What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-03 compared with 2023-08-01 · 237 added, 204 removed, 398 unchanged (53% of the section changed)

15 unchanged sentences

(iii) Our ability to recruit and retain high-quality leadership, restaurant-level management and team members;

(iv) Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availability of credit and interest rates;

(iv) Economic and geopolitical conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availability of credit and interest rates;

(v) Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;

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(vii) Fluctuations in the price and availability of commodities, including supplier freight charges and restaurant distribution expenses, and other impacts of inflation and our dependence on a limited number of suppliers and distributors to meet our beef, chicken and other major product supply needs;

(viii) The severity, extent and duration of a health pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed in this Report, and the responses of domestic and foreign federal, state and local governments to the pandemic;

(ix) Our ability to preserve and grow the reputation and value of our brands, particularly in light of changes in consumer engagement with social media platforms and limited control with respect to the operations of our franchisees;

17 unchanged sentences

We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts.

As of June 25, 2023, we owned and operated 1,187 full-service restaurants and off-premises only kitchens and franchised 298 full-service restaurants and off-premises only kitchens across 47 states, Guam and 13 countries.

As of September 24, 2023, we owned and operated 1,188 full-service restaurants and off-premises only kitchens and franchised 296 full-service restaurants and off-premises only kitchens across 47 states, Guam and 13 countries.

We have four founder-inspired concepts:

Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Financial Overview - Our financial overview for the thirteen weeks ended June 25, 2023 includes the following:

Financial Overview - Our financial overview for the thirteen weeks ended September 24, 2023 includes the following:

combined and Outback Steakhouse comparable restaurant sales of (0.5)% and (1.1)%, respectively;

• Increase in Total revenues of 2.4%, as compared to the second quarter of 2022;

• Operating income and restaurant-level operating margins of 7.8% and 16.4%, respectively, as compared to 7.8% and 15.5%, respectively, for the second quarter of 2022;

• Operating income of $89.4 million, as compared to $87.7 million in the second quarter of 2022;

• Diluted earnings per share of $0.70 as compared to diluted loss per share of $(0.72) for the second quarter of 2022.

• Increase in Total revenues of 2.3%, as compared to the third quarter of 2022;

• Operating income and restaurant-level operating margins of 5.4% and 13.8%, respectively, as compared to 4.9% and 13.1%, respectively, for the third quarter of 2022;

• Operating income of $58.2 million, as compared to $51.3 million in the third quarter of 2022;

• Diluted earnings per share of $0.45 as compared to $0.34 for the third quarter of 2022.

Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following:

2 unchanged sentences

• 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 (loss) and Diluted earnings (loss) per share —financial measures utilized to evaluate our operating performance.

• Restaurant-level operating margin, Income from operations, Net income and Diluted earnings per share —financial measures utilized to evaluate 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.

Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expenses and Other restaurant operating expenses (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss).

The following categories of revenue and operating expenses

The following categories of revenue and operating expenses are

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

not included in restaurant-level operating 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;

2 unchanged sentences

(iv) Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period.

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 (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 for, Net income (loss) 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.

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Number of restaurants (at end of the period):

JUNE 25, 2023 JUNE 26, 2022

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Outback Steakhouse

25 unchanged sentences

____________________

(1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of May 31, 2023 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.

(2) International Company-owned Other included four and two Aussie Grill locations as of June 25, 2023 and June 26, 2022, respectively.

International Franchised Other included three Aussie Grill locations as of June 25, 2023 and June 26, 2022.

(1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of August 31, 2023 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.

(2) International Company-owned Other included four and two Aussie Grill locations as of September 24, 2023 and September 25, 2022, respectively.

International Franchised Other included three Aussie Grill locations as of September 24, 2023 and September 25, 2022.

The table below presents the number of our off-premises only kitchens in operation as of the periods indicated:

Number of kitchens (at end of the period) (1):

JUNE 25, 2023 JUNE 26, 2022

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Company-owned 1 1

International

Company-owned — 1

Franchised - South Korea 6 45

7 unchanged sentences

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:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Restaurant sales 98.6 % 98.5 % 98.6 % 98.5 %

13 unchanged sentences

Interest expense, net (1.2) (1.2) (1.1) (1.3)

Income (loss) before provision for income taxes 6.6 (4.5) 7.7 1.9

Provision for income taxes 0.5 1.0 0.9 1.2

Net income (loss) 6.1 (5.5) 6.8 0.7

Income before (benefit) provision for income taxes 4.2 3.7 6.6 2.5

(Benefit) provision for income taxes (*) 0.6 0.6 1.0

Net income 4.2 3.1 6.0 1.5

net income attributable to noncontrolling interests 0.1 0.1 0.1 0.2

Net income (loss) attributable to Bloomin’ Brands

Net income attributable to Bloomin’ Brands

4.1 % 3.0 % 5.9 % 1.3 %

3 unchanged sentences

Restaurant Sales - Following is a summary of the change in Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 26, 2022 $ 1,108.9 $ 2,232.5

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 25, 2022 $ 1,040.4 $ 3,272.9

Restaurant openings 14.9 52.5

Comparable restaurant sales (1) 11.9 87.2

Brazil value added tax exemptions (1) 10.9 30.1

Restaurant closures (1) (6.6) (12.0)

Effect of foreign currency translation 8.4 9.5

For the periods ended June 25, 2023 $ 1,137.3 $ 2,365.6

Restaurant closures (10.0) (21.5)

Comparable restaurant sales (0.2) 86.5

For the periods ended September 24, 2023 $ 1,064.4 $ 3,430.0

________________

(1) Summation of quarterly changes for restaurant openings, closures and comparable restaurant sales will not total annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened or closed.

(1) See Note 14 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The increase in Restaurant sales during the thirteen weeks ended June 25, 2023 was primarily due to:

(i) the opening of 50 new restaurants not included in our comparable restaurant sales base, (ii) higher comparable restaurant sales, primarily driven by increases in menu pricing, and (iii) value added tax exemptions in Brazil.

The increase was partially offset by the closure of 18 restaurants since March 27, 2022 and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase in Restaurant sales during the twenty-six weeks ended June 25, 2023 was primarily due to:

(i) higher comparable restaurant sales, primarily driven by increases in menu pricing, (ii) the opening of 55 new restaurants not included in our comparable restaurant sales base and (iii) value added tax exemptions in Brazil.

The increase in Restaurant sales during the thirteen weeks ended September 24, 2023 was primarily due to:

(i) the opening of 47 new restaurants not included in our comparable restaurant sales base, (ii) value added tax exemptions in Brazil and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase was partially offset by the closure of 17 restaurants since June 26, 2022.

The increase in Restaurant sales during the thirty-nine weeks ended September 24, 2023 was primarily due to:

(i) higher comparable restaurant sales, primarily driven by increases in menu pricing, (ii) the opening of 61 new restaurants not included in our comparable restaurant sales base, (iii) value added tax exemptions in Brazil and (iv) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase in Restaurant sales was partially offset by the closure of 29 restaurants since December 26, 2021.

1 unchanged sentence

Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Average restaurant unit volumes (weekly):

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____________________

(1) Translated at average exchange rates of 5.06 and 4.89 for the thirteen weeks ended June 25, 2023 and June 26, 2022, respectively, and 5.14 and 5.15 for the twenty-six weeks ended June 25, 2023 and June 26, 2022, respectively.

(1) Translated at average exchange rates of 4.85 and 5.18 for the thirteen weeks ended September 24, 2023 and September 25, 2022, respectively, and 5.03 and 5.16 for the thirty-nine weeks ended September 24, 2023 and September 25, 2022, respectively.

Excludes the benefit of the Brazil value added tax exemptions discussed in Note 14 - Income Taxes of the Notes to Consolidated Financial Statements.

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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:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

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:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Year over year percentage change:

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(1) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(2) Includes trading day impact from calendar period reporting.

(2) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 14 - Income Taxes of the Notes to Consolidated Financial Statements.

Includes trading day impact from calendar period reporting.

(3) Includes the impact of menu pricing changes, product mix and discounts.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Franchise and other revenues

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Franchise revenues $ 11.8 $ 11.8 $ 37.9 $ 37.8

1 unchanged sentence

Franchise and other revenues $ 15.4 $ 15.4 $ 47.3 $ 48.6

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Food and beverage $ 321.9 $ 332.9 $ 1,057.3 $ 1,056.8

% of Restaurant sales 30.2 % 32.0 % (1.8) % 30.8 % 32.3 % (1.5) %

Food and beverage costs decreased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to 2.4% from increases in average check per person driven by an increase in menu pricing and 0.3% from the impact of certain cost saving initiatives.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 primarily due to 1.8% from increases in average check per person driven by an increase in menu pricing and 0.6% from the impact of certain cost saving and productivity initiatives.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 0.8% from commodity inflation.

Food and beverage costs decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 primarily due to 2.3% from increases in average check per person driven by an increase in menu pricing and 0.3% from the impact of certain cost saving initiatives.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 primarily due to 2.1% from increases in average check per person driven by an increase in menu pricing and 0.5% from the impact of certain cost saving and productivity initiatives.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 1.1% from commodity inflation.

Labor and other related expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Labor and other related $ 314.4 $ 303.2 $ 981.9 $ 924.5

% of Restaurant sales 29.5 % 29.1 % 0.4 % 28.6 % 28.2 % 0.4 %

Labor and other related expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to an increase of 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation.

This increase was partially offset by decreases as a percentage of Restaurant sales of 1.0% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Labor and other related expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 primarily due to an increase of 1.7% from higher hourly and field management labor costs, primarily due to wage rate inflation.

This increase was partially offset by decreases as a percentage of Restaurant sales of 1.2% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

Other restaurant operating $ 273.3 $ 263.5 $ 556.3 $ 522.6

% of Restaurant sales 24.0 % 23.8 % 0.2 % 23.5 % 23.4 % 0.1 %

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to 1.1% from higher operating expenses including utilities, primarily due to inflation, and 0.3% from higher advertising expense.

These increases were offset by decreases as a percentage of Restaurant sales of 0.7% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Labor and other related expenses increased as a percentage of Restaurant sales during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 primarily due to 1.5% from higher hourly and field management labor costs, primarily due to wage rate inflation.

This increase was partially offset by decreases as a percentage of Restaurant sales of 0.8% from an increase in average check per person and 0.2% from the impact of certain cost saving and productivity initiatives.

Labor and other related expenses increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 primarily due to 1.8% from higher hourly and field management labor costs, primarily due to wage rate inflation.

This increase was partially offset by decreases as a percentage of Restaurant sales of 1.1% from an increase in average check per person and 0.2% from the impact of certain cost saving and productivity initiatives.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Other restaurant operating expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 primarily due to 1.3% from higher operating expenses including utilities, primarily due to inflation, and 0.3% from higher advertising expense.

These increases were offset by decreases as a percentage of Restaurant sales of 1.1% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Other restaurant operating $ 281.1 $ 267.9 $ 837.3 $ 790.6

% of Restaurant sales 26.4 % 25.8 % 0.6 % 24.4 % 24.2 % 0.2 %

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 primarily due to 1.0% from higher operating expenses, primarily due to inflation, and 0.4% from higher advertising expense.

These increases were partially offset by decreases as a percentage of Restaurant sales of 0.3% from the impact of certain cost saving and productivity initiatives and 0.2% from an increase in average check per person.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 primarily due to 1.1% from higher operating expenses including utilities, primarily due to inflation, and 0.3% from higher advertising expense.

These increases were partially offset by decreases as a percentage of Restaurant sales of 0.8% from an increase in average check per person and 0.2% from the impact of certain cost saving and productivity initiatives.

Depreciation and amortization

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Depreciation and amortization $ 48.0 $ 42.2 $ 5.8 $ 141.9 $ 125.2 $ 16.7

Depreciation and amortization increased during the thirteen and twenty-six weeks ended June 25, 2023 as compared to the thirteen and twenty-six weeks ended June 26, 2022 primarily due to additional depreciation expense related to technology projects and restaurant development.

Depreciation and amortization increased during the thirteen and thirty-nine weeks ended September 24, 2023 as compared to the thirteen and thirty-nine weeks ended September 25, 2022 primarily due to technology projects and restaurant development.

General and administrative

1 unchanged sentence

Following is a summary of the change in General and administrative expense for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 26, 2022 $ 59.2 $ 117.9

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 25, 2022 $ 56.1 $ 174.0

Employee stock-based compensation 2.4 0.7

Severance 1.7 1.7

Legal and professional fees 1.7 5.3

Travel and entertainment 1.1 2.8

Incentive compensation (2.6) 1.1

Compensation, benefits and payroll tax (0.2) 3.2

Travel and entertainment 0.5 1.7

Legal and professional fees 0.3 3.3

Other 2.0 2.6

For the periods ended June 25, 2023 $ 63.4 $ 129.2

For the periods ended September 24, 2023 $ 62.2 $ 191.4

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Provision for impaired assets and restaurant closings $ (6.0) $ 2.1 $ (8.1) $ (0.9) $ 4.1 $ (5.0)

During the thirteen weeks ended September 24, 2023, we recognized a net gain of $6.7 million in connection with the lease termination and closure of one U.S.

Income from operations

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Income from operations $ 58.2 $ 51.3 $ 6.9 $ 268.3 $ 246.3 $ 22.0

% of Total revenues 5.4 % 4.9 % 0.5 % 7.7 % 7.4 % 0.3 %

The increase in Income from operations generated during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 was primarily due to:

(i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil.

The increase in Income from operations generated during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 was primarily due to:

(i) an increase in average check per person, (ii) the impact of certain cost saving and productivity initiatives, (iii) a lease termination gain and (iv) value added tax exemptions in Brazil.

These increases were partially offset by:

(i) higher labor costs, primarily due to wage rate inflation, (ii) higher operating expenses including utilities, primarily due to inflation, (iii) commodity inflation and (iv) higher depreciation and advertising expense.

The increase in Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil.

(i) higher labor costs, primarily due to wage rate inflation, (ii) higher operating expenses, primarily due to inflation, (iii) commodity inflation and (iv) higher depreciation and advertising expense.

The increase in Income from operations generated during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 was primarily due to:

(i) an increase in average check per person, (ii) the impact of certain cost saving and productivity initiatives and (iii) value added tax exemptions in Brazil.

These increases were partially offset by:

(i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii)

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

higher operating expenses including utilities, primarily due to inflation, and (iv) higher depreciation and advertising expense.

Operating income margin d uring the thirteen and twenty-six weeks ended June 25, 2023 includes net increases of approximately 0.4% and 0.3%, respectively, attributable to exemptions from Brazil federal value added taxes (PIS and COFINS) provided by Brazil tax legislation.

(i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses including utilities, primarily due to inflation, and (iv) higher depreciation and advertising expense.

Operating income margins d uring both the thirteen and thirty-nine weeks ended September 24, 2023 include net increases of approximately 0.4% attributable to Brazil value added tax exemptions (PIS and COFINS) provided by Brazil tax legislation.

See Note 14 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.

Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net

In connection with the partial repurchase of our 2025 Notes, we recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net, of $17.7 million during the thirteen weeks ended June 26, 2022.

Provision for income taxes

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 CHANGE JUNE 25, 2023 JUNE 26, 2022 CHANGE

Income (loss) before provision for income taxes $ 76.5 $ (50.1) $ 126.6 $ 184.7 $ 43.5 $ 141.2

Provision for income taxes $ 6.5 $ 11.5 $ (5.0) $ 21.2 $ 27.5 $ (6.3)

Effective income tax rate 8.5 % (23.0) % 31.5 % 11.5 % 63.2 % (51.7) %

The effective income tax rate for the thirteen weeks ended June 25, 2023 changed by 31.5 percentage points as compared to the thirteen weeks ended June 26, 2022.

This change is primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to the Loss before provision for income taxes during the thirteen weeks ended June 26, 2022, resulted in a negative effective income tax rate.

This change was partially offset by a reduction in the effective income tax rate during the thirteen weeks ended June 25, 2023 from benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation.

The effective income tax rate for the twenty-six weeks ended June 25, 2023 decreased by 51.7 percentage points as compared to the twenty-six weeks ended June 26, 2022.

The decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian inc ome tax rate from 34% to 0% for the twenty-six weeks ended June 25, 2023, and the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.

In connection with the 2025 Notes Partial Repurchase, we recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net, of $17.7 million during the thirty-nine weeks ended September 25, 2022.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(Benefit) provision for income taxes

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 CHANGE

Income before (benefit) provision for income taxes $ 45.4 $ 38.6 $ 6.8 $ 230.0 $ 82.1 $ 147.9

(Benefit) provision for income taxes $ (0.1) $ 5.6 $ (5.7) $ 21.2 $ 33.0 $ (11.8)

Effective income tax rate (0.1) % 14.4 % (14.5) % 9.2 % 40.2 % (31.0) %

The effective income tax rates for the thirteen and thirty-nine weeks ended September 24, 2023 decreased by 14.5 and 31.0 percentage points, respectively, as compared to the thirteen and thirty-nine weeks ended September 25, 2022.

These decreases were primarily due to benefits of Brazil tax legislation and income tax exemptions on Brazil state VAT benefits.

See Note 14 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion.

The decrease for the thirty-nine weeks ended September 24, 2023 was further impacted by the 2022 non-deductible losses associated with the 2025 Notes Partial Repurchase.

SEGMENT PERFORMANCE

11 unchanged sentences

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, certain insurance expenses and certain bonus expenses.

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.

Refer to Note 16 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.

1 unchanged sentence

See the Overview-Key Financial Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional details regarding the calculation of restaurant-level operating margin.

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Restaurant sales $ 901,138 $ 910,679 $ 2,975,145 $ 2,920,241

5 unchanged sentences

Restaurant-level operating margin 12.7 % 12.7 % 15.4 % 15.2 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales - Following is a summary of the change in U.S.

segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (1)

For the periods ended June 26, 2022 $ 985.9 $ 2,009.6

Restaurant openings 8.1 19.4

Comparable restaurant sales 6.0 57.0

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 25, 2022 $ 910.7 $ 2,920.2

Restaurant closures (10.0) (21.5)

For the periods ended June 25, 2023 $ 993.4 $ 2,074.0

________________

(1) Summation of quarterly changes will not total to annual amounts as the restaurants that meet the definition of each change category will differ each period based on when the restaurant opened or closed.

The increase in U.S.

Restaurant sales during the thirteen weeks ended June 25, 2023 was primarily due to the opening of 15 new restaurants not included in our comparable restaurant sales base and higher comparable restaurant sales, primarily driven by increases in menu pricing.

The increase was partially offset by the closure of 17 restaurants since March 27, 2022.

Comparable restaurant sales (4.4) 52.2

Restaurant openings 4.8 24.2

For the periods ended September 24, 2023 $ 901.1 $ 2,975.1

The decrease in U.S.

Restaurant sales during the thirteen weeks ended September 24, 2023 was primarily due to the closure of 16 restaurants since June 26, 2022 and lower comparable restaurant sales, primarily driven by lower traffic.

The decrease was partially offset by the opening of 13 new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

Restaurant sales during the twenty-six weeks ended June 25, 2023 was primarily due to higher comparable restaurant sales, primarily driven by increases in menu pricing, and the opening of 17 new restaurants not included in our comparable restaurant sales base.

Restaurant sales during the thirty-nine weeks ended September 24, 2023 was primarily due to higher comparable restaurant sales, primarily driven by increases in menu pricing, and the opening of 17 new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales was partially offset by the closure of 28 restaurants since December 26, 2021.

Income from operations

Income from operations generated during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 decreased slightly primarily due to:

These decreases were partially offset by:

(i) an increase in comparable restaurant sales and (ii) the impact of certain cost saving initiatives.

Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was flat primarily due to:

Income from operations generated during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 was flat primarily due to:

These decreases were offset by:

(i) an increase in average check per person, (ii) the impact of certain cost saving and productivity initiatives and (iii) a lease termination gain.

Income from operations generated during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 was flat primarily due to:

These decreases were partially offset by:

(i) an increase in comparable restaurant sales and (ii) the impact of certain cost saving initiatives.

These decreases were offset by an increase in average check per person and the impact of certain cost saving and productivity initiatives.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

International Segment

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Restaurant sales $ 163,275 $ 129,696 $ 454,832 $ 352,627

5 unchanged sentences

Restaurant-level operating margin 19.8 % 18.5 % 21.1 % 17.8 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales - Following is a summary of the change in international segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 26, 2022 $ 123.0 $ 222.9

Restaurant openings (1) 9.9 18.2

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 25, 2022 $ 129.7 $ 352.7

Brazil value added tax exemptions (1) 10.9 30.1

Comparable restaurant sales (1) 5.9 30.2

Restaurant openings 10.1 28.3

Effect of foreign currency translation 8.4 9.5

For the periods ended June 25, 2023 $ 143.9 $ 291.6

Comparable restaurant sales 4.2 34.3

For the periods ended September 24, 2023 $ 163.3 $ 454.9

________________

(1) Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened.

(1) See Note 14 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.

The increase in international Restaurant sales during the thirteen weeks ended June 25, 2023 was primarily due to:

(i) the opening of 35 new restaurants not included in our comparable restaurant sales base, (ii) value added tax exemptions in Brazil and (iii) higher comparable restaurant sales in Brazil and Hong Kong.

The increase was partially offset by the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase in international Restaurant sales during the twenty-six weeks ended June 25, 2023 was primarily due to:

(i) higher comparable restaurant sales in Brazil and Hong Kong, primarily driven by the lapping of Q1 2022 COVID-19 related capacity restrictions, (ii) value added tax exemptions in Brazil and (iii) the opening of 38 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the thirteen weeks ended September 24, 2023 was primarily due to:

(i) value added tax exemptions in Brazil, (ii) the opening of 34 new restaurants not included in our comparable restaurant sales base, (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

dollar and (iv) higher comparable restaurant sales in Brazil.

The increase in international Restaurant sales during the thirty-nine weeks ended September 24, 2023 was primarily due to:

(i) higher comparable restaurant sales in Brazil and Hong Kong, primarily driven by the lapping of Q1 2022 COVID-19 related capacity restrictions, (ii) value added tax exemptions in Brazil, (iii) the opening of 44 new restaurants not included in our comparable restaurant sales base and (iv) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

Income from operations

The increase in international Income from operations generated during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 was primarily due to:

(i) an increase in restaurant sales, primarily driven by increases in menu pricing, and (ii) value added tax exemptions in Brazil.

These increases were partially offset by decreases primarily due to:

(i) higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) commodity inflation and (iv) higher advertising expense.

The increase in international Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) an increase in restaurant sales, primarily driven by the recovery of in-restaurant dining and increases in menu pricing, and (ii) value added tax exemptions in Brazil.

The increase in international Income from operations generated during the thirteen weeks ended September 24, 2023 as compared to the thirteen weeks ended September 25, 2022 was primarily due to value added tax exemptions in Brazil and an increase in average check per person.

These increases were partially offset by decreases primarily due to:

(i) higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) commodity inflation and (iv) higher a dvertising expense.

(i) higher operating costs, primarily due to inflation, (ii) higher advertising expense and (iii) commodity inflation.

The increase in international Income from operations generated during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 was primarily due to value added tax exemptions in Brazil and an increase in restaurant sales, primarily driven by the recovery of in-restaurant dining and

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

an increase in average check per person.

These increases were partially offset by decreases primarily due to:

(i) higher operating costs, primarily due to inflation, (ii) commodity inflation and (iii) higher a dvertising expense.

Non-GAAP Financial Measures

Consolidated restaurant-level operating income and corresponding margin non-GAAP reconciliations - The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and the corresponding margin for the periods indicated:

Consolidated THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations - 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 THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Income from operations $ 58,216 $ 51,309 $ 268,295 $ 246,284

6 unchanged sentences

Restaurant-level operating margin 13.8 % 13.1 % 16.1 % 15.3 %

Segment restaurant-level and operating margin non-GAAP reconciliations - The following tables reconcile segment Income from operations and the corresponding margin to segment restaurant-level operating income and the corresponding margin for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

Partner compensation program changes 1,894 — 1,894 —

Total restaurant-level operating income adjustments 1,894 — 1,894 —

Adjusted restaurant-level operating income $ 148,926 $ 136,248 $ 555,309 $ 501,003

Adjusted restaurant-level operating margin 14.0 % 13.1 % 16.2 % 15.3 %

Segment restaurant-level and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations - The following tables reconcile segment Income from operations and the corresponding margin to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Income from operations $ 68,014 $ 68,501 $ 304,265 $ 305,347

6 unchanged sentences

Restaurant-level operating margin 12.7 % 12.7 % 15.4 % 15.2 %

International THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

Partner compensation program changes 1,894 — 1,894 —

Total restaurant-level operating income adjustments 1,894 — 1,894 —

Adjusted restaurant-level operating income $ 116,763 $ 115,498 $ 459,427 $ 442,517

Adjusted restaurant-level operating margin 13.0 % 12.7 % 15.4 % 15.2 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

International THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Income from operations $ 22,034 $ 15,849 $ 67,028 $ 38,859

6 unchanged sentences

Restaurant-level operating margin 19.8 % 18.5 % 21.1 % 17.8 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant-level operating margin non-GAAP reconciliations (continued) - The following tables present the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:

Total restaurant-level operating income adjustments — — — —

Adjusted restaurant-level operating income $ 32,404 $ 24,013 $ 96,092 $ 62,881

Adjusted restaurant-level operating margin 19.8 % 18.5 % 21.1 % 17.8 %

Adjusted restaurant-level operating margin non-GAAP reconciliations (continued) - The following tables present the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:

THIRTEEN WEEKS ENDED

JUNE 25, 2023 JUNE 26, 2022

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

REPORTED ADJUSTED (1) REPORTED ADJUSTED

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

3 unchanged sentences

Restaurant-level operating margin 13.8 % 14.0 % 13.1 % 13.1 %

TWENTY-SIX WEEKS ENDED

JUNE 25, 2023 JUNE 26, 2022

THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

REPORTED ADJUSTED (1) REPORTED ADJUSTED

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

3 unchanged sentences

Restaurant-level operating margin 16.1 % 16.2 % 15.3 % 15.3 %

Adjusted net income and adjusted diluted earnings per share non-GAAP reconciliations - The following table reconciles Net income (loss) attributable to Bloomin’ Brands to adjusted diluted earnings per share for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(in thousands, except share and per share data) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

Net income (loss) attributable to Bloomin’ Brands

_________________

(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 the restaurant-level operating margin adjustments.

All restaurant-level operating margin adjustments for the periods presented were recorded within Labor and other related expenses.

BLOOMIN’ BRANDS, INC.

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 operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Income from operations $ 58,216 $ 51,309 $ 268,295 $ 246,284

Operating income margin 5.4 % 4.9 % 7.7 % 7.4 %

Total restaurant-level operating income adjustments (1) 1,894 — 1,894 —

Restaurant and asset impairments and closing costs (2) (6,586) — (6,586) —

Other (3) 3,436 — 3,436 —

Total income from operations adjustments (1,256) — (1,256) —

Adjusted income from operations $ 56,960 $ 51,309 $ 267,039 $ 246,284

Adjusted operating income margin 5.3 % 4.9 % 7.7 % 7.4 %

_________________

(2) Includes a lease termination gain and related restaurant closure costs.

(3) Primarily includes professional fees, severance and other costs not correlated to our core operating performance during the period.

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:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(in thousands, except per share data) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Net income attributable to Bloomin’ Brands

$ 44,528 $ 31,986 $ 204,116 $ 43,862

Income from operations adjustments (1) (1,256) — (1,256) —

Loss on extinguishment and modification of debt (2) — — — 107,630

4 unchanged sentences

Adjusted net income $ 40,622 $ 31,986 $ 200,210 $ 170,499

Diluted earnings (loss) per share (3) $ 0.70 $ (0.72) $ 1.63 $ 0.12

Diluted earnings per share $ 0.45 $ 0.34 $ 2.08 $ 0.44

Adjusted diluted earnings per share (4) $ 0.44 $ 0.35 $ 2.15 $ 1.84

2 unchanged sentences

_________________

(1) For 2022, includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.

(2) The tax effects of non-GAAP adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.

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.

(1) See the Adjusted income from operations non-GAAP reconciliations table above for details regarding Income from operations adjustments.

(2) The thirty-nine weeks ended September 25, 2022 includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.

(3) Includes a $2.9 million adjustment during the thirteen and thirty-nine weeks ended September 24, 2023 related to a Brazil federal income tax exemption on certain state VAT benefits.

See Note 14 - Income Taxes for details regarding the Brazil federal income tax exemption.

Also 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 the thirty-nine weeks ended September 25, 2022, the primary difference

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(3) Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended June 26, 2022 as their effect would be antidilutive.

(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,002 and 7,774 shares for the thirteen weeks ended June 25, 2023 and June 26, 2022, respectively, and 4,917 and 8,253 shares for the twenty-six weeks ended June 25, 2023 and June 26, 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.

These shares were excluded from the calculation of GAAP diluted loss per share during the period as their effect would be antidilutive.

between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 N otes Partial Repurchase.

(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,367 and 3,690 shares for the thirteen weeks ended September 24, 2023 and September 25, 2022, respectively, and 5,067 and 6,732 shares for the thirty-nine weeks ended September 24, 2023 and September 25, 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

System-Wide Sales - System-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we own them or not.

4 unchanged sentences

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 service fees.

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 25, 2023 JUNE 26, 2022 JUNE 25, 2023 JUNE 26, 2022

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Outback Steakhouse $ 119 $ 119 $ 386 $ 377

9 unchanged sentences

(1) Includes franchise sales for off-premises only kitchens in South Korea.

(2) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income (Loss).

(2) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income.

Liquidity and Capital Resources

Cash and Cash Equivalents

As of June 25, 2023, we had $88.8 million in cash and cash equivalents, of which $34.3 million was held by foreign affiliates.

As of September 24, 2023, we had $86.6 million in cash and cash equivalents, of which $32.0 million was held by foreign affiliates.

The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.

As of June 25, 2023, we had aggregate undistributed foreign earnings of approximately $40.5 million.

As of September 24, 2023, we had aggregate undistributed foreign earnings of approximately $34.9 million.

This amount consisted primarily of historical earnings from 2017 and prior that were previously taxed in the U.S.

13 unchanged sentences

2023 payments (768,000) (214) — (768,214)

Balance as of June 25, 2023 $ 365,000 $ 104,786 $ 300,000 $ 769,786

Interest rates, as of June 25, 2023 (1) 6.77 % 5.00 % 5.13 %

Balance as of September 24, 2023 $ 390,000 $ 104,786 $ 300,000 $ 794,786

Interest rates, as of September 24, 2023 (1) 6.93 % 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 June 25, 2023.

As of June 25, 2023, we had $615.2 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $19.8 million.

(1) Interest rate for revolving credit facility represents the weighted average interest rate as of September 24, 2023.

As of September 24, 2023, we had $590.2 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $19.8 million.

Our credit agreement, as amended, contains various financial and non-financial covenants.

1 unchanged sentence

See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 25, 2022 for further information.

As of June 25, 2023 and December 25, 2022, we were in compliance with our debt covenants.

As of September 24, 2023 and December 25, 2022, we were in compliance with our debt covenants.

We believe that we will remain in compliance with our debt covenants during the next 12 months and beyond.

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, remodeling or relocating older restaurants, development of new restaurants, investment in technology, debt payments, dividend payments and share repurchases.

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, remodeling or relocating older restaurants, development of new restaurants, investments in technology, dividend payments, debt payments, and share repurchases.

We believe that our expected liquidity sources are adequate to fund debt service requirements, lease obligations, capital expenditures and working capital obligations during the 12 months following this filing.

2 unchanged sentences

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 - In July 2023, our Board declared a quarterly cash dividend of $0.24 per share, payable on August 25, 2023.

Dividends and Share Repurchases - In October 2023, our Board declared a quarterly cash dividend of $0.24 per share, payable on November 29, 2023.

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.

4 unchanged sentences

The 2023 Share Repurchase Program will expire on August 7, 2024.

As of June 25, 2023, we had $103.8 million remaining available for repurchase under the 2023 Share Repurchase Program.

Following is a summary of dividends and share repurchases from fiscal year 2022 through June 25, 2023:

As of September 24, 2023, we had $87.9 million remaining available for repurchase under the 2023 Share Repurchase Program.

Following is a summary of dividends and share repurchases from fiscal year 2022 through September 24, 2023:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

2 unchanged sentences

Second fiscal quarter 2023 20,990 15,539 36,529

Third fiscal quarter 2023 20,901 15,956 36,857

Total (1) $ 112,641 $ 162,139 $ 274,780

________________

(1) Subsequent to June 25, 2023, we repurchased $7.3 million of our common stock under a Rule 10b5-1 plan.

(1) Subsequent to September 24, 2023, we repurchased $8.6 million of our common stock through October 31, 2023 under a Rule 10b5-1 plan.

Summary of Cash Flows and Financial Condition

Cash Flows - The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated:

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 25, 2023 JUNE 26, 2022

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Net cash provided by operating activities $ 373,553 $ 292,579

3 unchanged sentences

Net increase in cash, cash equivalents and restricted cash $ 1,844 $ 1,764

Operating activities - The increase in net cash provided by operating activities during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) higher operational receipts, net of payments, (ii) lower inventory purchases and (iii) decreased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to higher capital expenditures.

Financing activities - The increase in net cash used in financing activities during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to higher payments of cash dividends on our common stock and higher net repayments on the revolving credit facility, independent of draws used to settle certain outstanding debt obligations discussed below.

These increases were partially offset by:

(i) a decrease in repurchases of common stock, (ii) partner equity plan payments during 2022 and (iii) lower payments for the purchase of noncontrolling interests.

The twenty-six weeks ended June 26, 2022 also included the 2025 Notes Partial Repurchase and the repayment of our Term loan A which were funded by draws on our revolving credit facility and proceeds from the 2025 Notes hedge transactions.

Operating Activities - The increase in net cash provided by operating activities during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 was primarily due to:

(i) higher operational receipts, net of payments, (ii) decreased employee compensation payments and (iii) lower inventory purchases.

Investing Activities - The increase in net cash used in investing activities during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 2022 was primarily due to higher capital expenditures.

Financing Activities - The decrease in net cash used in financing activities during the thirty-nine weeks ended September 24, 2023 as compared to the thirty-nine weeks ended September 25, 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.

These decreases were partially offset by higher payments of cash dividends on our common stock.

BLOOMIN’ BRANDS, INC.

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Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated:

(dollars in thousands) JUNE 25, 2023 DECEMBER 25, 2022

(dollars in thousands) SEPTEMBER 24, 2023 DECEMBER 25, 2022

Current assets $ 261,125 $ 346,577

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Working capital (deficit) includes:

(i) Unearned revenue primarily from unredeemed gift cards of $312.6 million and $394.2 million as of June 25, 2023 and December 25, 2022, respectively, and (ii) current operating lease liabilities of $185.4 million and $183.5 million as of June 25, 2023 and December 25, 2022, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

(i) Unearned revenue primarily from unredeemed gift cards of $294.1 million and $394.2 million as of September 24, 2023 and December 25, 2022, respectively, and (ii) current operating lease liabilities of $185.7 million and $183.5 million as of September 24, 2023 and December 25, 2022, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies).

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Recently Issued Financial Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended June 25, 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 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended September 24, 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 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

BLOOMIN’ BRANDS, INC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis