Yahoo Finance Bloomin Brands Inc (BLMN) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges ...
Total Revenue: $1.2 billion, down 4% from 2023.
US Comparable Restaurant Sales: Down 160 basis points.
Traffic: Negative 430 basis points.
Average Check: Up 2.7% from 2023.
Q1 GAAP Diluted EPS: Negative $0.96.
Q1 Adjusted Diluted EPS: $0.70.
Adjusted Operating Margins: 7.5%, down from 9.7% last year.
Total Debt: $952 million at the end of Q1.
Off-Premises Sales: Approx. 23% of total US sales.
Dividend: Quarterly dividend declared at $0.24 per share, payable on May 31.
2024 Full Year Guidance: Adjusted EPS expected to be between $2.51 and $2.66.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Outback Steakhouse outperformed the industry by 270 basis points in Q1, with traffic as a key driver of sales momentum.
Bloomin Brands Inc (NASDAQ:BLMN) is making significant investments in technology and operations, enhancing guest experience and service consistency.
The company is expanding its off-premises business, which now represents 23% of US sales, showing strong demand and growth potential.
Bloomin Brands Inc (NASDAQ:BLMN) plans to remodel 60 to 65 restaurants and open 40 to 45 new ones systemwide, indicating a robust pipeline and commitment to asset improvement.
The company maintains a strong balance sheet and robust cash flow, enabling continued investment in marketing, technology, and operations.
Negative Points
US comparable sales were down 160 basis points, and traffic decreased by 430 basis points in Q1 2024.
Bloomin Brands Inc (NASDAQ:BLMN) reported a decline in total revenues by 4% from the previous year, primarily due to negative impacts such as the calendar shift and the end of the Brazil value-added tax exemption.
The company's Q1 GAAP diluted earnings per share was negative $0.96, influenced by the loss on extinguishment of debt.
Inflation levels remain somewhat elevated, contributing to additional year-over-year margin unfavorability, particularly in labor costs due to wage inflation.
The strategic review of operations in Brazil introduces uncertainty, although it presents a potential for future financial upside if new tax legislation is beneficial.
Q & A Highlights
Q: What has changed with the strategic review of Bloomin' Brands' operations in Brazil compared to previous considerations? A: David Deno, CEO, explained that post-COVID, the Brazil business is thriving, growing quickly, and it's an opportune time to explore refranchising. The company is open to selling but seeks proper valuation, maintaining some level of control over governance and royalty rates.
Q: How is the consumer environment affecting Bloomin' Brands, particularly in terms of traffic and spending patterns? A: David Deno noted a shift in consumer behavior, with lower-end consumers managing their spending more tightly, evident in reduced check sizes and shifts in menu choices. However, middle to high-income consumers are maintaining their spending levels.
Q: Can you discuss the operational improvements at Outback and their impact on competitive performance? A: David Deno highlighted significant improvements in steak accuracy and consistency of experience, attributing these to investments in kitchen technology. These enhancements are helping Outback close the gap with competitors and contribute to its outperformance in the casual dining sector.
Q: What are the plans for Carrabba's in terms of operational strategy and growth? A: David Deno outlined that Carrabba's will continue focusing on its robust off-premise business and improving in-restaurant dining experiences. Initiatives like wine dinners and lunch offerings are being expanded, alongside investments in kitchen productivity to reduce costs and improve service.
Q: How is the promotional strategy at Outback evolving in response to the current market conditions? A: David Deno mentioned that Outback would continue offering high-quality, value-centric limited-time offers (LTOs) that align with the brand's identity. These are designed to respond to increased promotional activities in the industry without engaging in broad, deep discounting.
Q: What financial strategies are being considered if the Brazil operations are sold or refranchised? A: Michael Healy, CFO, stated that the potential sale proceeds could be used for various purposes such as debt reduction, share repurchases, or reinvestment in U.S. operations, depending on the deal's specifics and timing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
