Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bloomin Brands Inc (NASDAQ:BLMN) has initiated a holistic strategy to improve business results in 2025, focusing on simplifying operations and enhancing guest experiences.
• The company has refranchised its Brazil operations, retaining a 33% ownership, which de-risks the business model and allows management to focus on domestic growth.
• BLMN is implementing a menu simplification strategy, reducing menu items by 10-20% to improve quality and operational efficiency.
• The introduction of Ziosk technology at Outback is expected to enhance guest satisfaction and operational efficiency, with 80% of guests using pay-at-the-table features in test locations.
• The company is focusing on sustainable traffic and sales growth by improving quality, value, and guest experience, with a particular emphasis on turning around the Outback brand.

Negative Points

• Bloomin Brands Inc (NASDAQ:BLMN) underperformed the industry in Q4 2024, losing market share by 260 basis points on sales and 410 basis points on traffic.
• The company's Q4 2024 revenues were down 8% from the previous year, primarily due to the absence of a 53rd week and restaurant closures.
• BLMN's Q4 adjusted operating margins declined to 4.4% from 7.5% the previous year, impacted by inflationary pressures on labor and restaurant operating expenses.
• The company reported a GAAP diluted earnings per share loss of $0.93 in Q4 2024, compared to a profit of $0.45 in 2023, due to impairments and tax expenses related to the Brazil transaction.
• BLMN's guidance for 2025 anticipates flat to negative 2% US comparable restaurant sales, with continued pressure from labor and commodity inflation.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with BLMN.

Q: Mike Spanos, you've expressed the importance of taking care of the people and helping ensure they can do their jobs well. Can you give a sense of the timeline for these actions and any other big changes you want to look at? A: We started quickly with leadership changes and the Brazil transaction to de-risk and simplify the business. We've also de-layered the organization to empower brand-level decision-making. Menu reductions will be implemented by May, and Ziosk will be in place by the end of April. The focus is on abundant everyday value, with significant benefits expected in the second half of the year.

Q: Should we consider similar trends by brand for the first quarter as seen in the fourth quarter? A: Yes, the trends by brand observed in the fourth quarter are expected to be consistent in the first quarter.

Q: Are there any underlying changes in consumer spending beyond weather and holiday shifts? A: We see a choppy environment and a choosy consumer, particularly in the short term. There is some check management among households under $100,000, affecting appetizer mix and beverage attachments. However, long-term trends remain positive, and we are meeting consumers with the right value to encourage visits.

Q: What is the main opportunity for improving the guest experience? A: The main opportunity lies in consistency of execution, focusing on quality, value, and guest experience to drive intent to return and frequency of visitation.

Q: How are you envisioning the Outback value strategy as you move away from LTOs? A: The focus is on abundant everyday value, exemplified by the Aussie 3 Course, which has shown strong guest engagement and trade-up behavior. This strategy builds brand trust and encourages frequent visits, aligning with our goal of delivering consistent value and simplifying operations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.