Bloomin' Brands, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes. Unless the context otherwise indicates, as used in this report, the term the “Company,” “we,” “us,” “our” and other similar terms mean Bloomin’ Brands, Inc. and its subsidiaries. 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 (the “Exchange Act”). 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. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause actual results to differ materially from statements made or suggested by forward-looking statements include, but are not limited to, the following: (i) Consumer reactions to public health and food safety issues; (ii) Minimum wage increases, additional mandated employee benefits and fluctuations in the cost and availability of employees; (iii) Our ability to recruit and retain high-quality leadership, restaurant-level management and team members; (iv) Economic and geopolitical conditions, including recent tariff developments, 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; (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; 24 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF 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, pork, chicken and other major product supply needs; (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 impacts of our operations in Brazil as a minority investor and franchisor following our recent sale transaction; (xi) Our ability to comply with 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 or uncertainty with respect to applicable laws and regulations, including tax laws and unanticipated liabilities, and the impact of any litigation; (xiv) Our ability to implement our remodeling, relocation and expansion plans, due to uncertainty in locating and acquiring attractive sites on acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequate financing and estimating the performance of newly opened, remodeled or relocated restaurants, and our cost savings plans to enable reinvestment in our business, due to uncertainty with respect to macroeconomic conditions and the efficiency that may be added by the actions we take; (xv) Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters or unforeseen events; (xvi) The effects of our leverage and restrictive covenants in our various credit facilities on our ability to raise additional capital to fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy or our industry; (xvii) Any impairment in the carrying value of our goodwill or other intangible or long-lived assets and its effect on our financial condition and results of operations; and (xviii) Such other factors as discussed in Part I, Item IA. Risk Factors of our Annual Report on Form 10-K for the year ended December 29, 2024. Given these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. 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 25 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF 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. Overview We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of March 30, 2025, we owned and operated 980 restaurants and franchised 486 restaurants across 46 states, Guam and 12 countries. Our restaurant portfolio includes: 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 March 30, 2025 from continuing operations includes the following: • U.S. combined and Outback Steakhouse comparable restaurant sales of (0.5)% and (1.3)%, respectively; • Decrease in Total revenues of (1.8)% as compared to the first quarter of 2024; • Operating income and restaurant-level operating margins of 5.5% and 13.9%, respectively, as compared to 6.6% and 15.4%, respectively, for the first quarter of 2024; • Operating income of $57.2 million as compared to $70.9 million in the first quarter of 2024; and • Diluted earnings per share of $0.50 as compared to $(1.00) for the first quarter of 2024. Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following: • Average restaurant unit volumes —average sales (excluding gift card breakage) per restaurant to measure changes in customer traffic, pricing and development of the brand. • Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants. • System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands. • Restaurant-level operating margin, Income from operations, Net income (loss) and Diluted earnings (loss) 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. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss). The following categories of revenue and operating expenses are not included in restaurant-level operating income and corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (i) Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income; (ii) Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants; 26 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued (iii) General and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices; and (iv) Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period. Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive 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. • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance. We believe that our use of these non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board evaluate our operating performance, allocate resources and administer employee incentive plans. 27 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 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): MARCH 30, 2025 MARCH 31, 2024 U.S. Outback Steakhouse Company-owned 552 544 Franchised 121 125 Total 673 669 Carrabba’s Italian Grill Company-owned 191 192 Franchised 17 18 Total 208 210 Bonefish Grill Company-owned 162 162 Franchised 4 4 Total 166 166 Fleming’s Prime Steakhouse & Wine Bar Company-owned 65 64 Aussie Grill Company-owned — 4 Franchised 1 2 Total 1 6 U.S. total 1,113 1,115 International Franchise Outback Steakhouse - Brazil (1) 178 — Outback Steakhouse - South Korea 98 92 Other (1) 67 48 International Franchise total 343 140 International other - Company-owned Outback Steakhouse - Hong Kong/China 10 19 Outback Steakhouse - Brazil (1) — 159 Other - Brazil (1) — 18 System-wide total 1,466 1,451 System-wide total - Company-owned 980 1,162 System-wide total - Franchised 486 289 ____________________ (1) Following the close of the Brazil Sale Transaction on December 30, 2024, all restaurants in that market operate as unconsolidated franchisees and the related store count is no longer reported on a one-month lag. See Note 2 - Discontinued Operations of the Notes to Consolidated Financial Statements for further details. The March 31, 2024 restaurant counts for Brazil, are reported as of February 29, 2024, to correspond with the balance sheet date of this subsidiary. 28 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Results of Operations REVENUES Restaurant Sales - Following is a summary of the change in Restaurant sales for the period indicated: (dollars in millions) THIRTEEN WEEKS ENDED For the period ended March 31, 2024 $ 1,046.7 Change from: Restaurant closures (1) (27.5) Comparable restaurant sales (6.1) Restaurant openings (2) 16.4 For the period ended March 30, 2025 $ 1,029.5 ________________ (1) Includes the restaurant sales impact from the closure of 58 restaurants since December 31, 2023. (2) Includes restaurant sales from 25 new restaurants not included in our comparable restaurant sales base. 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 30, 2025 MARCH 31, 2024 Average restaurant unit volumes: U.S. Outback Steakhouse $ 82,423 $ 83,012 Carrabba’s Italian Grill $ 74,224 $ 72,325 Bonefish Grill $ 64,573 $ 66,661 Fleming’s Prime Steakhouse & Wine Bar $ 123,287 $ 115,580 Operating weeks: U.S. Outback Steakhouse 7,182 7,205 Carrabba’s Italian Grill 2,483 2,550 Bonefish Grill 2,106 2,168 Fleming’s Prime Steakhouse & Wine Bar 830 832 29 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases - Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated: THIRTEEN WEEKS ENDED MARCH 30, 2025 MARCH 31, 2024 Year over year percentage change: Comparable restaurant sales (restaurants open 18 months or more): U.S. (1) Outback Steakhouse (1.3) % (1.2) % Carrabba’s Italian Grill 1.4 % 0.4 % Bonefish Grill (4.0) % (4.9) % Fleming’s Prime Steakhouse & Wine Bar 5.1 % (2.0) % Combined U.S. (0.5) % (1.6) % Traffic: U.S. Outback Steakhouse (4.1) % (4.2) % Carrabba’s Italian Grill (0.3) % (2.9) % Bonefish Grill (9.4) % (7.1) % Fleming’s Prime Steakhouse & Wine Bar (0.5) % (5.0) % Combined U.S. (3.9) % (4.3) % Average check per person (2): U.S. Outback Steakhouse 2.8 % 3.0 % Carrabba’s Italian Grill 1.7 % 3.3 % Bonefish Grill 5.4 % 2.2 % Fleming’s Prime Steakhouse & Wine Bar 5.6 % 3.0 % Combined U.S. 3.4 % 2.7 % ____________________ (1) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening. (2) Includes the impact of menu pricing changes, product mix and discounts. 30 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued COSTS AND EXPENSES The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Restaurant sales or Total revenues for the periods indicated: THIRTEEN WEEKS ENDED MARCH 30, 2025 MARCH 31, 2024 Revenues Restaurant sales 98.1 % 97.9 % Franchise and other revenues 1.9 2.1 Total revenues 100.0 100.0 Costs and expenses Food and beverage (1) 30.4 30.1 Labor and other related (1) 30.6 30.1 Other restaurant operating (1) 25.1 24.3 Depreciation and amortization 4.2 4.0 General and administrative 5.8 5.6 Provision for impaired assets and restaurant closings * 1.0 Total costs and expenses 94.5 93.4 Income from operations 5.5 6.6 Loss on extinguishment of debt — (12.7) Interest expense, net (1.1) (1.2) Income (loss) before provision for income taxes 4.4 (7.3) Provision for income taxes 0.1 0.7 Loss from equity method investment, net of tax (0.1) — Net income (loss) from continuing operations 4.2 (8.0) Net (loss) income from discontinued operations, net of tax (*) 0.3 Net income (loss) 4.2 (7.7) Less: net income attributable to noncontrolling interests 0.2 0.1 Net income (loss) attributable to Bloomin’ Brands 4.0 % (7.8) % ____________________ (1) As a percentage of Restaurant sales. * Less than 1/10th of one percent of Total revenues. 31 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Thirteen weeks ended March 30, 2025 as compared to thirteen weeks ended March 31, 2024 Food and beverage cost increased as a percentage of Restaurant sales primarily due to 0.9% from unfavorable product cost mix and 0.7% from commodity inflation. These increases were partially offset by decreases as a percentage of Restaurant sales of 1.1% in menu pricing and 0.3% from cost-saving and productivity initiatives. Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.1% from higher hourly and field management labor costs, mainly 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 1.3% from higher restaurant-level operating and supply expenses, mainly due to inflation. This increase was partially offset by decreases as a percentage of Restaurant sales of 0.3% from an increase in average check per person and 0.2% from certain cost-saving and productivity initiatives. General and administrative expense increased as a percentage of Total revenues primarily due to severance and costs associated with our foreign currency forward contracts. Loss on extinguishment of debt during the thirteen weeks ended March 31, 2024 was in connection with the Second 2025 Notes Partial Repurchase. Provision for income taxes for the thirteen weeks ended March 30, 2025 includes the benefit of FICA tax credits on certain employees’ tips in 2025 relative to forecasted pretax book income. Provision for income taxes for the thirteen weeks ended March 31, 2024 includes the impact of the non-deductible losses associated with the Second 2025 Notes Partial Repurchase. SEGMENT PERFORMANCE Revenues for both segments include transactions with customers and royalties from franchisees. There were no material transactions among reportable segments. Excluded from Income from operations for U.S. are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses. The below segment disclosures have been recast to include amounts that relate solely to our continuing operations. 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. 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. 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. 32 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Summary financial data - Following is a summary of financial data by segment for the periods indicated: U.S. THIRTEEN WEEKS ENDED (dollars in thousands) MARCH 30, 2025 MARCH 31, 2024 Revenues Restaurant sales (1) $ 1,020,130 $ 1,030,896 Franchise and other revenues 10,773 12,208 Total revenues $ 1,030,903 $ 1,043,104 Income from continuing operations $ 87,670 $ 97,484 Operating income margin, continuing operations 8.5 % 9.3 % INTERNATIONAL FRANCHISE THIRTEEN WEEKS ENDED (dollars in thousands) MARCH 30, 2025 MARCH 31, 2024 Franchise revenues (2) $ 9,283 $ 10,112 Income from continuing operations $ 9,004 $ 9,689 ____________________ (1) The decrease was primarily due to lower comparable restaurant sales and the net impact of restaurant closures and openings. (2) Includes royalties from international franchisees and intercompany royalties from Brazil operations at a 5% royalty rate prior to the Brazil Sale Transaction. On December 30, 2024, we entered into franchise agreements in connection with the Brazil Sale Transaction that include royalty rates that are lower than our historical intercompany rates and on the low end of our international franchisee royalty percentage range. Income from continuing operations U.S. - The decrease in U.S. Income from operations generated during the thirteen weeks ended March 30, 2025 as compared to the thirteen weeks ended March 31, 2024 was primarily due to: (i) lower restaurant sales, (ii) higher operating, labor and commodity costs, primarily due to inflation, and (iii) unfavorable product cost mix. These decreases were partially offset by: (i) an increase in average check per person, primarily due to pricing, (ii) the lapping of 2024 impairment and closure costs in connection with the 2023 Restaurant Closures and (iii) the impact of certain cost-saving and productivity initiatives. 33 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 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 continuing operations and the corresponding margin to restaurant-level operating income from continuing operations and consolidated adjusted restaurant-level operating income and the corresponding margins for the periods indicated: Consolidated THIRTEEN WEEKS ENDED (dollars in thousands) MARCH 30, 2025 MARCH 31, 2024 Income from continuing operations $ 57,231 $ 70,917 Operating income margin, continuing operations 5.5 % 6.6 % Less: Franchise and other revenues 20,077 22,383 Plus: Depreciation and amortization 43,947 42,700 General and administrative 61,377 59,476 Provision for impaired assets and restaurant closings 350 10,873 Restaurant-level operating income from continuing operations $ 142,828 $ 161,583 Restaurant-level operating margin, continuing operations 13.9 % 15.4 % Adjustments: Closure-related charges — 434 Total restaurant-level operating income adjustments — 434 Adjusted restaurant-level operating income from continuing operations $ 142,828 $ 162,017 Adjusted restaurant-level operating margin, continuing operations 13.9 % 15.5 % Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from continuing operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated: THIRTEEN WEEKS ENDED (dollars in thousands) MARCH 30, 2025 MARCH 31, 2024 Income from continuing operations $ 57,231 $ 70,917 Operating income margin, continuing operations 5.5 % 6.6 % Adjustments: Total restaurant-level operating income adjustments (1) — 434 Severance and other transformational costs (2) 6,058 — Foreign currency forward contract costs (3) 2,328 — Asset impairments and closure-related charges (4) (1,929) 12,521 Total income from operations adjustments 6,457 12,955 Adjusted income from operations, continuing operations $ 63,688 $ 83,872 Adjusted operating income margin, continuing operations 6.1 % 7.8 % _________________ (1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating income adjustments. (2) Severance and other costs incurred as a result of transformational and restructuring activities. (3) Costs in connection with the foreign currency forward contracts that mostly offset foreign currency exchange risk associated with installment payments from the Brazil Sale Transaction. (4) Primarily includes gains from certain lease terminations for the thirteen weeks ended March 30, 2025. Includes asset impairment, closure costs and severance in connection with the 2023 Restaurant Closures for the thirteen weeks ended March 31, 2024. 34 Table of Contents 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 income (loss) 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 30, 2025 MARCH 31, 2024 Net income (loss) attributable to Bloomin’ Brands $ 42,152 $ (83,872) Net (loss) income from discontinued operations, net of tax (254) 2,908 Net income (loss) attributable to Bloomin’ Brands from continuing operations (1) 42,406 (86,780) Adjustments: Income from operations adjustments (2) 6,457 12,955 Loss on extinguishment of debt (3) — 135,797 Total adjustments, before income taxes 6,457 148,752 Adjustment to provision for income taxes (4) 1,130 (1,043) Net adjustments, continuing operations 7,587 147,709 Adjusted net income, continuing operations 49,993 60,929 Adjusted net (loss) income, discontinued operations (5) (254) 2,585 Adjusted net income $ 49,739 $ 63,514 Diluted earnings (loss) per share: Continuing operations $ 0.50 $ (1.00) Discontinued operations — 0.03 Net diluted earnings (loss) per share $ 0.50 $ (0.96) Adjusted diluted earnings per share Continuing operations $ 0.59 $ 0.64 Discontinued operations — 0.03 Adjusted diluted earnings per share (6)(7) $ 0.58 $ 0.67 Diluted weighted average common shares outstanding (7) 85,130 87,024 Adjusted diluted weighted average common shares outstanding (6)(7) 85,130 95,376 _________________ (1) Represents net income (loss) from continuing operations less net income attributable to noncontrolling interests. (2) See the Adjusted Income from Operations Non-GAAP Reconciliations table above for details regarding Income from operations adjustments. (3) Includes losses in connection with the Second 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants. (4) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. The thirteen weeks ended March 30, 2025 include an adjustment to income tax expense related to foreign currency gains on the Brazil sale installment receivable. For the thirteen weeks ended March 31, 2024, the difference between GAAP and adjusted effective income tax rates primarily relates to nondeductible losses and other tax costs associated with the Second 2025 Notes Partial Repurchase. (5) Includes net (loss) income from our Brazil operations for the periods presented. See Note 2 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details regarding the Brazil Sale Transaction. (6) Adjusted diluted weighted average common shares outstanding for the thirteen weeks ended March 31, 2024 were calculated including the effect of 4.3 million dilutive securities for outstanding 2025 Notes and the effect of 3.1 million dilutive securities for the Warrant Transactions, as defined below. In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”). The impact of dilutive securities for the outstanding 2025 Notes and the Warrant Transactions were immaterial for the thirteen weeks ended March 30, 2025. Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the thirteen weeks ended March 31, 2024 have been recast to remove the 4.3 million share benefit of the convertible note hedge transactions we issued in connection with the offering of the 2025 Notes, which was previously included as a non-GAAP share adjustment. (7) Due to a GAAP net loss from continuing operations, 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 securities that would have been dilutive for GAAP. 35 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 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. Management uses this information to make decisions about future plans for the development of additional restaurants and new concepts, as well as evaluation of current operations. System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 4 - Revenue Recognition of the Notes to Consolidated Financial Statements. The following table provides a summary of sales of franchised restaurants by segment for the periods indicated, which are not included in our consolidated Restaurant sales. 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 (dollars in millions) MARCH 30, 2025 MARCH 31, 2024 U.S. Outback Steakhouse $ 130 $ 133 Carrabba’s Italian Grill 11 12 Bonefish Grill 2 3 U.S. total 143 148 International Franchise Outback Steakhouse - Brazil (1) 106 124 Outback Steakhouse - South Korea 80 82 Other 31 31 International Franchise total 217 237 Total franchise sales $ 360 $ 385 _________________ (1) The decrease in Brazil sales primarily resulted from fluctuations in foreign exchange rates. The thirteen weeks ended March 30, 2025, includes activity for December 31, 2024 through March 30, 2025 and the thirteen weeks ended March 31, 2024, includes activity for December 1, 2024 through February 29, 2024. Liquidity and Capital Resources Cash and Cash Equivalents As of March 30, 2025, we had $57.7 million in cash and cash equivalents, of which $4.7 million was held by foreign affiliates. As of March 30, 2025, we did not have aggregate undistributed foreign earnings from our consolidated foreign subsidiaries. 36 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Borrowing Capacity and Debt Service Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the period indicated: SENIOR SECURED CREDIT FACILITY TOTAL CREDIT FACILITIES (dollars in thousands) REVOLVING CREDIT FACILITY 2025 NOTES 2029 NOTES Balance as of December 29, 2024 $ 710,000 $ 20,724 $ 300,000 $ 1,030,724 2025 new debt 385,000 — — 385,000 2025 payments (495,000) — — (495,000) Balance as of March 30, 2025 (1) $ 600,000 $ 20,724 $ 300,000 $ 920,724 Interest rates, as of March 30, 2025 (2) 6.22 % 5.00 % 5.13 % Principal maturity date September 2029 May 2025 April 2029 ____________________ (1) On May 1, 2025, the 2025 Notes were settled primarily using borrowings from the revolving credit facility. (2) Interest rate for revolving credit facility represents the weighted average interest rate as of March 30, 2025. As of March 30, 2025, we had $583.7 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $16.3 million. Our credit agreement, as amended, contains various financial and non-financial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities. As of March 30, 2025 and December 29, 2024, 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. Sources and Uses of Cash Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, development of new restaurants, remodeling older restaurants or relocating, investments in technology and dividend payments. 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. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully. Brazil Sale Transaction - On December 30, 2024 we received cash proceeds, net of withheld income taxes, of $103.9 million, in U.S. dollars based on the exchange rate on the Closing Date, representing 52% of the total Purchase Price from the Brazil Sale Transaction, and applied the proceeds to our revolving credit facility during the thirteen weeks ended March 30, 2025. The second installment payment, representing 48% of total proceeds from the Brazil Sale Transaction, is due on December 30, 2025, which we also anticipate applying towards the revolving credit facility. Capital Expenditures - We estimate that our capital expenditures will total approximately $190 million to $210 million in 2025. 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. 37 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Dividends and Share Repurchases - In April 2025, our Board declared a quarterly cash dividend of $0.15 per share, payable on June 4, 2025. 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 approved a $350.0 million share repurchase authorization. As of March 30, 2025, $96.8 million remained available for repurchase. The following table presents our dividends and share repurchases for the periods indicated: (dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL Fiscal year 2024 $ 82,574 $ 265,695 $ 348,269 First fiscal quarter 2025 12,747 — 12,747 Total $ 95,321 $ 265,695 $ 361,016 Summary of Cash Flows and Financial Condition Cash Flows - The following chart presents a summary of our cash flows provided by (used in) operating, investing and financing activities from continuing operations for the periods indicated: Operating Activities - The increase in net cash provided by operating activities during the thirteen weeks ended March 30, 2025 as compared to the thirteen weeks ended March 31, 2024 was primarily due to changes in working capital partially offset by lower net earnings. Investing Activities - Net cash provided by investing activities during the thirteen weeks ended March 30, 2025 was primarily due to the proceeds from the Brazil sale, net of taxes withheld, partially offset by capital expenditures and payments on foreign currency forward contracts. Net cash used in investing activities during the thirteen weeks ended March 31, 2024 was primarily due to capital expenditures. Financing Activities - Net cash used in financing activities during the thirteen weeks ended March 30, 2025 was primarily due to net payments on the revolving credit facility from the proceeds on the Brazil Sale Transaction. Net cash provided by financing activities during the thirteen weeks ended March 31, 2024 was primarily due to net 38 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued draws on the revolving credit facility exceeding cash used to repurchase common stock and net cash received from the partial unwind agreements relating to a portion of the convertible note hedge and warrant transactions that were entered into in connection with the issuance of the 2025 Notes. Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated: (dollars in thousands) MARCH 30, 2025 DECEMBER 29, 2024 Current assets $ 318,881 $ 320,519 Current liabilities 778,465 952,336 Working capital (deficit) $ (459,584) $ (631,817) Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $317.7 million and $374.1 million as of March 30, 2025 and December 29, 2024, respectively, and (ii) current operating lease liabilities of $161.2 million and $158.8 million as of March 30, 2025 and December 29, 2024, 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). We operate successfully with negative working capital because cash collected on restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital ex penditures. Recently Issued Financial Accounting Standards For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended March 30, 2025 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. 39 Table of Contents BLOOMIN’ BRANDS, INC.