Bloomin Brands (BLMN) 6 Aug 24 2024 Q2 Earnings call transcript

Bloomin' Brands, Inc. recently held its fiscal second quarter 2024 earnings call, providing investors and stakeholders with a comprehensive update on the company's financial performance and strategic initiatives. The call, led by executives David Deno and Michael Healy, highlighted the company's resilience in a challenging industry environment, as well as its commitment to driving growth and improving performance at its flagship Outback Steakhouse brand.

Financial Performance and Guidance

The company reported an adjusted diluted earnings per share of $0.51 for the quarter, down from $0.70 in 2023. Total revenues for the quarter were $1.1 billion, a 3% decrease from the previous year. These figures were primarily driven by a decline in comparable restaurant sales and the loss of the Brazil value-added tax exemption benefit.

In response to these challenges, the company announced updated guidance for the fiscal year, with adjusted diluted earnings per share projected to be between $2.10 and $2.30. This reflects the softer industry environment and the company's strategic focus on value and traffic growth.

Strategic Initiatives and Growth Opportunities

Despite the near-term challenges, Bloomin' Brands remains optimistic about its long-term prospects. The company is focusing on enhancing the customer experience at Outback Steakhouse, with a particular emphasis on service, menu offerings, and digital marketing. This strategic approach is expected to drive same-store sales growth and improve traffic trends, especially in the second half of the year.

Additionally, Bloomin' Brands is making significant investments in asset upgrades through new openings, relocations, and remodels. This includes the remodeling of 60 to 65 restaurants and the opening of 40 to 45 new restaurants system-wide. These initiatives are aimed at upgrading the company's portfolio and improving traffic trends, particularly at Outback.

Navigating Industry Challenges and Consumer Trends

The earnings call also touched on broader industry trends and challenges, with executives expressing confidence in the company's ability to navigate the current environment while maintaining a focus on value and innovation. The company is seeing signs of inflation returning to normal and is positioning itself to take advantage of any potential interest rate declines.

In terms of consumer behavior, executives noted that guests are being more choosy with their dining choices, emphasizing the importance of delivering value and exceptional experiences to retain market share. Bloomin' Brands is addressing this trend with promotional strategies, such as the introduction of a 3-course meal at $14.99, and a focus on digital marketing and consumer decision-making capabilities.

Outlook for the Future

Looking ahead, Bloomin' Brands is focused on driving growth and enhancing the customer experience at Outback Steakhouse. The company's strategic initiatives, coupled with its strong financial position, position it well to capitalize on opportunities in the evolving restaurant landscape. With a commitment to navigating near-term challenges and setting the stage for long-term success, Bloomin' Brands is poised to continue delivering value to its stakeholders and capitalizing on the growth potential in the casual dining sector.