Bloomin' Brands, Inc.

Greetings and welcome to the Blumenbrand's fiscal fourth quarter 2022 earnings conference call. At this time, all participants are on 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 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 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 2022, an overview of company highlights, and an update to 2023 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 2022 diluted earnings per share was 68 cents, which compares to 60 cents in Q4 2021, up 13%. This is also more than double our 2019 results. Combined U.S. comparable sales were up 1.4%, with each brand having positive same-store sales, despite challenges from weather events at both the beginning and the end of the quarter. We were pleased with our Q4 results. and it was the culmination of a year where we successfully navigated significant inflation. During 2022, we made the 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 our customers. In terms of 2022 performance, I would especially like to recognize Fleming's in Brazil. In 2022, Fleming's comparable same-store sales were up an impressive 12%. This is the second consecutive year of double-digit comp sales growth for Fleming's. Brazil's sales were up 38% for the year. Finally, our 2022 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 levels of hospitality experience is what makes our restaurant so successful. As we look forward, we will further capitalize on the success of 2022. As you'll see from our guidance for the year and the quarter, we are off to a good start in 2023. To achieve our objectives, these will be our key priorities. First and foremost, drive healthy sales and traffic. We will accomplish this by improving execution and consistency through technology, leveraging proven marketing platforms to drive frequency, introducing new products and new sales layers, and finally ramping up the remodeling of our restaurants. Let me first talk about the investments we've made to improve execution and consistency. We've completed the rollout of handheld technology for our servers. In addition, we continue to roll out new cooking technology, including advanced grills and ovens. We will complete the rollout of the new technology in the third quarter. These innovations will further improve guest experience, leading to increasing customer preference and frequency. This benefit is in addition to the productivity dollars embedded in our 2023 plan. The second part of building sales and traffic is more targeted marketing designed to build brand equity and drive frequency. Starting in 2023, Outback is bringing back the No Rules, Just Right platform, and we are deploying additional marketing dollars to support the launch. But this is more than just marketing. It's an attitude. It's how we reenergize our restaurants with new food offerings, exceptional service, and most importantly, it ties back to our heritage. No Rules, Just Right is aimed at highlighting our great menu and and the everyday value that we offer to our guests. The third element to our sales building strategy will be the introduction of new sales layers at all of our brands to complement the work being done at Outback. One example is the introduction of Social Hour at Fleming's, which captures our wonderful food and drink offerings during the early evening. We also continue to grow our events and catering business within Fleming's and look forward to the innovation that's coming from this piece of business. Another example is brunches returning to Bonefish. It is a very successful day part and we brought back with even better food offerings while providing a good financial return for the company. We will provide more details and additional sales layers at all of our brands as the year progresses. The final sales driving strategy I want to highlight is the additional emphasis on remodels in 2023. We paused our remodel efforts during the pandemic and have since developed a variety of scopes that we can deploy based on varying needs of our restaurants. We intend to remodel over 100 locations this year as the beginning of a multi-year effort to touch a large percentage of our business. We know keeping our assets looking at their best, along with our ongoing relocation program, is a key element to growing traffic. All this is about bringing in restaurant traffic back to pre-pandemic levels. Importantly, these layers are platforms to deliver growth in 2023 and beyond. Second priority for 2023 is to continue expanding our off-premises business, which is performing very well. We will capitalize on our strong carry-out and delivery capabilities. Importantly, the profit margins in this channel are comparable to margins of the in-restaurant business. Catering will remain an important and growing lever for our brands. The Carabas team remains an industry leader in this space and has done a fantastic job. We expect to see more progress out of Outback and Bonefish, knowing both can do a great job in catering. Lastly, we offer significant value through our bundles platform, We expect off-premises to remain a large and growing part of our business. The third priority is to maintain the major progress we have made in operating margin over the last three years amid a highly inflationary environment. As discussed, margin improvements start with growing healthy traffic across the in-restaurant and off-premises channels. We also reduced reliance on discounting of promotional LTOs and pivoted advertising spend towards more targeted, higher-return digital channels. In addition, we remain disciplined in managing the middle of the P&L and are aggressively pursuing efficiencies in food, labor, and overhead. As Chris will discuss, despite persistent inflation, we've been able to achieve our margins well above 2019. We remain committed to growing to 8% operating margins over the long term. Our fourth priority is to capitalize on our progress to become a more digitally savvy company. In Q4, approximately 76% 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. And the final priority is to build more restaurants, especially at Outback, Fleming's, and in Brazil. Each of these brands have strong sales and profit margins and offer great returns. we see major expansion opportunities at Outback where our goal is to significantly grow our U.S. restaurant base. We intend to grow Fleming from 65 to 100 and plan to more than double our footprint in Brazil. And finally, keep an eye on Carabas. Before turning over to Chris, I just want to say this kind of expansion would not be possible without major progress on our balance sheet. We've significantly reduced debt and our credit ratios are much improved. And today we announced a 71% dividend increase and a new $125 million share repurchase authorization, highlighting the power of our cash flow generation. In summary, 2022 was a good year for our company. We are focused on achieving our 2023 goals while building a great business that will continue to thrive. And with that, I'll now turn the call over to Chris, who will provide more detail on Q4 and the full year 2023.