Bloomin’ Brands Announces 2021 Q2 Financial Results and Strong Operating Margin Expansion

TAMPA, Fla.–()–Bloomin’ Brands, Inc. (Nasdaq: BLMN) today reported results for the second quarter 2021 (“Q2 2021”) compared to the second quarter 2020 (“Q2 2020”).

CEO Comments

“Q2 represented another quarter of strong results. We are well positioned to grow sales and capture additional market share,” said David Deno, Chief Executive Officer. “We are making great progress improving margins, increasing cash flow and retaining off-premises sales as dining rooms have reopened. Our sales momentum has continued through the first four weeks of the third quarter with U.S. comp sales up 15.2% on a two-year basis versus 2019.”

Diluted EPS and Adjusted Diluted EPS

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

 

Q2

 

 

 

 

2021

 

2020

 

CHANGE

Q2 2019 (1)

Diluted earnings (loss) per share attributable to common stockholders

$

0.75

 

 

$

(1.05)

 

 

$

1.80

 

$

0.32

 

Adjustments (2)

0.06

 

 

0.31

 

 

(0.25)

 

0.04

 

Adjusted diluted earnings (loss) per share (2)

$

0.81

 

 

$

(0.74)

 

 

$

1.55

 

$

0.36

 

 

 

 

 

 

 

 

___________________

(1) Presented for improved comparability.

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

 

Second Quarter Financial Results

(dollars in millions)

Q2 2021

 

Q2 2020

 

CHANGE

Q2 2019 (1)

Total revenues

$

1,077.4

 

 

$

578.5

 

 

86.2

%

$

1,021.9

 

 

 

 

 

 

 

 

Restaurant-level operating margin

20.3

%

 

2.1

%

 

18.2

%

15.0

%

Adjusted restaurant-level operating margin (2)

20.3

%

 

2.7

%

 

17.6

%

15.0

%

 

 

 

 

 

 

 

GAAP operating income (loss) margin

11.6

%

 

(19.3)

%

 

30.9

%

4.3

%

Adjusted operating income (loss) margin (2)

11.0

%

 

(13.7)

%

 

24.7

%

4.6

%

___________________

(1) Presented for improved comparability.

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

  • The increase in Total revenues was primarily due to: (i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales, (ii) higher franchise revenues and (iii) the net impact of restaurant openings and closures.
  • GAAP restaurant-level operating margin increased due to higher comparable restaurant sales and lower advertising expense. These increases were partially offset by the 2020 benefit of employee retention credits from relief pay and higher management bonus. Charges related to the COVID-19 pandemic were excluded from our 2020 Adjusted restaurant-level operating margin.
  • GAAP operating income margin increased due to: (i) an increase in restaurant-level operating margin as described above, (ii) 2020 asset impairment charges related to the COVID-19 pandemic and (iii) favorable court rulings in Brazil related to value-added taxes recorded in other revenues. These increases were partially offset by an increase in incentive compensation expense. Adjusted operating income excludes the impact of charges related to the COVID-19 pandemic, benefits from value-added tax court rulings in Brazil and expenses from restructuring and transformational initiatives.

Second Quarter Comparable Restaurant Sales

The following table includes Company-owned comparable restaurant sales for the second quarter ended June 27, 2021 as well as performance relative to 2019 for improved comparability due to the impact of COVID-19:

 

THIRTEEN WEEKS ENDED

 

JUNE 27, 2021

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

COMPARABLE TO 2019 (1)

 

COMPARABLE TO 2020

U.S.

 

 

 

Outback Steakhouse

11.3

%

 

65.8

%

Carrabba’s Italian Grill

16.7

%

 

84.3

%

Bonefish Grill

4.2

%

 

141.2

%

Fleming’s Prime Steakhouse & Wine Bar

24.4

%

 

182.6

%

Combined U.S.

12.1

%

 

84.6

%

International

 

 

 

Outback Steakhouse – Brazil (2)(3)

(36.3)

%

 

78.8

%

_________________

(1) Represents comparable restaurant sales increases (decreases) relative to 2019 for improved comparability due to the impact of COVID-19 on fiscal year 2020 restaurant sales.

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

(3) Outback Steakhouse Brazil results are reported on a one-month lag and are presented on a calendar basis. Represents results through May 31, 2021.

Recent Sales Results – U.S.

Third quarter-to-date U.S. comparable restaurant sales results have continued to strengthen on a two-year basis due to our sales building initiatives, pent up consumer demand and additional stimulus.

The following tables include quarter-to-date U.S. Company-owned comparable restaurant sales for the four-week period ended July 25, 2021 and weekly U.S. comparable average unit volumes for the periods indicated:

 

FOUR WEEKS ENDED

 

JULY 25, 2021

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

COMPARABLE TO 2019 (1)

 

COMPARABLE TO 2020 (2)

U.S.

 

 

 

Outback Steakhouse

11.2

%

 

27.4

%

Carrabba’s Italian Grill

23.3

%

 

46.5

%

Bonefish Grill

12.3

%

 

65.4

%

Fleming’s Prime Steakhouse & Wine Bar

37.5

%

 

100.8

%

Combined U.S.

15.2

%

 

40.0

%

 

 

 

 

 

FOUR WEEKS ENDED

Comparable restaurant average unit volumes (weekly):

JULY 25, 2021 (3)

 

JULY 28, 2019 (3)

U.S.

 

 

 

Outback Steakhouse

$

73,367

 

$

65,938

Carrabba’s Italian Grill

$

63,650

 

$

51,640

Bonefish Grill

$

62,118

 

$

55,334

Fleming’s Prime Steakhouse & Wine Bar

$

94,553

 

$

68,769

Combined U.S.

$

70,762

 

$

61,379

_________________

(1) For the four-week period June 28, 2021 through July 25, 2021 as compared to July 1, 2019 through July 28, 2019.

(2) For the four-week period June 28, 2021 through July 25, 2021 as compared to June 29, 2020 through July 26, 2020.

(3) For the four-week periods June 28, 2021 through July 25, 2021 and July 1, 2019 through July 28, 2019, respectively.

Recent Sales Results – Brazil

Brazil’s second quarter sales were impacted by a rise in COVID-19 cases that resulted in significantly reduced in-restaurant dining capacity for a majority of the country. In recent weeks as the vaccine rollout increased, we have seen in-restaurant dining capacity increase which has resulted in rapidly improving weekly sales volumes. In São Paulo, which represents our largest market with 46% of stores, in-restaurant dining capacity increased to 60% on July 7, 2021, providing optimism about the continued recovery.

The following tables include Brazil third quarter-to-date Company-owned comparable restaurant sales for the eight-week period ended July 25, 2021 and weekly comparable average unit volumes for the periods indicated:

 

EIGHT WEEKS ENDED

 

JULY 25, 2021

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

COMPARABLE TO 2019 (1)

 

COMPARABLE TO 2020 (2)

International

 

 

 

Outback Steakhouse – Brazil (3)

(7.9)

%

 

141.6

%

 

 

 

 

 

EIGHT WEEKS ENDED

Comparable restaurant average unit volumes (weekly):

JULY 25, 2021 (4)

 

JULY 28, 2019 (4)

International

 

 

 

Outback Steakhouse – Brazil (5)

$

59,222

 

 

$

64,816

 

________________

(1) For the eight-week period May 31, 2021 through July 25, 2021 as compared to June 3, 2019 through July 28, 2019.

(2) For the eight-week period May 31, 2021 through July 25, 2021 as compared to June 1, 2020 through July 26, 2020.

(3) Excludes the effect of fluctuations in foreign currency rates.

(4) For the eight-week periods May 31, 2021 through July 25, 2021 and June 3, 2019 through July 28, 2019, respectively.

(5) Translated at an average exchange rate of 5.09.

Q3 2021 Financial Outlook

The table below presents our expectations for selected fiscal Q3 2021 financial operating results. Our outlook assumes no significant business interruptions related to COVID-19 and contemplates the following considerations:

  • Continuing momentum in U.S. sales trends and includes a level of traditional Q3 seasonality; and
  • Achieving ongoing operating efficiencies from simplification efforts, waste reduction and lower advertising.

Selected Financial Data:

 

 

Q3 2021 Outlook

Total revenues

 

 

At least $1.015B

 

 

 

 

EBITDA (1)

 

 

At least $115M

 

 

 

 

GAAP diluted earnings per share (2)

 

 

At least $0.45

 

 

 

 

Adjusted diluted earnings per share (3)

 

 

At least $0.50

_________________

(1) See EBITDA outlook reconciliation later in this release.

(2) Assumes weighted average diluted shares of approximately 110 million, which includes the dilutive impact of shares issuable in excess of the convertible note principal and excludes the benefit of the convertible notes hedge.

(3) Assumes weighted average adjusted diluted shares of approximately 100 million, which excludes common shares to be issued upon conversion of the 2025 Notes for the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

Fiscal 2021 Financial Outlook

We are updating our 2021 financial outlook for the following items:

  • Increased commodity inflation reflects increases in protein costs, primarily chicken and seafood, as we acquired additional supply outside of our contracted terms due to higher sales volumes;
  • Higher general and administrative expenses from additional incentive compensation as a result of strong financial performance; and
  • A reduction in capital expenditures due to raw material constraints delaying relocations, remodels and new restaurants into 2022.

All other aspects of our previously provided financial outlook remain unchanged. See the table below for more details.

 

Selected Financial Data:

Prior Outlook

 

Current Outlook

Commodity inflation

Flat

 

Approx. 1.0%

 

 

 

 

Labor inflation

3.0% – 3.5%

 

3.0% – 3.5%

 

 

 

 

General and administrative expenses

$225M – $230M

 

$240M – $245M

 

 

 

 

Depreciation and amortization

$165M – $175M

 

$165M – $175M

 

 

 

 

Capital expenditures

$170M – $185M

 

$140M – $150M

 

 

 

 

Number of new system-wide restaurants

20 – 25

 

20 – 25

We are not providing any additional sales or profit guidance for the full-year due to the ongoing uncertainties related to the COVID-19 pandemic.

Conference Call

The Company will host a conference call today, July 30, 2021 at 8:30 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 restaurant-level operating margin, (ii) Adjusted income (loss) from operations and the corresponding margin, (iii) Adjusted net income (loss), (iv) Adjusted diluted earnings (loss) per share, (v) Adjusted segment restaurant-level operating margin, (vi) Adjusted segment income (loss) from operations and the corresponding margin and (vii) Earnings before interest, taxes, depreciation and amortization (“EBITDA”).

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 five, six, seven and ten 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 1,450 restaurants in 47 states, Guam and 19 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”, “Q3 2021 Financial Outlook” and “Fiscal 2021 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; competition; increases in labor costs; government actions and policies; increases in unemployment rates and taxes; local, regional, national and international economic conditions; consumer confidence and spending patterns; price and availability of commodities; the effects of changes in tax laws; challenges associated with our remodeling, relocation and expansion plans; interruption or breach of our systems or loss of consumer or employee information; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to preserve the value of and grow our brands; the seasonality of the Company’s business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the cost and availability of credit; interest rate changes; and compliance with debt covenants and the Company’s ability to make debt payments and planned investments. 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 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

1,055,227

 

 

$

576,261

 

 

$

2,034,678

 

 

$

1,572,498

 

Franchise and other revenues

22,139

 

 

2,198

 

 

30,161

 

 

14,298

 

Total revenues

1,077,366

 

 

578,459

 

 

2,064,839

 

 

1,586,796

 

Costs and expenses

 

 

 

 

 

 

 

Food and beverage costs

312,102

 

 

180,758

 

 

603,972

 

 

500,451

 

Labor and other related

294,999

 

 

205,537

 

 

569,637

 

 

514,806

 

Other restaurant operating

233,450

 

 

177,846

 

 

462,743

 

 

424,401

 

Depreciation and amortization

40,539

 

 

45,784

 

 

81,765

 

 

94,052

 

General and administrative

66,462

 

 

55,487

 

 

123,710

 

 

140,289

 

Provision for impaired assets and restaurant closings

5,177

 

 

24,959

 

 

7,377

 

 

66,277

 

Total costs and expenses

952,729

 

 

690,371

 

 

1,849,204

 

 

1,740,276

 

Income (loss) from operations

124,637

 

 

(111,912)

 

 

215,635

 

 

(153,480)

 

Loss on extinguishment and modification of debt

(2,073)

 

 

(237)

 

 

(2,073)

 

 

(237)

 

Other income (expense), net

 

 

581

 

 

21

 

 

(212)

 

Interest expense, net

(14,990)

 

 

(16,639)

 

 

(29,618)

 

 

(28,347)

 

Income (loss) before provision (benefit) for income taxes

107,574

 

 

(128,207)

 

 

183,965

 

 

(182,276)

 

Provision (benefit) for income taxes

22,688

 

 

(35,779)

 

 

29,281

 

 

(55,434)

 

Net income (loss)

84,886

 

 

(92,428)

 

 

154,684

 

 

(126,842)

 

Less: net income (loss) attributable to noncontrolling interests

2,341

 

 

(172)

 

 

3,277

 

 

25

 

Net income (loss) attributable to Bloomin’ Brands

82,545

 

 

(92,256)

 

 

151,407

 

 

(126,867)

 

Redemption of preferred stock in excess of carrying value

 

 

 

 

 

 

(3,496)

 

Net income (loss) attributable to common stockholders

82,545

 

 

(92,256)

 

 

151,407

 

 

(130,363)

 

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

 

 

 

 

691

 

 

 

Diluted net income (loss) attributable to common stockholders

$

82,545

 

 

$

(92,256)

 

 

$

152,098

 

 

$

(130,363)

 

 

 

 

 

 

 

 

 

Earnings (loss) per share attributable to common stockholders:

 

 

 

 

 

 

 

Basic

$

0.93

 

 

$

(1.05)

 

 

$

1.71

 

 

$

(1.49)

 

Diluted

$

0.75

 

 

$

(1.05)

 

 

$

1.38

 

 

$

(1.49)

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

89,075

 

 

87,496

 

 

88,721

 

 

87,312

 

Diluted

109,805

 

 

87,496

 

 

110,223

 

 

87,312

 

TABLE TWO

BLOOMIN’ BRANDS, INC.

SEGMENT RESULTS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

990,293

 

 

$

536,767

 

 

$

1,890,352

 

 

$

1,421,656

 

Franchise and other revenues

12,765

 

 

313

 

 

17,624

 

 

9,921

 

Total revenues

$

1,003,058

 

 

$

537,080

 

 

$

1,907,976

 

 

$

1,431,577

 

Restaurant-level operating margin

21.7

%

 

3.2

%

 

20.5

%

 

8.4

%

Income (loss) from operations

$

165,297

 

 

$

(62,921)

 

 

$

287,032

 

 

$

(51,542)

 

Operating income (loss) margin

16.5

%

 

(11.7)

%

 

15.0

%

 

(3.6)

%

International Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Restaurant sales

$

64,934

 

 

$

39,494

 

 

$

144,326

 

 

$

150,842

 

Franchise and other revenues (1)

9,374

 

 

1,885

 

 

12,537

 

 

4,377

 

Total revenues

$

74,308

 

 

$

41,379

 

 

$

156,863

 

 

$

155,219

 

Restaurant-level operating margin

3.2

%

 

(21.8)

%

 

9.3

%

 

8.0

%

Income (loss) from operations

$

2,470

 

 

$

(17,070)

 

 

$

6,007

 

 

$

(10,283)

 

Operating income (loss) margin

3.3

%

 

(41.3)

%

 

3.8

%

 

(6.6)

%

Reconciliation of Segment Income (Loss) from Operations to Consolidated Income (Loss) from Operations

 

 

 

 

 

 

 

Segment income (loss) from operations

 

 

 

 

 

 

 

U.S.

$

165,297

 

 

$

(62,921)

 

 

$

287,032

 

 

$

(51,542)

 

International

2,470

 

 

(17,070)

 

 

6,007

 

 

(10,283)

 

Total segment income (loss) from operations

167,767

 

 

(79,991)

 

 

293,039

 

 

(61,825)

 

Unallocated corporate operating expense (2)

(43,130)

 

 

(31,921)

 

 

(77,404)

 

 

(91,655)

 

Total income (loss) from operations

$

124,637

 

 

$

(111,912)

 

 

$

215,635

 

 

$

(153,480)

 

____________________

(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.

(2) The thirteen and twenty-six weeks ended June 28, 2020 include $2.4 million and $24.6 million, respectively, of charges that were not allocated to our segments related to our transformational initiatives.

TABLE THREE

BLOOMIN’ BRANDS, INC.

SUPPLEMENTAL BALANCE SHEET INFORMATION

(UNAUDITED)

(dollars in thousands)

JUNE 27, 2021

DECEMBER 27, 2020

Cash and cash equivalents

$

101,285

 

 

$

109,980

 

Net working capital (deficit) (1)

$

(666,393)

 

 

$

(626,250)

 

Total assets

$

3,246,753

 

 

$

3,362,107

 

Total debt, net

$

850,063

 

 

$

1,036,480

 

Total stockholders’ equity

$

152,907

 

 

$

10,957

 

_________________

(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 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Income (loss) from operations

$

124,637

 

 

$

(111,912)

 

 

$

215,635

 

 

$

(153,480)

 

Operating income (loss) margin

11.6

%

 

(19.3)

%

 

10.4

%

 

(9.7)

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

22,139

 

 

2,198

 

 

30,161

 

 

14,298

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

40,539

 

 

45,784

 

 

81,765

 

 

94,052

 

General and administrative

66,462

 

 

55,487

 

 

123,710

 

 

140,289

 

Provision for impaired assets and restaurant closings

5,177

 

 

24,959

 

 

7,377

 

 

66,277

 

Restaurant-level operating income

$

214,676

 

 

$

12,120

 

 

$

398,326

 

 

$

132,840

 

Restaurant-level operating margin

20.3

%

 

2.1

%

 

19.6

%

 

8.4

%

 

 

 

 

 

 

 

 

U.S.

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Income (loss) from operations

$

165,297

 

 

$

(62,921)

 

 

$

287,032

 

 

$

(51,542)

 

Operating income (loss) margin

16.5

%

 

(11.7)

%

 

15.0

%

 

(3.6)

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

12,765

 

 

313

 

 

17,624

 

 

9,921

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

33,579

 

 

37,308

 

 

67,224

 

 

74,948

 

General and administrative

22,953

 

 

18,343

 

 

44,045

 

 

49,223

 

Provision for impaired assets and restaurant closings

5,676

 

 

24,781

 

 

7,139

 

 

56,475

 

Restaurant-level operating income

$

214,740

 

 

$

17,198

 

 

$

387,816

 

 

$

119,183

 

Restaurant-level operating margin

21.7

%

 

3.2

%

 

20.5

%

 

8.4

%

 

 

 

 

 

 

 

 

International

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Income (loss) from operations

$

2,470

 

 

$

(17,070)

 

 

$

6,007

 

 

$

(10,283)

 

Operating income (loss) margin

3.3

%

 

(41.3)

%

 

3.8

%

 

(6.6)

%

Less:

 

 

 

 

 

 

 

Franchise and other revenues

9,374

 

 

1,885

 

 

12,537

 

 

4,377

 

Plus:

 

 

 

 

 

 

 

Depreciation and amortization

5,565

 

 

5,884

 

 

11,285

 

 

12,642

 

General and administrative

4,116

 

 

4,146

 

 

8,721

 

 

10,402

 

Provision for impaired assets and restaurant closings

(708)

 

 

296

 

 

(1)

 

 

3,640

 

Restaurant-level operating income (loss)

$

2,069

 

 

$

(8,629)

 

 

$

13,475

 

 

$

12,024

 

Restaurant-level operating margin

3.2

%

 

(21.8)

%

 

9.3

%

 

8.0

%

TABLE FIVE

BLOOMIN’ BRANDS, INC.

RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

FAVORABLE

(UNFAVORABLE)

CHANGE IN

ADJUSTED

QUARTER TO

DATE

 

JUNE 27, 2021

 

JUNE 28, 2020

 

Consolidated:

REPORTED

 

ADJUSTED

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage costs

29.6

%

 

29.6

%

 

31.4

%

 

31.2

%

 

1.6

%

Labor and other related

28.0

%

 

28.0

%

 

35.7

%

 

35.7

%

 

7.7

%

Other restaurant operating

22.1

%

 

22.1

%

 

30.9

%

 

30.4

%

 

8.3

%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin (2)

20.3

%

 

20.3

%

 

2.1

%

 

2.7

%

 

17.6

%

 

 

 

 

 

 

 

 

 

 

Segments – Restaurant-level operating margin:

 

 

 

 

 

 

 

 

 

U.S. (2)

21.7

%

 

21.7

%

 

3.2

%

 

3.9

%

 

17.8

%

International (2)

3.2

%

 

3.2

%

 

(21.8)

%

 

(21.4)

%

 

24.6

%

 

 

 

 

 

 

 

 

 

 

 

TWENTY-SIX WEEKS ENDED

 

FAVORABLE (UNFAVORABLE) CHANGE IN ADJUSTED

YEAR TO DATE

 

JUNE 27, 2021

 

JUNE 28, 2020

 

Consolidated:

REPORTED

 

ADJUSTED

 

REPORTED

 

ADJUSTED (1)

 

Restaurant sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage costs

29.7

%

 

29.7

%

 

31.8

%

 

31.4

%

 

1.7

%

Labor and other related

28.0

%

 

28.0

%

 

32.7

%

 

32.7

%

 

4.7

%

Other restaurant operating

22.7

%

 

22.7

%

 

27.0

%

 

27.0

%

 

4.3

%

 

 

 

 

 

 

 

 

 

 

Restaurant-level operating margin (2)

19.6

%

 

19.6

%

 

8.4

%

 

8.9

%

 

10.7

%

 

 

 

 

 

 

 

 

 

 

Segments – Restaurant-level operating margin:

 

 

 

 

 

 

 

 

 

U.S. (2)

20.5

%

 

20.5

%

 

8.4

%

 

8.7

%

 

11.8

%

International (2)

9.3

%

 

9.3

%

 

8.0

%

 

9.3

%

 

%

_________________

(1)

The table set forth below titled “Restaurant-level Operating Margin Adjustments” provides additional information regarding the adjustments for each period presented.

(2)

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:

 

(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.

Restaurant-level Operating Margin Adjustments – Following is a summary of (favorable) unfavorable adjusted restaurant-level operating margin adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in table six of this release for the periods indicated:

 

THIRTEEN WEEKS

 

TWENTY-SIX WEEKS

ENDED

ENDED

(dollars in millions)

JUNE 28, 2020

 

JUNE 28, 2020

COVID-19 related costs (1)

$

(3.7)

 

 

$

(9.9)

 

Restaurant relocations, asset impairments and closing costs

 

 

2.7

 

 

$

(3.7)

 

 

$

(7.2)

 

_________________

(1) Includes $1.2 million and $7.3 million of adjustments for the thirteen and twenty-six weeks ended June 28, 2020, respectively, recorded in Food and beverage costs, including $0.2 million and $2.0 million of adjustments, respectively, recorded in the international segment. All other adjustments were recorded within the U.S. segment.

TABLE SIX

BLOOMIN’ BRANDS, INC.

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

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(in thousands, except per share data)

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Income (loss) from operations

$

124,637

 

 

$

(111,912)

 

 

$

215,635

 

 

$

(153,480)

 

Operating income (loss) margin

11.6

%

 

(19.3)

%

 

10.4

%

 

(9.7)

%

Adjustments:

 

 

 

 

 

 

 

Legal and other matters (1)

(6,337)

 

 

 

 

(6,337)

 

 

178

 

COVID-19-related costs (2)

 

 

30,342

 

 

 

 

79,218

 

Severance and other transformational costs (3)

 

 

2,415

 

 

 

 

24,647

 

Restaurant relocations, asset impairments and closing costs (4)

 

 

 

 

 

 

(2,205)

 

Total income (loss) from operations adjustments

(6,337)

 

 

32,757

 

 

(6,337)

 

 

101,838

 

Adjusted income (loss) from operations

$

118,300

 

 

$

(79,155)

 

 

$

209,298

 

 

$

(51,642)

 

Adjusted operating income (loss) margin

11.0

%

 

(13.7)

%

 

10.2

%

 

(3.3)

%

 

 

 

 

 

 

 

 

Diluted net income (loss) attributable to common stockholders

$

82,545

 

 

$

(92,256)

 

 

$

152,098

 

 

$

(130,363)

 

Convertible senior notes if-converted method interest

adjustment, net of tax (5)

 

 

 

 

691

 

 

 

Net income (loss) attributable to common stockholders

82,545

 

 

(92,256)

 

 

151,407

 

 

(130,363)

 

Adjustments:

 

 

 

 

 

 

 

Income (loss) from operations adjustments

(6,337)

 

 

32,757

 

 

(6,337)

 

 

101,838

 

Loss on extinguishment and modification of debt

2,073

 

 

 

 

2,073

 

 

 

Amortization of debt discount (6)

 

 

1,379

 

 

 

 

1,379

 

Total adjustments, before income taxes

(4,264)

 

 

34,136

 

 

(4,264)

 

 

103,217

 

Adjustment to provision for income taxes (7)

1,243

 

 

(6,474)

 

 

1,243

 

 

(28,469)

 

Redemption of preferred stock in excess of carrying value (8)

 

 

 

 

 

 

3,496

 

Net adjustments

(3,021)

 

 

27,662

 

 

(3,021)

 

 

78,244

 

Adjusted net income (loss)

$

79,524

 

 

$

(64,594)

 

 

$

148,386

 

 

$

(52,119)

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share attributable to common stockholders (9)

$

0.75

 

 

$

(1.05)

 

 

$

1.38

 

 

$

(1.49)

 

Adjusted diluted earnings (loss) per share (9)(10)

$

0.81

 

 

$

(0.74)

 

 

$

1.53

 

 

$

(0.60)

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding (9)

109,805

 

 

87,496

 

 

110,223

 

 

87,312

 

Adjusted diluted weighted average common shares outstanding (9)(10)

98,574

 

 

87,496

 

 

97,011

 

 

87,312

 

_________________

(1) The thirteen and twenty-six weeks ended June 27, 2021 includes 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) Costs incurred in connection with the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage,contingent lease liabilities and current expected credit losses.

(3) Severance, professional fees and other costs incurred as a result of transformational and restructuring activities.

(4) Includes asset impairment charges and accelerated depreciation incurred in connection with our relocation program and a lease termination gain of $2.8 million.

(5) Adjustment for interest expense related to our convertible senior notes (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 our 2025 Notes in cash. The calculation of adjusted diluted earnings per share excludes the 2025 Notes interest adjustment.

(6) Amortization of the debt discount related to the issuance of the 2025 Notes.

(7) Income tax effect of the adjustments for the periods presented.

(8) Consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio subsidiary.

(9) 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 and twenty-six weeks ended June 28, 2020.

(10) For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was 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 the thirteen and twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 11,231 and 10,442 shares, 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 (loss) adjustments:

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Franchise and other revenues

$

(6,337)

 

 

$

 

 

$

(6,337)

 

 

$

 

Food and beverage costs

 

 

1,163

 

 

 

 

7,345

 

Other restaurant operating

 

 

2,467

 

 

 

 

(176)

 

Depreciation and amortization

 

 

 

 

 

 

407

 

General and administrative

 

 

3,632

 

 

 

 

27,856

 

Provision for impaired assets and restaurant closings

 

 

25,495

 

 

 

 

66,406

 

Loss on extinguishment and modification of debt

2,073

 

 

 

 

2,073

 

 

 

Interest expense, net

 

 

1,379

 

 

 

 

1,379

 

Provision (benefit) for income taxes

1,243

 

 

(6,474)

 

 

1,243

 

 

(28,469)

 

Redemption of preferred stock in excess of carrying value

 

 

 

 

 

 

3,496

 

Net adjustments

$

(3,021)

 

 

$

27,662

 

 

$

(3,021)

 

 

$

78,244

 

TABLE SEVEN

BLOOMIN’ BRANDS, INC.

SEGMENT INCOME FROM OPERATIONS NON-GAAP RECONCILIATIONS

(UNAUDITED)

(dollars in thousands)

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

U.S. Segment

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

Income (loss) from operations

$

165,297

 

 

$

(62,921)

 

 

$

287,032

 

 

$

(51,542)

 

Operating income (loss) margin

16.5

%

 

(11.7)

%

 

15.0

%

 

(3.6)

%

Adjustments:

 

 

 

 

 

 

 

COVID-19-related costs (1)

 

 

29,805

 

 

 

 

72,784

 

Restaurant relocations, asset impairments and closing costs (2)

 

 

 

 

 

 

(2,205)

 

Adjusted income (loss) from operations

$

165,297

 

 

$

(33,116)

 

 

$

287,032

 

 

$

19,037

 

Adjusted operating income (loss) margin

16.5

%

 

(6.2)

%

 

15.0

%

 

1.3

%

 

 

 

 

 

 

 

 

International Segment

 

 

 

 

 

 

 

Income (loss) from operations

$

2,470

 

 

$

(17,070)

 

 

$

6,007

 

 

$

(10,283)

 

Operating income (loss) margin

3.3

%

 

(41.3)

%

 

3.8

%

 

(6.6)

%

Adjustments:

 

 

 

 

 

 

 

Legal and other matters (3)

(6,337)

 

 

 

 

(6,337)

 

 

 

COVID-19 related costs (1)

 

 

459

 

 

 

 

5,651

 

Adjusted loss from operations

$

(3,867)

 

 

$

(16,611)

 

 

$

(330)

 

 

$

(4,632)

 

Adjusted operating loss margin

(5.7)

%

 

(40.1)

%

 

(0.2)

%

 

(3.0)

%

_________________

(1) Costs incurred in connection with the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses.

(2) Includes asset impairment charges and accelerated depreciation incurred in connection with our relocation program and a lease termination gain of $2.8 million.

(3) 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 INFORMATION

(UNAUDITED)

Number of restaurants (at end of the period):

MARCH 28, 2021

 

OPENINGS

 

CLOSURES

 

JUNE 27, 2021

U.S.:

 

 

 

 

 

 

 

Outback Steakhouse

 

 

 

 

 

 

 

Company-owned

567

 

 

 

 

(1)

 

 

566

 

Franchised

131

 

 

 

 

 

 

131

 

Total

698

 

 

 

 

(1)

 

 

697

 

Carrabba’s Italian Grill

 

 

 

 

 

 

 

Company-owned

199

 

 

 

 

 

 

199

 

Franchised

21

 

 

 

 

(1)

 

 

20

 

Total

220

 

 

 

 

(1)

 

 

219

 

Bonefish Grill

 

 

 

 

 

 

 

Company-owned

180

 

 

 

 

(1)

 

 

179

 

Franchised

7

 

 

 

 

 

 

7

 

Total

187

 

 

 

 

(1)

 

 

186

 

Fleming’s Prime Steakhouse & Wine Bar

 

 

 

 

 

 

 

Company-owned

64

 

 

 

 

 

 

64

 

Other

 

 

 

 

 

 

 

Company-owned (1)

6

 

 

2

 

 

 

 

8

 

U.S. total

1,175

 

 

2

 

 

(3)

 

 

1,174

 

International:

 

 

 

 

 

 

 

Company-owned

 

 

 

 

 

 

 

Outback Steakhouse – Brazil (2)

110

 

 

3

 

 

 

 

113

 

Other (1)(3)

34

 

 

 

 

 

 

34

 

Franchised

 

 

 

 

 

 

 

Outback Steakhouse—South Korea (3)

100

 

 

9

 

 

(1)

 

 

108

 

Other (1)

57

 

 

 

 

(2)

 

 

55

 

International total

301

 

 

12

 

 

(3)

 

 

310

 

System-wide total

1,476

 

 

14

 

 

(6)

 

 

1,484

 

____________________

(1) U.S. Company-owned and International Franchised Other includes four and three fast-casual Aussie Grill locations as of June 27, 2021. International Company-owned Other includes two fast-casual Aussie Grill locations as of June 27, 2021.

(2) The restaurant counts for Brazil are reported as of February 28, 2021 and May 31, 2021, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) As of June 27, 2021, we had 32 international dark kitchens that offer delivery only included in Franchised Outback Steakhouse – South Korea. In addition, we had one international dark kitchen location included within Company-owned Other as of June 27, 2021.

TABLE NINE

BLOOMIN’ BRANDS, INC.

COMPARABLE RESTAURANT SALES INFORMATION

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

 

JUNE 27, 2021

 

JUNE 28, 2020

 

JUNE 27, 2021

 

JUNE 28, 2020

 

Comparable to

2019 (1)

 

Comparable to

2020

 

Comparable to

2019

 

Comparable to

2019 (1)

 

Comparable to

2020

 

Comparable to

2019

Year over year percentage change:

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

U.S. (2)

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

11.3

%

 

65.8

%

 

(32.9)

%

 

2.3

%

 

28.8

%

 

(20.6)

%

Carrabba’s Italian Grill

16.7

%

 

84.3

%

 

(36.7)

%

 

7.7

%

 

38.4

%

 

(22.2)

%

Bonefish Grill

4.2

%

 

141.2

%

 

(56.8)

%

 

(6.3)

%

 

43.5

%

 

(34.7)

%

Fleming’s Prime Steakhouse &

Wine Bar

24.4

%

 

182.6

%

 

(56.3)

%

 

3.6

%

 

55.6

%

 

(33.6)

%

Combined U.S.

12.1

%

 

84.6

%

 

(39.4)

%

 

1.9

%

 

34.4

%

 

(24.2)

%

International

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse – Brazil (3)

(36.3)

%

 

78.8

%

 

(63.9)

%

 

(26.2)

%

 

2.7

%

 

(27.4)

%

 

 

 

 

 

 

 

 

 

 

 

 

Traffic:

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

4.4

%

 

51.4

%

 

(31.0)

%

 

(2.7)

%

 

21.9

%

 

(20.2)

%

Carrabba’s Italian Grill

13.0

%

 

57.2

%

 

(28.1)

%

 

5.8

%

 

27.0

%

 

(16.7)

%

Bonefish Grill

3.9

%

 

52.4

%

 

(29.8)

%

 

(4.7)

%

 

22.4

%

 

(20.6)

%

Fleming’s Prime Steakhouse & Wine Bar

11.9

%

 

97.0

%

 

(43.5)

%

 

(3.5)

%

 

33.5

%

 

(28.0)

%

Combined U.S.

6.2

%

 

53.6

%

 

(30.6)

%

 

(1.4)

%

 

23.2

%

 

(19.8)

%

International

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse – Brazil

(20.3)

%

 

63.0

%

 

(48.5)

%

 

(13.6)

%

 

8.9

%

 

(19.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

Average check per person (4):

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse

6.9

%

 

14.4

%

 

(1.9)

%

 

5.0

%

 

6.9

%

 

(0.4)

%

Carrabba’s Italian Grill

3.7

%

 

27.1

%

 

(8.6)

%

 

1.9

%

 

11.4

%

 

(5.5)

%

Bonefish Grill

0.3

%

 

88.8

%

 

(27.0)

%

 

(1.6)

%

 

21.1

%

 

(14.1)

%

Fleming’s Prime Steakhouse & Wine Bar

12.5

%

 

85.6

%

 

(12.8)

%

 

7.1

%

 

22.1

%

 

(5.6)

%

Combined U.S.

5.9

%

 

31.0

%

 

(8.8)

%

 

3.3

%

 

11.2

%

 

(4.4)

%

International

 

 

 

 

 

 

 

 

 

 

 

Outback Steakhouse – Brazil

(15.8)

%

 

22.2

%

 

(15.2)

%

 

(12.4)

%

 

(4.5)

%

 

(8.4)

%

____________________

(1) Represents comparable restaurant sales, traffic and average check per person increases (decreases) relative to fiscal year 2019 for improved comparability due to the impact of COVID-19 on fiscal year 2020 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.

TABLE TEN

BLOOMIN’ BRANDS, INC.

EBITDA RECONCILIATIONS

(UNAUDITED)

 

THIRTEEN WEEKS ENDED

 

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 27, 2021

 

JUNE 27, 2021

Net income attributable to common stockholders

$

82,545

 

 

$

151,407

 

Provision for income taxes

22,688

 

 

29,281

 

Interest expense, net

14,990

 

 

29,618

 

Depreciation and amortization

40,539

 

 

81,765

 

EBITDA

$

160,762

 

 

$

292,071

 

TABLE ELEVEN

BLOOMIN’ BRANDS, INC.

FISCAL 2021 THIRD QUARTER EBITDA OUTLOOK RECONCILIATION

(UNAUDITED)

(dollars in millions)

 

Net income attributable to common stockholders

At least $50M

Provision for income taxes

At least $10M

Interest expense, net

At least $14M

Depreciation and amortization

At least $41M

EBITDA

At least $115M

 

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