Bloomin' Brands, Inc.

Greetings and welcome to the Blumenbrand's Fiscal Second 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. Please note this event is being recorded. It is now my pleasure to introduce your host, Tara Kurian, Vice President, Corporate Finance and Investor Relations. 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, Chief Financial Officer and Executive Vice President. By now, you should have access to our fiscal second 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 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 SEC filings, which are available at www.sec.gov. During today's call, we'll provide a brief recap of our financial performance for the fiscal second 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 Q2 2024 diluted earnings per share was 51 cents. U.S. comparable sales were down 10 basis points, which was 20 basis points better than industry sales during the quarter, as measured by BlackBox. The casual dining industry was softer than anticipated in the second quarter. While our comparable sales growth outpaced the industry, we did not meet our expectations. We are focused on navigating the difficult near-term industry headwinds as well as setting up outback for long-term success. These near-term challenges, coupled with our Q2 results, are leading us to update our full-year guidance. Michael will go into more detail in a few minutes. On a positive note, we are seeing signs of inflation return to normal, which creates some immediate opportunities for us. Additionally, interest rates may decline in the near future. Both of these factors will create a more favorable environment for the industry and our company. The key is to recognize that we have a strong business as we navigate the coming months. We are confident in our ability to manage the industry trends and take share in the second half and beyond. This thinking has been included in our updated guidance. As mentioned on prior calls, thriving same-store sales growth and improving traffic at Outback remains our number one priority. Outback is a power brand, and we are working to strengthen the business across many areas. We've done a significant amount of work on deepening the understanding of our customers, their visit motivations, and how we can further differentiate Outback within the casual dining landscape. We have put some of these learnings into action, and we expect much more progress through the end of the year. There are three primary areas we are focused on. Number one, consistently delivering great experiences. Number two, improving the menu to offer abundance and value. Number three, building consumer decision-making capabilities and digital marketing into a competitive advantage. Starting with delivering great experiences, we know that consistently delivering great food and service is the key to driving same-store sales growth. And at Outback, that is exactly our goal. We are enhancing our service model to provide even better, more memorable, and welcoming service to our guests. All of our technology and equipment investments, such as new grills and server handhelds, have been rolled out, and we are building on these investments. We've shared in recent quarters that we are seeing significant improvements in our customer satisfaction metrics with regard to execution, and that continues. Over the last year, stake accuracy is up 500 basis points and consistency of experience is up 500 basis points. This progress is further validated by casual dining industry metrics, which have continued to improve. Friendly service and food quality are now 290 and 40 basis points ahead of our casual dining peers, respectively. We know that over time, these level of improvements will help drive same-store sales growth. Moving on to our second area of focus, improving our menu to focus on abundance and value. We are looking at the Outback menu to simplify offerings, reduce the number of items, and target higher satisfaction menu items that resonate with our guests. At the same time, we are looking at selectively adding new differentiated items that provide abundant value. Taken together, this will likely result in a more simplified menu at Outback with fewer items and higher value. We do not want to share too much detail for competitive purposes, but work is underway and we'll be able to share more in the upcoming quarters. Speaking of value, our current LTU offering has an entry price point of $14.99, the lowest offering of the year. Three courses for $14.99 is an exceptional offer. We are not adjusting our strategy to go after deep discounting. Rather, we feel this is the best for the strength and the health of a brand long term. We are focused on delivering offerings that are only available at Outback. Importantly, they provide an attractive value to our customers. They are promotions that we can own that connect with our guests and drive traffic in difficult times. We anticipate LTOs that have similar price points in the near term, and we know we must continue to spend on marketing to maintain our share of voice. Our last area of focus is building consumer decision-making capabilities and digital marketing into a competitive advantage. Our multi-channel advertising strategy currently leverages analytics to ensure strong returns and maximizes our reach. We want to continue to improve this capability and develop a robust way to communicate, engage, and motivate our guests. We've started building the foundation in both our team and our tools to further improve our decision-making and resource allocation. We are establishing the framework for long-term success of the Outback brand that will be grounded in our no rules, just right philosophy and will stay true to the irreverent and adventurous spirit of Outback. A great deal of work is underway and we will discuss our progress in the coming quarters. Now onto 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 opened 40 to 45 new restaurants system-wide this year. 15 are new Outback Steakhouse restaurants, and one is a new Fleming's that will open in the U.S. In addition, we will open 20 high-returning restaurants in Brazil this year. The balance of the openings will come from our franchise partners. We know that upgrading our assets is a big part of improving traffic trends, especially at Outback. In addition, we are achieving good returns from our new restaurants and relocations. We have a strong pipeline, but we are also seeing increasing costs. As such, we are committed to delivering a great return and will adjust the future pipeline as needed to maintain the returns we are currently seeing. The last priority I'll discuss today is our leading off-premises business, which is 24% of our U.S. sales. We are pioneers in the to-go space, and we continue to see strong demand in this highly incremental occasion. This business has more than doubled since 2019 and is an important sales channel. We need to continue to pursue our off-premises business and grow in restaurant sales. Additionally, our catering business is expanding at all of our brands, but particularly at Carrabba's. Their Q2 catering business has increased approximately 180% over the last two years and clearly demonstrates a runway for future growth. Importantly, the sales initiatives I described are supported by strong cash flow and a solid 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 thank the great teams in our restaurants and restaurant support center. The progress we are making would not be possible without all of your hard work. Thank you for delivering outstanding hospitality and service to our guests. Before I turn it over to Michael, I would like to provide updates on two previously announced matters. The first is on the potential re-franchising in Brazil. We are encouraged with the level of interest in the business. We are making progress on a possible transaction. We'll provide an update as events warrant. This is a fantastic business with great long-term value. And the second matter is CEO succession. The board has formed a committee, and the process is underway with a leading executive search firm. Importantly, I remain fully committed to leading the company and supporting a transition to the new CEO when they are selected. And with that, over to you, Michael, to discuss our Q2 financial performance and updated 2024 guidance.