What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-03 · 191 added, 311 removed, 324 unchanged (61% of the section changed)

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Cautionary Statement

This Quarterly Report on Form 10-Q (the “Report”) includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “feels,” “seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could” or “would” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms.

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

(vi) Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;

(vi) Our ability to protect our information technology systems from interruption or security breach, including cybersecurity threats, and to protect consumer data and personal employee information;

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(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 a 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;

(x) The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreign currency exchange rates;

(xi) Our ability to comply with new environmental, social and governance (“ESG”) requirements or our failure to achieve any goals, targets or objectives with respect to ESG matters;

(xii) Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits, including by maintaining relationships with third party delivery apps and services;

(viii) 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;

(ix) The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreign currency exchange rates;

(x) The impact of the strategic review process for our Brazil operations or any resulting action or inaction;

(xi) Our ability to comply with new corporate citizenship and sustainability reporting requirements and investor expectations or our failure to achieve any goals, targets or objectives that we establish with respect to corporate citizenship and sustainability matters;

(xii) Our ability to effectively respond to changes in patterns of consumer traffic, including by maintaining relationships with third party delivery apps and services, consumer tastes and dietary habits;

(xiii) Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effects of changes to applicable laws and regulations, including tax laws and unanticipated liabilities, and the impact of any litigation;

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Any forward-looking statement that we make in this Report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments.

Comparisons of results for current and any prior

Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

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

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.

As of March 31, 2024, we owned and operated 1,162 restaurants and franchised 289 restaurants across 46 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 September 24, 2023 includes the following:

Financial Overview - Our financial overview for the thirteen weeks ended March 31, 2024 includes the following:

combined and Outback Steakhouse comparable restaurant sales of (1.6)% and (1.2)%, respectively;

• 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.

• Decrease in Total revenues of (4.0)% as compared to the first quarter of 2023;

• Operating income and restaurant-level operating margins of 6.4% and 16.0%, respectively, as compared to 9.7% and 17.9%, respectively, for the first quarter of 2023;

• Operating income of $77.1 million as compared to $120.6 million in the first quarter of 2023;

• Diluted loss per share of $(0.96) as compared to diluted earnings per share of $0.93 for the first quarter of 2023.

Reviewing Strategic Alternatives for Brazil Operations - On May 7, 2024, we announced that we are exploring and evaluating strategic alternatives for our Brazil operations that have the potential to maximize value for our shareholders, including but not limited to, a possible sale of the operations.

The Board has retained BofA Securities, Inc.

as its financial advisor.

We plan to proceed in a timely manner, but have not set a definitive timetable for completion of this process.

There can be no assurance that this review will result in a transaction or other strategic alternative of any kind.

We do not intend to make any further public comment regarding the review unless it determines that disclosure is appropriate or necessary.

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

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• 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.

• Restaurant-level operating margin, Income from operations, Net (loss) income and Diluted (loss) 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.

The following categories of revenue and operating expenses are

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

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income.

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;

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(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.

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 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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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Selected Operating Data - The table below presents the number of our full-service restaurants in operation as of the periods indicated:

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):

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

MARCH 31, 2024 MARCH 26, 2023

Outback Steakhouse

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Company-owned 4 7

Franchised 2 —

total (1) 1,115 1,158

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____________________

(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):

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Company-owned 1 1

International

Franchised - South Korea 6 45

System-wide total 7 46

____________________

(1) Excludes virtual concepts that operate out of existing restaurants and sports venue locations.

(1) Excludes four and 26 off-premises only kitchens as of March 31, 2024 and March 26, 2023, respectively.

One location was Company-owned in the U.S.

and all others were franchised in South Korea as of March 31, 2024 and March 26, 2023.

(2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of February 29, 2024 and February 28, 2023, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) International Company-owned Other included two and four Aussie Grill locations as of March 31, 2024 and March 26, 2023, respectively.

International Franchised Other included five and four Aussie Grill locations as of March 31, 2024 and March 26, 2023, respectively.

BLOOMIN’ BRANDS, INC.

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Results of Operations

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 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 %

Franchise and other revenues 1.4 1.5 1.4 1.5

Total revenues 100.0 100.0 100.0 100.0

Costs and expenses

Food and beverage (1) 30.2 32.0 30.8 32.3

Labor and other related (1) 29.5 29.1 28.6 28.2

Other restaurant operating (1) 26.4 25.8 24.4 24.2

Depreciation and amortization 4.4 4.0 4.1 3.8

General and administrative 5.8 5.3 5.5 5.2

Provision for impaired assets and restaurant closings (0.6) 0.2 (*) 0.1

Total costs and expenses 94.6 95.1 92.3 92.6

Income from operations 5.4 4.9 7.7 7.4

Loss on extinguishment and modification of debt — — — (3.1)

Loss on fair value adjustment of derivatives, net — — — (0.5)

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

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 attributable to Bloomin’ Brands

4.1 % 3.0 % 5.9 % 1.3 %

________________

(1) As a percentage of Restaurant sales.

* Less than 1/10 th of one percent of Total revenues.

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

(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

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

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 26, 2023 $ 1,228.2

Comparable restaurant sales (1) (35.7)

Restaurant closures (25.1)

Brazil value added tax exemptions (2) (9.6)

Restaurant openings 14.3

Effect of foreign currency translation 7.4

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

For the period ended March 31, 2024 $ 1,179.5

________________

(1) The thirteen weeks ended March 26, 2023 included high-volume days between December 26 th and December 31 st and the thirteen weeks ended March 31, 2024 excluded these days.

This shift had an estimated $16.5 million negative impact on comparable restaurant sales.

(2) Beginning in the fourth quarter of 2023, we are once again subject to the value added taxes for which we were previously exempt under the Brazil tax legislation.

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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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.

Average Restaurant Unit Volumes and Operating Weeks

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

The decrease in Restaurant sales during the thirteen weeks ended March 31, 2024 was primarily due to:

(i) lower comparable restaurant sales including the impact of the one-week shift in the fiscal calendar, (ii) the closure of 57 restaurants since December 25, 2022 and (iii) value added tax exemptions in Brazil during 2023.

The decrease in Restaurant sales was partially offset by the opening of 53 new restaurants not included in our comparable restaurant sales base and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

Average Restaurant Unit Volumes and Operating Weeks - Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 31, 2024 MARCH 26, 2023

Average restaurant unit volumes (weekly):

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____________________

(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.

(1) Translated at average exchange rates of 4.92 and 5.21 for the thirteen weeks ended March 31, 2024 and March 26, 2023, 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 (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

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

MARCH 31, 2024 (1) MARCH 26, 2023

Year over year percentage change:

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Combined U.S.

4.2 % 8.6 % 5.0 % 9.5 %

International

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____________________

(1) For Q1 2024, comparable restaurant sales, traffic and average check per person compare the thirteen weeks from January 1, 2024 through March 31, 2024 to the thirteen weeks from January 2, 2023 through April 2, 2023.

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

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Franchise and other revenues

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

Other revenues 3.6 3.6 9.4 10.8

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:

THIRTEEN WEEKS ENDED

MARCH 31, 2024 MARCH 26, 2023

Restaurant sales 98.7 % 98.7 %

Franchise and other revenues 1.3 1.3

Total revenues 100.0 100.0

Costs and expenses

Food and beverage costs

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 (1) 30.3 31.3

% 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 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 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 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 (1) 29.1 27.8

% 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 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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 (1) 24.6 23.0

% 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 4.1 3.7

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 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 5.6 5.3

General and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, other employee-related costs and professional services.

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

(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

Other 2.0 2.6

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 0.9 0.3

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 THIRTY-NINE WEEKS ENDED

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

Total costs and expenses 93.6 90.3

Income from operations 6.4 9.7

% 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 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, 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) 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 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.

Loss on extinguishment of debt (11.4) —

Interest expense, net (1.1) (1.0)

(Loss) income before provision for income taxes (6.1) 8.7

Provision for income taxes 0.8 1.2

Net (loss) income (6.9) 7.5

net income attributable to noncontrolling interests 0.1 0.2

Net (loss) income attributable to Bloomin’ Brands

(7.0) % 7.3 %

____________________

(1) As a percentage of Restaurant sales.

Thirteen weeks ended March 31, 2024 as compared to thirteen weeks ended March 26, 2023

Food and beverage cost decreased as a percentage of Restaurant sales primarily due to 1.3% from increases in average check per person driven by an increase in menu pricing and 0.7% from cost saving and productivity initiatives.

These decreases were partially offset by increases as a percentage of Restaurant sales of 0.6% from commodity inflation and 0.4% from unfavorable product mix.

Labor and other related expense increased as a percentage of Restaurant sales primarily due to 2.0% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by a decrease of 0.5% from an increase in average check per person.

Other restaurant operating expense increased as a percentage of Restaurant sales primarily due to 0.9% from higher restaurant-level operating and supply expenses, primarily due to inflation, and 0.7% from higher advertising expense, partially offset by a decrease of 0.2% from certain cost saving and productivity initiatives.

Depreciation and amortization expense increased primarily due to restaurant development and technology projects, partially offset by a decrease due to restaurant closures under the 2023 Closure Initiative.

General and administrative expense increased primarily due to higher severance partially offset by a decrease in employee stock-based compensation.

BLOOMIN’ BRANDS, INC.

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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.

Provision for impaired assets and restaurant closings increased primarily due to charges in connection with the 2023 Closure Initiative within the U.S.

Income from operations during the thirteen weeks ended March 31, 2024 includes a net operating margin decrease of approximatel y 0.3% attributable to the lapping of the 2023 Brazil value added tax exemptions (PIS and COFINS).

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

Loss on extinguishment of debt during the thirteen weeks ended March 31, 2024 was in connection with the 2025 Notes Partial Repurchase, which is described in further detail within Note 9 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.

Provision for income taxes for the thirteen weeks ended March 31, 2024 includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

SEGMENT PERFORMANCE

18 unchanged sentences

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

Summary financial data - Following is a summary of financial data by segment for the periods indicated:

INTERNATIONAL

THIRTEEN WEEKS ENDED THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023 MARCH 31, 2024 MARCH 26, 2023

Restaurant sales $ 1,030,896 $ 1,080,569 $ 148,591 $ 147,665

5 unchanged sentences

Restaurant-level operating margin 15.7 % 17.4 % 18.3 % 23.0 %

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 THIRTY-NINE WEEKS ENDED

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

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

INTERNATIONAL

THIRTEEN WEEKS ENDED THIRTEEN WEEKS ENDED

(dollars in millions) (dollars in millions)

For the period ended March 26, 2023 $ 1,080.6 For the period ended March 26, 2023 $ 147.6

Comparable restaurant sales (1) (32.8) Effect of foreign currency translation 7.4

Restaurant closures (2) (24.5) Restaurant openings (3) 6.7

Restaurant openings (3) 7.6 Brazil value added tax exemptions (4) (9.6)

For the period ended March 31, 2024 $ 1,030.9 Comparable restaurant sales (2.9)

Restaurant closures (2) (0.6)

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 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 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 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 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

Franchise and other revenues 3,586 3,546 11,244 11,278

Total revenues $ 166,861 $ 133,242 $ 466,076 $ 363,905

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

Operating income margin 13.2 % 11.9 % 14.4 % 10.7 %

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

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

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

(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

Restaurant openings 10.1 28.3

Effect of foreign currency translation 8.4 9.5

Comparable restaurant sales 4.2 34.3

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

For the period ended March 31, 2024 $ 148.6

____________________

(1) Includes an estimated $16.5 million negative impact on comparable restaurant sales from a one-week shift in the fiscal calendar.

(2) Includes the restaurant sales impact from the closure of 55 U.S.

and two international restaurants since December 25, 2022.

(3) Includes restaurant sales from 17 U.S.

and 36 international new restaurants not included in our comparable restaurant sales base.

(4) Beginning in the fourth quarter of 2023, we are once again subject to the value added taxes for which we were previously exempt under the Brazil tax legislation.

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 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 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, 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

- The decrease in U.S.

Income from operations generated during the thirteen weeks ended March 31, 2024 as compared to the thirteen weeks ended March 26, 2023 was primarily due to:

(i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) impairment and closure costs in connection with the 2023 Closure Initiative, (iv) higher advertising expense and (v) unfavorable product mix.

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

International - The decrease in international Income from operations generated during the thirteen weeks ended March 31, 2024 as compared to the thirteen weeks ended March 26, 2023 was primarily due to:

(i) higher operating and labor costs, primarily due to inflation, (ii) lapping value added tax exemptions in Brazil during 2023, (iii) a decline in customer traffic and (iv) commodity inflation.

These decreases were partially offset by an increase in average check per person.

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 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

Consolidated THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Income from operations $ 77,093 $ 120,633

6 unchanged sentences

Restaurant-level operating margin 16.0 % 17.9 %

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

Asset impairments and closure-related costs (1) 434 —

Total restaurant-level operating income adjustments 434 —

1 unchanged sentence

Adjusted restaurant-level operating margin 16.0 % 17.9 %

_________________

(1) Represents costs in connection with the 2023 Closure Initiative.

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Income from operations $ 97,484 $ 133,243

6 unchanged sentences

Restaurant-level operating margin 15.7 % 17.4 %

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

Asset impairments and closure-related costs (1) 434 —

Total restaurant-level operating income adjustments 434 —

1 unchanged sentence

Adjusted restaurant-level operating margin 15.8 % 17.4 %

_________________

(1) Represents costs in connection with the 2023 Closure Initiative.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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

International THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Income from operations $ 15,762 $ 24,508

6 unchanged sentences

Restaurant-level operating margin 18.3 % 23.0 %

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:

Adjusted Restaurant-level Operating Margin Non-GAAP Reconciliations (continued) - The following table presents the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:

THIRTEEN WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

REPORTED ADJUSTED (1) REPORTED ADJUSTED

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage 30.2 % 30.2 % 32.0 % 32.0 %

Labor and other related 29.5 % 29.4 % 29.1 % 29.1 %

Other restaurant operating 26.4 % 26.4 % 25.8 % 25.8 %

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

THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

MARCH 31, 2024 MARCH 26, 2023

REPORTED ADJUSTED (1) REPORTED ADJUSTED

6 unchanged sentences

(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

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

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Income from operations $ 77,093 $ 120,633

1 unchanged sentence

Total restaurant-level operating income adjustments (1) 434 —

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

Other (3) 3,436 — 3,436 —

Asset impairments and closure-related charges (2) 12,521 —

Total income from operations adjustments 12,955 —

3 unchanged sentences

(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

(2) Includes asset impairment, closure costs and severance in connection with the 2023 Closure Initiative.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’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:

THIRTEEN WEEKS ENDED

(in thousands, except per share data) MARCH 31, 2024 MARCH 26, 2023

Net (loss) income attributable to Bloomin’ Brands

$ (83,872) $ 91,311

Income from operations adjustments (1) 12,955 —

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

Loss on fair value adjustment of derivatives, net (2) — — — 17,685

Loss on extinguishment of debt (2) 135,797 —

Total adjustments, before income taxes 148,752 —

2 unchanged sentences

Adjusted net income $ 63,514 $ 91,311

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

Diluted (loss) earnings per share $ (0.96) $ 0.93

Adjusted diluted earnings per share $ 0.70 $ 0.98

3 unchanged sentences

(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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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.

(2) Includes losses in connection with the 2025 Notes Partial Repurchase.

See Note 9 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.

(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.

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) Due to a GAAP net loss, antidilutive securities are excluded from diluted weighted average common shares outstanding for the thirteen weeks ended March 31, 2024.

However, considering the adjusted net income position, adjusted diluted weighted average common shares outstanding incorporates 4,031 dilutive securities, including 3,132 for outstanding warrants.

Adjusted diluted weighted average common shares outstanding was calculated including the benefit of our convertible notes hedge.

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.

2 unchanged sentences

For a summary of sales of Company-owned restaurants, refer to Note 2 - Revenue Recognition of the Notes to Consolidated Financial Statements.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results.

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 THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 31, 2024 MARCH 26, 2023

Outback Steakhouse $ 133 $ 136

8 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.

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

Liquidity and Capital Resources

Cash and Cash Equivalents

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.

As of March 31, 2024, we had $131.7 million in cash and cash equivalents, of which $57.5 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 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.

under the 2017 Tax Cuts and Jobs Act and post-2017 foreign earnings, which we may repatriate to the U.S.

As of March 31, 2024, we had aggregate undistributed foreign earnings of approximately $46.7 million that may be repatriated to the U.S.

without additional material U.S.

1 unchanged sentence

These amounts are not considered indefinitely reinvested in our foreign subsidiaries.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Borrowing Capacity and Debt Service

5 unchanged sentences

2024 payments (296,000) — — (296,000)

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 %

2024 conversions — (84,062) — (84,062)

Balance as of March 31, 2024 $ 635,000 $ 20,724 $ 300,000 $ 955,724

Interest rates, as of March 31, 2024 (1) 6.94 % 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 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.

(1) Interest rate for revolving credit facility represents the weighted average interest rate as of March 31, 2024.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

As of March 31, 2024, we had $346.7 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $18.3 million.

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

1 unchanged sentence

See Note 12 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 31, 2023 for further information.

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

As of March 31, 2024 and December 31, 2023, 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, investments in technology, dividend payments, debt payments, and share repurchases.

2025 Notes Partial Repurchase - On February 29, 2024, we and the Noteholders entered into the Exchange Agreements in which the Noteholders 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.

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, we entered into the Early Termination Agreements with the Derivative Counterparties.

Upon settlement, we received approximately $118.2 million in cash and 0.3 million shares of common stock from the Derivative Counterparties and paid $102.2 million in cash to the Derivative Counterparties during the thirteen weeks ended March 31, 2024.

See Note 9 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Early Termination Agreements.

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 or relocating older restaurants, investments in technology, dividend 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 October 2023, our Board declared a quarterly cash dividend of $0.24 per share, payable on November 29, 2023.

Dividends and Share Repurchases - In April 2024, our Board declared a quarterly cash dividend of $0.24 per share, payable on May 31, 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.

In February 2024, our Board canceled the remaining $57.5 million under our former share repurchase authorization and approved a new $350.0 million share repurchase authorization.

The 2024 Share Repurchase Program includes capacity above our normal share repurchases activity to provide flexibility in retiring our 2025 Notes at or prior to their May 2025 maturity.

The 2024 Share Repurchase Program will expire on August 13, 2025.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

On February 7, 2023, our Board approved the 2023 Share Repurchase Program under which we are authorized to repurchase up to $125.0 million of our outstanding common stock.

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

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:

On March 1, 2024, we entered into the ASR Agreement, in connection with our previously announced 2024 Share Repurchase Program, with Wells Fargo to repurchase $220.0 million of our common stock.

Under the ASR Agreement, we made an aggregate payment of $220.0 million to Wells Fargo and received an aggregate initial delivery of approximately 6.5 million shares of common stock on March 4, 2024, representing approximately 80% of the total shares that are estimated to be repurchased under the ASR Agreement based on the price per share of common stock on that date.

On April 23, 2024, we received 1.4 million additional shares of common stock from Wells Fargo in connection with the final settlement of the ASR Agreement.

See Note 10 - Stockholders’ Equity of the Notes to Consolidated Financial Statements for additional details regarding the ASR Agreement.

As of March 31, 2024, $130.0 million remained available for repurchase under the 2024 Share Repurchase Program.

Following is a summary of dividends and share repurchases from fiscal year 2023 through March 31, 2024:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

1 unchanged sentence

First fiscal quarter 2024 21,075 188,500 209,575

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

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

Total (1) $ 104,817 $ 258,500 $ 363,317

________________

(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.

(1) Excludes $44.0 million paid in March 2024 for the repurchase of 1.4 million shares that settled on April 23, 2024 in connection with the ASR Agreement.

Also excludes $0.4 million of fees recorded in Additional paid-in capital related to repurchases under the ASR Agreement.

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:

THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Net cash provided by operating activities $ 73,786 $ 189,668

Net cash used in investing activities (64,585) (62,945)

Net cash used in financing activities (147,505) (170,760)

Net cash provided by (used in) financing activities 8,758 (116,987)

Effect of exchange rate changes on cash and cash equivalents (668) (30)

Net increase in cash, cash equivalents and restricted cash $ 17,291 $ 9,706

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.

Operating Activities - The decrease in net cash provided by operating activities during the thirteen weeks ended March 31, 2024 as compared to the thirteen weeks ended March 26, 2023 was primarily due to changes in working capital and lower net earnings.

Financing Activities - The net cash provided by financing activities during the thirteen weeks ended March 31, 2024 was due to net draws on the revolving credit facility exceeding cash used to repurchase common stock and net cash received from the Early Termination Agreements.

Net cash used in financing activities during thirteen weeks ended March 26, 2023 was primarily due to net repayments on our revolving credit facility.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

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

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Current assets $ 298,172 $ 343,314

2 unchanged sentences

Working capital (deficit) includes:

(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.

(i) Unearned revenue primarily from unredeemed gift cards of $320.0 million and $381.9 million as of March 31, 2024 and December 31, 2023, respectively, and (ii) current operating lease liabilities of $171.2 million and $175.4 million as of March 31, 2024 and December 31, 2023, 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 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.

For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended March 31, 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 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.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis