Bloomin Brands Inc
For the period ended Dec 29, 2024. Filed Feb 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 26, 2025
BLMN$9.75-6.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-28.
0001546417-24-000037
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-29; filed 2025-02-26.
0001546417-25-000034
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 171 previous paragraphs and 170 current paragraphs.
56 unchanged; 78 reworded; 32 added; 34 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 20 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
•Diluted (loss) earnings per share of $(0.61) as compared to $2.13 in 2023.
Current report
Sale of Majority Ownership of our Brazil Operations -On December 30, 2024, we completed the sale of 67% of our Brazil operations (the “Brazil Sale Transaction”) and entered into amended and restated franchise agreements with all existing restaurants in Brazil. The balance sheets, results of operations and cash flows of our Brazil operations are reported as discontinued operations for all periods presented. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.
Current report
Simplifying the Agenda. We are focused on our operations, removing menu items and enabling our operators to deliver a great guest experience. Our transaction to re-franchise our Brazil business will allow our management team to focus on improvements in our domestic operations.
Current report
Consistently Deliver Guest-Centric Experience. We are investing in our product quality, technology and operational execution to ensure guests consistently have a great experience when they interact with our brands across both in-restaurant and off-premises channels. We believe this will drive increased frequency.
Current report
Refine Our Marketing Approach. We are refining our menu offerings to offer abundant, every day value, which we believe will resonate with the marketplace. We will continue to offer experiential-driven events with unique items as a way to drive trial to our brands.
Current report
Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases
Current report
Food and beverage cost decreased as a percentage of Restaurant sales due to 1.3% from increases in menu pricing and 0.6% from cost-saving and productivity initiatives. These decreases were partially offset by increases as a percentage of Restaurant sales of 0.5% from unfavorable product mix and 0.5% from commodity inflation.
Current report
Other restaurant operating expense increased as a percentage of Restaurant sales primarily due to: (i) 1.1% from higher restaurant-level operating and supply expenses, primarily due to inflation, (ii) 0.5% from higher advertising expense and (iii) 0.4% from higher insurance and legal expense, primarily from lapping the 2023 favorable settlement of certain collective action wage and hour lawsuits. These increases were partially offset by decreases as a percentage of Restaurant sales of 0.3% from an increase in average check per person and 0.3% from certain cost-saving and productivity initiatives.
Current report
Provision for impaired assets and restaurant closings increased primarily due to: (i) asset impairments during Q4 2024 related to 41 older, underperforming restaurants (the “Q4 2024 Restaurant Impairment”), and from the closure of (ii) nine restaurants in Hong Kong and (iii) 36 older, predominately underperforming restaurants within the U.S. segment (the “2023 Restaurant Closures”). These increases were partially offset by the Q4 2023 asset impairment and closure charges in connection with the 2023 Restaurant Closures.
Current report
The change in (Benefit) provision for income taxes is primarily due to FICA tax credits on certain tipped wages partially offset by the 2024 nondeductible losses associated with the Second 2025 Notes Partial Repurchase, relative to the 2024 pre-tax book loss.
Current report
Operating income is utilized by our CODM as the segment profit or loss measure and to manage the business, review operating performance and allocate resources.
Current report
(1)The decrease from 2023 to 2024 was primarily due to: (i) the restaurant sales during the 53rd week of 2023, (ii) the net impact of restaurant closures and openings and (iii) lower comparable restaurant sales. The increase from 2022 to 2023 was primarily due to the restaurant sales during the 53rd week of 2023 and higher comparable restaurant sales, partially offset by the net impact of restaurant closures and openings. See Results of Operations -Restaurant Salesfor a rollforward of consolidated Restaurant sales.
Current report
(2)Includes international royalties from franchisees and royalties from our Brazil operations at our historical 5%intercompany rate. 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.
Current report
Income from continuing operations
Current report
(4)No adjustments for the periods presented. Excludes intercompany royalty expense of $25.9 million and $26.4 million for 2024 and 2023, respectively, since the corresponding intercompany royalty revenue is included within Franchise and other revenues from continuing operations and is therefore already excluded from the calculation of restaurant-level operating income. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.
Current report
(2)Fiscal year 2024 includes asset impairment, closure costs and severance primarily in connection with: (i) the 2023 Restaurant Closures, (ii) the closure of nine restaurants in Hong Kong and (iii) the Q4 2024 Restaurant Impairment. Fiscal year 2023 includes asset impairment, closure costs and severance primarily in connection with the 2023 Restaurant Closures.
Current report
(3)Compensation costs and professional fees related to our CEO transition and severance related to other executive level changes.
Current report
(4)Represents fees incurred in connection with a project-based strategic initiative. The costs incurred represent third-party consulting fees related to a strategic initiative to develop revenue growth management capabilities for Outback Steakhouse and are included in General and administrative expense. Given the magnitude and scope of this initiative and that it is not expected to recur after 2024, we consider these incremental expenses to be distinct from other consulting fees that we incur in the ordinary course of business and not reflective of the ongoing costs to operate our business or operating performance in the period.
Current report
(5)Gains in connection with the foreign exchange forward contracts entered into to partially offset foreign currency exchange risk associated with installment payments from the Brazil Sale Transaction.
Current report
(7)Includes operating income from our Brazil operations for the periods presented, including intercompany royalty expense. For 2024, includes non-GAAP adjustments of $68.3 million for impairment of assets held for sale, $3.3 million of transaction related professional fees and $1.5 million of other impairment. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.
Current report
(1)Represents net (loss) income from continuing operations less net income attributable to noncontrolling interests.
Current report
(5)Includes net (loss) income from our Brazil operations for the periods presented and Income from operations adjustments described in footnote 7 of the Adjusted Income from Operations Non-GAAP Reconciliations table above. For 2024, also includes adjustments for $33.8 million of deferred income tax expense resulting from the Brazil Sale Transaction and the tax effects of non-GAAP adjustments. For 2023, also includes a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state value added tax benefits. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details regarding the Brazil Sale Transaction.
Current report
(6)Adjusted diluted weighted average common shares outstanding for the fiscal years 2024 and 2023 were calculated including the effect of 1.6 million and 5.1 million dilutive securities, respectively, for outstanding 2025 Notes and the effect of 1.0 million and 3.4 million dilutive securities, respectively, for the Warrant Transactions, as defined below. In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”). If our stock price is in excess of the conversion price of the 2025 Notes ($10.60 and $11.14 as of December 29, 2024 and December 31, 2023, respectively), the Convertible Note Hedge Transactions deliver shares to offset dilution from the 2025 Notes, which, in combination with the Warrant Transactions, effectively offset dilution from the 2025 Notes up to the strike price of the Warrant Transactions ($14.84 and $15.60 as of December 29, 2024 and December 31, 2023, respectively). Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the fiscal year 2023 have been recast to remove the 5.1 million share benefit of the Convertible Note Hedge Transactions which was previously included as a non-GAAP share adjustment.
Current report
(7)Due to a GAAP net loss from continuing operations, antidilutive securities are excluded from diluted weighted average common shares outstanding for the fiscal year 2024. However, considering the adjusted net income position, adjusted diluted weighted average common shares outstanding incorporates securities that would have been dilutive for GAAP.
Current report
As of December 29, 2024, we did not have aggregate undistributed foreign earnings from its consolidated foreign subsidiaries.
Current report
(1)Subsequent to December 29, 2024, we repaid $140.0 million on our revolving credit facility, primarily with proceeds from the Brazil Sale Transaction.
Current report
2025 Notes Partial Repurchase - On February 29, 2024, we and certain holders entered into exchange agreements (the “2024 Exchange Agreements”) in which the holders agreed to exchange $83.6 million in aggregate principal amount of our outstanding 2025 Notes for approximately 7.5 million shares of our common stock and $3.3 million in cash, including accrued interest (the “Second 2025 Notes Partial Repurchase”).
Current report
Sources and Uses of Cash
Current report
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 total proceeds 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. The remaining 33% ownership interest is subject to a put-call mechanism contained in the shareholders agreement whereby the buyer may cause us to sell or we may cause the buyer to purchase the totality of the remaining interest during the fourth quarter of 2028 at a multiple of earnings defined in the shareholders agreement.
Current report
During 2024, we received $15.1 million of cash in connection with forward currency exchange contracts entered into concurrently with the Brazil Sale Transaction to hedge a portion of the foreign currency risk of the related purchase price installment payments.
Current report
Investing activities -The decrease in net cash used in investing activities during 2024 as compared to 2023 was primarily due to lower capital expenditures and receipt of proceeds from foreign exchange forward contracts.
Current report
Financing activities -The decrease in net cash used in financing activities during 2024 as compared to 2023 was primarily due to higher net draws on the revolving credit facility and net cash received from the 2024 Note Hedge Early Termination Agreements, partially offset by higher repurchases of common stock and lower net proceeds from share-based compensation.
Removed paragraphs (34)
Previous report
•Diluted earnings per share of $2.56 as compared to $1.03 in 2022.
Previous report
•Enhance the Customer Experience to Drive Sustainable Healthy Sales Growth. We plan to continue to make investments to enhance our core guest experience, upgrade kitchen equipment and technology, increase off-premises dining occasions, remodel and relocate restaurants, invest in digital marketing and data personalization and utilize the Dine Rewards loyalty program and multimedia marketing campaigns to drive sales.
Previous report
•Enrich Engagement Among Stakeholders. We take the responsibility to our people, customers and communities seriously and continue to invest in programs that support the well-being of those engaged with us.
Previous report
•Accelerate Growth Opportunities. We believe a substantial development opportunity remains for our concepts in the U.S. and internationally through existing geography fill-in and market expansion. We will continue to pursue U.S. fill-in opportunities for Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar and Carrabba’s Italian Grill across key southern states such as North Carolina, Florida and Texas as well as California. We will also focus on strategic expansion in Brazil and pursue global franchise opportunities.
Previous report
Macroeconomic Conditions - The combination of macroeconomic and other factors have put considerable pressure on the casual dining industry. The ongoing impacts of inflation, rising interest rates, reduced disposable consumer income, access to credit, other national, regional and local regulatory and economic conditions and consumer confidence have had a negative effect on discretionary consumer spending.
Previous report
Should the macroeconomic and other conditions persist, we will continue to face increased pressure with respect to our pricing, traffic levels and commodity costs. We believe that in this environment, we need to maintain our focus on value and innovation as well as refreshing our restaurant base through remodels and new restaurant development to continue to drive sales.
Previous report
(1)Excludes five and 36 off-premises only kitchens as of December 31, 2023 and December 25, 2022, respectively. One location was Company-owned in the U.S and all others were franchised in South Korea as of December 31, 2023 and December 25, 2022.
Previous report
(3)International Company-owned Other included two and four Aussie Grill locations as of December 31, 2023 and December 25, 2022, respectively. International Franchised Other included four Aussie Grill locations as of December 31, 2023 and December 25, 2022.
Previous report
(1)Fiscal years 2023 and 2022, include $30.2 million and $7.7 million, respectively, of value added tax exemptions resulting from the Brazil tax legislation. Beginning in the fourth quarter of 2023, we are once again subject to the value added taxes for which we were previously exempt. See Note 20 -Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.
Previous report
(2)Includes $101.9 million of restaurant sales generated by restaurants closed, primarily in February 2024, in connection with the 2023 Closure Initiative, as defined below. See Note 4 -Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative.
Previous report
The increase in Restaurant sales in 2023 as compared to 2022 was primarily due to: (i) restaurant sales during the 53rd week of 2023, (ii) higher comparable restaurant sales, (iii) the opening of 66 new restaurants not included in our comparable restaurant sales base, (iv) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar and (v) value added tax exemptions in Brazil. The increase in Restaurant sales was partially offset by the closure of 35 restaurants since December 26, 2021.
Previous report
Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases)
Previous report
General and administrative expense increased primarily due to: (i) legal and professional fees, (ii) compensation and related expenses, (iii) travel expenses and (iv) incentive compensation, partially offset by a decrease in employee stock-based compensation.
Previous report
Provision for impaired assets and restaurant closings increased primarily due to asset impairment and closure charges during the fourteen weeks ended December 31, 2023 of $33.3 million and $0.9 million within the U.S. and international segments, respectively, in connection with the closure of three U.S. and two international Aussie Grill restaurants and the decision to close 36 predominantly older, underperforming U.S. restaurants (the “2023 Closure Initiative”). See Note 4 -Impairments and Exit Costsfor additional details regarding the 2023 Closure Initiative. We expect to incur an additional $8 million to $11 million of severance and closure costs in connection with the 2023 Closure Initiative during the thirteen weeks ended March 31, 2024.
Previous report
Income from operations during 2023 includes a net operating margin increase of approximately 0.2% attributable to Brazil value added tax exemptions (PIS and COFINS) provided by Brazil tax legislation. See Note 20 -Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.
Previous report
See Note 20 -Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.
Previous report
Restaurant sales -Following is a summary of the change in segment Restaurant sales for the period indicated:
Previous report
(3)Fiscal years 2023 and 2022 include $30.2 million and $7.7 million, respectively, of value added tax exemptions resulting from the Brazil tax legislation. 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 20 -Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with the Brazil tax legislation.
Previous report
(4)Includes $99.2 million of restaurant sales generated by restaurants closed, primarily in February 2024, in connection with the 2023 Closure Initiative. See Note 4 -Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative.
Previous report
Income from operations
Previous report
International - The increase in international Income from operations generated during 2023 as compared to 2022 was primarily due to value added tax exemptions in Brazil and an increase in restaurant sales, primarily driven by an increase in average check per person and the recovery of in-restaurant dining. These increases were partially offset by decreases primarily due to higher operating and labor costs, primarily due to inflation, and higher advertising expense.
Previous report
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:
Previous report
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:
Previous report
(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 margin adjustments. For 2023, restaurant-level operating margin adjustments of $1.9 million and ($6.1) million were recorded within Labor and other related expense and Other restaurant operating expense, respectively. For 2022, all restaurant-level operating margin adjustments were recorded within Other restaurant operating expense.
Previous report
(2)Includes asset impairment, closure costs and severance in connection with the 2023 Closure Initiative. Also includes a lease termination gain, net of related asset impairment charges, of $6.7 million related to the closure of one restaurant.
Previous report
(4)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,067 and 6,089 shares for 2023 and 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.
Previous report
(1)Includes franchise sales for off-premises only kitchens in South Korea.
Previous report
As of December 31, 2023, we had aggregate undistributed foreign earnings of approximately$42.6 million that may be repatriated to the U.S. without additional material U.S. federal income tax. These amounts are not considered indefinitely reinvested in our foreign subsidiaries.
Previous report
Use of Cash
Previous report
Brazil Judicial Deposit - During the first half of 2024, we anticipate making a judicial deposit of approximately $45.0 million to $50.0 million in connection with our appeal of an unfavorable court ruling related to our ongoing litigation regarding our eligibility for tax exemptions under the Brazil tax legislation. The judicial deposit includes the disputed amounts through December 31, 2023 and will be recorded in Other assets, net, on our Consolidated Balance Sheet. We believe that we will more likely than not prevail in this appeal and accordingly, have not recorded any expense or liability for the disputed amounts.
Previous report
See Note 20 -Income Taxes of the Notes to Consolidated Financial Statements for further information regarding the Brazil tax legislation and related litigation.
Previous report
(1)Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.
Previous report
(1)Excludes $0.1 million of excise tax on share repurchases for fiscal year 2023.
Previous report
Based on a review of operating results for each of our restaurants, given the current operating environment, the amount of net book value associated with lower performing restaurants that would be deemed at risk for impairment is not material to our consolidated financial statements.
Reworded paragraphs (78)
Previous wording
Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources for fiscal year 2021, see our Annual Report on Form 10-K for the year ended December 25, 2022, filed with the SEC on February 22, 2023.
Current wording
Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. We have classified the results of operations, non-GAAP measures, and liquidity and capital resources of our Brazil operations as discontinued operations for all periods presented. Unless otherwise noted, this Management Discussion and Analysis of Financial Condition and Results of Operations does not include discontinued operations. For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2022, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
Previous wording
We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 31, 2023, we owned and operated 1,189 restaurants and franchised 291 restaurants across 47 states, Guam and 13 countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Current wording
We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 29, 2024, we owned and operated 1,172 restaurants and franchised 291 restaurants across 46 states, Guam and 12 countries. Our restaurant portfolio includes: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Previous wording
Financial Overview -Our financial overview for 2023 includes the following:
Current wording
Financial Overview -Our financial overview for 2024 from continuing operations includes the following:
Previous wording
•U.S. combined and Outback Steakhouse comparable restaurant sales of 1.4% and 1.1%, respectively;
Current wording
•U.S. combined and Outback Steakhouse comparable restaurant sales of (1.1)% and (1.2)%, respectively;
Previous wording
•Increase in Total revenues of 5.8% as compared to 2022;
Current wording
•Decrease in Total revenues of (5.2)% as compared to 2023;
Previous wording
•Operating income and restaurant-level operating margins of 7.0% and 16.2%, respectively, as compared to 7.5% and 15.6%, respectively for 2022;
Current wording
•Operating income and restaurant-level operating margins of 3.5% and 13.3%, respectively, as compared to 6.8% and 15.4%, respectively for 2023;
Previous wording
•Operating income of $325.1 million as compared to $330.4 million in 2022; and
Current wording
•Operating income of $139.8 million as compared to $282.8 million in 2023; and
Previous wording
Business Strategies - In 2024, our key business strategies include:
Current wording
Business Strategies - Our current key business strategies include:
Previous wording
•Drive Long-Term Shareholder Value. We plan to drive long-term shareholder value by reinvesting operational cash flow into our business, improving our credit profile and returning excess cash to shareholders through dividends and share repurchases.
Current wording
Drive Long-Term Shareholder Value. We plan to drive long-term shareholder value by reinvesting into our base business and addressing the state of our asset base, paying down debt and returning excess cash to shareholders through dividends. We have refined our pipeline to slow new unit growth beginning in 2026. While we still believe there are development opportunities for our concepts in the U.S., we remain focused on driving healthy traffic in our existing restaurants.
Previous wording
•Average restaurant unit volumes—average sales (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.
Current wording
•Average restaurant unit volumes—average sales (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.
Previous wording
•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.
Current wording
•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.
Previous wording
•Restaurant-level operating margin, Income from operations, Net income and Diluted earnings per share—financial measures utilized to evaluate our operating performance.
Current wording
•Restaurant-level operating margin, Income from operations, Net (loss) income and Diluted (loss) earnings per share—financial measures utilized to evaluate our operating performance.
Previous wording
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 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. The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period:
Current wording
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 (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:
Previous wording
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.
Current wording
Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive (Loss) Income. As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net (loss) income or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry.
Previous wording
Selected Operating Data -The table below presents the number of our restaurants in operation as of the periods indicated:
Current wording
Selected Operating Data -The table below presents the number of our restaurants in operation (from both continuing and discontinued operations) as of the periods indicated:
Previous wording
(2)The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of November 30, 2023 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.
Current wording
(1)The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other - Brazil, are reported as of November 30, 2024 and 2023, respectively, to correspond with the balance sheet dates of this subsidiary. Following the close of the Brazil Sale Transaction on December 30, 2024, all restaurants in that market operate as unconsolidated franchisees. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for further details.
Previous wording
Restaurant Sales -Following is a summary of the change in Restaurant sales for the period indicated:
Current wording
Restaurant Sales -Following is a summary of the change in Restaurant sales for the periods indicated:
Previous wording
(3)Includes restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week of fiscal year 2023.
Current wording
(1)Fiscal year 2023 included restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week.
Previous wording
(2)Includes the restaurant sales impact from the closure of 32 and three U.S. and international restaurants, respectively, since December 26, 2021.
Current wording
(2)Fiscal years 2024 and 2023 include restaurant sales impact from the closure of 73 and 34 restaurants since December 25, 2022 and December 26, 2021, respectively.
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(1)Includes restaurant sales from 19 and 47 new U.S. and international restaurants, respectively, not included in our comparable restaurant sales base.
Current wording
(3)Fiscal years 2024 and 2023 include restaurant sales from 27 and 19 new restaurants, respectively, not included in our comparable restaurant sales base.
Previous wording
(1)Translated at average exchange rates of 5.02 and 5.19 for 2023 and 2022, respectively. Excludes the benefit of the Brazil value added tax exemptions discussed in Note 20 -Income Taxes of the Notes to Consolidated Financial Statements.
Current wording
(1)Translated at average exchange rates of 5.29 and 5.02 for 2024 and 2023, respectively. Excludes the benefit of the Brazil value added tax exemptions discussed in Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements.
Previous wording
Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated:
Current wording
Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated:
Previous wording
(1)For 2023, comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.
Current wording
(1)For 2024, U.S. comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023. For 2023, U.S. comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.
Previous wording
(3)Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 20 -Income Taxes of the Notes to Consolidated Financial Statements. Includes trading day impact from calendar period reporting.
Current wording
(3)Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements.
Previous wording
(4)Includes the impact of menu pricing changes, product mix and discounts.
Current wording
(5)Includes the impact of menu pricing changes, product mix and discounts.
Previous wording
Fiscal year 2023 as compared to fiscal year 2022
Current wording
Fiscal year 2024 as compared to fiscal year 2023 - continuing operations
Previous wording
Depreciation and amortization expense increased primarily due to technology projects and restaurant development.
Current wording
Depreciation and amortization expense increased primarily due to restaurant development and technology projects, partially offset by restaurant closures.
Previous wording
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, netduring 2022 were in connection with the repurchase of $125.0 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 13 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Current wording
Loss on extinguishment of debt and Loss on fair value adjustment of derivatives, netduring 2024 were in connection with the repurchase of $83.6 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “Second 2025 Notes Partial Repurchase”), which is described in further detail within Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Previous wording
Interest expense, netwas flat primarily due to: (i) the lapping of terminated interest rate swap amortization during 2022, (ii) the 2025 Notes Partial Repurchase in May 2022 and (iii) the repayment of Term Loan A in April 2022. These decreases were offset by an increase in interest expense from higher balances and interest rates on our revolving credit facility.
Current wording
Interest expense, netincreased primarily due to higher balances and interest rates on the unhedged portion of our revolving credit facility partially offset by a decrease in interest expense from the Second 2025 Notes Partial Repurchase.
Previous wording
In the U.S., a restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce Income before provision for income taxes.
Current wording
(Benefit) provision for income taxes includes credits we and other restaurant company employers may claim against federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce (Loss) income before (benefit) provision for income taxes.
Previous wording
We have a blended federal and state statutory rate of approximately 26%. The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages and benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%. The effective income tax rate in 2022 was higher than the blended federal and state statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022, partially offset by the benefit of FICA tax credits on certain tipped wages.
Current wording
We have a blended federal and state statutory rate of approximately 26% for all periods presented. The effective income tax rate in 2024 was lower than the blended federal and state statutory rate primarily due to the federal and state impact of nondeductible losses associated with the Second 2025 Notes Partial Repurchase, partially offset by the FICA tax credits on certain tipped wages, relative to the 2024 pre-tax book loss. The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.
Previous wording
Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.3% from commodity inflation. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk for discussion of our commodity inflation expectations for 2024.
Current wording
Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.4% from commodity inflation.
Previous wording
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.2% from certain cost saving and productivity initiatives.
Current wording
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.3% from certain cost saving and productivity initiatives.
Previous wording
Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.7% from an increase in average check per person, (ii) 0.3% from certain cost saving and productivity initiatives and (iii) 0.2% from the favorable settlement of certain collective action wage and hour lawsuits. These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.4% from higher advertising expense.
Current wording
Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.6% from an increase in average check per person, (ii) 0.4% from the favorable settlement of certain collective action wage and hour lawsuits and (iii) 0.3% from certain cost saving and productivity initiatives. These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.3% from higher advertising expense.
Previous wording
Provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022 and the 2023 benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%.
Current wording
(Benefit) provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses recorded during 2022 associated with the First 2025 Notes Partial Repurchase, which is described in further detail within Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Previous wording
We consider each of our restaurant concepts and international markets as operating segments, which reflects how we manage our business, review operating performance and allocate resources. Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker. We aggregate our operating segments into two reportable segments, U.S. and international. The
Current wording
We consider each of our U.S. restaurant concepts and our international franchise business as operating segments, which reflects how we manage our business, review operating performance and allocate resources. All other operating segments, which include our operations in Hong Kong and China do not meet the quantitative thresholds for determining reportable operating segments.
Previous wording
U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment.
Current wording
Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker (“CODM”). We aggregate our U.S. operating segments into a U.S. reportable segment. The U.S. segment includes all restaurants operating in the U.S. while franchised restaurants operating outside the U.S. are included in the international franchise segment.
Previous wording
Revenues for both segments include only transactions with customers and exclude intersegment revenues. Excluded from Income from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses.
Current wording
Revenues for both segments include only transactions with customers and exclude intersegment revenues. 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.
Previous wording
Refer to Note 22 -Segment Reportingof the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.
Current wording
Refer to Note 19 -Segment Reportingof the Notes to Consolidated Financial Statements for reconciliation of segment income from operations to the consolidated operating results.
Previous wording
U.S.- The decrease in U.S. Income from operations generated during 2023 as compared to 2022 was primarily due to: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses, including utilities, primarily due to inflation, (iv) higher impairment charges and restaurant closure costs and (v) higher depreciation and advertising expense. These decreases were partially offset by an increase in average check per person and certain cost saving and productivity initiatives.
Current wording
U.S.- The decrease in U.S. Income from operations generated during 2024 as compared to 2023 was primarily due to: (i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) higher impairment and closure costs and (iv) higher advertising, depreciation and amortization expense. These decreases were partially offset by an increase in average check per person and the impact of certain cost-saving and produc tivity initiatives.
Showing the first 40 of 78 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(4)Includes trading day impact from calendar period reporting.
Current report — wording carried from elsewhere
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by a decrease of 0.6% from an increase in average check per person.
Current report — wording carried from elsewhere
Fiscal year 2023 as compared to fiscal year 2022 - continuing operations
Current report — wording carried from elsewhere
Operating activities -The decrease in net cash provided by operating activities during 2024 as compared to 2023 was primarily due to lower net earnings and changes in working capital.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
(5)Includes restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week of fiscal year 2023.
Previous report — wording carried elsewhere
(1)Lease remeasurement gains in connection with the 2023 Closure Initiative.
Previous report — wording carried elsewhere
(2)Costs incurred in connection with the transition to a new partner compensation program.