Bloomin' Brands, Inc.

Greetings and welcome to Blumenbrand's third quarter 2022 earnings 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 third quarter 2022 earnings release. It can also be found on our website at blumenbrands.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 GAAP 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 third quarter 2022, an overview of company highlights, and an update to 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 Q3 2022 diluted earnings per share was 35 cents, which is more than triple our 2019 results. This compares to $0.57 in Q3 2021 as we lapped exceptional earnings from stimulus checks and pent-up consumer demand. This quarter was among the highest inflationary quarters of the year. We made the conscious decision to preserve our value equation and not raise prices to fully offset inflation. While the consumer has remained resilient to date, we believe this short-term decision will have long-term benefits for the business. The confidence in our strategy, both domestically and internationally, is reflected in our increased revenue guidance. This was driven in large part by the momentum we saw in our sales initiatives during the quarter and the marketing investments we are making to balance the year. During the quarter, we saw comp trends improve sequentially every month. This was driven by stronger traffic across all U.S. concepts, particularly in in-restaurant dining. Importantly, this represents over 300 basis points of outperformance in traffic versus the industry on a three-year basis. We continue to execute against the comprehensive plan we established to build a stronger, leaner, operation-centered company. This includes leveraging our leading off-premises business, growing digital capabilities, and improved operational efficiencies to deliver on our key commitments. These results would not have been possible without the talented and dedicated employees in our restaurants and the Restaurant Support Center. I'm especially proud of the team's proactive response to aid and assist those impacted by Hurricane Ian. This storm hit the west coast of Florida at the end of September, causing significant disruption to residents, our employees, and restaurants. Among their efforts, the team fed more than 11,000 first responders, volunteers, and families in southwest Florida. This is a testament to the passion of our employees to take care of our people and communities during this time of need. As we look ahead to the balance of the year, the focus remains on achieving our full-year objectives despite a more challenging economic environment. The plans in place set us up well to achieve our objectives, strengthen the business, and provide momentum for 2023 and beyond. As we've said in past calls, the key elements of our plan include First, grow in-restaurant sales by improving our service levels and food offerings. We have made investments over the past several years to elevate the customer experience, which is showing up in improved social and customer scores, especially at Outback. As part of this effort, we continue to look for ways to simplify the business to improve execution and consistency. We are rolling out several innovations, such as new cooking technology, including advanced grills and ovens to improve food quality and productivity. We are also installing kitchen display systems for meal pacing and handheld technology for our servers. We expect to complete the rollout of the handheld technology by the end of the year and the new cooking technology by the middle of next year. As technology rolls out, these innovations should reduce operational complexities in our restaurants and further improve customer service. We are also deploying more targeted marketing to build awareness and drive frequency. These initiatives are aimed at highlighting our great menu and the everyday value that we offer to guests. Importantly, this is accomplished without sacrificing product quality or the guest experience. In addition, these programs offer high returns and do not rely on deep discounting to drive traffic. Second, expand our leading off-premises business. We continue to capitalize on our strong carryout and delivery capabilities. Retention levels held steady with Q2 and are contributing to sales outperformance. Importantly, Profit margins in this channel are comparable to margins of the in-restaurant business. Third-party delivery continues to grow even as people have returned to in-restaurant dining. We are also pursuing catering opportunities as people are returning to offices. Catering will also be an important lever for growth over the upcoming holiday season. We offer significant value through our bundles platforms. We expect off-premises to be a large and growing part of the business. Leverage operating margin gains by growing sales and reducing costs. This starts by growing healthy traffic across the in-restaurant and off-premises channels. We also reduced reliance on discounting and promotional LTOs and pivoted advertising spend towards more targeted, high-return digital channels. In addition, we remain disciplined in managing middle of the P&L and are aggressively pursuing efficiencies in food, labor, and overhead. As Chris will discuss, despite the large increase in costs, we are able to achieve our margin objectives where we more than doubled our operating margins versus 2019. And lastly, it's become an even more digitally savvy company. In Q3, approximately 77% of total U.S. off-premises sales were through digital channels. In the past year, we implemented a new online ordering system and mobile app to support our digital business. Both have outperformed expectations, and the new app has over 2 million downloads. You can expect to see more activity as we improve the functionality and features of our app and digital offerings. These priorities will guide us for the remainder of 2022 and beyond. Because of the momentum we have seen in so many areas, including a much stronger balance sheet, we are focused on growing our restaurant base in a meaningful way. We continue to make progress executing against our development plans and are building a strong pipeline of new units. and we expect to accelerate new unit growth in 2023. Our growth priorities are, first, ignite new unit growth at Outback. We are continuing to open a smaller and less expensive prototype that will enable more meaningful growth with healthy returns. This includes pursuing new trade areas and rapidly growing markets, as well as selling opportunities in major metro areas. To date, we have opened five new smaller locations with strong sales and positive guest feedback. In addition, We are also upgrading and contemporizing our asset base. Investments in remodels are offering good returns, and recent relocations at Outback are providing outside sales lift with volumes exceeding $4.7 million, well above the system average. Second, open more Flemings. The business is performing extremely well and is a proven category leader in fine dining. The average unit volumes are the best in the portfolio. We are building first-class facilities on great real estate, largely in stronghold markets of Florida, California, and Texas. We are opening the newest plumbing in Fort Lauderdale in December. Third, Brazil continues to be a category leader and is seeing a strong recovery in both sales and profits. New restaurants are opening above expectations. We opened 15 new outlets this year and have a robust pipeline for growth. At the end of the quarter, there were 137 locations. We believe we can grow this brand to approximately 240 restaurants over time in this under-penetrated market. And finally, expand the Kravitz business in key markets. Kravitz has been among our top performers in the company over the last three years. They have built a terrific off-premises business that has opened up a number of possibilities for the brand. The most recent opening in Tampa is performing extremely well and provides optimism about the future growth potential of the brand. In summary, Q3 was another solid quarter. We are focused on achieving our 2022 goals while building a great business that will thrive in 2023 and beyond. And with that, I'll turn the call over to Chris who will provide more detail on Q3 and the balance of the year.