Bloomin' Brands Q2 2024 10-Q Filed

Ticker: BLMN · Form: 10-Q · Filed: 2024-08-07T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, financials, quarterly-report

TL;DR

Bloomin' Brands Q2 2024 10-Q is in. Check financials.

AI Summary

Bloomin' Brands, Inc. filed its 10-Q for the period ending June 30, 2024. The company, headquartered in Tampa, FL, operates in the retail-eating places sector. This filing provides financial updates for the second quarter of 2024.

Why It Matters

This filing provides investors with the latest financial performance and operational details for Bloomin' Brands, Inc. during the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags.

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is the quarter ended June 30, 2024.

When was this 10-Q filed with the SEC?

This 10-Q was filed on August 7, 2024.

What is the company's Standard Industrial Classification (SIC) code?

The company's SIC code is 5812, which corresponds to Retail-Eating Places.

Where is Bloomin' Brands, Inc. headquartered?

Bloomin' Brands, Inc. is headquartered in Tampa, FL.

What is the SEC file number for Bloomin' Brands, Inc.?

The SEC file number for Bloomin' Brands, Inc. is 001-35625.

Filing Stats: 4,735 words · 19 min read · ~16 pages · Grade level 14.9 · Accepted 2024-08-07 16:06:32

Filing Documents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Page No.

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Financial Statements: Consolidated Balance Sheets — June 3 0 , 2024 and December 31, 2023 3 Consolidated Statements of Operations and Comprehensive Income (Loss) — For the Thirteen and Tw en ty-Six Weeks Ended June 30 , 2024 and June 25 , 2023 4 Consolidated Statements of Changes in Stockholders' Equity — For the Thirteen and Twenty-Six Weeks Ended June 30 , 2024 and June 2 5 , 2023 5 Condensed Consolidated Statements of Cash Flows — For the T wenty- Six Weeks Ended June 3 0 , 2024 and June 2 5 , 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 45

Controls and Procedures

Item 4. Controls and Procedures 45

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 46

Risk Factors

Item 1A. Risk Factors 46

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46

Other Information

Item 5. Other Information 46

Exhibits

Item 6. Exhibits 48 Signature 49 2 Table of Contents BLOOMIN' BRANDS, INC.

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) JUNE 30, 2024 DECEMBER 31, 2023 (UNAUDITED) ASSETS Current assets Cash and cash equivalents $ 117,919 $ 111,519 Restricted cash and cash equivalents — 2,854 Inventories 74,081 75,939 Other current assets, net 108,211 153,002 Total current assets 300,211 343,314 Property, fixtures and equipment, net 1,056,469 1,031,922 Operating lease right-of-use assets 1,074,261 1,084,951 Goodwill 272,404 276,317 Intangible assets, net 439,532 442,985 Deferred income tax assets, net 164,941 159,405 Other assets, net 86,350 85,187 Total assets $ 3,394,168 $ 3,424,081 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 178,201 $ 189,202 Current operating lease liabilities 169,397 175,442 Accrued and other current liabilities 210,657 255,814 Unearned revenue 309,015 381,877 Total current liabilities 867,270 1,002,335 Non-current operating lease liabilities 1,134,464 1,131,639 Long-term debt, net 1,001,982 780,719 Other long-term liabilities, net 100,759 97,385 Total liabilities 3,104,475 3,012,078 Commitments and contingencies (Note 16) Stockholders' equity Bloomin' Brands stockholders' equity Preferred stock, $ 0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 30, 2024 and December 31, 2023 — — Common stock, $ 0.01 par value, 475,000,000 shares authorized; 85,776,033 and 86,968,536 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 858 870 Additional paid-in capital 1,309,482 1,115,387 Accumulated deficit ( 834,926 ) ( 528,831 ) Accumulated other comprehensive loss ( 188,606 ) ( 178,304 ) Total Bloomin' Brands stockholders' equity 286,808 409,122 Noncontrolling interests 2,885 2,881 Total stockholders' equity 289,693 412,003 Total liabilities and stockholders' equity $ 3,394,168 $ 3,424,081 The accompanying notes are an integral p

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Description of the Business and Basis of Presentation Description of the Business - Bloomin' Brands ("Bloomin' Brands" or the "Company") owns and operates casual, upscale casual and fine dining restaurants. OSI Restaurant Partners, LLC ("OSI") is the Company's primary operating entity. The Company's restaurant portfolio has four concepts: Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar. Additional Outback Steakhouse, Carrabba's Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchise agreements. Basis of Presentation - The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States ("U.S. GAAP") for complete financial statements. In the opinion of the Company, all adjustments necessary for fair financial statement presentation for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," ("ASU No. 2023-07") which requires disclosure of significant segment expenses regularly provided to the Company's c

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 2. Revenue Recognition The following tables include the disaggregation of Restaurant sales and franchise revenues by restaurant concept and major international market for the periods indicated: THIRTEEN WEEKS ENDED JUNE 30, 2024 JUNE 25, 2023 (dollars in thousands) RESTAURANT SALES FRANCHISE REVENUES RESTAURANT SALES FRANCHISE REVENUES U.S. Outback Steakhouse $ 562,904 $ 8,076 $ 576,989 $ 8,219 Carrabba's Italian Grill 174,576 752 176,666 758 Bonefish Grill 134,279 128 143,458 95 Fleming's Prime Steakhouse & Wine Bar 88,390 — 92,851 — Other 1,939 18 3,474 10 U.S. total 962,088 8,974 993,438 9,082 International Outback Steakhouse - Brazil (1) 118,357 — 119,295 — Other (1)(2) 23,120 3,142 24,597 3,486 International total 141,477 3,142 143,892 3,486 Total $ 1,103,565 $ 12,116 $ 1,137,330 $ 12,568 TWENTY-SIX WEEKS ENDED JUNE 30, 2024 JUNE 25, 2023 (dollars in thousands) RESTAURANT SALES FRANCHISE REVENUES RESTAURANT SALES FRANCHISE REVENUES U.S. Outback Steakhouse $ 1,166,517 $ 16,396 $ 1,205,172 $ 16,763 Carrabba's Italian Grill 359,005 1,488 364,708 1,553 Bonefish Grill 278,782 288 301,147 266 Fleming's Prime Steakhouse & Wine Bar 184,552 — 195,624 — Other 4,128 56 7,356 25 U.S. total 1,992,984 18,228 2,074,007 18,607 International Outback Steakhouse - Brazil (1) 243,194 — 241,311 — Other (1)(2) 46,874 6,698 50,246 7,484 International total 290,068 6,698 291,557 7,484 Total $ 2,283,052 $ 24,926 $ 2,365,564 $ 26,091 ________________ (1) Includes $ 9.6 million and $ 19.2 million of Restaurant sales during the thirteen and twenty-six weeks ended June 25, 2023, respectively, in connection with value added tax exemptions resulting from Brazil tax legislation. See Note 15 - Income Taxes for details regarding the Brazil tax legislation. (2) Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued The following table includes a detail of assets and liabilities from contracts with customers included on the Company's Consolidated Balance Sheets as of the periods indicated: (dollars in thousands) JUNE 30, 2024 DECEMBER 31, 2023 Other current assets, net Deferred gift card sales commissions $ 12,650 $ 18,081 Unearned revenue Deferred gift card revenue $ 300,590 $ 374,274 Deferred loyalty revenue 6,461 5,664 Deferred franchise fees - current 460 473 Other 1,504 1,466 Total Unearned revenue $ 309,015 $ 381,877 Other long-term liabilities, net Deferred franchise fees - non-current $ 3,896 $ 4,036 The following table is a rollforward of deferred gift card sales commissions for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (dollars in thousands) JUNE 30, 2024 JUNE 25, 2023 JUNE 30, 2024 JUNE 25, 2023 Balance, beginning of the period $ 13,520 $ 13,403 $ 18,081 $ 17,755 Deferred gift card sales commissions amortization ( 5,163 ) ( 5,383 ) ( 12,661 ) ( 13,180 ) Deferred gift card sales commissions capitalization 4,942 5,340 8,856 9,743 Other ( 649 ) ( 666 ) ( 1,626 ) ( 1,624 ) Balance, end of the period $ 12,650 $ 12,694 $ 12,650 $ 12,694 The following table is a rollforward of unearned gift card revenue for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (dollars in thousands) JUNE 30, 2024 JUNE 25, 2023 JUNE 30, 2024 JUNE 25, 2023 Balance, beginning of the period $ 312,283 $ 314,096 $ 374,274 $ 386,495 Gift card sales 59,336 65,338 105,945 118,343 Gift card redemptions ( 66,854 ) ( 70,175 ) ( 169,324 ) ( 188,458 ) Gift card breakage ( 4,175 ) ( 4,317 ) ( 10,305 ) ( 11,438 ) Balance, end of the period $ 300,590 $ 304,942 $ 300,590 $ 304,942 10 Table of Contents BLOOMIN' BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 3. Impairments and Exit Costs The components of Provision for impaired assets and restaurant closings are as follows for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (dollars in thousands) JUNE 30, 2024 JUNE 30, 2024 Impairment losses U.S. (1) $ — $ 1,852 International (2) 14,048 14,048 Total impairment losses $ 14,048 $ 15,900 Restaurant closure charges U.S. (1) $ 2,135 $ 11,219 International (2) 78 15 Total restaurant closure charges 2,213 11,234 Provision for impaired assets and restaurant closings $ 16,261 $ 27,134 ________________ (1) Primarily includes charges in connection with the 2023 Restaurant Closures, as discussed below. (2) Primarily includes charges in connection with the Q2 2024 decision to close nine restaurants in Hong Kong. 2023 Restaurant Closures - During the fourth quarter of 2023, the Company closed three U.S. and two international Aussie Grill restaurants and made the decision to close 36 predominantly older, underperforming U.S. restaurants (the "2023 Restaurant Closures"). Following is a summary of expenses recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the period indicated (dollars in thousands): DESCRIPTION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION TWENTY-SIX WEEKS ENDED JUNE 30, 2024 Asset impairments and closure charges Provision for impaired assets and restaurant closings $ 11,714 Severance and other expenses General and administrative 2,974 Closure-related labor costs Labor and other related 434 Total (1) $ 15,122 ________________ (1) During the fourth quarter of 2023, the Company recognized $ 32.4 million of net charges in connection with the 2023 Restaurant Closures. 11 Table of Contents BLOOMIN' BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 4. Earnings (Loss) Per Share The following table presents the computation of basic and diluted earnings (loss) per share for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (in thousands, except per share data) JUNE 30, 2024 JUNE 25, 2023 JUNE 30, 2024 JUNE 25, 2023 Net income (loss) attributable to Bloomin' Brands $ 28,403 $ 68,277 $ ( 55,469 ) $ 159,588 Basic weighted average common shares outstanding 86,688 88,559 86,856 88,838 Effect of dilutive securities: Stock options 204 395 — 398 Nonvested restricted stock units 86 132 — 201 Nonvested performance-based share units — — — 143 Convertible senior notes (1) 1,005 5,002 — 4,917 Warrants (1) 649 3,313 — 3,209 Diluted weighted average common shares outstanding 88,632 97,401 86,856 97,706 Basic earnings (loss) per share $ 0.33 $ 0.77 $ ( 0.64 ) $ 1.80 Diluted earnings (loss) per share $ 0.32 $ 0.70 $ ( 0.64 ) $ 1.63 ________________ (1) During the twenty-six weeks ended June 30, 2024, the Company repurchased $ 83.6 million of the convertible notes due in 2025 and settled the corresponding portion of the related note hedges and warrants (the "2025 Notes Partial Repurchase"). Share-based compensation-related weighted average securities outstanding not included in the computation of earnings (loss) per share because their effect was antidilutive were as follows for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (shares in thousands) JUNE 30, 2024 JUNE 25, 2023 JUNE 30, 2024 JUNE 25, 2023 Stock options 324 689 451 707 Nonvested restricted stock units 55 21 199 70 Nonvested performance-based share units 619 581 543 463 5. Stock-based Compensation Plans The Company recognized stock-based compensation expense as follows for the periods indicated: THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (dollars in thousands) JUNE 30, 2024 JUNE 25, 2023 JUNE 30, 2024 JUNE 25, 2023 Performanc

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued The following table presents a summary of the Company's performance-based share units ("PSUs") activity: (in thousands, except per unit data) PERFORMANCE-BASED SHARE UNITS WEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNIT AGGREGATE INTRINSIC VALUE (1) Outstanding as of December 31, 2023 818 $ 26.92 $ 23,026 Granted 290 $ 27.26 Performance adjustment (2) 237 $ 25.40 Vested ( 473 ) $ 25.40 Forfeited ( 86 ) $ 27.57 Outstanding as of June 30, 2024 786 $ 27.43 $ 15,107 Expected to vest as of June 30, 2024 (3) 288 $ 5,543 ________________ (1) Based on the $ 28.15 and $ 19.23 share price of the Company's common stock on December 29, 2023 and June 28, 2024, the last trading day of the year ended December 31, 2023 and twenty-six weeks ended June 30, 2024, respectively. (2) Represents adjustment to 200 % payout for PSUs granted during 2021. (3) Estimated number of units to be issued upon the vesting of outstanding PSUs based on Company performance projections of performance criteria set forth in the 2022, 2023 and 2024 PSU award agreements. Assumptions used in the Monte Carlo simulation model and the grant date fair value of PSUs granted were as follows for the periods indicated: TWENTY-SIX WEEKS ENDED JUNE 30, 2024 JUNE 25, 2023 Assumptions: Risk-free interest rate (1) 4.37 % 4.26 % Dividend yield (2) 3.49 % 3.47 % Volatility (3) 51.41 % 51.02 % Grant date fair value per unit (4) $ 27.26 $ 29.01 ________________ (1) Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for the performance period of the unit. (2) Dividend yield is the level of dividends expected to

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