Bloomin' Brands, Inc.

Greetings and welcome to the Bloomin' Brands Fiscal Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Senior Vice President of Investor Relations. Thank you. Mr. Graff, you may begin.

Thank you and good morning, everyone. With me on today's call are David Dino, our Chief Executive Officer, and Chris Meyer, Executive Vice President and Chief Financial Officer. By now, you should have access to our fiscal fourth quarter 2021 earnings release. It can also be found on our website at bloomandbrands.com in the investor section. Throughout this conference call, we will be presenting results on an adjusted basis, an explanation of our use of non-GAAP financial measures, and reconciliations to the most directly comparable gap measures appear in our earnings release on our website, as previously described. Before we begin formal remarks, I'd like to remind everyone that part of our discussion today will include forward-looking statements, including a discussion of recent trends. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are mentioned in our earnings release, Others are discussed in our SEC filings, which are available at sec.gov. During today's call, we'll provide a brief recap of our financial performance for the fiscal fourth quarter 2021, an overview of company highlights, and 2022 guidance. Once we've completed these remarks, we'll open up the call for questions. And with that, I'd now like to turn the call over to David Dino.

Well, thank you, Mark, and welcome to everyone listening today. As noted in this morning's earnings release, adjusted Q4 2021 diluted earnings per share was 60 cents versus 32 cents in Q4 2019, up 88%. We also saw good sales growth in Q4 as sales outpaced the industry by 240 basis points on a two-year basis. This success is directly tied to the planning and hard work that has taken place in our company over the last few years. Back in 2019, we presented a comprehensive plan to build a stronger, leaner, operation-centered company, one focused on providing even better food and service to customers. I will talk about those plans in a minute. It's clear our strategies are working, and this gives us confidence in our ability to deliver on key commitments and drive even more sales growth. Stepping back, we are a far different and better company today than we were in 2019. I wanted to highlight this in a few key measures to dimensionalize the progress we have made. In 2021, we earned $2.70 a share versus $1.54 a share in 2019, which is a two-year growth of 75% on an adjusted basis. U.S. comp sales finished up 4.5% versus 2019 and were up 30.5% versus 2020. Adjusted operating margins finished at 9.1%, versus 4.8% in 2019. Our operating margins now compare favorably to many in the industry. And finally, we have a much stronger balance sheet. We generate significant free cash flow and paid down approximately $300 million in debt in 2021. As a result, our credit metrics have improved and are now below our goal of three times least adjusted leverage. As Chris will lay out in a bit, this now enables us to return cash to shareholders while paying down additional debt. These results would not have been possible without the talented and dedicated employees in our restaurants and restaurant support center. Your commitment to serving guests with the highest level of service, hospitality, and experience is what makes our restaurants so successful. As we look forward, we will further capitalize on the success of 2021. Specifically, our focus will be on executing against the following key priorities to deliver sustainable growth. First, grow in restaurant sales by improving service levels and food offerings. Over the last few years, we have made investments in these areas to elevate the customer experience across the portfolio, especially at Outback. We also look for ways to simplify the business to improve execution and consistency. These concerted efforts have translated to market share gains, where we outperformed the industry by 590 basis points on a two-year basis versus 2019. In addition, we continue to upgrade our asset base. Investments in remiles are offering good returns, and relocations at Outback are providing outsized sales lifts and volumes exceeding $4.5 million. Second, for our leading off-premises business, we capitalize on our strong carry-off delivery capabilities during the pandemic. Retention levels in this important channel are contributing to sales outperformance. U.S. off-premises sales were over $1 billion in 2021, up 147% versus 2019. We enjoyed sales gains in both carryout and delivery. Importantly, profit margins in this channel are approaching the margins of the in-restaurant business. This is the result of initiatives that were completed the last few quarters. In addition, we are aggressively pursuing catering opportunities as return to work grows. Carrabba saw 46% growth in catering sales in 2021 versus 2019. We offer significant value through our bundles platforms and are expanding relationships to increase market awareness and drive penetration. We expect off-premises to remain a large and growing part of the business going forward. Third, leverage operating margins gains by growing sales and reducing costs. This starts by growing healthy traffic across the in-restaurant and off-premises channels. We also reduce reliance on discounting and promotional LTOs and pivot advertising spend towards more targeted, higher ROI digital measures. In addition, we remain disciplined in managing the middle P&L and are aggressively pursuing efficiencies in food, labor, and overhead. Importantly, we will roll out several initiatives in the coming quarters. These include new cooking technology, including advanced grills and ovens to improve food quality and productivity. In addition, we will be deploying kitchen display systems for meal pacing and handheld technology for our servers. These innovations should further improve customer service and reduce costs. and finally become an even more digitally savvy company. In 2021, approximately 70% of total U.S. off-premises sales were through digital channels. Digital sales were $750 million in 2021, up 268% versus 2019. Over the past year, we implemented a new online ordering system and mobile apps to support our digital business. These technology initiatives are aimed at creating a frictionless customer experience while also enhancing customer engagement. We have outperformed expectations, and the new app has over 1.4 million downloads. You can expect to see more activity on these fronts in the coming quarters. The priorities above will be our guide for 2022 and beyond. Because of the momentum we have in so many areas and our stronger balance sheet, we are in a position to begin growing our restaurant base in a meaningful way once again. We will provide more details on our new unit development plans for 2022 and beyond during our first quarter call in April. In the meantime, just let me say our new unit priorities will be Outback, Fleming's, and Brazil. And Chris has incorporated the impact of our development plans in the 2022 guidance that he will discuss in a few minutes. In summary, Q4 is another terrific quarter, and this momentum sets us up well for 2022. We remain ruthlessly focused on executing against our key initiatives. We are optimistic about our ability to continue capitalizing these opportunities and drive total shareholder returns. And with that, I'll now turn the call over to Chris, who will provide more detail on Q4 and provide some thoughts on 2022.