Bloomin' Brands, Inc.

Greetings and welcome to the Blumenbrand's Fiscal First Quarter 2024 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. If you require operator assistance, please press star then zero. It is now my pleasure to introduce your host, Tara Kurian, Vice President, Corporate Finance and Investor Relations. Ms. Kurian, You may begin.

Thank you, and good morning, everyone. With me on today's call are David Dino, our Chief Executive Officer, and Michael Healy, our Chief Financial Officer and Executive Vice President. By now, you should have access to our fiscal first quarter 2024 earnings release. It can also be found on our website at www.bloominbrands.com in the Investors 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 in a material way from our forward-looking statements. Some of these risks are mentioned in our earnings release. Others are discussed in our FCC filings, which are available at www.fcc.gov. During today's call, we'll provide a brief recap of our financial performance for the first fiscal quarter, 2024, an overview of company highlights, and current thoughts on fiscal 2024 guidance. Once we've completed these remarks, we'll open the call up for questions. With that, I would like to now turn the call over to David Dino.

Well, thank you, Tara, and welcome to everyone listening today. As noted in this morning's earnings release, adjusted Q1 2024 diluted earnings per share was 70 cents, and U.S. comparable sales were down 160 basis points. These outcomes were within our expectations and represent a solid start to 2024. The industry backdrop remained more challenging than expected after the weather-related impact in January. Despite this headwind, we consistently outperformed the industry on both sales and traffic. Combined U.S. comparable sales were 230 basis points better than the industry sales during the quarter, as measured by BlackBox. Importantly, during Q1, we saw a sequential improvement in our performance, and for the quarter, we outperformed the industry. Our top-line performance was driven by Outback and Carrabba's. Driving same-store sales growth and improving traffic at Outback remains our number one priority. As we discussed on our last call, we have done a significant amount of work on our customer. We are well underway in further improving our marketing and guest experience and leveraging our technology. Having said that, we have more to do. The work thus far is contributing to our market share gains. Our goal is to have best-in-class operations. We'll continue to focus on delivering a differentiated guest experience through improved service and consistently great food. All of our technology and equipment investments, such as new grills and server handhelds, have been rolled out, and now our job is to leverage these investments. As we discussed last quarter, all this work has significantly improved our internal customer measures. A couple of key leading indicators we track are stake accuracy and consistency of experience. Over the last year, stake accuracy is up 500 basis points and consistency of experience is up 400 basis points. This is further validated by casual dining industry metrics, which have continued to improve. Friendly service and food quality are now 370 and 240 basis points ahead of our casual dining peers, respectively. We are very confident that our strategy at Outback is working. We are seeing it improve sales and traffic at Outback. Outback sales outperform the industry by 270 basis points in the first quarter and beat the industry in 20 of the last 22 weeks. Importantly, traffic has been this key driver of this sales momentum. Outback traffic beat the industry 240 basis points on average over the last two months of the quarter. Michael will talk to full year and second quarter guidance shortly, but most importantly, we expect second quarter sales at Outback to be positive, and we expect Outback to continue to outperform the industry during the quarter. We feel very good about Outback's performance and the direction of the brand. and we are in a state of continuous improvement. All of our future enhancements will be grounded in the no rules, just right philosophy, and will stay true to the irreverent and adventurous spirit of the Outback brand. As mentioned on prior calls, we are putting more marketing dollars behind these great ideas to improve our share of voice in a highly competitive market. Our multi-channel advertising strategy leverages analytics to ensure strong returns and maximizes our ability to connect with our customers. Specifically, since the holiday season last year, We've had three strong, limited-time offers at accessible price points that have resonated with our guests. We offered the Steak Moss LTO in Q4, followed by the three-course offering in the spring, and now back by popular demand, Steak and Lobster. These steak-centered LTOs are differentiated offerings that can only be found at Outback and represent a great value to our guests. We are equally confident in our marketing calendar in the back half of the year. We are focusing on delivering the right balance between traffic-driving ALTOs while still providing a great return for the company. Now on to some of our other priorities. During 2024, we will continue to make investments to upgrade our assets through new openings, relocating, and remodeling restaurants. We expect to remodel 60 to 65 restaurants and open 40 to 45 new restaurants system-wide this year. 15 to 17 of these new restaurants will open in the United States. We know that upgrading our assets is a big part of improving our traffic trends, especially at Outback. In addition, we are seeing very good returns from our new restaurants and relocations, and we have a robust pipeline. The last priority I'll discuss today is our leading off-premises channel. This business has more than doubled since 2019 and currently represents 23% of our U.S. sales. We need to continue to pursue our off-premises business and grow in restaurant sales. We were pioneers in the to-go space, and we continue to see strong demand in this highly incremental occasion. In addition, the success of our catering business at all of our brands, but particularly at Carrabba's, provides a runway for future growth. Importantly, the sales initiatives I have described are supported by a solid foundation of robust cash flow and a strong balance sheet. This gives us the ability to invest in our marketing and operations initiatives, our technology plans, and asset improvements. These efforts are helping us build a strong business that will thrive for many years to come. I want to stress the first quarter results and all the initiatives that I laid out would not have been possible without the great teams in our restaurants and restaurant support center. Thank you for delivering outstanding hospitality and service to our guests. Before I turn the call over to Michael, I want to provide a quick update on our Brazil business. As included in our earnings release this morning, we are reviewing strategic alternatives for our operations in Brazil. Although we are under no obligation to sell, Discussions with interested parties are ongoing. This is a great business with an outstanding management team and a significant runway for future growth, which we believe warrants a strong valuation. And finally, as you are aware, Michael Healy was appointed as our company's chief financial officer last month. We are very fortunate that Michael is our CFO. He has had several increasingly important positions in finance, supply chain, and general management that prepared Michael to be an outstanding CFO. Michael is a terrific executive, and I know you will enjoy your interactions with him. Before handing over to Michael, I want to take a moment to expand on the announcement of my retirement. When I joined Bloomin' Brands in 2012, my intention was to stay here for five years. While the opportunity to serve as CEO, followed by the pandemic, extended that plan, the time was now right to begin the search for my successor. Discussions with the board directors about the timing of my retirement has been underway for some time, and they are leading the search. I will remain in my role as CEO and director. I will continue leading the implementation of our strategic priorities that are making us a stronger, leaner, operations-centered company until the new CEO is identified and a successful transition is completed. The best day for Bloomin' Brands are ahead with proven leaders at the helm of these great brands. On a personal note, I have worked with several of you for many years and have enjoyed returning to restaurants and the opportunity to work with you again. Thank you for your continued support of Bloomin' Brands. And with that, Over to you, Michael, to discuss our Q1 financial performance and 2024 guidance.