 

 

83,032

 

 

 

81,765

 

General and administrative

 

59,246

 

 

 

66,462

 

 

 

117,920

 

 

 

123,710

 

Provision for impaired assets and restaurant closings

 

193

 

 

 

5,177

 

 

 

2,032

 

 

 

7,377

 

Total costs and expenses

 

1,037,443

 

 

 

952,729

 

 

 

2,070,722

 

 

 

1,849,204

 

Income from operations

 

87,719

 

 

 

124,637

 

 

 

194,975

 

 

 

215,635

 

Loss on extinguishment and modification of debt

 

(107,630

)

 

 

(2,073

)

 

 

(107,630

)

 

 

(2,073

)

Loss on fair value adjustment of derivatives, net

 

(17,685

)

 

 

 

 

 

(17,685

)

 

 

 

Other income, net

 

 

 

 

 

 

 

 

 

 

21

 

Interest expense, net

 

(12,548

)

 

 

(14,990

)

 

 

(26,181

)

 

 

(29,618

)

(Loss) income before provision for income taxes

 

(50,144

)

 

 

107,574

 

 

 

43,479

 

 

 

183,965

 

Provision for income taxes

 

11,536

 

 

 

22,688

 

 

 

27,465

 

 

 

29,281

 

Net (loss) income

 

(61,680

)

 

 

84,886

 

 

 

16,014

 

 

 

154,684

 

Less: net income attributable to noncontrolling interests

 

1,955

 

 

 

2,341

 

 

 

4,138

 

 

 

3,277

 

Net (loss) income attributable to Bloomin' Brands

 

(63,635

)

 

 

82,545

 

 

 

11,876

 

 

 

151,407

 

Convertible senior notes if-converted method interest adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

691

 

Diluted net (loss) income attributable to Bloomin' Brands

$

(63,635

)

 

$

82,545

 

 

$

11,876

 

 

$

152,098

 

 

 

 

 

 

 

 

 

(Loss) earnings per share:

 

 

 

 

 

 

 

Basic

$

(0.72

)

 

$

0.93

 

 

$

0.13

 

 

$

1.71

 

Diluted

$

(0.72

)

 

$

0.75

 

 

$

0.12

 

 

$

1.38

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

88,898

 

 

 

89,075

 

 

 

89,127

 

 

 

88,721

 

Diluted

 

88,898

 

 

 

109,805

 

 

 

102,045

 

 

 

110,223

 

 

TABLE TWO

BLOOMIN' BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

985,927

 

 

$

990,293

 

 

$

2,009,562

 

 

$

1,890,352

 

Franchise and other revenues

 

12,700

 

 

 

12,765

 

 

 

25,472

 

 

 

17,624

 

Total revenues

$

998,627

 

 

$

1,003,058

 

 

$

2,035,034

 

 

$

1,907,976

 

Restaurant-level operating margin

 

15.1

%

 

 

21.7

%

 

 

16.3

%

 

 

20.5

%

Income from operations

$

104,620

 

 

$

165,297

 

 

$

236,846

 

 

$

287,032

 

Operating income margin

 

10.5

%

 

 

16.5

%

 

 

11.6

%

 

 

15.0

%

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

122,991

 

 

$

64,934

 

 

$

222,931

 

 

$

144,326

 

Franchise and other revenues (1)

 

3,544

 

 

 

9,374

 

 

 

7,732

 

 

 

12,537

 

Total revenues

$

126,535

 

 

$

74,308

 

 

$

230,663

 

 

$

156,863

 

Restaurant-level operating margin

 

17.8

%

 

 

3.2

%

 

 

17.4

%

 

 

9.3

%

Income from operations

$

14,126

 

 

$

2,470

 

 

$

23,010

 

 

$

6,007

 

Operating income margin

 

11.2

%

 

 

3.3

%

 

 

10.0

%

 

 

3.8

%

Reconciliation of Segment Income from Operations to Consolidated Income from Operations

 

 

 

 

 

 

 

Segment income from operations

 

 

 

 

 

 

 

U.S.

$

104,620

 

 

$

165,297

 

 

$

236,846

 

 

$

287,032

 

International

 

14,126

 

 

 

2,470

 

 

 

23,010

 

 

 

6,007

 

Total segment income from operations

 

118,746

 

 

 

167,767

 

 

 

259,856

 

 

 

293,039

 

Unallocated corporate operating expense

 

(31,027

)

 

 

(43,130

)

 

 

(64,881

)

 

 

(77,404

)

Total income from operations

$

87,719

 

 

$

124,637

 

 

$

194,975

 

 

$

215,635

 

____________________
(1) During the thirteen and twenty-six weeks ended June 27, 2021, we recognized $6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of Program of Social Integration ("PIS") and Contribution for the Financing of Social Security ("COFINS") taxes.

 

TABLE THREE

BLOOMIN' BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

 

JUNE 26, 2022

 

DECEMBER 26, 2021

(dollars in thousands)

(UNAUDITED)

 

 

Cash and cash equivalents

$

95,346

 

 

$

87,585

 

Net working capital (deficit) (1)

$

(616,924

)

 

$

(631,833

)

Total assets

$

3,229,995

 

 

$

3,294,271

 

Total debt, net

$

801,733

 

 

$

793,065

 

Total stockholders' equity

$

262,741

 

 

$

222,850

 

_________________
(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 MARGIN RECONCILIATIONS

(UNAUDITED)

Consolidated

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Income from operations

$

87,719

 

 

$

124,637

 

 

$

194,975

 

 

$

215,635

 

Operating income margin

 

7.8

%

 

 

11.6

%

 

 

8.6

%

 

 

10.4

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

16,244

 

 

 

22,139

 

 

 

33,204

 

 

 

30,161

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

41,257

 

 

 

40,539

 

 

 

83,032

 

 

 

81,765

 

General and administrative

 

59,246

 

 

 

66,462

 

 

 

117,920

 

 

 

123,710

 

Provision for impaired assets and restaurant closings

 

193

 

 

 

5,177

 

 

 

2,032

 

 

 

7,377

 

Restaurant-level operating income

$

172,171

 

 

$

214,676

 

 

$

364,755

 

 

$

398,326

 

Restaurant-level operating margin

 

15.5

%

 

 

20.3

%

 

 

16.3

%

 

 

19.6

%

 

 

 

 

 

 

 

 

U.S.

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Income from operations

$

104,620

 

 

$

165,297

 

 

$

236,846

 

 

$

287,032

 

Operating income margin

 

10.5

%

 

 

16.5

%

 

 

11.6

%

 

 

15.0

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

12,700

 

 

 

12,765

 

 

 

25,472

 

 

 

17,624

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

33,545

 

 

 

33,579

 

 

 

68,303

 

 

 

67,224

 

General and administrative

 

23,648

 

 

 

22,953

 

 

 

47,093

 

 

 

44,045

 

Provision for impaired assets and restaurant closings

 

191

 

 

 

5,676

 

 

 

249

 

 

 

7,139

 

Restaurant-level operating income

$

149,304

 

 

$

214,740

 

 

$

327,019

 

 

$

387,816

 

Restaurant-level operating margin

 

15.1

%

 

 

21.7

%

 

 

16.3

%

 

 

20.5

%

 

 

 

 

 

 

 

 

International

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Income from operations

$

14,126

 

 

$

2,470

 

 

$

23,010

 

 

$

6,007

 

Operating income margin

 

11.2

%

 

 

3.3

%

 

 

10.0

%

 

 

3.8

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

 

3,544

 

 

 

9,374

 

 

 

7,732

 

 

 

12,537

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

 

6,020

 

 

 

5,565

 

 

 

11,556

 

 

 

11,285

 

General and administrative

 

5,331

 

 

 

4,116

 

 

 

10,259

 

 

 

8,721

 

Provision for impaired assets and restaurant closings

 

 

 

 

(708

)

 

 

1,775

 

 

 

(1

)

Restaurant-level operating income

$

21,933

 

 

$

2,069

 

 

$

38,868

 

 

$

13,475

 

Restaurant-level operating margin

 

17.8

%

 

 

3.2

%

 

 

17.4

%

 

 

9.3

%

_________________

The following categories of our 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:

(1) 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.
(2) 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.
(3) General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices.
(4) Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.

 

TABLE FIVE

BLOOMIN' BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

(UNFAVORABLE)
FAVORABLE CHANGE
QUARTER TO DATE

Consolidated:

JUNE 26, 2022

 

JUNE 27, 2021

 

Restaurant sales

100.0 %

 

100.0 %

 

 

 

 

 

 

 

 

Food and beverage costs

32.9 %

 

29.6 %

 

(3.3) %

Labor and other related

27.8 %

 

28.0 %

 

0.2 %

Other restaurant operating

23.8 %

 

22.1 %

 

(1.7) %

 

 

 

 

 

 

Restaurant-level operating margin

15.5 %

 

20.3 %

 

(4.8) %

 

 

 

 

 

 

Segments - Restaurant-level operating margin:

 

 

 

 

 

U.S.

15.1 %

 

21.7 %

 

(6.6) %

International

17.8 %

 

3.2 %

 

14.6 %

 

 

 

 

 

 

 

TWENTY-SIX WEEKS ENDED

 

(UNFAVORABLE)
FAVORABLE CHANGE
YEAR TO DATE

Consolidated:

JUNE 26, 2022

 

JUNE 27, 2021

 

Restaurant sales

100.0 %

 

100.0 %

 

 

 

 

 

 

 

 

Food and beverage costs

32.4 %

 

29.7 %

 

(2.7) %

Labor and other related

27.8 %

 

28.0 %

 

0.2 %

Other restaurant operating

23.4 %

 

22.7 %

 

(0.7) %

 

 

 

 

 

 

Restaurant-level operating margin

16.3 %

 

19.6 %

 

(3.3) %

 

 

 

 

 

 

Segments - Restaurant-level operating margin:

 

 

 

 

 

U.S.

16.3 %

 

20.5 %

 

(4.2) %

International

17.4 %

 

9.3 %

 

8.1 %

 

TABLE SIX

BLOOMIN' BRANDS, INC.

INCOME FROM OPERATIONS, NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Income from operations

$

87,719

 

 

$

124,637

 

 

$

194,975

 

 

$

215,635

 

Operating income margin

 

7.8

%

 

 

11.6

%

 

 

8.6

%

 

 

10.4

%

Adjustments:

 

 

 

 

 

 

 

Legal and other matters (1)

 

 

 

 

(6,337

)

 

 

 

 

 

(6,337

)

Total income from operations adjustments

 

 

 

 

(6,337

)

 

 

 

 

 

(6,337

)

Adjusted income from operations

$

87,719

 

 

$

118,300

 

 

$

194,975

 

 

$

209,298

 

Adjusted operating income margin

 

7.8

%

 

 

11.0

%

 

 

8.6

%

 

 

10.2

%

 

 

 

 

 

 

 

 

Diluted net (loss) income attributable to Bloomin' Brands

$

(63,635

)

 

$

82,545

 

 

$

11,876

 

 

$

152,098

 

Convertible senior notes if-converted method interest adjustment, net of tax (2)

 

 

 

 

 

 

 

 

 

 

691

 

Net (loss) income attributable to Bloomin' Brands

 

(63,635

)

 

 

82,545

 

 

 

11,876

 

 

 

151,407

 

Adjustments:

 

 

 

 

 

 

 

Income from operations adjustments

 

 

 

 

(6,337

)

 

 

 

 

 

(6,337

)

Loss on extinguishment and modification of debt (3)

 

107,630

 

 

 

2,073

 

 

 

107,630

 

 

 

2,073

 

Loss on fair value adjustment of derivatives, net (4)

 

17,685

 

 

 

 

 

 

17,685

 

 

 

 

Total adjustments, before income taxes

 

125,315

 

 

 

(4,264

)

 

 

125,315

 

 

 

(4,264

)

Adjustment to provision for income taxes (5)

 

1,322

 

 

 

1,243

 

 

 

1,322

 

 

 

1,243

 

Net adjustments

 

126,637

 

 

 

(3,021

)

 

 

126,637

 

 

 

(3,021

)

Adjusted net income

$

63,002

 

 

$

79,524

 

 

$

138,513

 

 

$

148,386

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share (6)

$

(0.72

)

 

$

0.75

 

 

$

0.12

 

 

$

1.38

 

Adjusted diluted earnings per share (7)

$

0.68

 

 

$

0.81

 

 

$

1.48

 

 

$

1.53

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding (6)

 

88,898

 

 

 

109,805

 

 

 

102,045

 

 

 

110,223

 

Adjusted diluted weighted average common shares outstanding (7)

 

92,863

 

 

 

98,574

 

 

 

93,792

 

 

 

97,011

 

_________________
(1) The thirteen and twenty-six weeks ended June 27, 2021 include the recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.
(2) Adjustment for interest expense related to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of the 2025 Notes in cash.
(3) The thirteen and twenty-six weeks ended June 26, 2022 include losses in connection with the $125.0 million 2025 Notes Partial Repurchase, the modification of our revolving credit facility and the extinguishment of our term loan A.
(4) Fair value adjustments to the conversion feature of the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants in connection with the 2025 Notes Partial Repurchase.
(5) Income tax effect of the adjustments for the periods presented. For the thirteen and twenty-six weeks ended June 26, 2022, the primary difference between the GAAP and adjusted effective income tax rates relate to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.
(6) Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended June 26, 2022.
(7) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 7,774 and 11,231 shares for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and 8,253 and 10,442 shares for the twenty-six weeks ended June 26, 2022 and June 27, 2021, 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. For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period. For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.

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

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Franchise and other revenues

$

 

$

(6,337

)

 

$

 

$

(6,337

)

Loss on extinguishment and modification of debt

 

107,630

 

 

2,073

 

 

 

107,630

 

 

2,073

 

Loss on fair value adjustment of derivatives, net

 

17,685

 

 

 

 

 

17,685

 

 

 

Provision for income taxes

 

1,322

 

 

1,243

 

 

 

1,322

 

 

1,243

 

Net adjustments

$

126,637

 

$

(3,021

)

 

$

126,637

 

$

(3,021

)

 

TABLE SEVEN

BLOOMIN' BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

International Segment

JUNE 26, 2022

 

JUNE 27, 2021

 

JUNE 26, 2022

 

JUNE 27, 2021

Income from operations

$

14,126

 

 

$

2,470

 

 

$

23,010

 

 

$

6,007

 

Operating income margin

 

11.2

%

 

 

3.3

%

 

 

10.0

%

 

 

3.8

%

Adjustments:

 

 

 

 

 

 

 

Legal and other matters (1)

 

 

 

 

(6,337

)

 

 

 

 

 

(6,337

)

Adjusted income (loss) from operations

$

14,126

 

 

$

(3,867

)

 

$

23,010

 

 

$

(330

)

Adjusted operating income (loss) margin

 

11.2

%

 

 

(5.7

) %

 

 

10.0

%

 

 

(0.2

) %

_________________
(1) Recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.

 

TABLE EIGHT

BLOOMIN' BRANDS, INC.

COMPARATIVE RESTAURANT AND OFF-PREMISES ONLY KITCHEN INFORMATION

(UNAUDITED)

Number of restaurants:

MARCH 27, 2022

 

OPENINGS

 

CLOSURES

 

JUNE 26, 2022

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

Company-owned

562

 

2

 

(1)

 

563

Franchised

130

 

 

 

130

Total

692

 

2

 

(1)

 

693

Carrabba's Italian Grill

 

 

 

 

 

 

 

Company-owned

199

 

 

(1)

 

198

Franchised

20

 

 

(1)

 

19

Total

219

 

 

(2)

 

217

Bonefish Grill

 

 

 

 

 

 

 

Company-owned

175

 

 

(1)

 

174

Franchised

7

 

 

 

7

Total

182

 

 

(1)

 

181

Fleming's Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

Company-owned

64

 

 

 

64

Aussie Grill

 

 

 

 

 

 

 

Company-owned

7

 

 

(2)

 

5

U.S. total

1,164

 

2

 

(6)

 

1,160

International

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (1)

123

 

6

 

 

129

Other (1)(2)

33

 

 

 

33

Franchised

 

 

 

 

 

 

 

Outback Steakhouse - South Korea

78

 

1

 

(2)

 

77

Other (2)

52

 

 

(2)

 

50

International total

286

 

7

 

(4)

 

289

System-wide total

1,450

 

9

 

(10)

 

1,449

System-wide total - Company-owned

1,163

 

8

 

(5)

 

1,166

System-wide total - Franchised

287

 

1

 

(5)

 

283

____________________
(1) The restaurant counts for Brazil, including Abbraccio restaurants within International Company-owned Other, are reported as of February 28, 2022 and May 31, 2022, respectively, to correspond with the balance sheet dates of this subsidiary.
(2) International Company-owned Other and International Franchised Other included two and three Aussie Grill locations, respectively, as of June 26, 2022.

 
Number of kitchens (1):

MARCH 27, 2022

 

OPENINGS

 

CLOSURES

 

JUNE 26, 2022

U.S.

 

 

 

 

 

 

 

Company-owned

2

 

 

 

2

International

 

 

 

 

 

 

 

Company-owned

1

 

 

 

1

Franchised - South Korea

46

 

3

 

 

49

System-wide total

49

 

3

 

 

52

____________________
(1) Excludes virtual concepts that operate out of existing restaurants and sports venue locations.

TABLE NINE

BLOOMIN' BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

 

JUNE 26, 2022

 

JUNE 26, 2022

 

COMPARABLE TO

 

COMPARABLE TO

 

2021

 

2019 (1)

 

2021

 

2019 (1)

Year over year percentage change:

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

U.S. (2)

 

 

 

 

 

 

 

Outback Steakhouse

(1.1) %

 

10.1 %

 

3.9 %

 

6.3 %

Carrabba's Italian Grill

(1.0) %

 

15.6 %

 

5.0 %

 

13.1 %

Bonefish Grill

(1.1) %

 

3.3 %

 

9.2 %

 

2.5 %

Fleming's Prime Steakhouse & Wine Bar

6.0 %

 

31.8 %

 

23.1 %

 

27.6 %

Combined U.S.

(0.4) %

 

11.7 %

 

6.4 %

 

8.6 %

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil (3)

95.7 %

 

27.6 %

 

61.1 %

 

20.8 %

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

(8.7) %

 

(4.5) %

 

(5.0) %

 

(7.4) %

Carrabba's Italian Grill

(7.5) %

 

4.6 %

 

(2.5) %

 

3.2 %

Bonefish Grill

(8.6) %

 

(4.9) %

 

(1.0) %

 

(5.6) %

Fleming's Prime Steakhouse & Wine Bar

(2.9) %

 

8.8 %

 

11.1 %

 

7.3 %

Combined U.S.

(8.3) %

 

(2.5) %

 

(3.5) %

 

(4.8) %

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

57.8 %

 

28.8 %

 

42.0 %

 

23.9 %

 

 

 

 

 

 

 

 

Average check per person (4):

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

Outback Steakhouse

7.6 %

 

14.6 %

 

8.9 %

 

13.7 %

Carrabba's Italian Grill

6.5 %

 

11.0 %

 

7.5 %

 

9.9 %

Bonefish Grill

7.5 %

 

8.2 %

 

10.2 %

 

8.1 %

Fleming's Prime Steakhouse & Wine Bar

8.9 %

 

23.0 %

 

12.0 %

 

20.3 %

Combined U.S.

7.9 %

 

14.2 %

 

9.9 %

 

13.4 %

International

 

 

 

 

 

 

 

Outback Steakhouse - Brazil

37.3 %

 

— %

 

19.2 %

 

(2.8) %

____________________
(1) Comparable restaurant sales, traffic and average check per person increases (decreases) relative to 2019 for improved comparability to pre-COVID-19 restaurant sales.
(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. Includes trading day impact from calendar period reporting.
(4) Average check per person includes the impact of menu pricing changes, product mix and discounts.

Posted In: Press Releases