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What changed in Bloomin' Brands, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bloomin' Brands, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+354 added−363 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Bloomin' Brands, Inc.'s 2024 10-K

354 paragraphs added · 363 removed · 269 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+14 added−37 removed29 unchanged
Biggest changeOutback Steakhouse Company-owned 566 6 (10) 562 Franchised 127 — (1) 126 Total 693 6 (11) 688 46 Carrabba’s Italian Grill Company-owned 199 — (1) 198 Franchised 19 — — 19 Total 218 — (1) 217 29 Bonefish Grill Company-owned 173 — (3) 170 Franchised 7 1 (2) 6 Total 180 1 (5) 176 30 Fleming’s Prime Steakhouse & Wine Bar Company-owned 65 — (1) 64 25 Aussie Grill Company-owned 7 — (3) 4 Franchised — 1 — 1 Total 7 1 (3) 5 1 U.S. total (1) 1,163 8 (21) 1,150 International Company-owned Outback Steakhouse - Brazil (2) 139 16 — 155 Other (2)(3) 36 2 (2) 36 Franchised Outback Steakhouse - South Korea (1) 86 16 (10) 92 Other (3) 47 4 (4) 47 International total 308 38 (16) 330 System-wide total 1,471 46 (37) 1,480 System-wide total - Company-owned 1,185 24 (20) 1,189 System-wide total - Franchised 286 22 (17) 291 ____________________ (1) Excludes 36 and five off-premises only kitchens as of December 25, 2022 and December 31, 2023, respectively.
Biggest changeOutback Steakhouse Company-owned 562 14 (23) — 553 Franchised 126 — (4) — 122 Total 688 14 (27) — 675 44 Carrabba’s Italian Grill Company-owned (1) 198 — (7) 1 192 Franchised (1) 19 — — (1) 18 Total 217 — (7) — 210 29 Bonefish Grill Company-owned 170 — (8) — 162 Franchised 6 — (2) — 4 Total 176 — (10) — 166 27 Fleming’s Prime Steakhouse & Wine Bar Company-owned 64 — (1) — 63 25 Aussie Grill Company-owned 4 — (4) — — Franchised 1 1 — — 2 Total 5 1 (4) — 2 2 U.S. total 1,150 15 (49) — 1,116 International Franchise Outback Steakhouse - South Korea 92 6 (2) — 96 Other 47 3 (1) — 49 International Franchise total 139 9 (3) — 145 Other - Company-owned Outback Steakhouse - Hong Kong/China 19 1 (10) — 10 Discontinued operations - Company-owned Outback Steakhouse - Brazil (2) 155 18 — — 173 Other - Brazil (2) 17 2 — — 19 System-wide total 1,480 45 (62) — 1,463 System-wide total - Company-owned 1,189 35 (53) 1 1,172 System-wide total - Franchised 291 10 (9) (1) 291 ____________________ (1) During 2024, we purchased one franchised Carrabba’s Italian Grill location which is now operated as Company-owned.
Company-owned Restaurants - Company-owned restaurants are restaurants wholly-owned by us or in which we have a majority ownership. The results of operations of Company-owned restaurants are included in our consolidated operating results and the portion of income or loss attributable to the noncontrolling interests is eliminated in our Consolidated Statements of Operations and Comprehensive Income.
Company-owned Restaurants - Company-owned restaurants are restaurants wholly-owned by us or in which we have a majority ownership. The results of operations of Company-owned restaurants are included in our consolidated operating results and the portion of income or loss attributable to the noncontrolling interests is eliminated in our Consolidated Statements of Operations and Comprehensive (Loss) Income.
Under the terms of the 2023 Resolution Agreement, advertising fees are reduced to 2.25% of gross sales 8 Table of Contents BLOOMIN’ BRANDS, INC. until December 27, 2026 or upon the earlier occurrence of certain specified events, including the sale of all or substantially all of the assets or equity of Out West, bankruptcy or a liquidation event.
Under the terms of the 2023 Resolution Agreement, advertising fees are reduced to 2.25% of gross sales until December 27, 2026 or upon the earlier occurrence of certain specified events, including the sale of all or substantially all of the assets or equity of Out West, bankruptcy or a liquidation event. 8 Table of Contents BLOOMIN’ BRANDS, INC.
Due to the nature of our industry, we expect to continue purchasing a substantial amount of beef and pork from a small number of suppliers. Other major commodity categories purchased include seafood, poultry, produce, dairy, bread, oils and pasta and energy sources to operate our restaurants, such as natural gas and electricity.
Due to the nature of our industry, we expect to continue purchasing a substantial amount of beef from a small number of suppliers. Other major commodity categories purchased include seafood, pork, poultry, produce, dairy, bread, oils and pasta and energy sources to operate our restaurants, such as natural gas and electricity.
Our concepts have active public relations programs and also rely on national promotions, site visibility, local marketing, digital marketing, direct mail, billboards and point-of-sale materials to promote our restaurants. We focus on data segmentation and personalization, customer relationship management and digital advertising to be more efficient and relevant with our advertising expenditures.
Our concepts have active public relations programs and also rely on national promotions, site visibility, local marketing, customer relationship management initiatives, direct mail, billboards and point-of-sale materials to promote our restaurants. We focus on data segmentation and personalization, customer relationship management and digital advertising to be more efficient and relevant with our advertising expenditures.
International - Our restaurants outside of the U.S. are subject to similar regional and local laws and regulations as our U.S. restaurants, including labor, food safety, data privacy, anti-corruption/anti-bribery and information security. See Item 1A. - Risk Factors for a discussion of risks relating to federal, state, local and international regulation of our business.
International - Our restaurants outside the U.S. are subject to similar regional and local laws and regulations as our U.S. restaurants, including labor, food safety, data privacy, anti-corruption/anti-bribery and information security. See Item 1A. - Risk Factors for discussion of risks relating to federal, state, local and international regulation of our business.
Our restaurant teams have many touch points to seek to ensure food safety, quality and freshness through all phases of preparation. We are committed to building long-term partnerships with suppliers who are dedicated to delivering safe, high-quality ingredients in a sustainable way.
Our restaurant teams have many touch points to ensure food safety, quality and freshness through all phases of preparation. We are committed to building long-term partnerships with suppliers who are dedicated to delivering safe, high-quality ingredients in a sustainable way.
Effective December 31, 2023, we entered into an Amended & Restated Holistic Agreement (the “2023 Resolution Agreement”) with Cerca Trova Southwest Restaurant Group, LLC (d/b/a Out West Restaurant Group) and certain of its affiliates (collectively, “Out West”), a franchisee of 78 Outback Steakhouse restaurants in the western United States.
Effective December 31, 2023, we entered into an Amended & Restated Holistic Agreement (the “2023 Resolution Agreement”) with Cerca Trova Southwest Restaurant Group, LLC (d/b/a Out West Restaurant Group) and certain of its affiliates (collectively, “Out West”), a franchisee of 75 Outback Steakhouse restaurants in the western United States.
In addition, we maintain an Ethics and Compliance Hotline (the “Hotline”), which includes an 800 number and an online form where our Team Members can report any workplace concerns, with the option to report anonymously. The Hotline is accessible via several languages, 24 hours a day, seven days a week.
In addition, we maintain an Ethics and Compliance Hotline (the “Hotline”), which includes a phone number and an online form where our Team Members can report any workplace concerns, with the option to report anonymously. The Hotline is accessible via several languages, 24 hours a day, seven days a week.
Our reports and other materials filed with the SEC are also available at www.sec.gov. The reference to website addresses in this Report does not constitute incorporation by reference of the information contained on the websites and should not be considered part of this Report. 16 Table of Contents BLOOMIN’ BRANDS, INC.
Our reports and other materials filed with the SEC are also available at www.sec.gov. The reference to website addresses in this Report does not constitute incorporation by reference of the information contained on the websites and should not be considered part of this Report. 14 Table of Contents BLOOMIN’ BRANDS, INC.
Our restaurant operations are also subject to federal and state laws for such matters as: • immigration, employment, minimum wage, overtime, tip credits, paid leave, safety standards, worker conditions and health care; • menu labeling and food safety; • the Americans with Disabilities Act, which, among other things, requires our restaurants to meet federally mandated requirements for the disabled; and • information security, data privacy, anti-corruption/anti-bribery, cashless payments and gift cards.
Our restaurant operations are also subject to federal, state and local laws and regulations for such matters as: • immigration, employment, minimum wage, overtime, tip credits, paid and unpaid leave, safety standards, worker conditions and health care; • menu labeling and food safety; • the Americans with Disabilities Act, which, among other things, requires our restaurants to meet federally mandated requirements for the disabled; and • information security, data privacy, anti-corruption/anti-bribery, cashless payments and gift cards.
Additional Information - We make available, free of charge, through our internet website www.bloominbrands.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the SEC.
Additional Information - We make available, free of charge, through our internet website www.bloominbrands.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the Securities and Exchange Commission (“SEC”).
Following is a summary of sales by occasion, sales mix by product type and average check per person for Company-owned restaurants during 2023: U.S.
Following is a summary of sales by occasion, sales mix by product type and average check per person for Company-owned restaurants during 2024: U.S.
Eligible Team Members participating in the 401(k) receive matching contributions. • Employee discounts when dining at any one of our brands. • All levels of the organization, including hourly Team Members that meet certain service criteria, can qualify for paid time off for the purpose of rest, relaxation and planned time away from the workplace.
Eligible Team Members participating in the 401(k) receive matching contributions. • Employee discounts when dining at any one of our brands. • All levels of the organization, including hourly Team Members that meet certain service criteria, can qualify for paid time off for the purpose of rest, relaxation and planned time away from the workplace. 12 Table of Contents BLOOMIN’ BRANDS, INC.
Risk Factors for additional discussion of our cybersecurity measures. Advertising and Marketing - We advertise through a diverse set of media channels including, but not limited to, national/spot television, radio, social media, search engines and other digital tactics.
See Item 1C. Cybersecurity and Item 1A. Risk Factors for additional discussion of our cybersecurity measures. Advertising and Marketing - We advertise through a diverse set of media channels including, but not limited to, national/spot television, radio, social media, search engines and other digital tactics.
Featuring a wood-burning grill inspired by the many tastes of Italy, guests can enjoy signature dishes such as Chicken Bryan and Pollo Rosa Maria, wood-fire grilled steaks and chops, small plates and classic Italian pasta dishes in a welcoming, contemporary atmosphere.
Featuring a wood-burning grill inspired by the many tastes of Italy, guests can enjoy signature dishes such as Chicken Bryan and Pollo Rosa Maria, wood-fire grilled steaks and chops, small plates and classic Italian pasta dishes in a welcoming, contemporary atmosphere. 5 Table of Contents BLOOMIN’ BRANDS, INC.
Internationally, we face competition due to the number of casual dining restaurant options in the markets in which we operate. REVENUE GENERATING ACTIVITIES We generate our revenues from our Company-owned restaurants and through sales of franchise rights and ongoing royalties and other fees from our franchised restaurants.
Internationally, we face competition due to the number of casual dining restaurant options in the markets in which we operate. 7 Table of Contents BLOOMIN’ BRANDS, INC. REVENUE GENERATING ACTIVITIES We generate our revenues from our Company-owned restaurants and through sales of franchise rights and ongoing royalties and other fees from our franchised restaurants.
However, we believe such uses will not 10 Table of Contents BLOOMIN’ BRANDS, INC. adversely affect us. Our policy is to, whenever possible, pursue registration of our marks in countries where we operate and to vigorously oppose any infringement of our marks. We also have registered domain names for each of our concepts.
However, we believe such uses will not adversely affect us. Our policy is to, whenever possible, pursue registration of our marks in countries where we operate and to vigorously oppose any infringement of our marks. We also have registered domain names for each of our concepts.
Our Segments We consider each of our restaurant concepts and international markets to be operating segments, which reflects how we manage our business, review operating performance and allocate resources. We aggregate our operating segments into two reportable segments, U.S. and international.
Our Segments We consider each of our U.S. restaurant concepts and international franchise markets in aggregate to be operating segments, which reflects how we manage our business, review operating performance and allocate resources. We aggregate our U.S. operating segments into the U.S. reportable segment.
We believe that creating exceptional guest experiences begins with providing a positive, supportive work environment that welcomes individual differences and allows employees to grow and have fun. We focus on developing genuine, emotional guest connections through friendly service and high-quality food.
We believe that creating exceptional guest experiences begins with providing a positive, supportive work environment that welcomes individual differences and allows employees to grow and have fun. We focus on developing genuine, emotional guest connections through friendly service and high-quality food. 11 Table of Contents BLOOMIN’ BRANDS, INC.
Offering a selection of classic and signature hand-crafted cocktails, using fresh juices, edible garnishes and house infusions, Bonefish Grill also features a distinct list of wines, the perfect match for any food pairing. 5 Table of Contents BLOOMIN’ BRANDS, INC.
Offering a selection of classic and signature hand-crafted cocktails, using fresh juices, edible garnishes and house infusions, Bonefish Grill also features a distinct list of wines, the perfect match for any food pairing.
Information Systems - We leverage technology to support areas such as digital marketing and customer engagement, business analytics and decision support, restaurant operations and productivity initiatives related to optimizing our staffing, food waste management and supply chain efficiency. 9 Table of Contents BLOOMIN’ BRANDS, INC.
Information Systems - We leverage technology to support areas such as digital marketing and customer engagement, business analytics and decision support, restaurant operations and productivity initiatives related to optimizing our staffing, food waste management and supply chain efficiency.
Segment As of December 31, 2023, in our U.S. segment, we owned and operated 998 restaurants and franchised 152 restaurants across 47 states. Outback Steakhouse - Outback Steakhouse is a casual steakhouse restaurant concept focused on steaks, bold flavors and Australian decor. The Outback Steakhouse menu offers seasoned and seared grilled steaks, chops, chicken, seafood, pasta, salads and seasonal specials.
Segment As of December 29, 2024, in our U.S. segment, we owned and operated 970 restaurants and franchised 146 restaurants across 46 states. Outback Steakhouse - Outback Steakhouse is a casual steakhouse restaurant concept focused on steaks, bold flavors and Australian decor. The Outback Steakhouse menu offers seasoned and seared grilled steaks, chops, chicken, seafood, pasta, salads and seasonal specials.
Total Rewards - Our total rewards philosophy is to motivate and retain our Team Members by offering, what we believe to be, competitive salary packages. To align Team Member objectives with our Company and ultimately our stockholders, Bloomin’ Brands offers programs that reward long-term performance.
Total Rewards - Our philosophy is to motivate and retain our Team Members by offering comprehensive total rewards packages. To align Team Member objectives with our Company and ultimately our stockholders, Bloomin’ Brands offers programs that reward long-term performance.
Healy served as Senior Vice President, President of Bonefish Grill from November 2021 to November 2023; Senior Vice President, Field Operations and Innovation from April 2021 to November 2021; Senior Vice President, Global Supply Chain Officer from February 2019 to April 2021; Group Vice President, Finance for Outback Steakhouse from May 2015 to February 2019; and Vice President, Development and Strategic Analytics from April 2012 to May 2015.
Senior Vice President, President of Bonefish Grill from November 2021 to November 2023. Senior Vice President, Field Operations and Innovation from April 2021 to November 2021. Senior Vice President, Global Supply Chain Officer from February 2019 to April 2021. Group Vice President, Finance for Outback Steakhouse from May 2015 to February 2019.
Outback Steakhouse United States of America Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar International Outback Steakhouse Brazil, Hong Kong/China Carrabba’s Italian Grill (Abbraccio) Brazil _________________ (1) Includes franchise locations. See Item 2. Properties for disclosure of our restaurant count by country and territory. U.S.
(1) Outback Steakhouse United States of America Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar International Franchise (2) Outback Steakhouse 12 Franchise Markets Carrabba’s Italian Grill (Abbraccio) _________________ (1) Includes franchise locations. (2) See Item 2. Properties for disclosure of our restaurant count by country and territory.
The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Following is a summary of reportable segments as of December 31, 2023: REPORTABLE SEGMENT (1) CONCEPT GEOGRAPHIC LOCATION U.S.
The U.S. segment includes all restaurants operating in the U.S. while franchised restaurants operating outside the U.S. are included in the international franchise segment. Following is a summary of reportable segments as of December 29, 2024: REPORTABLE SEGMENT CONCEPT GEOGRAPHIC LOCATION U.S.
Our Company-owned restaurants, and most of our franchised restaurants, are connected through a portal that provides our employees and franchise partners with access to business information and tools that allow them to collaborate, communicate, train and share information. We maintain a system to ensure network security and safeguard against data loss. See Item 1C. Cybersecurity and Item 1A.
Our Company-owned restaurants, and most of our franchised restaurants, are connected through a portal that provides our employees and franchise partners with access to business information and tools that allow them to collaborate, communicate, train and share information. 9 Table of Contents BLOOMIN’ BRANDS, INC. We maintain a system to ensure network security and safeguard against data loss.
These customized relationships enable our staff to effectively manage and prioritize our supply chain. Beef and pork represent the majority of purchased proteins in the U.S. and Brazil, respectively. In 2023, our U.S. restaurants purchased beef raw materials primarily from four U.S. beef suppliers and our restaurants in Brazil purchased pork raw materials primarily from four pork suppliers in Brazil.
These customized relationships enable our staff to effectively manage and prioritize our supply chain needs. Beef represents the majority of purchased proteins in the U.S. In 2024, our U.S. restaurants purchased beef raw materials primarily from four beef suppliers.
We also regularly monitor commodity markets and trends to execute product purchases at the most advantageous times. We have a distribution program that includes food, non-alcoholic beverage, smallwares and packaging goods in all major markets. Where applicable, this program is managed by custom distribution companies that only provide products approved for our system.
We also regularly monitor commodity markets and trends to execute product purchases at the most advantageous times. We and our franchisees have distribution programs that includes food, non-alcoholic beverage, smallwares and packaging goods. Where applicable, these programs may be managed by custom distribution companies that only provide products approved for our system.
OSI Restaurant Partners, LLC (“OSI”), a wholly-owned subsidiary of Bloomin’ Brands, is our primary operating entity. MARKETS As of December 31, 2023, we owned and operated 1,189 restaurants and franchised 291 restaurants across 47 states, Guam and 13 countries.
OSI Restaurant Partners, LLC (“OSI”), a wholly-owned subsidiary of Bloomin’ Brands, is our primary operating entity. MARKETS As of December 29, 2024, we owned and operated 1,172 restaurants and franchised 291 restaurants across 46 states, Guam and 12 countries.
We deliver on this by ensuring Team Members are trained, understand their role in inclusivity and are held accountable in making our restaurants a place where everyone is valued for who they are and what they bring to the table.
We deliver on this by ensuring Team Members are trained, understand their role in inclusivity and are held accountable in making our restaurants a place where everyone is valued for who they are and what they bring to the table. We support words with actions by engaging with organizations dedicated to cultivating more diverse and inclusive communities.
We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Our restaurant concepts range in price point and degree of formality from casual (Outback Steakhouse and Carrabba’s Italian Grill) to upscale casual (Bonefish Grill) and fine dining (Fleming’s Prime Steakhouse & Wine Bar).
Our restaurant portfolio includes Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Our restaurant concepts range in price point and degree of formality from casual (Outback Steakhouse and Carrabba’s Italian Grill) to polished casual (Bonefish Grill) and fine dining (Fleming’s Prime Steakhouse & Wine Bar).
We provide annual training to our Restaurant Partners, Area Operating Partners, Market Vice Presidents and RSC Team Members on our Code of Conduct, Preventing Discrimination and Harassment and Anti-Bribery and Anti-Corruption. All field-level employees are also provided Preventing Discrimination and Harassment training.
To support this commitment, we have a Code of Conduct that provides clear direction for behavioral expectations. We provide annual training to our Restaurant Partners, Area Operating Partners, Market Vice Presidents and RSC Team Members on our Code of Conduct, Preventing Discrimination and Harassment and Anti-Bribery and Anti-Corruption. All field-level employees are also provided Preventing Discrimination and Harassment training.
INTERNATIONAL Occasion: Outback Steakhouse Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar Outback Steakhouse Brazil In-restaurant sales 74 % 67 % 84 % 95 % 86 % Off-premises sales 26 % 33 % 16 % 5 % 14 % 100 % 100 % 100 % 100 % 100 % Sales mix by product type: Food & non-alcoholic beverage 92 % 90 % 81 % 79 % 92 % Alcoholic beverage 8 % 10 % 19 % 21 % 8 % 100 % 100 % 100 % 100 % 100 % Average check per person ($USD) $ 28 $ 25 $ 34 $ 100 $ 13 Average check per person (R$) R$ 64 Unaffiliated Franchise Program - Our unaffiliated franchise agreements grant third parties the right to establish and operate a restaurant using one of our concepts.
Occasion: Outback Steakhouse Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar Outback Steakhouse Brazil In-restaurant sales 75 % 66 % 83 % 96 % 85 % Off-premises sales 25 % 34 % 17 % 4 % 15 % 100 % 100 % 100 % 100 % 100 % Sales mix by product type: Food & non-alcoholic beverage 92 % 90 % 81 % 80 % 96 % Alcoholic beverage 8 % 10 % 19 % 20 % 4 % 100 % 100 % 100 % 100 % 100 % Average check per person (USD$) $ 29 $ 26 $ 36 $ 106 $ 12 Average check per person (R$) R$ 64 Unaffiliated Franchise Program - Our unaffiliated franchise agreements grant third parties the right to establish and operate a restaurant using one of our concepts.
Our integrated point-of-sale system allows us to transact business in our U.S. restaurants and communicate sales data through a secure corporate network to our enterprise resource planning system and data warehouse.
Additionally, we maintain systems to support our customer loyalty program with a focus on increasing traffic to our restaurants. Our integrated point-of-sale system allows us to transact business in our U.S. restaurants and communicate sales data through a secure corporate network to our enterprise resource planning system and data warehouse.
Annual strategic talent reviews and succession planning for executive-level roles, senior management and key restaurant leadership positions help ensure consistency in management talent quality. During 2023, approximately 91% of promotions to our Manager in Training program and to Restaurant Managing Partner were internal, which consisted of 42% women and 29% people of color.
Annual strategic talent reviews and succession planning for executive-level roles, senior management and key restaurant leadership positions help ensure consistency in management talent quality. In 2024, approximately 91% of promotions to our Manager in Training program and to Restaurant Managing Partner were internal. We regularly monitor and evaluate turnover and attrition metrics.
Additionally, severe storms, extended periods of inclement weather or climate extremes resulting from climate change may also affect the seasonal operating results of the areas impacted. GOVERNMENT REGULATION We are subject to various federal, state, local and international laws affecting our business.
Holidays may affect sales volumes seasonally in some of our markets. Severe storms, extended periods of inclement weather or climate change may affect the seasonal operating results of the areas impacted. 10 Table of Contents BLOOMIN’ BRANDS, INC. GOVERNMENT REGULATION We are subject to various federal, state, local and international laws affecting our business.
To drive customer engagement, we continue to invest in data and technology infrastructure, including brand websites, digital marketing, online ordering and mobile apps. To increase customer convenience, we leverage our online ordering infrastructure to facilitate off-premises dining systems. Additionally, we developed systems to support our customer loyalty program with a focus on increasing traffic to our restaurants.
To drive customer engagement, we continue to invest in data and technology infrastructure, including brand websites, digital marketing, online ordering, pay at the table technology and mobile apps. To increase customer convenience, we leverage our online ordering infrastructure to facilitate off-premises dining systems.
Further, improving product offerings and convenience options from quick-service and fast-casual restaurants, and the expansion of home delivery services, together with negative economic conditions, could cause consumers to choose less expensive 7 Table of Contents BLOOMIN’ BRANDS, INC. alternatives than our restaurants.
We also face growing competition from the supermarket industry which offers expanded selections of prepared meals. Further, improving product offerings and convenience options from quick-service and fast-casual restaurants, and the expansion of home delivery services, together with negative economic conditions, could cause consumers to choose less expensive alternatives than our restaurants.
Competition The restaurant industry is highly competitive with a substantial number of restaurant operators that compete directly and indirectly with us in respect to price, service, location and food quality, and there are other well-established competitors with significant financial and other resources. There is also active competition for management personnel, attractive suitable real estate sites, supplies and restaurant employees.
See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for further details. Competition The restaurant industry is highly competitive with a substantial number of restaurant operators that compete directly and indirectly with us in respect to price, service, location and food quality, and there are other well-established competitors with significant financial and other resources.
Gonzalez served as Senior Vice President, Global Supply Chain Officer from April 2021 to October 2023; Vice President, Global Supply Planning and Forecasting from April 2019 to April 2021; and Vice President, Supply Planning and Forecasting from September 2014 to April 2019. Mark Graff has served as Executive Vice President, President of Bonefish Grill and Fine Dining since November 2023.
Vice President, Supply Planning and Forecasting from September 2014 to April 2019. Mark Graff 45 Executive Vice President, President of Bonefish Grill and Fine Dining since November 2023. Senior Vice President, Development from April 2023 to November 2023. Senior Vice President, Development, Financial Planning & Analysis and Investor Relations from May 2021 to April 2023.
We also developed an informational poster for our U.S. restaurants, in English and Spanish, which provides the phone number, the web address for the reporting form and a QR code to make it easy for our Team Members to report concerns. 12 Table of Contents BLOOMIN’ BRANDS, INC. Finally, we continue to support a hybrid work environment in the RSC.
We also developed an informational poster for our U.S. restaurants, in English and Spanish, which provides the phone number, the web address for the reporting form and a QR code to make it easy for our Team Members to report concerns. We aim to cultivate a welcoming, safe and inclusive environment that celebrates diverse backgrounds.
One location was Company-owned in the U.S and all others were franchised in South Korea as of December 25, 2022 and December 31, 2023. (2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of November 30, 2022 and 2023, respectively, to correspond with the balance sheet dates of this subsidiary.
(2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other - Brazil, are reported as of November 30, 2023 and 2024, respectively, to correspond with the balance sheet dates of this subsidiary. Following the close of the Brazil Sale Transaction on December 30, 2024, all restaurants in that market operate as unconsolidated franchisees.
Additionally, in our company-owned international markets, we have teams that engage local agencies to tailor advertising to each market and develop relevant and timely promotions based on local consumer demand. During 2023, Outback brought back the “No Rules, Just Right” platform, which includes highlighting our great menu and everyday value that we offer to our guests.
Additionally, our larger international markets have teams that engage local agencies to tailor advertising to each market and develop relevant and timely promotions based on local consumer demand. In 2023, Outback Steakhouse brought back our “No Rules, Just Right” campaign that highlights great food, top-quality dining experiences and the spirit of Australia.
In addition, competition is influenced strongly by marketing and brand reputation. At an aggregate level, all major casual dining restaurants in markets in which we operate would be considered competitors of our concepts. We also face growing competition from the supermarket industry which offers expanded selections of prepared meals.
There is also active competition for management personnel, attractive suitable real estate sites, supplies and restaurant employees. In addition, competition is influenced strongly by marketing and brand reputation. At an aggregate level, all major casual dining restaurants in markets in which we operate would be considered competitors of our concepts.
In addition, we have dedicated supply chain management personnel for our Company-owned international operations in South America and Asia. The global supply chain management organization is responsible for all food and operating supply purchases as well as a large percentage of purchases of field and corporate services.
RESOURCES Sourcing and Supply - Our supply chain management organization is responsible for all food and operating supply purchases as well as a large percentage of purchases of field and corporate services.
We are committed to high standards of ethical, moral and legal business conduct and strive to be an open and honest workplace, providing a positive work environment and fostering a culture of integrity and ethical decision-making. To support this commitment, we have a Code of Conduct that provides clear direction for behavioral expectations.
During 2024, our turnover rates for U.S. hourly restaurant Team Members and U.S. restaurant management were 84% and 20%, respectively. We are committed to high standards of ethical, moral and legal business conduct and strive to be an open and honest workplace, providing a positive work environment and fostering a culture of integrity and ethical decision-making.
Pace previously served as Group Vice President and Controller from October 2015 to July 2022 and Vice President, Corporate Controller from July 2013 to October 2015. Suzann Trevisan has served as Senior Vice President, Chief Human Resources Officer since September 2022. Prior to joining Bloomin’ Brands, Ms.
Lefferts has also served as Secretary since February 2016. Philip Pace 50 Senior Vice President, Chief Accounting Officer since July 2022. Group Vice President and Controller from October 2015 to July 2022. Vice President, Corporate Controller from July 2013 to October 2015.
Our current Joey design in Brazil consists of an in-line strip mall space with approximately 4,800 square feet and seating for approximately 190 guests. Remodeling - We regularly remodel restaurants across all of our concepts to maintain the relevance of our restaurants’ ambience, focused on driving additional traffic to our restaurants. During 2023, we completed more than 100 restaurant remodels.
Remodeling - We regularly remodel restaurants across all of our concepts to maintain the relevance of our restaurants’ ambience, focused on driving additional traffic to our restaurants. We completed 65 restaurant remodels during 2024 and more than 100 restaurant remodels during 2023. 6 Table of Contents BLOOMIN’ BRANDS, INC.
“No Rules, Just Right” is more than a marketing platform, it is an attitude, aimed at re-energizing our restaurants with new food offerings, exceptional service and most importantly, ties back to our past. Our multi-branded U.S. loyalty program, Dine Rewards, is designed to drive incremental traffic and provide data for customer segmentation and personalization opportunities.
“No Rules, Just Right” is more than a marketing platform, it is a philosophy that puts the guest experience at the center of every decision made within Outback Steakhouse. Our U.S. loyalty program, Dine Rewards, is designed to drive incremental traffic and provide data for customer segmentation and personalization opportunities.
Properties for disclosure of our international restaurant count by country and territory. Outback Steakhouse - Our international Outback Steakhouse restaurants have a menu similar to our U.S. menu with additional variety to meet local taste preferences. In addition to the traditional Outback Special sirloin, a typical international menu may feature local cuts of beef.
Outback Steakhouse - Our international Outback Steakhouse restaurants have a menu similar to our U.S. menu with a focus on signature steaks, including the traditional Outback Special sirloin. There is additional menu item variety to meet local taste preferences.
Abbraccio Cucina Italiana also has a range of beverage options, including classically inspired cocktails and local favorites with an Italian twist. Restaurant Development We utilize the ownership structure and market entry strategy that best fits the needs for a particular market, including Company-owned units and franchises, as determined by demand, cost structure and economic conditions. U.S.
Restaurant Development We utilize the ownership structure and market entry strategy that best fits the needs for a particular market, including Company-owned units and franchisees, as determined by demand, cost structure and economic conditions. U.S. Development - We opportunistically pursue unit growth across our concepts through existing geography fill-in and market expansion opportunities.
In addition, during 2022 we implemented an annual matching gift and volunteer grant program for eligible 501(c)(3) non-profit organizations and provided a limited dollar-for-dollar match or grant for full-time RSC Team Members who made a personal charitable donation or volunteered for a minimum of ten hours during non-working hours. 14 Table of Contents BLOOMIN’ BRANDS, INC.
RSC Team Members who made a personal charitable donation or volunteered for a minimum of ten hours during non-working hours. 13 Table of Contents BLOOMIN’ BRANDS, INC.
Since 2017, the Trust has paid approximately $2.2 million to the benefit of over 1,500 Team Members who applied for support, including Team Members impacted by hurricanes and other natural disasters. We are inspired by the generosity of our Team Members and encourage them to give back to their communities.
Since 2017, the Trust has paid approximately $2.5 million in response to over 1,900 applications from Team Members who applied for support, including Team Members impacted by hurricanes and other natural disasters. We embrace the communities we serve, from feeding first responders to supporting non-profit organizations, especially in the Tampa Bay area of Florida, home to our U.S. RSC.
Development - We opportunistically pursue unit growth across our concepts through existing geography fill-in and market expansion opportunities. During 2021, we opened our first U.S. Outback Steakhouse utilizing a smaller-scaled “Joey” design. The Joey was designed to increase return on investment through a reduced restaurant footprint with a more efficient layout.
In recent years, we began developing our U.S. Outback Steakhouse restaurants utilizing a smaller-scaled “Joey” design. The Joey was designed to increase return on investment through a reduced restaurant footprint with a more efficient layout. Our current Joey design consists of a freestanding building with approximately 5,000 square feet and seating for approximately 190 guests.
(2) Includes restaurant management, Chef Partners, Restaurant Managing Partners, Area Operating Partners, Regional Vice Presidents and Market Vice Presidents. In addition to gender, racial and ethnic diversity, our U.S Team Members are also diverse in age, comprised of five generations: Traditionalists, Baby Boomers, Generation X, Millennials and Generation Z.
In addition to gender, racial and ethnic diversity, our U.S Team Members are also diverse in age, comprised of five generations: Traditionalists, Baby Boomers, Generation X, Millennials and Generation Z. Celebrating Our People – Team Members, guests, suppliers and communities have always been at the heart of our Company’s culture, driven each day by our founding Principles & Beliefs.
To facilitate this community engagement, field Team Members volunteer within their communities and RSC Team Members participate in an annual Community Service Day. In 2023, its 15th year, Team Members volunteered over 800 hours of service at 16 non-profit organizations in the Tampa Bay area.
We are inspired by the generosity of our Team Members and encourage them to give back to their communities. To facilitate this community engagement, field Team Members volunteer within their communities and U.S. RSC Team Members participate in an annual Community Service Day.
From our participation at the Women’s Foodservice Forum annual conference to memorable heritage month programs and active community involvement (for example, Juneteenth service activities, Pride sponsorships and engagement, walks and runs for special health-focused causes), our Employee Resource Groups have been instrumental in providing support, a sense of community and both personal and professional development for our Team Members.
Additionally, employee-led resource groups have been instrumental in providing support, a sense of community and both personal and professional development for our Team Members. Workplace Safety - Employee health and safety in the workplace is important to our Company.
Fleming’s Prime Steakhouse & Wine Bar offers an impressive range of USDA Prime steaks, premium seafood entrées, storied wines and fresh hand-crafted cocktails. International Segment We have local management to support and grow restaurants in each of the countries where we have Company-owned operations.
Fleming’s Prime Steakhouse & Wine Bar offers an impressive range of USDA Prime steaks, premium seafood entrées, storied wines and fresh hand-crafted cocktails. International Franchise Segment As of December 29, 2024, our international franchise segment includes 145 franchised restaurants across 11 countries and Guam. See Item 2. Properties for disclosure of our international restaurant count by country and territory.
International Development - We continue to pursue international expansion opportunities, leveraging established equity and franchise markets in South America and Asia, and in strategically selected emerging and high-growth developed markets, with a focus on Brazil. All Outback Steakhouse restaurants opened in Brazil since the beginning of 2021 were built utilizing the Joey design.
We opened 14 Outback Steakhouse restaurants during 2024 and plan to open approximately 15 additional locations in 2025. International Development - We continue to pursue international expansion opportunities through our franchise partners, leveraging established franchised markets in South America, Asia and the Middle East, with a focus on Brazil, through our minority interest in these operations.
Information About Our Executive Officers - Below is a list of the names, ages, positions and a brief description of the business experience of each of our executive officers as of February 23, 2024: NAME AGE POSITION David Deno 66 Chief Executive Officer Christopher Meyer 52 Executive Vice President, Chief Financial Officer Lissette Gonzalez 50 Executive Vice President, Chief Supply Chain and Operations Excellence Officer Mark Graff 44 Executive Vice President, President of Bonefish Grill and Fine Dining W.
Information About Our Executive Officers - Below is a list of the names, ages, positions and a brief description of the business experience of each of our executive officers as of February 21, 2025: NAME AGE TITLE AND RECENT BUSINESS EXPERIENCE Michael Spanos 60 Chief Executive Officer and member of the Board of Directors since September 2024.
Team Members, including the following as of the period indicated: DECEMBER 31, 2023 KEY STATISTICS WOMEN PEOPLE OF COLOR (1) Restaurant Support Center 61% 23% Operations Leadership (2) 40% 32% Hourly Team Members 52% 50% _________________ (1) Denotes U.S. Team Members that identify as Black/African American, Hispanic/Latinx, Asian, Native American, Pacific Islander or two or more races.
We track several workforce statistics to help us understand the gender, racial and ethnic diversity of our U.S. Team Members, including the following as of the period indicated: DECEMBER 29, 2024 KEY STATISTICS WOMEN PEOPLE OF COLOR (1) Restaurant Support Center 59% 25% Operations Leadership (2) 39% 33% Hourly Team Members 52% 51% _________________ (1) Denotes U.S.
Mr. Graff served as Senior Vice President, Development from April 2023 to November 2023; Senior Vice President, Development, Financial Planning & Analysis and Investor Relations from May 2021 to April 2023; Group Vice President, Corporate Finance and Investor Relations from February 2019 to May 2021; and Vice President, Corporate Finance and Investor Relations from February 2016 to February 2019.
Group Vice President, Corporate Finance and Investor Relations from February 2019 to May 2021. Vice President, Corporate Finance and Investor Relations from February 2016 to February 2019. Treasurer from February 2019 to November 2020. Pat Hafner 51 Executive Vice President, Outback Steakhouse since January 2025. President of Carrabba’s Italian Grill from May 2022 to January 2025.
HUMAN CAPITAL RESOURCES Employees - As of December 31, 2023, we employed approximately 87,000 Team Members, of which approximately 750 are corporate personnel, including more than 250 in international markets. 11 Table of Contents BLOOMIN’ BRANDS, INC.
HUMAN CAPITAL RESOURCES Employees - As of December 29, 2024, we employed approximately 81,000 Team Members, of which approximately 800 are Restaurant Support Center (“RSC”) employees. This total includes approximately 14,000 Team Members in Brazil, of which approximately 250 are Brazil RSC employees.
Removed
Our international operations are integrated with our corporate headquarters to leverage enterprise-wide capabilities, including marketing, finance, real estate, information technology, legal, human resources, supply chain management and productivity. As of December 31, 2023, in our international segment, we owned and operated 191 restaurants and franchised 139 restaurants across 13 countries and Guam. See Item 2.
Added
Subsequent to December 29, 2024, we completed the sale of the majority ownership of our Brazil operations, and all restaurants in that market are now operated as unconsolidated franchisees. See International Franchise Segment discussion below for details.
Removed
Our current Joey design consists of a freestanding building with approximately 5,000 square feet and seating for approximately 190 guests. We opened six Outback Steakhouse restaurants during 2023 and plan to open approximately 15 additional locations throughout 2024.
Added
Subsequent to December 29, 2024, we completed the sale of the majority ownership of our Brazil operations. All restaurants in that market now operate as unconsolidated franchisees and Brazil is included in our franchise market count. See International Franchise Segment discussion below for details. U.S.
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Beginning in 2022, the remodel of our Outback Steakhouse restaurants included the installation of advanced grills and ovens. We completed the rollout of this equipment to substantially all Outback Steakhouse restaurants during 2023.
Added
Abbraccio Cucina Italiana also has a range of beverage options, including classically inspired cocktails and local favorites with an Italian twist. On December 30, 2024, we sold 67% of our Brazil operations (the “Brazil Sale Transaction”) and retained a 33% interest. As of November 30, 2024, there were 192 restaurants operating in Brazil.
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These investments have improved our cooking consistency, meal pacing and guest satisfaction while also providing a cost-saving opportunity for our Company. 6 Table of Contents BLOOMIN’ BRANDS, INC. System-wide Restaurant Summary - Following is a system-wide rollforward of our restaurants in operation during 2023: DECEMBER 25, 2022 2023 ACTIVITY DECEMBER 31, 2023 U.S.
Added
Following the sale, restaurants that were formerly Company-owned now operate as unconsolidated franchisees. See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details regarding the sale.
Removed
STATE Number of restaurants: OPENINGS CLOSURES COUNT U.S.
Added
System-wide Restaurant Summary - Following is a system-wide rollforward of our restaurants during 2024: DECEMBER 31, 2023 2024 ACTIVITY DECEMBER 29, 2024 U.S. STATE Number of restaurants: OPENINGS CLOSURES OTHER COUNT U.S.
Removed
(3) International Company-owned Other included four and two Aussie Grill locations as of December 25, 2022 and December 31, 2023, respectively. International Franchised Other included four Aussie Grill locations as of December 25, 2022 and December 31, 2023.
Added
In connection with the closing of the Brazil Sale Transaction on December 30, 2024, we entered into amended and restated franchise agreements with all existing restaurants in Brazil for 20-year terms. Royalty rates, initial franchise fees, and local advertising spend requirements are consistent with the lower end of our other international franchise royalty range.
Removed
Out West also entered into a forbearance agreement with its lenders that, in conjunction with the 2023 Resolution Agreement, provides, among other things, for a pre-determined calculation of available monthly cash (after payment of operating expenses, including rents, royalties, national advertising fees and local marketing expenditures) that Out West may use for capital expenditures and to settle its obligations due to its lenders.
Added
The Brazil franchise agreements also include a development fee for each new restaurant and a fee upon renewal of the franchise agreement after the initial 20-year term. Initial franchise fees were not charged for restaurants operating in Brazil at the time of the closing.
Removed
See Note 3 - Revenue Recognition of the Notes to Consolidated Financial Statements for further details regarding the 2023 Resolution Agreement. RESOURCES Sourcing and Supply - We take a global approach to procurement and supply chain management, with our corporate team serving all U.S. and international concepts.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

84 edited+15 added−3 removed123 unchanged
Biggest changeWe also evaluate long-lived assets on a quarterly basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We cannot accurately predict the amount and timing of any impairment of assets. A significant amount of judgment is involved in determining if an indication of impairment exists.
Biggest changeWe cannot accurately predict the amount and timing of any impairment of assets. A significant amount of judgment is involved in determining if an indication of impairment exists. Unforeseen events could make developing forecasts for, and the accounting of, valuation of goodwill and certain other assets slower and more difficult.
We may be exposed to new and unforeseen risks and challenges, particularly if we enter into markets or engage in activities with which we have no or limited prior experience, and it may be difficult to predict the success of such endeavors.
We may be exposed to new and unforeseen risks and challenges, particularly if we enter into markets or engage in activities with which we have limited or no prior experience, and it may be difficult to predict the success of such endeavors.
Food safety issues could be caused by suppliers or distributors and, as a result, be out of our control and this risk may be exacerbated by current supply chain issues, which could delay deliveries and necessitate alternative sourcing on short notice. Health concerns or outbreaks of disease in a food product could also reduce demand for particular menu offerings.
Food safety issues could be caused by suppliers or distributors and, as a result, be out of our control and this risk may be exacerbated by supply chain issues, which could delay deliveries and necessitate alternative sourcing on short notice. Health concerns or outbreaks of disease in a food product could also reduce demand for particular menu offerings.
A claim or investigation resulting from a cyber or other security threat to our systems and data may have a material adverse effect on our business and distract management from running the business. Responses to cybersecurity also have the potential of incurring significant remediation costs, to the extent such costs are not covered by our applicable insurance policies.
A claim or investigation resulting from a cyber or other security threat to our systems and data may have a material adverse effect on our business and distract management from running the business. Responses to cybersecurity incidents also have the potential of incurring significant remediation costs, to the extent such costs are not covered by our applicable insurance policies.
Our foreign operations are subject to all of the same risks as our U.S. restaurants, as well as additional risks including, among others, international economic, political, social and legal conditions and the possibility of instability and unrest, differing cultures and consumer preferences, diverse government regulations and tax systems, cybersecurity threats, corruption, anti-American sentiment, the ability to source high-quality ingredients and other commodities in a cost-effective manner, uncertain or differing interpretations of rights and obligations in connection 21 Table of Contents BLOOMIN’ BRANDS, INC. with international franchise agreements and the collection of ongoing royalties from international franchisees, the availability and costs of land, construction and financing, and the availability of experienced management, appropriate franchisees and operating partners.
Our foreign operations are subject to all of the same risks as our U.S. restaurants, as well as additional risks including, among others, international economic, political, social and legal conditions and the possibility of instability and unrest, differing cultures and consumer preferences, diverse government regulations and tax systems, cybersecurity threats, corruption, anti-American sentiment, the ability to source high-quality ingredients and other 24 Table of Contents BLOOMIN’ BRANDS, INC. commodities in a cost-effective manner, uncertain or differing interpretations of rights and obligations in connection with international franchise agreements and the collection of ongoing royalties from international franchisees, the availability and costs of land, construction and financing, and the availability of experienced management, appropriate franchisees and operating partners.
Due to the nature of our industry, we expect to continue to purchase a substantial amount of our beef and pork from a small number of suppliers. Global economic factors continue to place significant pressure on suppliers, making the supply environment more expensive and causing supply chain issues.
Due to the nature of our industry, we expect to continue to purchase a substantial amount of our beef from a small number of suppliers. Global economic factors continue to place significant pressure on suppliers, making the supply environment more expensive and causing supply chain issues.
However, franchisees are independent third parties that we do not control, and these franchisees own, operate and oversee the daily operations of their restaurants. As a result, the ultimate success and quality of any franchise restaurant rests with the franchisee.
However, franchisees are generally independent third parties that we do not control, and these franchisees own, operate and oversee the daily operations of their restaurants. As a result, the ultimate success and quality of any franchise restaurant rests with the franchisee.
Risks Related to Our Business and Industry Food safety and food-borne illness concerns in our restaurants or throughout the industry or supply chain may have an adverse effect on our business by reducing demand and increasing costs.
Risks Related to the Restaurant Industry Food safety and food-borne illness concerns in our restaurants or throughout the industry or supply chain may have an adverse effect on our business by reducing demand and increasing costs.
Further, if our suppliers or distributors are unable to fulfill their obligations under their contracts or we are unable to develop or maintain relationships with these or new suppliers or distributors, if needed, we could encounter supply shortages and incur higher costs.
If our suppliers or distributors are unable to fulfill their obligations under their contracts or we are unable to develop or maintain relationships with these or new suppliers or distributors, if needed, we could encounter supply shortages and incur higher costs.
We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers and distributors for our major products, such as beef and pork.
We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers and distributors for our major products, such as beef.
Our leverage could have important consequences, including: • making it more difficult for us to make payments on indebtedness; • increasing our vulnerability to general economic, industry and competitive conditions and the various risks we face in our business; • increasing our cost of borrowing or limiting our ability to obtain additional financing if needed; • reducing our ability to use our cash flow to fund our operations, capital expenditures, dividend payments, and future business and strategic opportunities; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may not be as highly leveraged.
Our leverage could have important consequences, including: • making it more difficult for us to make payments on indebtedness; • increasing our vulnerability to general economic, industry and competitive conditions and the various risks we face in our business; • increasing our cost of borrowing or limiting our ability to obtain additional financing, if needed; • reducing our ability to use our cash flow to fund our operations, capital expenditures, dividend payments, repurchases of our common stock and future business and strategic opportunities; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may not be as highly leveraged.
Despite our security measures, our technology systems may be vulnerable to damage, disability or failures due to physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, employee error or malfeasance, denial of service, hacking, “phishing” attacks, social engineering, malware, ransomware, viruses, worms and other attacks or disruptive problems, which have increased in sophistication, frequency and duration in recent years.
Despite our security measures, our technology systems remain vulnerable to damage, disability or failures due to physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, employee error or malfeasance, denial of service, hacking, “phishing” attacks, social engineering, malware, ransomware, viruses, worms and other attacks or disruptive problems, which have increased in sophistication, frequency and duration in recent years.
Any failure or perceived failure by us to adequately address stakeholder expectations regarding corporate citizenship, including diversity, equity and inclusion, employee health, safety and welfare, and workplace rights, among others, may damage our reputation and adversely affect our business and results of operations.
Any failure or perceived failure by us to adequately address stakeholder expectations and legal requirements regarding corporate citizenship, including diversity, equity and inclusion, employee health, safety and welfare, and workplace rights, among others, may damage our reputation and adversely affect our business and results of operations.
We have been, and will continue to be, the target of attempted cyber and other security threats, including those common to most industries and those targeting us due to the confidential consumer information we obtain through our electronic processing of credit and debit card transactions.
We have been, and will continue to be, the target of cyber and other security threats and incidents, including those common to most industries and those targeting us due to the confidential consumer information we obtain through our electronic processing of credit and debit card transactions.
We are subject to various U.S. federal, state and international laws and regulations related to the offer and sale of franchises. Failure to comply with these laws could adversely affect the results we generate from franchises or otherwise impose costs on us.
We are subject to various U.S. federal, state and international laws and regulations related to the offer and sale of franchisees. Failure to comply with these laws could adversely affect the results we generate from franchisees or otherwise impose costs on us.
Our effective income tax rate and other taxes in the future could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, an “ownership change” as defined under Section 382 of the Internal Revenue Code, changes in U.S. or foreign tax laws, including the proposed 15% global minimum tax under the Organization for Economic Co-operation and Development (“OECD”) Pillar Two (“Pillar Two”), Global Anti-Base Erosion rules, uncertainty in the interpretation of tax laws, comprehensive tax reform measures or other legislative changes, and the outcome of income tax audits and tax litigation, such as in Brazil.
Our effective income tax rate and other taxes in the future could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, an “ownership change” as defined under Section 382 of the Internal Revenue Code, changes in U.S. or foreign tax laws, including the 15% global minimum tax under the Organization for Economic Co-operation and Development (“OECD”) Pillar Two (“Pillar Two”), Global Anti-Base Erosion rules, uncertainty in the interpretation of tax laws, comprehensive tax reform measures or other legislative changes, particularly as a result of the recent U.S. elections, and the outcome of income tax audits and tax litigation, such as in Brazil.
Other states and countries in which we operate have enacted, or are proposing to enact, similar laws or the laws expanding existing privacy rights. New areas of litigation related to privacy rights continue to emerge. Compliance with newly developed laws and regulations, which are subject to change and uncertain interpretations, may cause us to incur substantial costs.
Other states and countries in which we operate have enacted, or are proposing to enact, similar laws or the laws expanding existing privacy rights. New areas of litigation related to privacy rights continue to emerge. Compliance with newly developed laws and regulations, which are subject to change and uncertain interpretations, may cause us to incu r substantial costs.
Although we segment our card data environment and employ a cybersecurity protection program based upon industry frameworks, as well as scan and improve our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures with oversight by our Audit Committee, there are no assurances that such programs will prevent or detect all potential cybersecurity breaches or technological failures.
Although we segment our card data environment and employ a cybersecurity protection program based upon industry frameworks, as well as scan and improve our environment for any threats and identify and remediate vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures with oversight by our Audit Committee, there are no assurances that such programs will prevent or detect all cybersecurity breaches or technological failures.
If we fail to achieve goals, targets, or objectives we may set with respect to corporate citizenship and sustainability matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards, including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for corporate citizenship and sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, and decreased demand 22 Table of Contents BLOOMIN’ BRANDS, INC. from consumers, or the price of our common stock could decline, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
If we fail to achieve goals, targets, or objectives we may set with respect to corporate citizenship and sustainability matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards, including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for corporate citizenship and sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, and decreased demand from consumers, or the price of our common stock could decline, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
Alcoholic beverage sales represent 11% of our consolidated restaurant sales and are subject to extensive state and local licensing and other regulations. The failure of a restaurant to obtain or retain a liquor license would adversely affect that restaurant’s operations. In addition, we are subject to “dram shop” statutes in certain states.
Alcoholic beverage sales represent ten percent of our consolidated restaurant sales and are subject to extensive state and local licensing and other regulations. The failure of a restaurant to obtain or retain a liquor license would adversely affect that restaurant’s operations. In addition, we are subject to “dram shop” statutes in certain states.
We are subject to various federal and state employment and labor laws and regulations. We and our vendors are subject to various employment and labor laws and regulations governing relationships with employees throughout the world and changes to laws and regulations may affect operating costs.
We and our vendors are subject to various employment and labor laws and regulations governing relationships with employees throughout the world and changes to laws and regulations may affect operating costs.
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses or other diseases, including the COVID-19 pandemic. If a regional or global health pandemic occurs, depending upon its location, duration and severity, our business could be severely affected.
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses or other diseases. If a regional or global health pandemic occurs, depending upon its location, duration and severity, our business could be severely affected.
We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters, and back up and off-site locations for recovery of electronic and other forms of data and information, and the ability to manage our business remotely.
We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters, and backup and off-site locations for recovery of electronic and other forms of data and information, and the ability to manage our business remotely.
Any significant additional government regulations and new laws governing relationships with employees, including minimum wage increases, regulations relating to union organizing rights and activities, the employment status of third-party delivery drivers, mandated benefits or other requirements that impose additional obligations on us, could increase our costs and adversely affect our business and results of operations.
Any significant additional government regulations and new laws governing relationships with employees, including minimum wage increases, regulations relating to union organizing rights and activities, the employment status of third-party delivery drivers, mandated benefits or other requirements that impose additional obligations on us, could increase our costs and adversely affect our business and results of operations. 17 Table of Contents BLOOMIN’ BRANDS, INC.
We have limited control with respect to the operations of our franchisees, which could have a negative impact on our business. Our franchisees are contractually obligated to operate their restaurants in accordance with our standards and we provide training and support to franchisees.
Risks Related to Our Business Model and Strategy We have limited control with respect to the operations of our franchisees, which could have a negative impact on our business. Our franchisees are contractually obligated to operate their restaurants in accordance with our standards and we provide training and support to franchisees.
For example, the COVID-19 pandemic, severe winter weather conditions and hurricanes have impacted our traffic, and that of our franchises, and results of operations in recent years.
For example, the COVID-19 pandemic, severe winter weather conditions, wildfires and hurricanes have impacted our traffic, and that of our franchisees, and results of operations in recent years.
We may also incur costs of and challenges in 23 Table of Contents BLOOMIN’ BRANDS, INC. ensuring compliance with measures implemented in response to a widespread illness or a pandemic, such as requirements for physical barriers or other preventative measures in restaurants or vaccination or testing requirements for our employees, which can vary by the location of the restaurant and may continue to change.
We may also incur costs of and challenges in ensuring compliance with measures implemented in response to a widespread illness or a pandemic, such as requirements for physical barriers or other preventative measures in restaurants or vaccination or testing requirements for our employees, which can vary by the location of the restaurant and may continue to change.
The failure to meet our debt service obligations or the failure to remain in compliance with the financial covenants under our debt agreements would constitute an event of default under those agreements and the lenders could elect to declare all amounts outstanding under them to be immediately due and payable and terminate all commitments to extend further credit. 27 Table of Contents BLOOMIN’ BRANDS, INC.
The failure to meet our debt service obligations or the failure to remain in compliance with the financial covenants under our debt agreements would constitute an event of default under those agreements and the lenders could elect to declare all amounts outstanding under them to be immediately due and payable and terminate all commitments to extend further credit.
In addition, these measures may not be sustainable or may be detrimental to continued operations. Failure to achieve such desired savings or other negative effects from cost-saving measures could adversely affect our results of operations and financial condition and curtail investment in growth opportunities. 24 Table of Contents BLOOMIN’ BRANDS, INC.
In addition, these measures may not be sustainable or may be detrimental to continued operations. Failure to achieve such desired savings or other negative effects from cost-saving measures could adversely affect our results of operations and financial condition and curtail investment in growth opportunities.
However, there are types of losses we may incur that cannot be insured against or that we believe are not commercially reasonable to insure. These losses, if they occur, could have a material and adverse effect on our business and results of operations.
However, there are types of losses we may incur that cannot be insured against or that we believe are not commercially reasonable to 28 Table of Contents BLOOMIN’ BRANDS, INC. insure. These losses, if they occur, could have a material and adverse effect on our business and results of operations.
Brand value and reputation are based in large part on consumer perceptions, which are driven by both our actions and by actions beyond our control, such as new brand strategies or their implementation, business incidents, ineffective advertising or marketing efforts, or unfavorable mainstream or social media publicity involving us, our industry, our franchisees, or our suppliers.
Brand value and reputation are based in large part on consumer perceptions, which are driven by both our actions and by actions beyond our control, such as new brand 23 Table of Contents BLOOMIN’ BRANDS, INC. strategies or their implementation, business incidents, ineffective advertising or marketing efforts, or unfavorable mainstream or social media publicity involving us, our industry, our franchisees, or our suppliers.
Companies across all industries are facing increasing scrutiny relating to their corporate citizenship and sustainability practices. We are also subject to corporate citizenship and sustainability disclosure rules and regulations and institutional investor voting policies that seek this information, making it more accessible for scrutiny.
Companies across all industries are facing increasing scrutiny relating to their corporate citizenship and sustainability practices, including from opponents of these initiatives. We are also subject to corporate citizenship and sustainability disclosure rules and regulations and institutional investor voting policies that seek this information, making it more accessible for scrutiny.
We are anticipating 3% to 4% commodity inflation for 2024, but there can be no assurance that our expectations will be accurate or that we will be able to efficiently pass through any increased costs in our prices.
We are anticipating 2.5% to 3.5% commodity inflation for 2025, but there can be no assurance that our expectations will be accurate or that we will be able to efficiently pass through any increased costs in our prices.
Significant legal fees and costs in complex class action litigation or an adverse judgment or settlement that is not insured or is in excess of insurance coverage could have a material adverse effect on our financial position and results of operations.
Significant legal fees and costs in complex class action litigation or an adverse judgment or settlement that is not insured or is in excess of insurance coverage could have a material adverse effect on our financial position and results of operations. 27 Table of Contents BLOOMIN’ BRANDS, INC.
Although 25 Table of Contents BLOOMIN’ BRANDS, INC. we cannot predict when or where we will be negatively impacted by widespread illnesses or pandemics, adverse weather events, to the extent that climate change or other factors result in more frequent, widespread or severe events, it could adversely impact our results.
Although we cannot predict when or where we will be negatively impacted by widespread illnesses or pandemics, adverse weather events, to the extent that climate change or other factors result in more frequent, widespread or severe events, it could adversely impact our results.
Because our decision to issue securities in any future offering will depend on market 28 Table of Contents BLOOMIN’ BRANDS, INC. conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest. Our stock price is subject to volatility. The stock market in general is highly volatile. As a result, the market price of our common stock is similarly volatile.
Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest. 26 Table of Contents BLOOMIN’ BRANDS, INC. Our stock price is subject to volatility. The stock market in general is highly volatile. As a result, the market price of our common stock is similarly volatile.
During periods of declining sales and profitability of franchisees, the incidence of franchisee defaults for these lease payments may increase and we may be required to make lease payments and seek recourse against the franchisee or agree to repayment terms.
During periods of declining sales and profitability of franchisees, the incidence of franchisee defaults for these lease payments may increase and we may be required to make lease payments and seek recourse against the franchisee or agree to repayment terms. 22 Table of Contents BLOOMIN’ BRANDS, INC.
Regardless of the ultimate success of any initiative, the implementation and integration of new business or operational processes could be disruptive to our current operations. Even if we test and evaluate an initiative on a limited basis, the diversion of management time and resources could have an adverse effect on our business. 26 Table of Contents BLOOMIN’ BRANDS, INC.
Regardless of the ultimate success of a strategic initiative, the implementation and integration of new business or operational processes could be disruptive to our current operations. Even if we test and evaluate an initiative on a limited basis, the diversion of management time and resources could have an adverse effect on our business.
We cannot be certain that our financial condition or credit and other market conditions will be favorable when our credit agreement matures in 2026, or at any earlier time we may seek to refinance our debt. Further, turmoil in global credit markets could adversely impact the availability and cost of credit.
We cannot be certain that our financial condition or credit and other market conditions will be favorable upon maturity of our unsecured notes or credit agreement in 2029, or at any earlier time we may seek to refinance our debt. Further, turmoil in global credit markets could adversely impact the availability and cost of credit.
An external disruption or an internal dispute could force us to sever ties with our suppliers, and we 20 Table of Contents BLOOMIN’ BRANDS, INC. may not be able to find a suitable replacement in a timely or cost-efficient manner.
An external disruption or an internal dispute could force us to sever ties with our suppliers, and we may not be able to find a suitable replacement in a timely or cost-efficient manner.
A security breach or even a perceived security breach or failure to appropriately respond to a cyber incident could result in litigation or governmental investigation, as well as damage to our reputation and brands.
A security breach or even a perceived security breach or failure to appropriately respond to a cyber incident could result in litigation or governmental investigation, as well as damage to our reputation and brands. 21 Table of Contents BLOOMIN’ BRANDS, INC.
For instance, if prevailing health or dietary preferences cause consumers to avoid steak and other products we offer in any of our concepts in favor of foods or ingredients that are perceived as healthier or otherwise reflect popular demand, our business and operating results would be harmed.
Food service businesses are affected by changes in consumer tastes and demographic trends. For instance, if prevailing health or dietary preferences cause consumers to avoid steak and other products we offer in any of our concepts in favor of foods or ingredients that are perceived as healthier or otherwise reflect popular demand, our business and operating results would be harmed.
We have experienced and continue to experience the impact of inflation and fluctuations in costs on our operating expenses and anticipate the inflationary conditions will continue in the near future.
We have experienced and continue to experience the impact of inflation and fluctuations in costs on our operating expenses and anticipate the inflationary 20 Table of Contents BLOOMIN’ BRANDS, INC. conditions will continue in the near future.
Beef and pork are a significant cost to us, and we may also incur higher costs to secure adequate suppliers or make substantial changes to our menu offerings, at the risk of material adverse harm to our business.
Beef is a significant cost to us, and we may also incur higher costs to secure 16 Table of Contents BLOOMIN’ BRANDS, INC. adequate suppliers or make substantial changes to our menu offerings, at the risk of material adverse harm to our business.
In addition, the rapid 19 Table of Contents BLOOMIN’ BRANDS, INC. evolution and increased adoption of artificial intelligence technologies may increase our cybersecurity risks, including generative artificial intelligence augmenting threat actors’ technological sophistication to enhance existing or create new malware.
In addition, the rapid evolution and increased adoption of artificial intelligence technologies increases our cybersecurity risks, including generative artificial intelligence augmenting threat actors’ technological sophistication to enhance existing or to create new malware.
Risks associated with our remodeling, relocation and expansion plans may have adverse effects on our operating results. As part of our business strategy, we intend to continue to remodel, relocate and expand our current portfolio of restaurants. Our 2024 development schedule calls for the construction of approximately 40 to 45 new system-wide locations, with approximately half in Brazil.
Risks associated with our remodeling, relocation and expansion plans may have adverse effects on our operating results. As part of our business strategy, we intend to continue to remodel, relocate and expand our current portfolio of restaurants. Our 2025 development schedule calls for the construction of approximately 18 to 20 new Company-owned locations.
Currency regulations and fluctuations in exchange rates could also affect our performance. We have operations in many foreign countries, including direct investments in restaurants in Brazil, Hong Kong and China, as well as international franchises.
Currency regulations and fluctuations in exchange rates could also affect our performance. We have operations in many foreign countries, including a minority equity investment in our Brazil franchisees, direct investments in restaurants in Hong Kong and international franchisees.
For example, state, federal and international regulations on sustainability matters, including the recently enacted Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act in California and the SEC’s climate change rule proposals, have been or are expected to be implemented that will require reporting and third-party assurance on greenhouse gas emissions and other environmental matters.
For example, state, federal and international regulations on sustainability matters, including the recently enacted Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act in California, have been or may be implemented that will require reporting and third-party assurance on greenhouse gas emissions and other environmental matters. 19 Table of Contents BLOOMIN’ BRANDS, INC.
Further, we face growing competition from quick service and fast-casual restaurants, the supermarket industry and meal kit and food delivery providers, with the improvement of prepared food offerings, “ghost” or “dark” kitchens where meals are prepared at a separate takeaway premises rather than a restaurant, and the trend towards convergence in grocery, deli, delivery, retail and restaurant services.
Further, we face growing competition from quick service and fast-casual restaurants, the supermarket industry and meal kit and food delivery providers, with the improvement of prepared food offerings. and the trend towards convergence in grocery, deli, delivery, retail and restaurant services.
Our failure to comply with government regulation related to our restaurant operations, and the costs of compliance or non-compliance, could adversely affect our business. We are subject to various federal, state, local and foreign laws affecting our business.
Inaccurate employee FICA tax reporting could subject us to monetary liabilities, which could harm our business, results of operations and financial condition. Our failure to comply with government regulation related to our restaurant operations, and the costs of compliance or non-compliance, could adversely affect our business. We are subject to various federal, state, local and foreign laws affecting our business.
As small businesses, some of our franchise operators may be negatively and disproportionately impacted by strategic initiatives, capital requirements, inflation, increased interest rates, labor costs, employee relations issues, or other causes.
In addition, we may also incur expenses in connection with supporting franchise restaurants that are underperforming. As small businesses, some of our franchise operators may be negatively and disproportionately impacted by strategic initiatives, capital requirements, inflation, increased interest rates, labor costs, employee relations issues, or other causes.
Challenging economic, political and social conditions may negatively impact consumer spending and thus cause a challenging sales environment in the casual dining sector and a decline in our financial results.
Risks Related to Inflation and Macroeconomic Disruption Challenging economic, political and social conditions may have a negative effect on our business and financial results. Challenging economic, political and social conditions may negatively impact consumer spending and thus cause a challenging sales environment in the casual dining sector and a decline in our financial results.
From time to time, we consider various initiatives in order to grow and evolve our business and brands and improve our operating results. These initiatives could include, among other things, acquisitions, development or dispositions of restaurants or brands, new joint ventures, new franchise arrangements, restaurant closures and changes to our operating model.
These actions and initiatives could include, among other things, acquisitions, development or dispositions of restaurants or brands, new joint ventures, new franchise arrangements, restaurant closures and changes to our operating model.
Although we have elected in our certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, our certificate of incorporation contains provisions that have the same effect as Section 203.
Although we have elected in our certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, our certificate of incorporation contains provisions that have the same effect as Section 203. General Risk Factors Litigation could have a material adverse impact on our business and our financial performance.
If we are unable to adequately maintain effective internal control over financial reporting, we may not be able to accurately report our financial results. Furthermore, we cannot be certain that our internal control over financial reporting and disclosure controls and procedures will prevent all possible errors and fraud, including through cyber-attacks.
Furthermore, we cannot be certain that our internal control over financial reporting and disclosure controls and procedures will prevent all possible errors and fraud, including through cyber-attacks.
We are subject to laws relating to information security, cashless payments and consumer credit, protection and fraud. Compliance with these laws and regulations can be costly, and any failure or perceived failure to comply with these laws or any breach of our systems could harm our reputation or lead to litigation, which could adversely affect our financial condition.
Compliance with these laws and regulations and monitoring and addressing changes can be costly, and any failure or perceived failure to comply with these laws or any breach of our systems could harm our reputation or lead to litigation, which could adversely affect our financial condition.
If we are unable to anticipate or successfully respond to changes in consumer preferences, our results of operations could be adversely affected, generally or in particular concepts or markets. Changes in tax laws, uncertainty in the judicial interpretation of those laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability.
If we are unable to anticipate or successfully respond to changes in consumer preferences, our results of operations could be adversely affected, generally or in particular concepts or markets.
We also rely on our employees to accurately disclose the full amount of their tip income, and we base our FICA tax reporting on the disclosures provided to us by such tipped employees.
Further, class action lawsuits filed pursuant to federal and state wage and hour laws may create additional material costs. We also rely on our employees to accurately disclose the full amount of their tip income, and we base our FICA tax reporting on the disclosures provided to us by such tipped employees.
Increased commodity, energy and other costs could decrease our profit margins or cause us to limit or otherwise modify our menus or increase prices, which could adversely affect our business.
Further, poor economic conditions may force nearby businesses to shut down, which could cause our restaurant locations to be less attractive. Increased commodity, energy and other costs could decrease our profit margins or cause us to limit or otherwise modify our menus or increase prices, which could adversely affect our business.
Failure to comply with any such legal requirements could subject us to monetary liabilities and other sanctions, which could harm our business, results of operations and financial condition. If we fail to adequately address corporate citizenship and sustainability matters, it could have an adverse effect on our business, financial condition, and operating results and may damage our reputation.
If we fail to adequately address corporate citizenship and sustainability matters, it could have an adverse effect on our business, financial condition, and operating results and may damage our reputation.
General Risk Factors An impairment in the carrying value of our goodwill or other intangible or long-lived assets could adversely affect our financial condition and results of operations. Along with other intangible assets, we test goodwill for impairment annually and whenever events or changes in circumstances indicate that its carrying value may not be recoverable.
Along with other intangible assets, we test goodwill for impairment annually and whenever events or changes in circumstances indicate that its carrying value may not be recoverable. We also evaluate long-lived assets on a quarterly basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Litigation could have a material adverse impact on our business and our financial performance. We are subject to lawsuits, administrative proceedings and claims that arise in the regular course of business.
We are subject to lawsuits, administrative proceedings and claims that arise in the regular course of business.
Additionally, if our insurance costs increase, there can be no assurance that we will be able to successfully offset the effect of such increases and our results of operations may be adversely affected. Item 1B. Unresolved Staff Comments Not applicable.
Additionally, if our insurance costs increase, there can be no assurance that we will be able to successfully offset the effect of such increases and our results of operations may be adversely affected. An impairment in the carrying value of our goodwill or other intangible or long-lived assets could adversely affect our financial condition and results of operations.
Inaccurate employee FICA tax reporting could subject us to monetary liabilities, which could harm our business, results of operations and financial condition. 17 Table of Contents BLOOMIN’ BRANDS, INC. Failure to recruit, train and retain high-quality leadership, restaurant-level management and hourly team members may inhibit our ability to operate and grow successfully.
If we are unable to continue to compete effectively, our traffic, sales and margins could decline and our business, financial condition and results of operations would be adversely affected. 15 Table of Contents BLOOMIN’ BRANDS, INC. Failure to recruit, train and retain high-quality leadership, restaurant-level management and hourly team members may inhibit our ability to operate and grow successfully.
Prices may also be affected by supply, market changes, increased competition, changes in laws, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, labor shortages or other reasons. As a result, these events, combined with other more general economic and demographic conditions, could impact our pricing and negatively affect our sales and profit margins.
Prices may also be affected by supply, market changes, increased competition, changes in laws, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, labor shortages, port disruptions and freight carrier stoppages, or other reasons.
Our dependence on a small number of suppliers subjects us to the risks of ingredient shortage, supply interruption, animal disease outbreak, and price volatility.
During 2024, we purchased more than 90% of our U.S. beef raw materials from four beef suppliers that represent a significant portion of the total beef marketplace in the U.S. Our dependence on a small number of suppliers subjects us to the risks of ingredient shortage, supply interruption, animal disease outbreak, and price volatility.
As of December 31, 2023, our total net indebtedness was $780.7 million and we had $599.2 million in available unused borrowing capacity under our revolving credit facility, net of undrawn letters of credit of $19.8 million.
As of December 29, 2024, our total net indebtedness was $1.0 billion and we had $474.0 million in available unused borrowing capacity under our revolving credit facility, net of undrawn letters of credit of $16.0 million. 25 Table of Contents BLOOMIN’ BRANDS, INC.
In addition, our competitors may generate or better implement business strategies that improve the value and relevance of their brands and reputation, relative to ours.
Consumer tastes, nutritional and dietary trends, traffic patterns and the type, number and location of competing restaurants often affect the restaurant business, and our competitors may react more efficiently, creatively and effectively to those conditions. In addition, our competitors may generate or better implement business strategies that improve the value and relevance of their brands and reputation, relative to ours.
A regional or global health pandemic might also adversely affect our business by disrupting or delaying production and delivery of materials and products in our supply chain and by causing staffing shortages in our stores. There are risks and uncertainties associated with initiatives that we may implement.
A regional or global health pandemic might also adversely affect our business by disrupting or delaying production and delivery of materials and products in our supply chain and by causing staffing shortages in our stores. Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.
The inappropriate use of social media vehicles by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. We face a variety of risks associated with doing business in foreign markets that could have a negative impact on our financial performance.
The inappropriate use of social media vehicles by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. Risks Related to Government Regulation We are subject to various federal and state employment and labor laws and regulations.
The food service industry is affected by consumer preferences and perceptions. Changes in these preferences and perceptions may lessen the demand for our products, which would reduce sales and harm our business. Food service businesses are affected by changes in consumer tastes and demographic trends.
A shortage of team members also could cause our restaurants to operate with reduced staff, which could adversely affect our ability to provide high-quality guest service. The food service industry is affected by consumer preferences and perceptions. Changes in these preferences and perceptions may lessen the demand for our products, which would reduce sales and harm our business.
Our inability to compete effectively could adversely affect our business, financial condition and results of operations. A substantial number of restaurant operators compete directly and indirectly with us with respect to price, service, location and food quality, some of which are well-established with significant resources.
A substantial number of restaurant operators compete directly and indirectly with us with respect to price, service, location and food quality, some of which are well-established with significant resources. There is also active competition for management, team members and other personnel, and attractive suitable real estate sites.
Further, it is difficult to predict what impact, if any, the U.S. presidential and congressional elections and their outcomes could have on consumer confidence and discretionary spending. In addition, the effects on the global economy from the ongoing conflicts in Israel and Ukraine, particularly if they escalate or broaden, are uncertain.
In addition, the effects on the global economy from the ongoing conflicts in Israel and Ukraine, particularly if they escalate or broaden, are uncertain.
We are subject to income and other taxes in the United States and numerous foreign jurisdictions.
Changes in tax laws, uncertainty in the judicial interpretation of those laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability. We are subject to income and other taxes in the United States and numerous foreign jurisdictions.
Unforeseen events could make developing forecasts for, and the accounting of, valuation of goodwill and certain other assets slower and more difficult. Should the value of goodwill or other intangible or long-lived assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations. 29 Table of Contents BLOOMIN’ BRANDS, INC.
Should the value of goodwill or other intangible or long-lived assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations. Failure to maintain effective systems of internal control over financial reporting and disclosure controls and procedures could adversely affect our business and financial results.
Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments by us could significantly change our reported or expected financial performance. Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.
Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments by us could significantly change our reported or expected financial perform ance. Item 1B. Unresolved Staff Comments Not applicable.
Failure to maintain effective systems of internal control over financial reporting and disclosure controls and procedures could adversely affect our business and financial results. Effective internal control over financial reporting is necessary for us to provide accurate financial information.
Effective internal control over financial reporting is necessary for us to provide accurate financial information. If we are unable to adequately maintain effective internal control over financial reporting, we may not be able to accurately report our financial results.
If sales trends or economic conditions worsen for franchisees, their financial results may worsen and our royalty, rent and other fee revenues may decline. In addition, we may also incur expenses in connection with supporting franchise restaurants that are underperforming.
This portion will increase as a result of the sale of a majority interest in our Brazil operations, which are now operated as unconsolidated franchisees. If sales trends or economic conditions worsen for franchisees, their financial results may worsen and our royalty, rent and other fee revenues may decline.
Our success will continue to depend, to a significant extent, on our leadership team and other key management personnel. The tight labor market in the United States has further strained and could continue to strain our ability to keep our restaurants fully staffed.
These risks and uncertainties could result in operational and administrative inefficiencies and additional added costs, which could adversely impact our results of operations. Further, the tight labor market in the United States has further strained and could continue to strain our ability to keep our restaurants fully staffed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−1 removed11 unchanged
Biggest changeIn the event we experience an incident, we classify it based on its significance and track remediation actions and outcomes. Although we do not believe we have been materially affected by cybersecurity incidents or threats in the past, we cannot provide any assurance that we will not experience a material incident in the future.
Biggest changeAlthough we do not believe we have been materially affected by cybersecurity incidents or threats in the past, or that past incidents are reasonably likely to materially affect us, we cannot provide any assurance that we will not experience a material incident in the future.
Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with the head of information security, who has over 25 years of experience in the field of cybersecurity, including prior service in the military in cybersecurity roles, and relevant industry certifications commensurate with his role.
Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with the CISO, who has over 25 years of experience in the field of cybersecurity, including prior service in the military in cybersecurity roles, and relevant industry certifications commensurate with his role.
The Audit Committee receives quarterly updates from our head of information security and our Chief Technology Officer (“CTO”) regarding our cybersecurity program and actions taken to manage cybersecurity risk, which include risk identification and management strategies, consumer data protection, security programs, ongoing risk mitigation activities and results of third-party assessments and testing.
The Audit Committee receives quarterly updates from our Chief Information Security Officer (“CISO”) and our Chief Information Officer (“CIO”) regarding our cybersecurity program and actions taken to manage cybersecurity risk, which include risk identification and management strategies, consumer data protection, security programs, ongoing risk mitigation activities and results of third-party assessments and testing.
We dedicate resources and apply security controls where we believe they would be most effective to predict, prevent, detect and respond to potential security threats to our highest value information assets, which we consider to be point-of-sale systems, financial systems and confidential, personal and private customer and employee information.
We dedicate 29 Table of Contents BLOOMIN’ BRANDS, INC. resources and apply security controls where we believe they would be most effective to predict, prevent, detect and respond to potential security threats to our highest value information assets, which we consider to be point-of-sale systems, financial systems and confidential, personal and private customer and employee information.
We maintain a dedicated cybersecurity department, which consists exclusively of Company employees, within our broader information technology department. Functions within this department range from new information technology solution design and implementation, vulnerability management, phishing awareness, threat detection, Payment Card Industry compliance and incident response.
We maintain a dedicated cybersecurity department, which consists exclusively of Company employees, within our broader information technology department. Functions within this department range from new information technology solution design and implementation, vulnerability management, phishing awareness, threat detection, 30 Table of Contents BLOOMIN’ BRANDS, INC. Payment Card Industry compliance and incident response.
We use multiple safeguards to protect our internal networks and systems, including, among others, firewalls, email protection and web filtering, endpoint detection and response software, controlled access to our data and systems, 30 Table of Contents BLOOMIN’ BRANDS, INC. segmenting our card data environment, vulnerability management and patching, and performing regular penetration testing.
We use multiple safeguards to protect our internal networks and systems, including, among others, firewalls, email protection and web filtering, endpoint detection and response software, controlled access to our data and systems, segmenting our card data environment, vulnerability management and patching, and performing regular penetration testing.
Our head of information security reports directly to the CTO who has over 20 years of restaurant technology experience. 31 Table of Contents BLOOMIN’ BRANDS, INC. Our CTO receives status reports from our cybersecurity department regularly and reports to our Chief Executive Officer, who receives updates on incidents, trends, projects and other relevant information regularly.
Our CISO reports directly to the CIO who has over 20 years of technology leadership experience in various industries. Our CIO receives status reports from our cybersecurity department regularly and reports to our Chief Executive Officer, who receives updates on incidents, trends, projects and other relevant information regularly.
Removed
As part of its oversight of our enterprise risk management program, the Audit Committee periodically reviews and prioritizes key risks facing our Company, including cybersecurity risk.
Added
In the event we experience an incident, we classify it based on its significance and track remediation actions and outcomes.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeThe following is a summary of our restaurant locations by country and territory as of December 31, 2023: COMPANY-OWNED FRANCHISED United States (1) 998 United States 152 International: International: Brazil (2) 172 Argentina 3 Japan 9 China (Mainland) 1 Australia 8 Mexico 4 Hong Kong 18 Canada 3 Qatar 6 Total international Company-owned 191 Costa Rica 2 Saudi Arabia 10 Dominican Republic 1 South Korea (1) 92 Guam 1 Total international franchised 139 Total Company-owned 1,189 Total franchised 291 ____________________ (1) Restaurant property counts exclude one and four off-premises only kitchens from Company-owned United States and franchised South Korea totals, respectively.
Biggest changeThe following is a summary of our restaurant locations by country and territory as of December 29, 2024: COMPANY-OWNED FRANCHISED United States 970 United States 146 Other - Hong Kong 10 International Discontinued Operations - Brazil (1) 192 Argentina 3 Japan 9 Australia 8 Mexico 4 Canada 3 Qatar 7 Costa Rica 2 Saudi Arabia 11 Dominican Republic 1 South Korea 96 Guam 1 Total international franchised 145 Total Company-owned 1,172 Total franchised 291 ____________________ (1) The restaurant count for Brazil is reported as of November 30, 2024 to correspond with the balance sheet date of this subsidiary.
Item 2. Properties We had 1,480 system-wide restaurants located across 47 states, Guam and 13 countries as of December 31, 2023.
Item 2. Properties We had 1,463 system-wide restaurants located across 46 states, Guam and 12 countries as of December 29, 2024.
INTERNATIONAL TOTAL PERCENTAGE OF TOTAL Company-owned sites 25 — 25 2 % Leased sites: Land, ground and building leases 692 1 693 58 % Space and in-line leases 281 190 471 40 % Total Company-owned restaurant sites 998 191 1,189 100 % We also lease corporate offices in Tampa, Florida and São Paulo, Brazil.
OTHER DISCONTINUED OPERATIONS TOTAL PERCENTAGE OF TOTAL Company-owned sites 23 — 23 2 % Leased sites: Land, ground and building leases 677 — 1 678 58 % Space and in-line leases 270 10 191 471 40 % Total Company-owned restaurant sites 970 10 192 1,172 100 % We also lease corporate offices in Tampa, Florida and, through the date of the Brazil Sale Transaction, in São Paulo, Brazil.
(2) The count for Brazil is reported as of November 30, 2023 to correspond with the balance sheet date of this subsidiary. We lease substantially all of our restaurant properties from third parties. As of December 31, 2023, our Company-owned restaurants were located on the following sites by segment: U.S.
Subsequent to December 29, 2024, we completed the sale of the majority ownership of our Brazil operations and all restaurants in that market now operate as unconsolidated franchisees. We lease substantially all of our restaurant properties from third parties. As of December 29, 2024, our Company-owned restaurants were located on the following sites by segment: U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+2 added−3 removed3 unchanged
Biggest changeIn February 2024, our Board canceled the remaining $57.5 million of authorization under the 2023 Share Repurchase Program and approved a new $350.0 million authorization (the “2024 Share Repurchase Program”), as announced in our press release issued on February 23, 2024. The 2024 Share Repurchase Program will expire on August 13, 2025. 33 Table of Contents BLOOMIN’ BRANDS, INC.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers - In February 2024, our Board canceled the remaining $57.5 million of authorization under the 2023 Share Repurchase Program and approved a new $350.0 million authorization (the “2024 Share Repurchase Program”), as announced in our press release issued on February 23, 2024.
See Note 6 - Stock-based and Deferred Compensation Plans of the Notes to Consolidated Financial Statements for details regarding the plan.
See Note 7 - Stock-based and Deferred Compensation Plans of the Notes to Consolidated Financial Statements for details regarding the plan.
The graph assumes an investment of $100 in our common stock and in each index on December 28, 2018 (the last business day of the fiscal year of investment), and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance.
The graph assumes an investment of $100 in our common stock and in each index on December 29, 2019 (the last business day of the fiscal year of investment), and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance.
Future dividend payments will depend on continued compliance with our financial covenants, as well as our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant. Holders - As of February 23, 2024, there were 113 holders of record of our common stock.
Future dividend payments will depend on continued compliance with our financial covenants, as well as our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant. Holders - As of February 21, 2025, there were 116 holders of record of our common stock.
DECEMBER 28, 2018 DECEMBER 29, 2019 DECEMBER 27, 2020 DECEMBER 26, 2021 DECEMBER 25, 2022 DECEMBER 31, 2023 Bloomin’ Brands, Inc.
DECEMBER 29, 2019 DECEMBER 27, 2020 DECEMBER 26, 2021 DECEMBER 25, 2022 DECEMBER 31, 2023 DECEMBER 29, 2024 Bloomin’ Brands, Inc.
Securities Authorized for Issuance Under Equity Compensation Plans - The following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2023: (shares in thousands) (a) (b) (c) PLAN CATEGORY NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) (3) Equity compensation plans approved by security holders 3,174 $ 21.04 6,925 ____________________ (1) Includes 1,449 shares issuable in respect to restricted stock units and performance-based share units (assuming target achievement of applicable performance metrics).
Securities Authorized for Issuance Under Equity Compensation Plans - The following table presents the securities authorized for issuance under our equity compensation plans as of December 29, 2024: (shares in thousands) (a) (b) (c) PLAN CATEGORY NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) (3) Equity compensation plans approved by security holders 2,966 $ 20.08 5,305 ____________________ (1) Includes 1,766 shares issuable in respect to restricted stock units and performance-based share units (assuming target achievement of applicable performance metrics).
Stock Performance Graph - The following graph depicts total return to stockholders from December 28, 2018 through December 31, 2023, relative to the performance of the Standard & Poor’s 500 index and the Standard & Poor’s 500 Consumer Discretionary index, a peer group.
Stock Performance Graph - The following graph depicts total return to stockholders from December 29, 2019 through December 29, 2024, relative to the performance of the Standard & Poor’s 500 index and the Standard & Poor’s 500 Consumer Discretionary index, a peer group.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers - The following table provides information regarding our purchases of common stock during the fourteen weeks ended December 31, 2023: REPORTING PERIOD TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE PAID PER SHARE TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (1) September 25, 2023 through October 22, 2023 269,131 $ 23.78 269,131 $ 81,461,316 October 23, 2023 through November 19, 2023 137,044 $ 23.35 137,044 $ 78,261,379 November 20, 2023 through December 31, 2023 329,103 $ 25.10 329,103 $ 70,000,707 Total 735,278 735,278 ____________________ (1) On February 7, 2023, our Board approved a share repurchase authorization of up to $125.0 million of our outstanding common stock as announced in our press release issued February 16, 2023 (the “2023 Share Repurchase Program”).
Added
The 2024 Share Repurchase Program will expire on August 13, 2025. We did not repurchase any shares of our outstanding common stock during the thirteen weeks ended December 29, 2024 . As of December 29, 2024, we had $96.8 million of remaining share repurchase authorization under the 2024 Share Repurchase Program. 32 Table of Contents BLOOMIN’ BRANDS, INC.
Removed
Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.
Added
(BLMN) $ 100.00 $ 88.36 $ 97.68 $ 100.21 $ 140.01 $ 64.09 Standard & Poor’s 500 $ 100.00 $ 116.38 $ 150.62 $ 124.54 $ 157.06 $ 199.28 Standard & Poor’s 500 Consumer Discretionary $ 100.00 $ 129.97 $ 164.24 $ 104.12 $ 147.78 $ 197.38
Removed
(BLMN) $ 100.00 $ 125.64 $ 111.01 $ 122.72 $ 125.90 $ 175.91 Standard & Poor’s 500 $ 100.00 $ 132.96 $ 154.75 $ 200.27 $ 165.59 $ 208.83 Standard & Poor’s 500 Consumer Discretionary $ 100.00 $ 130.08 $ 169.06 $ 213.64 $ 135.43 $ 192.23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

93 edited+49 added−47 removed42 unchanged
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted Net Income and Adjusted Diluted Earnings Per Share Non-GAAP Reconciliations - The following table reconciles Net income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earnings per share for the periods indicated: FISCAL YEAR (in thousands, except per share data) 2023 2022 Net income attributable to Bloomin’ Brands $ 247,386 $ 101,907 Adjustments: Income from operations adjustments (1) 31,576 5,900 Loss on extinguishment and modification of debt (2) — 107,630 Loss on fair value adjustment of derivatives, net (2) — 17,685 Total adjustments, before income taxes 31,576 131,215 Adjustment to provision for income taxes (3) (10,801) (263) Net adjustments 20,775 130,952 Adjusted net income $ 268,161 $ 232,859 Diluted earnings per share $ 2.56 $ 1.03 Adjusted diluted earnings per share (4) $ 2.93 $ 2.52 Diluted weighted average common shares outstanding 96,453 98,512 Adjusted diluted weighted average common shares outstanding (4) 91,386 92,423 _________________ (1) See the Adjusted Income from Operations Non-GAAP Reconciliations table above for details regarding Income from operations adjustments.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted Net Income and Adjusted Diluted Earnings Per Share Non-GAAP Reconciliations - The following table reconciles Net (loss) income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earnings per share for the periods indicated: FISCAL YEAR (in thousands, except per share data) 2024 2023 Net (loss) income attributable to Bloomin’ Brands $ (128,018) $ 247,386 Net (loss) income from discontinued operations, net of tax (75,982) 41,629 Net (loss) income attributable to Bloomin’ Brands from continuing operations (1) (52,036) 205,757 Adjustments: Income from operations adjustments (2) 58,336 31,576 Loss on extinguishment of debt (3) 135,797 — Total adjustments, before income taxes 194,133 31,576 Adjustment to provision for income taxes (4) (13,001) (7,872) Net adjustments, continuing operations 181,132 23,704 Adjusted net income, continuing operations 129,096 229,461 Adjusted net income, discontinued operations (5) 30,246 38,700 Adjusted net income $ 159,342 $ 268,161 Diluted (loss) earnings per share: Continuing operations $ (0.61) $ 2.13 Discontinued operations (0.88) 0.43 Net diluted (loss) earnings per share $ (1.49) $ 2.56 Adjusted diluted earnings per share Continuing operations $ 1.45 $ 2.38 Discontinued operations 0.34 0.40 Adjusted diluted earnings per share (6)(7) $ 1.79 $ 2.78 Diluted weighted average common shares outstanding (7) 85,905 96,453 Adjusted diluted weighted average common shares outstanding (6)(7) 88,900 96,453 _________________ (1) Represents net (loss) income from continuing operations less net income attributable to noncontrolling interests.
The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (i) Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income; (ii) Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants; (iii) General and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices; and (iv) Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period.
The following categories of revenue and operating expenses are not included in restaurant-level operating income and corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (i) Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income; (ii) Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants; (iii) General and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices; and (iv) Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period.
Financing activities - The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to: (i) a decrease in repurchases of common stock, (ii) higher net proceeds from share-based compensation and (iii) partner equity plan payments during 2022.
The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to: (i) a decrease in repurchases of common stock, (ii) higher net proceeds from share-based compensation and (iii) partner equity plan payments during 2022.
Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following: • Average restaurant unit volumes —average sales (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand. • Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants. • System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands. • Restaurant-level operating margin, Income from operations, Net income and Diluted earnings per share —financial measures utilized to evaluate our operating performance.
Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following: • Average restaurant unit volumes —average sales (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand. • Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants. • System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands. • Restaurant-level operating margin, Income from operations, Net (loss) income and Diluted (loss) earnings per share —financial measures utilized to evaluate our operating performance.
Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income.
Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income.
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.2% from certain cost saving and productivity initiatives.
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.3% from certain cost saving and productivity initiatives.
Use of Cash Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, development of new restaurants, relocating or remodeling older restaurants, investments in technology, dividend payments and share repurchases.
Sources and Uses of Cash Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, development of new restaurants, remodeling older restaurants or relocating, investments in technology and dividend payments.
Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.7% from an increase in average check per person, (ii) 0.3% from certain cost saving and productivity initiatives and (iii) 0.2% from the favorable settlement of certain collective action wage and hour lawsuits.
Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.6% from an increase in average check per person, (ii) 0.4% from the favorable settlement of certain collective action wage and hour lawsuits and (iii) 0.3% from certain cost saving and productivity initiatives.
Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to support the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive Income.
Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive (Loss) Income.
As of December 31, 2023, tax loss carryforwards and credit carryforwards that do not have a valuation allowance are expected to be recoverable within the applicable statutory expiration periods. We currently expect to utilize general business tax credit carryforwards within a 10-year period.
As of December 29, 2024, tax loss carryforwards and credit carryforwards that do not have a valuation allowance are expected to be recoverable within the applicable statutory expiration periods. We currently expect to utilize general business tax credit carryforwards within a 10-year period.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued COSTS AND EXPENSES The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Restaurant sales or Total revenues for the periods indicated: FISCAL YEAR 2023 2022 Revenues Restaurant sales 98.6 % 98.6 % Franchise and other revenues 1.4 1.4 Total revenues 100.0 100.0 Costs and expenses Food and beverage (1) 30.6 31.8 Labor and other related (1) 28.8 28.2 Other restaurant operating (1) 24.4 24.5 Depreciation and amortization 4.1 3.8 General and administrative 5.6 5.3 Provision for impaired assets and restaurant closings 0.7 0.1 Total costs and expenses 93.0 92.5 Income from operations 7.0 7.5 Loss on extinguishment and modification of debt — (2.5) Loss on fair value adjustment of derivatives, net — (0.4) Interest expense, net (1.2) (1.2) Income before provision for income taxes 5.8 3.4 Provision for income taxes 0.4 0.9 Net income 5.4 2.5 Less: net income attributable to noncontrolling interests 0.1 0.2 Net income attributable to Bloomin’ Brands 5.3 % 2.3 % ____________________ (1) As a percentage of Restaurant sales.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued COSTS AND EXPENSES The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Restaurant sales or Total revenues for the periods indicated: FISCAL YEAR 2024 2023 2022 Revenues Restaurant sales 97.9 % 97.8 % 97.9 % Franchise and other revenues 2.1 2.2 2.1 Total revenues 100.0 100.0 100.0 Costs and expenses Food and beverage (1) 29.7 30.4 31.5 Labor and other related (1) 31.1 29.9 29.1 Other restaurant operating (1) 25.9 24.2 24.3 Depreciation and amortization 4.4 4.1 3.7 General and administrative 5.6 5.6 5.3 Provision for impaired assets and restaurant closings 1.6 0.8 0.1 Total costs and expenses 96.5 93.2 92.4 Income from operations 3.5 6.8 7.6 Loss on extinguishment of debt (3.4) — (2.7) Loss on fair value adjustment of derivatives, net — — (0.4) Interest expense, net (1.6) (1.3) (1.3) (Loss) income before (benefit) provision for income taxes (1.5) 5.5 3.2 (Benefit) provision for income taxes (0.3) 0.4 0.9 Net (loss) income from continuing operations (1.2) 5.1 2.3 Net (loss) income from discontinued operations, net of tax (1.9) 1.0 0.4 Net (loss) income (3.1) 6.1 2.7 Less: net income attributable to noncontrolling interests 0.1 0.2 0.2 Net (loss) income attributable to Bloomin’ Brands (3.2) % 5.9 % 2.5 % ____________________ (1) As a percentage of Restaurant sales.
Insurance Reserves - We carry insurance programs with specific retention levels or high per-claim deductibles for a significant portion of expected losses under our workers’ compensation, general or liquor liability, health, property and management liability insurance programs. For some programs, we maintain stop-loss coverage to limit the exposure relating to certain risks.
Insurance Reserves - We carry insurance programs with specific retention levels or high per-claim deductibles for a significant portion of expected losses under our workers’ compensation, general or liquor liability, health, property and management liability insurance programs. For some programs, we maintain stop-loss coverage to limit the exposure relating to certain risks. 52 Table of Contents BLOOMIN’ BRANDS, INC.
A 50 basis point change in the discount rate in our insurance claim liabilities as of December 31, 2023, would have affected net earnings by $0.5 million in 2023. Income Taxes - Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis.
A 50 basis point change in the discount rate in our insurance claim liabilities as of December 29, 2024, would have affected net earnings by $0.6 million in 2024. Income Taxes - Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis.
Refer to Note 22 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results. Summary financial data - Following is a summary of financial data by segment for the periods indicated: U.S.
Refer to Note 19 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliation of segment income from operations to the consolidated operating results. Summary financial data - Following is a summary of financial data by segment for the periods indicated: U.S.
Fiscal year 2023 as compared to fiscal year 2022 Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.3% from commodity inflation. See Item 7A.
Fiscal year 2023 as compared to fiscal year 2022 - continuing operations Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.4% from commodity inflation.
Excludes $945.4 million related to operating lease renewal options that are reasonably certain of exercise. (2) Includes Senior Secured Credit Facility, 2029 Notes and 2025 Notes. Amounts are not reduced by unamortized debt issuance costs totaling $5.1 million. (3) Projected future interest payments on long-term debt are based on interest rates in effect as of December 31, 2023.
Excludes $988.4 million related to operating lease renewal options that are reasonably certain of exercise. (2) Includes Senior Secured Credit Facility, 2029 Notes and 2025 Notes. Amounts are not reduced by unamortized debt issuance costs totaling $3.3 million. (3) Projected future interest payments on long-term debt are based on interest rates in effect as of December 29, 2024.
System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 3 - Revenue Recognition of the Notes to Consolidated Financial Statements. The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results.
System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 4 - Revenue Recognition of the Notes to Consolidated Financial Statements. The following table provides a summary of sales of franchised restaurants by segment for the periods indicated, which are not included in our consolidated Restaurant sales.
The carrying value of the reporting unit or trade name is compared to its estimated fair value, with any excess of carrying value over fair value deemed to be an impairment. The carrying value of goodwill and trade names as of December 31, 2023 was $276.3 million and $414.7 million, respectively.
The carrying value of the reporting unit or trade name is compared to its estimated fair value, with any excess of carrying value over fair value deemed to be an impairment. The carrying value of goodwill and trade names as of December 29, 2024 was $213.3 million and $414.7 million, respectively.
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as ongoing maintenance and improvement of the assets, changes in economic conditions and changes in our operating performance.
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as the period of time the restaurant has been open, ongoing maintenance and improvement of the assets, changes in economic conditions and changes in our operating performance.
Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments.
Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes.
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net during 2022 were in connection with the repurchase of $125.0 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Loss on extinguishment of debt and Loss on fair value adjustment of derivatives, net during 2024 were in connection with the repurchase of $83.6 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “Second 2025 Notes Partial Repurchase”), which is described in further detail within Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Recently Issued Financial Accounting Standards For a description of recently issued Financial Accounting Standards that we adopted in 2023 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. 56 Table of Contents BLOOMIN’ BRANDS, INC.
Recently Issued Financial Accounting Standards For a description of recently issued Financial Accounting Standards that we adopted in 2024 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. 53 Table of Contents BLOOMIN’ BRANDS, INC.
Any adverse change in these factors could have a significant impact on the recoverability of assets and could have a material impact on our consolidated financial statements.
Any adverse change in these factors could have a significant impact on the recoverability of assets and could have a material impact on our consolidated financial statements. 51 Table of Contents BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually in the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually in the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources for fiscal year 2021, see our Annual Report on Form 10-K for the year ended December 25, 2022, filed with the SEC on February 22, 2023.
For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2022, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
These increases were partially offset by higher rent and interest payments. Investing activities - The increase in net cash used in investing activities during 2023 as compared to 2022 was primarily due to higher capital expenditures and a decrease in cash withdrawn from Company-owned life insurance policies .
The increase in net cash used in investing activities during 2023 as compared to 2022 was primarily due to higher capital expenditures and a decrease in cash withdrawn from Company-owned life insurance policies .
(2) Outback Steakhouse 1.1 % 2.8 % Carrabba’s Italian Grill 3.9 % 3.4 % Bonefish Grill 0.8 % 4.5 % Fleming’s Prime Steakhouse & Wine Bar (0.7) % 12.0 % Combined U.S. 1.4 % 4.0 % International Outback Steakhouse - Brazil (3) 5.5 % 38.3 % Traffic: U.S.
(1.1) % 1.4 % Discontinued operations Outback Steakhouse - Brazil (3)(4) (1.4) % 5.5 % Traffic: U.S. - continuing operations Outback Steakhouse (4.2) % (4.3) % Carrabba’s Italian Grill (3.2) % 0.3 % Bonefish Grill (7.1) % (3.3) % Fleming’s Prime Steakhouse & Wine Bar (5.8) % (2.0) % Combined U.S.
Overview We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 31, 2023, we owned and operated 1,189 restaurants and franchised 291 restaurants across 47 states, Guam and 13 countries.
Overview We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 29, 2024, we owned and operated 1,172 restaurants and franchised 291 restaurants across 46 states, Guam and 12 countries.
These decreases were partially offset by higher payments of cash dividends on our common stock and increased repayments on our debt. 52 Table of Contents BLOOMIN’ BRANDS, INC.
These decreases were partially offset by higher payments of cash dividends on our common stock and increased repayments on our debt.
If the qualitative assessment is not performed or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, a quantitative approach, using the fair value of the reporting unit, is calculated.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued If the qualitative assessment is not performed or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, a quantitative approach, using the fair value of the reporting unit, is calculated.
Excludes the benefit of the Brazil value added tax exemptions discussed in Note 20 - Income Taxes of the Notes to Consolidated Financial Statements. 39 Table of Contents BLOOMIN’ BRANDS, INC.
Excludes the benefit of the Brazil value added tax exemptions discussed in Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements. 37 Table of Contents BLOOMIN’ BRANDS, INC.
We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across our businesses. 35 Table of Contents BLOOMIN’ BRANDS, INC.
We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across o ur businesses.
Outback Steakhouse 5.4 % 9.1 % Carrabba’s Italian Grill 3.6 % 7.7 % Bonefish Grill 4.1 % 8.7 % Fleming’s Prime Steakhouse & Wine Bar 1.3 % 9.0 % Combined U.S. 4.5 % 9.3 % International Outback Steakhouse - Brazil (3) 6.5 % 14.6 % ____________________ (1) For 2023, comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.
(4.4) % (3.1) % Discontinued operations Outback Steakhouse - Brazil (3) (4.4) % (1.1) % Average check per person (5): U.S. - continuing operations Outback Steakhouse 3.0 % 5.4 % Carrabba’s Italian Grill 3.2 % 3.6 % Bonefish Grill 3.9 % 4.1 % Fleming’s Prime Steakhouse & Wine Bar 6.0 % 1.3 % Combined U.S. 3.3 % 4.5 % Discontinued operations Outback Steakhouse - Brazil (3) 2.6 % 6.5 % ____________________ (1) For 2024, U.S. comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023.
However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully. Capital Expenditures - We estimate that our capital expenditures will total approximately $270 million to $290 million in 2024.
However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully.
Selected Operating Data - The table below presents the number of our restaurants in operation as of the periods indicated: Number of restaurants (at end of the period): DECEMBER 31, 2023 DECEMBER 25, 2022 U.S.
Selected Operating Data - The table below presents the number of our restaurants in operation (from both continuing and discontinued operations) as of the periods indicated: Number of restaurants (at end of the period): DECEMBER 29, 2024 DECEMBER 31, 2023 U.S.
We record a liability for all unresolved and incurred but not reported claims at the anticipated cost below our specified retention levels or per-claim deductible amounts. Our liability for insurance claims was $45.9 million and $49.1 million as of December 31, 2023 and December 25, 2022, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued We record a liability for all unresolved and incurred but not reported claims at the anticipated cost below our specified retention levels or per-claim deductible amounts. Our liability for insurance claims was $53.0 million and $45.9 million as of December 29, 2024 and December 31, 2023, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Revenues for both segments include only transactions with customers and exclude intersegment revenues.
The U.S. segment includes all restaurants operating in the U.S. while franchised restaurants operating outside the U.S. are included in the international franchise segment. Revenues for both segments include only transactions with customers and exclude intersegment revenues.
In connection with the 2025 Notes Partial Repurchase, we entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “Warrant Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes.
Convertible Note Hedge and Warrant Transactions - In connection with the Second 2025 Notes Partial Repurchase, we entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “2024 Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “2024 Warrant Early Termination Agreements”) that we previously entered into in connection 47 Table of Contents BLOOMIN’ BRANDS, INC.
Financial Overview - Our financial overview for 2023 includes the following: • U.S. combined and Outback Steakhouse comparable restaurant sales of 1.4% and 1.1%, respectively; • Increase in Total revenues of 5.8% as compared to 2022; • Operating income and restaurant-level operating margins of 7.0% and 16.2%, respectively, as compared to 7.5% and 15.6%, respectively for 2022; • Operating income of $325.1 million as compared to $330.4 million in 2022; and • Diluted earnings per share of $2.56 as compared to $1.03 in 2022.
Financial Overview - Our financial overview for 2024 from continuing operations includes the following: • U.S. combined and Outback Steakhouse comparable restaurant sales of (1.1)% and (1.2)%, respectively; • Decrease in Total revenues of (5.2)% as compared to 2023; • Operating income and restaurant-level operating margins of 3.5% and 13.3%, respectively, as compared to 6.8% and 15.4%, respectively for 2023; • Operating income of $139.8 million as compared to $282.8 million in 2023; and • Diluted (loss) earnings per share of $(0.61) as compared to $2.13 in 2023.
The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages and benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%.
The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases) Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated: FISCAL YEAR 2023 (1) 2022 Year over year percentage change: Comparable restaurant sales (restaurants open 18 months or more): U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated: FISCAL YEAR 2024 (1) 2023 (1) Year over year percentage change: Comparable restaurant sales (restaurants open 18 months or more): U.S. - continuing operations (2) Outback Steakhouse (1.2) % 1.1 % Carrabba’s Italian Grill — % 3.9 % Bonefish Grill (3.2) % 0.8 % Fleming’s Prime Steakhouse & Wine Bar 0.2 % (0.7) % Combined U.S.
(2) Lease remeasurement gains in connection with the 2023 Closure Initiative. See Note 4 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative. (3) Costs incurred in connection with the transition to a new partner compensation program. 45 Table of Contents BLOOMIN’ BRANDS, INC.
(2) For 2023, includes lease remeasurement gains in connection with the 2023 Restaurant Closures. See Note 5 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Restaurant Closures. (3) Costs incurred in connection with the transition to a new partner compensation program. (4) No adjustments for the periods presented.
Income from operations generated during 2023 as compared to 2022 was primarily due to: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses, including utilities, primarily due to inflation, (iv) higher impairment charges and restaurant closure costs and (v) higher depreciation and advertising expense.
Income from operations generated during 2024 as compared to 2023 was primarily due to: (i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) higher impairment and closure costs and (iv) higher advertising, depreciation and amortization expense.
The effective income tax rate in 2022 was higher than the blended federal and state statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022, partially offset by the benefit of FICA tax credits on certain tipped wages.
The effective income tax rate in 2024 was lower than the blended federal and state statutory rate primarily due to the federal and state impact of nondeductible losses associated with the Second 2025 Notes Partial Repurchase, partially offset by the FICA tax credits on certain tipped wages, relative to the 2024 pre-tax book loss.
As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute 36 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued for, Net income or Income from operations.
As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net (loss) income or Income from operations.
In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry. • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “ Non-GAAP Financial Measures ” section below.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “ Non-GAAP Financial Measures ” section below.
We believe that we will remain in compliance with our debt covenants during the next 12 months and beyond. 2025 Notes Partial Repurchase - On May 25, 2022, we and certain holders (the “Noteholders”) entered into exchange agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of the 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.
We believe that we will remain in compliance with our debt covenants during the next 12 months and beyond. 2025 Notes Partial Repurchase - On February 29, 2024, we and certain holders entered into exchange agreements (the “2024 Exchange Agreements”) in which the holders agreed to exchange $83.6 million in aggregate principal amount of our outstanding 2025 Notes for approximately 7.5 million shares of our common stock and $3.3 million in cash, including accrued interest (the “Second 2025 Notes Partial Repurchase”).
(4) Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. We have purchase obligations with various vendors that consist primarily of inventory, fixtures and equipment and technology.
Estimated interest expense includes the impact of variable-to-fixed interest rate swap agreements. (4) Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
(2) Includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants. See Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.
(2) See the Adjusted Income from Operations Non-GAAP Reconciliations table above for details regarding Income from operations adjustments. (3) Includes losses in connection with the Second 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants. See Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.
Upon settlement, we received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements. See Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.
See Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the Second 2025 Notes Partial Repurchase and related 2024 Note Hedge Early Termination Agreements and 2024 Warrant Early Termination Agreements.
In February 2024, our Board declared a quarterly cash dividend of $0.24 per share, payable on March 20, 2024. Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in our debt agreements.
Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in our debt agreements. 48 Table of Contents BLOOMIN’ BRANDS, INC.
In the U.S., a restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce Income before provision for income taxes.
(Benefit) provision for income taxes includes credits we and other restaurant company employers may claim against federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S.
Excluded from Income from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses.
Excluded from Income from operations for U.S. are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses. Operating income is utilized by our CODM as the segment profit or loss measure and to manage the business, review operating performance and allocate resources.
As of December 31, 2023, we had $16.7 million of unrecognized tax benefits, including accrued interest and penalties, that if recognized, would impact our effective income tax rate. 55 Table of Contents BLOOMIN’ BRANDS, INC.
As of December 29, 2024, we had $17.1 million of unrecognized tax benefits, including accrued interest and penalties, that if recognized, would impact our effective income tax rate.
These increases were partially offset by decreases primarily due to higher operating and labor costs, primarily due to inflation, and higher advertising exp ense. Non-GAAP Financial Measures In addition to the results provided in accordance with generally accepted accounting principles (“U.S. GAAP”), we provide certain non-GAAP measures, which present operating results on an adjusted basis.
These decreases were partially offset by an increase in average check per person and the impact of certain cost-saving and produc tivity initiatives. Non-GAAP Financial Measures In addition to the results provided in accordance with generally accepted accounting principles (“U.S. GAAP”), we provide certain non-GAAP measures, which present operating results on an adjusted basis.
Our Amended Credit Agreement contains various financial and non-financial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities.
A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities. See Note 10 - Long-term Debt, Net of the notes to Consolidated Financial Statements for additional details regarding the Credit Agreement.
Includes trading day impact from calendar period reporting. (4) Includes the impact of menu pricing changes, product mix and discounts. 40 Table of Contents BLOOMIN’ BRANDS, INC.
(5) Includes the impact of menu pricing changes, product mix and discounts. 38 Table of Contents BLOOMIN’ BRANDS, INC.
These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.4% from higher advertising expense. Depreciation and amortization expense increased primarily due to technology projects and restaurant development. 41 Table of Contents BLOOMIN’ BRANDS, INC.
These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.3% from higher advertising expense.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees. FISCAL YEAR (dollars in millions) 2023 2022 U.S.
Franchise sales within this table do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or ser vice fees. FISCAL YEAR (dollars in millions) 2024 2023 U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Results of Operations REVENUES Restaurant Sales - Following is a summary of the change in Restaurant sales for the period indicated: FISCAL YEAR (dollars in millions) 2023 For fiscal year 2022 $ 4,352.7 Change from: Comparable restaurant sales 81.8 Restaurant openings 64.9 Effect of foreign currency translation 34.3 Brazil value added tax exemptions (1) 22.5 Restaurant closures (31.5) For fiscal year 2023 (comparable 52-week presentation) (2) 4,524.7 53rd week restaurant sales (3) 82.7 For fiscal year 2023 (as reported) $ 4,607.4 ____________________ (1) Fiscal years 2023 and 2022, include $30.2 million and $7.7 million, respectively, of value added tax exemptions resulting from the Brazil tax legislation.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Results of Operations REVENUES Restaurant Sales - Following is a summary of the change in Restaurant sales for the periods indicated: FISCAL YEAR (dollars in millions) 2024 2023 Restaurant sales of prior periods (continuing operations) $ 4,077.8 $ 3,923.9 53rd week restaurant sales (1) (82.7) For fiscal year 2024 (comparable 52-week presentation) 3,995.1 Change from: Restaurant closures (2) (129.6) (30.5) Comparable restaurant sales (54.5) 75.1 Restaurant openings (3) 55.2 27.2 Effect of foreign currency translation 0.1 (0.6) For fiscal year 2023 (comparable 52-week presentation) 3,995.1 53rd week restaurant sales (1) 82.7 For fiscal year 2024 and 2023 (as reported) $ 3,866.3 $ 4,077.8 ____________________ (1) Fiscal year 2023 included restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated: (dollars in thousands) DECEMBER 31, 2023 DECEMBER 25, 2022 Current assets $ 343,314 $ 346,577 Current liabilities 1,002,335 978,867 Working capital (deficit) $ (659,021) $ (632,290) Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $381.9 million and $394.2 million as of December 31, 2023 and December 25, 2022, respectively, and (ii) current operating lease liabilities of $175.4 million and $183.5 million as of December 31, 2023 and December 25, 2022, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $374.1 million and $380.2 million as of December 29, 2024 and December 31, 2023, respectively, and (ii) current operating lease liabilities of $158.8 million and $163.7 million as of December 29, 2024 and December 31, 2023, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.
The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including raw material constraints. 50 Table of Contents BLOOMIN’ BRANDS, INC.
The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including raw material constraints. Dividends and Share Repurchases - During 2024 and 2023, we declared and paid quarterly cash dividends of $0.24 per share.
Our ability to pay dividends and make share repurchases is dependent on our ability to obtain funds from our subsidiaries, continued compliance with the financial covenants in our debt agreements and the existence of surplus, as well as our earnings, financial condition, capital expenditure requirements and other factors that our Board deems relevant. 51 Table of Contents BLOOMIN’ BRANDS, INC.
The following table presents our dividends and share repurchases for the periods indicated: (dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL Fiscal year 2024 $ 82,574 $ 265,695 $ 348,269 Fiscal year 2023 83,742 70,000 153,742 Total $ 166,316 $ 335,695 $ 502,011 Our ability to pay dividends and make share repurchases is dependent on our ability to obtain funds from our subsidiaries, continued compliance with the financial covenants in our debt agreements and the existence of surplus, as well as our earnings, financial condition, capital expenditure requirements and other factors that our Board deems relevant.
The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated: Consolidated FISCAL YEAR (dollars in thousands) 2023 2022 Income from operations $ 325,144 $ 330,421 Operating income margin 7.0 % 7.5 % Less: Franchise and other revenues 64,062 63,813 Plus: Depreciation and amortization 191,171 169,617 General and administrative 260,470 234,752 Provision for impaired assets and restaurant closings 33,574 5,964 Restaurant-level operating income $ 746,297 $ 676,941 Restaurant-level operating margin 16.2 % 15.6 % Adjustments: Legal and other matters (1) (3,650) 5,900 Asset impairments and closing costs (2) (2,450) — Partner compensation (3) 1,894 — Total restaurant-level operating income adjustments (4,206) 5,900 Adjusted restaurant-level operating income $ 742,091 $ 682,841 Adjusted restaurant-level operating margin 16.1 % 15.7 % _________________ (1) Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.
The following table reconciles consolidated Income from continuing operations and the corresponding margin to restaurant-level operating income from continuing operations and consolidated adjusted restaurant-level operating income and the corresponding margins for the periods indicated: Consolidated FISCAL YEAR (dollars in thousands) 2024 2023 Income from continuing operations $ 139,808 $ 282,769 Operating income margin, continuing operations 3.5 % 6.8 % Less: Franchise and other revenues 84,131 90,371 Plus: Depreciation and amortization 175,580 169,266 General and administrative 219,383 233,559 Provision for impaired assets and restaurant closings 64,291 33,574 Restaurant-level operating income from continuing operations $ 514,931 $ 628,797 Restaurant-level operating margin 13.3 % 15.4 % Adjustments: Legal and other matters (1) — (3,650) Asset impairments and closure-related charges (2) 434 (2,450) Partner compensation (3) — 1,894 Total restaurant-level operating income adjustments 434 (4,206) Adjusted restaurant-level operating income from continuing operations $ 515,365 $ 624,591 Adjusted restaurant-level operating margin, continuing operations 13.3 % 15.3 % Restaurant-level operating income from discontinued operations (4) 108,062 117,500 Adjusted restaurant-level operating income $ 623,427 $ 742,091 Adjusted restaurant level operating margin 14.2 % 16.1 % _________________ (1) Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.
Such an economic penalty would typically result from having to abandon a building or equipment with remaining economic value upon vacating a property. 54 Table of Contents BLOOMIN’ BRANDS, INC.
Such an economic penalty would typically result from having to abandon a building or equipment with remaining economic value upon vacating a property. At the inception of each lease, we evaluate the property and the lease to determine whether the lease is an operating lease or a finance lease.
We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Our restaurant portfolio includes: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated: FISCAL YEAR (dollars in thousands) 2023 2022 Income from operations $ 325,144 $ 330,421 Operating income margin 7.0 % 7.5 % Adjustments: Total restaurant-level operating income adjustments (1) (4,206) 5,900 Asset impairments and closing costs (2) 28,236 — Other (3) 7,546 — Total income from operations adjustments 31,576 5,900 Adjusted income from operations $ 356,720 $ 336,321 Adjusted operating income margin 7.6 % 7.6 % _________________ (1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating income adjustments.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from continuing operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated: FISCAL YEAR (dollars in thousands) 2024 2023 Income from continuing operations $ 139,808 $ 282,769 Operating income margin, continuing operations 3.5 % 6.8 % Adjustments: Total restaurant-level operating income adjustments (1) 434 (4,206) Asset impairments and closure-related charges (2) 63,009 28,236 Executive transition costs (3) 4,121 — Strategic initiative fees (4) 6,500 — Foreign currency hedge gains (5) (15,728) — Other (6) — 7,546 Total income from operations adjustments 58,336 31,576 Adjusted income from operations, continuing operations $ 198,144 $ 314,345 Adjusted operating income margin, continuing operations 5.0 % 7.5 % Adjusted income from operations, discontinued operations (7) 34,446 42,375 Adjusted income from operations $ 232,590 $ 356,720 Adjusted operating income margin 5.2 % 7.6 % _________________ (1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating income adjustments.
However, our ability to utilize these tax credits could be adversely impacted by, among other items, a future “ownership change” as defined under Section 382 of the Internal Revenue Code. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized.
However, our ability to utilize these tax credits could be adversely impacted by, among other items, a future “ownership change” as defined under Section 382 of the Internal Revenue Code as well as the Company’s inability to generate sufficient future taxable income.
Interest expense, net was flat primarily due to: (i) the lapping of terminated interest rate swap amortization during 2022, (ii) the 2025 Notes Partial Repurchase in May 2022 and (iii) the repayment of Term Loan A in April 2022. These decreases were offset by an increase in interest expense from higher balances and interest rates on our revolving credit facility.
Interest expense, net increase d primarily due to higher balances and interest rates on the unhedged portion of our revolving credit facility partially offset by a decrease in interest expense from the Second 2025 Notes Partial Repurchase.
Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker. We aggregate our operating segments into two reportable segments, U.S. and international. The 42 Table of Contents BLOOMIN’ BRANDS, INC.
All other operating segments, which include our operations in Hong Kong and China do not meet the quantitative thresholds for determining reportable operating segments. Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker (“CODM”). We aggregate our U.S. operating segments into a U.S. reportable segment.
Borrowing Capacity and Debt Service Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the periods indicated: SENIOR SECURED CREDIT FACILITY TOTAL CREDIT FACILITIES TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES (dollars in thousands) Balance as of December 26, 2021 $ 195,000 $ 80,000 $ 230,000 $ 300,000 $ 805,000 2022 new debt — 1,239,500 — — 1,239,500 2022 payments (195,000) (889,500) (125,000) — (1,209,500) Balance as of December 25, 2022 — 430,000 105,000 300,000 835,000 2023 new debt — 1,079,000 — — 1,079,000 2023 payments — (1,128,000) (214) — (1,128,214) Balance as of December 31, 2023 $ — $ 381,000 $ 104,786 $ 300,000 $ 785,786 Interest rates, as of December 31, 2023 (1) 6.96 % 5.00 % 5.13 % Principal maturity date April 2026 May 2025 April 2029 ____________________ (1) Interest rate for revolving credit facility represents the weighted average interest rate as of December 31, 2023. 49 Table of Contents BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Borrowing Capacity and Debt Service Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the periods indicated: REVOLVING CREDIT FACILITY TOTAL CREDIT FACILITIES SENIOR SECURED CREDIT FACILITY FORMER CREDIT FACILITY 2025 NOTES 2029 NOTES (dollars in thousands) Balance as of December 25, 2022 $ — $ 430,000 $ 105,000 $ 300,000 $ 835,000 2023 new debt — 1,079,000 — — 1,079,000 2023 payments — (1,128,000) (214) — (1,128,214) Balance as of December 31, 2023 — 381,000 104,786 300,000 785,786 2024 new debt 1,070,000 1,195,000 — — 2,265,000 2024 payments (360,000) (1,576,000) — — (1,936,000) 2024 repurchases and conversions — — (84,062) — (84,062) Balance as of December 29, 2024 (1) $ 710,000 $ — $ 20,724 $ 300,000 $ 1,030,724 Interest rates, as of December 29, 2024 (2) 6.52 % 5.00 % 5.13 % Principal maturity date September 2029 May 2025 April 2029 ____________________ (1) Subsequent to December 29, 2024, we repaid $140.0 million on our revolving credit facility, primarily with proceeds from the Brazil Sale Transaction.
We performed our annual impairment test in the second quarter of 2023 by utilizing the quantitative approach and determined that the excess of fair value over carrying value of our reporting units was substantial.
We performed our annual impairment test in the second quarter of 2024 by utilizing the qualitative approach and determined that there were no events or circumstances to indicate that it was more likely than not that the fair value of any of our reporting units was less than their carrying values.
Provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022 and the 2023 benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%.
(Benefit) provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses recorded during 2022 associated with the First 2025 Notes Partial Repurchase, which is described in further detail within Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements. 40 Table of Contents BLOOMIN’ BRANDS, INC.
See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation. Segments We consider each of our restaurant concepts and international markets as operating segments, which reflects how we manage our business, review operating performance and allocate resources.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Segments We consider each of our U.S. restaurant concepts and our international franchise business as operating segments, which reflects how we manage our business, review operating performance and allocate resources.
(3) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. For 2023, also includes a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state value added tax benefits.
For 2023, also includes a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state value added tax benefits. See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details regarding the Brazil Sale Transaction.
For 2022, the primary difference between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.
(4) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. The difference between GAAP and adjusted effective income tax rates during fiscal year 2024 primarily relates to nondeductible losses and other tax costs associated with the Second 2025 Notes Partial Repurchase.
Following is a summary of our share repurchase programs active during the periods presented as of December 31, 2023 (dollars in thousands): SHARE REPURCHASE PROGRAM BOARD APPROVAL DATE AUTHORIZED REPURCHASED CANCELLED OR EXPIRED REMAINING 2022 February 8, 2022 $ 125,000 $ 125,000 $ — $ — 2023 (1) February 7, 2023 $ 125,000 54,999 $ — $ 70,001 Total share repurchase programs $ 179,999 ________________ (1) Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Following is a summary of our share repurchase programs active during the periods presented as of December 29, 2024 (dollars in thousands): SHARE REPURCHASE PROGRAM BOARD APPROVAL DATE AUTHORIZED REPURCHASED CANCELLED OR EXPIRED REMAINING 2022 February 8, 2022 $ 125,000 $ 125,000 $ — $ — 2023 February 7, 2023 $ 125,000 $ 67,499 $ 57,501 $ — 2024 (1) February 13, 2024 $ 350,000 $ 253,195 $ — $ 96,805 ________________ (1) The 2024 Share Repurchase Program will expire on August 13, 2025.
(5) Includes restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week of fiscal year 2023. 43 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Income from operations U.S. - The decrease in U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Income from continuing operations U.S. - The decrease in U.S.
(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening. (3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 20 - Income Taxes of the Notes to Consolidated Financial Statements.
(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements. (4) Includes trading day impact from calendar period reporting.
Outback Steakhouse Company-owned 562 566 Franchised 126 127 Total 688 693 Carrabba’s Italian Grill Company-owned 198 199 Franchised 19 19 Total 217 218 Bonefish Grill Company-owned 170 173 Franchised 6 7 Total 176 180 Fleming’s Prime Steakhouse & Wine Bar Company-owned 64 65 Aussie Grill Company-owned 4 7 Franchised 1 — Total 5 7 U.S. total (1) 1,150 1,163 International Company-owned Outback Steakhouse - Brazil (2) 155 139 Other (2)(3) 36 36 Franchised Outback Steakhouse - South Korea (1) 92 86 Other (3) 47 47 International total 330 308 System-wide total 1,480 1,471 System-wide total - Company-owned 1,189 1,185 System-wide total - Franchised 291 286 ____________________ (1) Excludes five and 36 off-premises only kitchens as of December 31, 2023 and December 25, 2022, respectively.
Outback Steakhouse Company-owned 553 562 Franchised 122 126 Total 675 688 Carrabba’s Italian Grill Company-owned 192 198 Franchised 18 19 Total 210 217 Bonefish Grill Company-owned 162 170 Franchised 4 6 Total 166 176 Fleming’s Prime Steakhouse & Wine Bar Company-owned 63 64 Aussie Grill Company-owned — 4 Franchised 2 1 Total 2 5 U.S. total 1,116 1,150 International Franchise Outback Steakhouse - South Korea 96 92 Other 49 47 International Franchise total 145 139 Other - Company-owned Outback Steakhouse - Hong Kong/China 10 19 Discontinued operations - Company-owned Outback Steakhouse - Brazil (1) 173 155 Other - Brazil (1) 19 17 System-wide total 1,463 1,480 System-wide total - Company-owned 1,172 1,189 System-wide total - Franchised 291 291 ____________________ (1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other - Brazil, are reported as of November 30, 2024 and 2023, respectively, to correspond with the balance sheet dates of this subsidiary.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+4 added−3 removed6 unchanged
Biggest changeDuring 2023, we experienced 5.3% labor cost inflation in the U.S. Interest Rate Risk Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows by targeting an appropriate mix of variable and fixed-rate debt.
Biggest changeDuring 2024, we experienced 3.7% labor cost inflation in the U.S and anticipate 4.0% to 5.0% labor cost inflation for 2025. Interest Rate Risk Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows by targeting an appropriate mix of variable and fixed-rate debt.
If these vendors were unable to fulfill their obligations under their contracts, we could encounter supply shortages and incur higher costs to secure adequate supplies. See Note 21 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further details.
If these vendors were unable to fulfill their obligations under their contracts, we could encounter supply shortages and incur higher costs to secure adequate supplies. See Note 18 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further details.
See Note 16 - Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information. 57 Table of Contents BLOOMIN’ BRANDS, INC. We utilize valuation models to estimate the effects of changing interest rates. The following table summarizes the changes to fair value and interest expense under a shock scenario.
See Note 13 - Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information. 54 Table of Contents BLOOMIN’ BRANDS, INC. We utilize valuation models to estimate the effects of changing interest rates. The following table summarizes the changes to fair value and interest expense under a shock scenario.
Extreme changes in commodity prices or long-term changes could affect our financial results adversely. Currently we do not use financial instruments to hedge our commodity risk. In addition to the market risks identified above, we are subject to business risk as our U.S. beef and Brazil pork supplies are highly dependent upon a limited number of vendors.
Extreme changes in commodity prices or long-term changes could affect our financial results adversely. Currently we do not use financial instruments to hedge our commodity risk. In addition to the market risks identified above, we are subject to business risk as our U.S. beef supply is highly dependent upon a limited number of vendors.
To manage the risk of fluctuations in variable interest rate debt, we have interest rate swaps with an aggregate notional amount of $200.0 million, with $100.0 million maturing on December 31, 2024 and $100.0 million maturing on December 31, 2025.
To manage the risk of fluctuations in variable interest rate debt, we have interest rate swaps with an aggregate notional amount of $375.0 million, with $100.0 million maturing on December 31, 2024, $100.0 million maturing on December 31, 2025, and $175.0 million maturing March 31, 2026.
As of December 31, 2023, approximately 70% of our estimated 2024 annual food purchases are covered by fixed contracts, most of which are scheduled to expire during 2024. During 2023, we experienced 4.3% commodity inflation in the U.S. and anticipate 3% to 4% commodity inflation for 2024.
As of December 29, 2024, approximately 80% of our estimated 2025 annual food purchases are covered by fixed contracts, most of which are scheduled to expire during 2025. During 2024, we experienced 1.1% commodity inflation in the U.S. and anticipate 2.5% to 3.5% commodity inflation for 2025.
As of December 31, 2023, our interest rate risk was primarily from variable interest rate changes on our revolving credit facility, which had an outstanding balance of $381.0 million. We periodically evaluate financial instruments to hedge our exposure to variable interest rates. We use derivative financial instruments as risk management tools and not for speculative purposes.
As of December 29, 2024, our interest rate risk was primarily from variable interest rate changes on our revolving credit facility. We periodically evaluate financial instruments to hedge our exposure to variable interest rates. We use derivative financial instruments as risk management tools and not for speculative purposes.
DECEMBER 31, 2023 (dollars in thousands) INCREASE DECREASE Change in fair value (1): Interest rate swap $ 5,230 $ (5,427) Change in annual interest expense (1): Variable rate debt $ 3,620 $ (3,620) ________________ (1) The potential change from a hypothetical 200 basis point increase (decrease) in short-term interest rates.
DECEMBER 29, 2024 (dollars in thousands) INCREASE DECREASE Change in fair value (1): Interest rate swap $ 5,693 $ (5,847) Change in annual interest expense (1): Variable rate debt $ 8,700 $ (8,700) ________________ (1) The potential change from a hypothetical 200 basis point increase (decrease) in short-term interest rates.
Actual results may differ materially from the discussion based upon general market conditions and changes in U.S. and global financial markets. 58 Table of Contents BLOOMIN’ BRANDS, INC.
This market risk discussion contains forward-looking statements. Actual results may differ materially from the discussion based upon general market conditions and changes in U.S. and global financ ial markets. 55 Table of Contents BLOOMIN’ BRANDS, INC.
Removed
Foreign Currency Exchange Rate Risk We are subject to foreign currency exchange risk for our restaurants operating in foreign countries. Our exposure to foreign currency exchange risk is primarily related to fluctuations in the Brazilian Real relative to the U.S. dollar. Our operations in other markets consist of Company-owned restaurants on a smaller scale than Brazil.
Added
Foreign Currency Exchange Rate Risk We are subject to foreign currency exchange risk. To manage a portion of our exchange rate risk, we entered into foreign currency forward contracts during 2024 to partially offset the foreign currency exchange gains and losses generated by the rate risk associated with the purchase price installment payments from the Brazil Sale Transaction.
Removed
If foreign currency exchange rates depreciate in the countries in which we operate, we may experience declines in our operating results. Currently, we do not use financial instruments to hedge foreign currency exchange rate changes. For 2023, 13.2% of our revenue was generated in foreign currencies.
Added
We recorded gains of $15.7 million as a result of changes in the fair value of foreign currency forward contracts during fiscal year 2024. As of December 29, 2024, the fair value of the derivative instruments was $0.3 million in an asset position.
Removed
A 10% change in average foreign currency rates against the U.S. dollar would have increased or decreased our Total revenues and Net income for our foreign entities by $67.0 million and $8.5 million, respectively. This market risk discussion contains forward-looking statements.
Added
As of December 29, 2024, our total notional amount of outstanding foreign currency forward contracts was $184.6 million. Subsequent to December 29, 2024, the outstanding notional amount decreased to $107.7 million following the collection of the first installment payment from the Brazil Sale Transaction.
Added
A hypothetical 10% increase or decrease in the Brazilian Real relative to the U.S. dollar for the remaining $107.7 million notional amount would result in a corresponding increase or decrease of approximately $8.4 million or $(10.2) million, respectively, in operating income with a corresponding decrease or increase in the U.S. dollar value of the hedged portion of the related receivable.

Other BLMN 10-K year-over-year comparisons