Q3 2021 Bloomin' Brands Inc Earnings Call

November 2, 2021

Greetings and welcome to the Bloom and brands fiscal third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow management's prepared remarks. It is now my pleasure to introduce your host Mark Graff Senior Vice President of Investor Relations. Thank you Mr. Graff you may.

Begin your presentation.

Thank you and good morning, everyone with me on today's call are David Deno, Our Chief Executive Officer, and Chris Meyer Executive Vice President and Chief Financial Officer.

Now you should have access to our fiscal third quarter 2021 earnings release.

It can also be found on our website at Goldman brand Dot com in the investors section.

This conference call, we will be presenting results on an adjusted basis, an explanation of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our earnings release on our website as previously described.

Before we begin formal remarks, I'd like to remind everyone that part of our discussion today will include forward looking statements, including a discussion of recent trends. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward looking statements.

Some of these risks are mentioned in our earnings release, others are discussed in our SEC filings, which are available at SEC Gov. During today's call. We will provide a brief recap of our financial performance for the fiscal third quarter 2021.

A discussion regarding current trends and select Q4 2021 guidance metrics. Once we've completed these remarks, we'll open up the call for questions and with that I'd now like to turn the call over to David Deno.

Well, thank you Mark and welcome to everyone listening today as noted in this morning's earnings release adjusted Q3 2021 diluted earnings per share was <unk> 57 in comparison to <unk>. In Q3 2019. This significant profit improvement represents a third quarter record for the company our strategies are working.

And reaffirm our ability to deliver on key commitments and drive even more sustainable growth.

This success is directly tied to the planning and hard work that has taken place in our company over the last few years in.

In 2019, we presented a comprehensive plan to build a stronger leaner operations centered company, one focused on providing even better service and food to customers. This plan is designed to significantly improve total shareholder return.

Where we get into the details of the third quarter I wanted to take a few minutes to review the initiatives from the 2019 plan, which are the driving force behind the strength of our results.

First CRO in restaurant sales by improving service levels and food offerings over the last few years, we have made investments in these areas to elevate the customer experience across the portfolio, especially at Outback. As a result, we are taking market share in the third quarter U S. Same store sales were up nine 5% on a two year basis versus 2019.

This was 600 basis points ahead of the industry.

Second who are leading off premises business, we capitalize on our strong off premises capabilities during the pandemic and the high off premise is retention levels in 2021 are contributing to sales outperformance during.

During the third quarter the company generated over $236 million in U S off premise sales, representing approximately 27% of total U S sales.

<unk> profit margins in the off premise channel are approaching the margins of the in restaurant business.

This is the result of initiatives that were completed the last few quarters, we expect off premises to remain a large and growing part of the business going forward.

Third rapidly approve operating margins by growing sales and reducing costs. We've established a detailed margin framework to grow operating margins to 8% of revenue representing a nearly 350 basis point improvement from 2019 levels. This starts by growing healthy traffic across the in restaurant and off premise channels.

We also reduced reliance on discounting and promotional <unk> and pivoted advertising spend towards more targeted higher ROI digital initiatives.

In addition, we remained disciplined in managing the middle of the P&L and are aggressively pursuing efficiencies in food labor and overhead.

Importantly, several technological and equipment innovations are in test that we intend to roll out to the restaurants in the coming quarters. These innovation should further improve customer service and reduce costs.

Margins in the third quarter were ahead of this long range goal.

Main steadfast in our efforts to achieve the margin framework, we committed to and we'll continue leveraging recent learnings to more efficiently run and support restaurants.

Fourth becoming even more digitally savvy company in Q3, approximately 70% of total U S off premises sales were through digital channels of 251% increase over 2019 levels.

Over the past year, you've implemented a new online ordering system and mobile app to support our digital business. Both of these have outperformed expectations you can expect to see more activity on these fronts in the coming quarters.

And finally build a much stronger balance sheet given the very good year to date results. We have generated a great deal of free cash flow and are paying down debt our credit metrics are improving each quarter and we remain on track to achieve the goal of three times lease adjusted leverage by early next year, a healthy balance sheet also provides great flexibility to.

<unk> cash to shareholders through share buybacks and dividends as well as pursue business opportunities that will enhance shareholder value.

The areas that we are excited about accelerating as new unit growth at Outback and Flemings Outback is a leading brand substantial opportunity for unit growth. The success of the Outback relocation program is a clear indicator of this demand in the past five years, we have relocated approximately 50 restaurants with sales lifts of 35.

Sent an average unit volume of $4 $6 million, we recently developed a new less expensive prototype that will enable more meaningful restaurant growth with healthy returns importantly, new Opex are also opening about $4 million and average unit volumes.

We also have the opportunity to open additional plantings in California, and Florida two of our best performing markets. Let me to the proven category leader it would be a source of growth for the company. We are actively building a pipeline for growth and look forward to discussing this in the coming quarters.

In February we will outline our new restaurant development plan for a meaningful increase in unit growth in the coming years.

Now turning to Q3 and current business trends.

Recently, there have been some discussions regarding product shortages in the restaurant industry. Fortunately because of the strength of the relationship with our suppliers and the hard work of our supply chain team, we have not encountered any major shortages. We continued to actively manage our network to ensure the restaurants are appropriately supplied with product to meet the growing consumer demand.

There's also been discussion in the industry around staffing challenges, while we are not immune to these issues. We have made significant investments in our people for instance, during the pandemic, we did not have any layoffs or furloughs.

This decision has contributed to the retention and employee engagement scores that are among the best in the industry and.

In addition, our turnover is better than industry averages. This has enabled us to better serve our guests and deliver the hospitality that our customers expect.

Now for our sales update <unk>.

Combined U S comp sales were up nine 5% in Q3 versus 2019.

The quarter started off strong through July however in August we saw some moderation from the resumption of traditional seasonality and concerns over the Delta variant.

Additionally, we made the decision not to replicate significant promotional activity that ran in 2019 at Outback Steakhouse. The offers we chose not to repeat include the.

The steak and lobster promotion for $16 99.

Steak and unlimited shrimp at a discounted price and offers tied to the launch of our third party delivery channel.

These programs started in early August of 2019, and had a collective traffic impact of approximately 10 percentage points over the last eight weeks of Q3 2019.

Although there were merits this activity repeating as promotions in 2021 did not make sense for our company in the current environment. While there was a negative traffic impact in Q3. It did have a positive impact on profitability in Q3, 2021 U S. Adjusted restaurant level operating margins grew by 430 basis points over 2019.

<unk>.

Through the first four weeks of the fourth quarter U S comp sales were up 5% versus 2019, the impact of our decision not to replicate 2019 promotional activities has carried into the fourth quarter, we should be done lapping as from heavy promotional spend in mid November importantly, our sales continued to outperform the industry, which gives us.

Confidence in the momentum of the business.

These results would not have been possible without the talented and dedicated employees throughout our company I would like to thank the hard working team members in the restaurants and at the restaurant support center your commitment to serving guests with the highest levels of service hospitality and experience is what makes our restaurants so successful.

In summary, Q3 was another terrific quarter, we remain ruthlessly focused on executing against our key initiatives. We are optimistic about our ability to continue to capitalize on these opportunities and drive total shareholder return.

And with that I'll now turn the call over to Chris to provide more detail on Q3, what we expect for Q4 and provide preliminary thoughts on 2022.

Thanks, Dave and good morning, everyone I would like to start by providing a recap of our financial performance for the fiscal third quarter of 2021, given the significant impact of Covid on Q3 2020 results most of our discussion today will compare against the third quarter of 2019, which we believe provides better context to our underlying.

Performance.

Total revenues in Q3 were $1.01 billion, which was up four 8% from 2019, driven by an improved sales environment in the U S. Total revenues in the U S segment were up 8% versus 2019. This increase was fueled by higher off premises sales and increases in average check.

Total revenues in our international segment were down 15% on a two year basis. The decline in international revenues was driven by Brazil, which had continued headwinds from COVID-19 related capacity constraints in Q3 as I will discuss in a moment the sales trajectory for Brazil is much improved thus far in Q4.

Q3 U S comp sales finished up nine 5% on a two year basis average unit volumes, where approximately $70000 per week in Q3 in the last earnings call. We discussed how July average unit volumes were $71000 in the U S that number dip down into the <unk>.

$65000 per week range in late August and early September as we did see impact from the emergence of the Delta Varian, coupled with some resumption of traditional seasonality since the middle of September we have seen weekly sales momentum build as weekly sales volumes have now accelerated back closer to 68.

Dollars per week as Dave discussed, we did see a larger degree of comp sales compression versus 2019 in September and into October driven almost entirely by not replicating 2019 promotional activity to give some additional context, our 2021 average unit volumes have.

Maintaining a consistent weekly gap to 2021 average unit volumes for the industry since the end of July.

Q3 sales gains were driven by a healthy combination of traffic and average check versus 2019, our increases in check average was driven by increased menu mix a reduction in discounts and to a lesser degree 2019 pricing actions.

Turning to off premises. This business has proven to be very sticky even as in restaurant volumes have improved in Q3 off premises represented 27% of U S sales, which was only slightly down from 28% in Q2 off premises revenues were 29% of sales at Outback and an impressive 30.

6% of sales at Carrabba's.

All of these metrics have held steady early in Q4 importantly, the highly incremental third party delivery business continues to grow and was 10% of U S revenues in Q3 off premises as a large part of our ongoing success and will remain a key part of our growth strategy moving forward.

Brazil, Q3 comp sales were down five 1% versus 2019, Brazil Covid cases remained elevated in June which was the startup Brazil's third quarter as the vaccination rate in Brazil increased in case counts began to moderate we saw an immediate increase in sales comp sales versus 2000.

19 turned positive at the beginning of August and are up 7% on average versus 2019 over the past eight weeks.

Our team in Brazil continues to execute at an extremely high level and we are confident in their ability to navigate the current environment.

As it relates to other aspects of our Q3 financial performance.

GAAP diluted earnings per share for the quarter was three.

Versus 11 in 2019, our Q3 results include a $62 million payment made to the founders of Carrabba's as we acquired the remaining royalty stream during the quarter. This large onetime item was excluded from our adjusted results.

Adjusted diluted earnings per share was 57 versus <unk> of adjusted diluted earnings per share in 2019.

Adjusted operating income for the quarter was $83 million. This result exceeded our adjusted operating income from 2019 of $22 million. This significant profit performance represented a third quarter record for our company.

Adjusted operating income margin was eight 2% in Q3 versus two 3% in 2019. This improvement is driven by our strong sales recovery ongoing efforts to drive efficiency into our business and lower marketing expenses.

In terms of our Q3 adjusted performance by cost category Cogs was 105 basis points favorable to 2019, driven primarily by waste reduction and increases in average check.

Our labor line was 120 basis points favorable to 2019.

The large change in average unit volumes for 2019 drove significant leverage on labor in Q3. In addition, we also benefited from simplification efforts. This showed up in a permanent reduction in food prep hours.

Operating expenses were 205 basis points favorable to 2019, due primarily to a $21 million reduction in marketing expense and higher average unit volumes. This favorability was offset by increases in to go supplies and third party delivery fees related to the growth in off premises.

On the G&A front Q3 was down $4 $9 million from 2019 net of adjustments. This includes the ongoing benefit of cost savings initiatives that we have detailed on prior calls.

In terms of our capital structure total debt at the end of the third quarter was $854 million. Our trailing 12 month lease adjusted leverage ratio is three three times, we are making significant progress towards the targeted leverage ratio of three times net debt to adjusted EBITDAR once we reach our.

<unk> ratio, we will evaluate further debt paydown or other uses of cash to enhance shareholder value.

Turning to Q4 guidance, we expect Q4 total revenues to be at least $1.02 billion as I indicated earlier, we have been averaging $68000 per week and U S Weekly average unit volumes for the first four weeks of Q4.

Our guidance for total revenues assumes weekly average unit volumes to increase to approximately $71000 in the U S for the balance of the quarter, excluding Thanksgiving week.

As a reminder, Thanksgiving week is traditionally a much lower volume week than other weeks in Q4 due to the lost operating day.

We expect adjusted EBITDA to be at least $115 million, we expect GAAP EPS to be at least 45.

With adjusted EPS of at least 50 sets.

These profitability measures for EBITDA and EPS would represent significant growth levels versus 2019 for perspective in 2019, our fourth quarter adjusted EPS was <unk> 32.

We believe our Q4 guidance reflects continued optimism for our current performance in the U S and a more bullish outlook on Brazil as they finish out their quarter.

In terms of full year 2021 guidance, we have two items that need to be updated.

We now expect commodity inflation to be approximately one 5% versus our previous guidance of approximately 1%. Although we are locked on beef. We are seeing pressures in some commodities that we are unable to lock into longer term arrangements.

Second we now expect labor inflation to be approximately four 5% versus our prior guidance of 3% to three 5%. This is largely driven by increased wage pressures given the competitive landscape as well as increased training and retention efforts.

Finally, although it is early I wanted to provide some initial thoughts on commodity and labor inflation for 2022, we will provide much more fulsome guidance on 2022 in February.

We expect commodity inflation to be approximately 10% next year. The commodity market is currently seeing elevated levels of inflation across all proteins, given strong consumer demand and product shortages due to supply chain disruptions. In addition, higher input costs across labor fuel freight.

And packaging are contributing to increases as well while this risk has been minimized in 2021 due to the great work of our supply chain team and favorable contracting we expect to see these elevated levels of inflation continue into next year, we have not taken any significant contracting positions.

At this point in time as we typically make these decisions in early December we will provide additional visibility on the call in February.

The labor market remains challenged and in addition to the impact of recent legislation we are paying higher wages in a highly competitive environment. We believe this will lead to labor inflation that is in the mid single digits next year.

All the inflationary pressures from commodities and labor will be significantly elevated relative to historical periods. We are confident that we have offsets to mitigate these headwinds.

These offsets include technology, driven productivity opportunities overhead reduction menu pricing and a significant recovery in Brazil in terms of pricing. We are taking a 3% increase in late November as a reminder, we have not taken a material men menu price increase since late two.

<unk> thousand 19, we will continue to monitor current inflationary trends for further potential pricing actions.

Since the onset of the pandemic, we have shown the ability to adapt to a constantly changing landscape and although there are many variables that can change heading into 2022, we are committed to achieving the 8% long term operating margin framework that we laid out for investors earlier this year.

We will provide more details on all aspects of our 2022 guidance, including sales inflation margins and capital in the February earnings call.

In summary, this was another successful quarter for Bloom and brands and we are well on our way to becoming a better stronger operations focused company and with that we will open up the call for questions.

At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to move your question from the queue for participants using speaker equipment. It may be necessary for you to pick up.

Handset before pressing the star keys, please limit yourself to one question and one follow up one moment, while we poll for questions.

Our first question comes from the line of Jeffrey Bernstein with Barclays. You May proceed with your question.

Great. Thank you very much.

I had one question and then one follow up question on the margin side of things.

It seems like you guys are fairly confident.

And your ability to.

Combat the headwinds in achieving our margin targets I'm just wondering in terms of time frame for this to be achieved.

It possible to see margin expansion in 'twenty two despite the cost headwinds and I think you mentioned in your confidence still and are committed to the 8% operating margin I'm. Just wondering if you can talk specifically about when you think that might be achieved considering the more recent structural cost pressures, we're seeing and then one follow up.

Yes, sure, Jeff Hey, it's Chris Good morning.

As you think about 2022 first of all it's very early right. So we'll give more guidance in February when we get to the call, but if you think about the construct of the way that the year could come together in 2022, given the guidance that we provided on commodities and labor you kind of have to think about it like this if you start with 10% commodity inflation that.

Would represent for us about $100 million of cost headwind next year and then if you add in mid single digit labor inflation that we talked about that would be maybe another $45 million of inflation headwind and opex youre going to get typical inflation, maybe a little more elevated than normal.

Another $25 million. So all in all if you look at next year and the construct of how we're thinking about it that's about $170 million of inflation headwinds that we would have to offset to keep that framework that we've been discussing so then it's just a question of the offsets right. So we already told you guys that were taking 3% menu pricing and that's going to get you give or take.

$100 million of upside to help offset the 170 and we also talked about Brazil, let's give context around Brazil, Brazil made $30 million in 2019 in 2021, Theyre tracking to breakeven for the year and now they've added new restaurants over the last couple of years, So Brazil could represent a very significant tailwind.

Again to help offset that inflationary pressure and then between productivity opportunities that we still believe we have in front of us a reset of our incentive compensation next year other overhead opportunities.

If necessary we're not no.

Beyond taking a little more menu pricing if thats necessary. They are absolutely when you add all of those levers up theres a path to offsetting the inflation pressures that we could see next year and holding on to the 8% operating margins now. The question that you asked is where does that fit in well there's still a lot more to think about in terms of traffic and marketing ROI.

And how that comes back into the business, but we will get more into that in February when we had a little better a little better visibility once we get past the holiday season. The important thing I think for you and for our investors is that we feel very good about our ability to manage the inflation pressures that we see in front of us.

I just want to add to Jeff we're very committed to the 8% margin. If you look at our Q3 numbers and their operating profit margin is up significantly versus.

2019, and you look at our Q4 discussion up significantly versus 2019. So we've got the levers in place to make that happen and I think one more thing to add.

The question is if you think about Q4 and what's different about Q4 keep in mind that the Brazil recovery Hasnt started yet in full effect in Q4, because their year ends at the end of November So we're not going to get the full benefit of Brazil, and the menu pricing that we've discussed doesn't go into effect until late in Q4, we only get about five weeks of that benefit.

That's why the Q4 margins a little more muted than what you might see next year.

Understood.

And then my follow up was just more broadly on the consumer Dave obviously with your overview of multiple brands and you've got a wide range of consumers and I'm just wondering what your outlook is.

On spending maybe to close this year and into 'twenty two it would just seem like the consumer is.

Seemingly absorbing outsized inflation, and therefore seeing higher prices on everything and that seems hard to sustain unless incomes will go and buy that level, which doesn't seem likely so I'm just wondering from your perspective.

Does this play out when do you see a reality check in terms of maybe a spending pullback from the consumer's perspective. Thank you.

Well thanks, Jeff.

Certainly we are very hopeful that this is a robust holiday season.

If people can't get goods, they can get services and they can engie.

Enjoy in restaurants, and other places and if you look at just the outsized sales gains at Fleming's for instance, just a remarkable performance by our fundings team and also I'll call. It. The Carrabba's team you can see what what's going on in the business. So it's a little too early I think Jeff to talk about 2022, we have to see the pandemic.

Flow through it to see what happens with the consumer, but we remain optimistic as a company and we're seeing really good demand in our restaurants.

Great. Thank you very much.

Yes.

Our next question comes from the line of Brian Mullan with Deutsche Bank. You May proceed with your question.

Okay. Thank you just a question on the sales deceleration in the in the fourth quarter.

Versus 2019, you ran through some of the promotional activity at Outback Youre lapping that was helpful. It sounds like that and then a couple of weeks, but it looks like Carrabba's and bonefish have slowed a bit in October as well relative to the third quarter trends. So are their promotional activity at those two brands that you also decided not to pursue or were those only specific to outback.

Well there were definitely promotional opportunities.

Things that we did at bonefish as well that we elected not to do this year.

So you're seeing some of that in their same store sales growth in Q4, but the carrabba's numbers are just remarkable as are the flemings numbers. So I mean to have those kinds of sales gains year on year quarter on quarter is really is really great and we talked about the outback piece in my discussion, but just to remind everybody again in Q.

Four in Q3 of 2019, we ran steak and lobster for 16, 99 steak and unlimited shrimp at a discounted price. If we did some offers tied to the new delivery channel you add all those up at Outback Thats worth 10 percentage points in traffic and we decided not to run that because we want to build the brand for the long term and we had substantial.

Margin increases in the brand and during the in the company during the time periods.

Some of the rationale and what not.

The only thing I would add to that is if you look at the Carrabba's. They did run <unk>. They ran limited time offers back in 2019 similar to Outback. The big difference between what you are looking at it in Outback, maybe relative to our Carrabba's is the two <unk> that we ran between mid August in mid November the steak and unlimited shrimp and then the stake in <unk>.

Mr promotion those are the two most effective traffic driving promotions that we run, albeit at a at a.

A discounted price, but they are very effective at driving traffic and that's that's the real delta between what Youre seeing at Outback and maybe some of the other brands.

Okay. Thank you and then just as a follow up you know as you look at making pricing decisions in the coming months on top of the 3% that you just took.

Are your operating margin targets are they part of the calculus in those pricing decisions, meaning would you manage this business and make those decisions specifically with the 8% in mind or is it maybe that's not the right way to make those decisions at the restaurant level.

So could you discourage us from thinking that way just trying to.

Understand how youre going to think about pricing on top of eight.

8%, 8% margin is that a target for us are going to stick to and move forward as a company now we have many levers and Chris talked about it right I mean pricing.

Pricing and productivity offset inflation.

Keep our value traded in place we wont pursue everything we can possibly pursuing our company.

To not to take the price that we want to or need to beyond 3% now if we need to of course, we will as the economy unfolds, but Chris talked about some of the opportunities the Brazil come back some of the initiatives, we've got going into our restaurants on the technology side all of those things come into play to help achieve our.

Profitability objectives, and our margin objectives.

Our next question comes from the line of Brett Levy.

<unk> partners you May proceed with your question.

I appreciate taking the question.

When you think about where you are right now in terms of your labor positioning.

You are on solid footing and we've heard some other companies out there really sound like Theyre more focused on.

Driving traffic, even if it's a little bit more of a hit to cost how are you thinking about that holistically in terms of.

Really trying to gain that market share trying to drive that traffic and maybe get leverage and volume as opposed to just the protection of.

Of margins and costs from pricing.

And just streamlining the business yes.

Yes, Brett we want both right, we want traffic gains and we want to preserve our margins. So that's really what we're trying to do it.

I can't speak to other companies, but I can speak to what we did and during the pandemic. We didn't let anybody go we didn't furlough anybody so when the business came back are people, who are already there and if you look at our employee engagement scores and our turnover scores are both really great compared to the industry. So we have certainly taken that.

Labor profiles to grow the business and I just want to underscore to you and all of our investors and analysts our job is to do both manage the margins and grow traffic and we will definitely do that.

And then just one more question on the just on the consumer.

Can you give any more detail into are you seeing any pockets of variance either incremental pressure or outsized gains across brands across the regions. Thanks.

Well.

Chris Chris can talk to some of the geography may be but overall.

Flemming if you look at those Fleming's numbers I mean that remarkable.

And so the high end is doing extremely well all of our restaurants are doing on the demand side and the the flemings numbers are particularly attractive.

It's really a great business there are among the very best in fine dining so.

Thats a pocket of business that I would that I would talk to but.

Chris I don't know you want to add anything else well now there's there's definitely still regional differences both on the sales side and even on the labor side right and it's still just bifurcate and we continue to have strength in the southeast, Georgia, North Carolina, Texas same St players, Tennessee same place we've been talking about continues to do really well.

Still pockets in the northeast and the Midwest, whether it's Michigan, New York State et cetera, where we have a little more issue in terms of driving volume, but for the record, though on a two year basis. Those states still are positive. It's just they're not as positive as the balance of the system and that same goes for the labor side, the pockets, where we've had challenging issues with staffing they tend to be more than that.

In the northeast and the Midwest.

Our next question comes from the line of John Glass with Morgan Stanley. You May proceed with your question. Thanks.

Thanks, and good morning.

First Chris just a follow up on your fourth quarter guide and the assumption of average weekly sales improving is that just a function of seasonality or do you assume that once you lap. This promotion things improve how do you build to that and I think you said that excludes Thanksgiving is there a way to think about the total quarter as reported in the fourth quarter and average weekly sales basis.

Yes, it probably goes down to about 70000 per week. If you include Thanksgiving week.

And in terms of just the overall.

Guide. It does include both seasonality and a step up in volume.

As the quarter progresses, but again, if you're if you're talking about the lapping of activity that's not going to have an impact this year on an overall absolute volumes. It really is more of a product or just the seasonality step up as the quarter progresses.

And John just as you know right. The last three weeks of the quarter. There are big for us and so we will be prepared for that and be prepared for a great holiday season, but the last three weeks are big Yeah. I mean, it's an at least guidance for a reason it really is this year has been anything but typical and there's so many unknowns over those last three.

Weeks, and we'll see how they come together.

I appreciate it and you talked about technology and equipment investments I think maybe some of that is going into the restaurants now at least that's my recollection either from what you said or my notes could you.

Dimensionalize, what you think that opportunity is for labor labor savings standpoint, So we understand how you might be able to mitigate some of this wage inflation for those sort of newer ideas or non traditional benefits.

Yes, Im not Jonathan.

Great detail for competitive reasons as to what we think the.

The labor rate people be but I'm extremely optimistic about the equipment's in test, it's getting ready to roll. This is at outback.

Equipment as far as what we can do to manage labor moving forward. It can really help us out. So that's part of the equation, but also the equipment from a sales standpoint. These are the product comes off faster table turns will be better the cooking accuracy will improve and this is not just a pipe dream. This is in test.

We're rolling out as quickly as we can as the supply chain lets us equipment supply chain lets us and so we have this in place ready to go on the front of the house, we have like a lot of restaurant companies have technology enabled products to help our servers.

There and we can also have greater cable coverage, so I'm not going to get into the pieces parts of the details on how much will that will due to labor.

Just know that these are two initiatives that we have well along in place and will be part of our plans for 2022 and beyond.

Thank you.

Our next question comes from the line of Jeff Farmer with Gordon Haskett. You May proceed with your question. Thanks. Good morning, just a follow up on staffing one of your casual dining peers pointed to capacity constraints.

Driven by staffing shortfalls that drove roughly a 3% to 4% same store sales headwind in the quarter did.

Did you see any level of that dynamic play out.

Across the quarter for any of your concepts.

No we really didn't there's pockets of things that we've got to manage and things and Chris talked about some of the parts of the country that we manage but.

Jeff.

Payroll practices, we had in our values and separately paid off for us and we.

We didn't let anybody go during the pandemic and we had the team in place and so we haven't seen that kind of.

Headwind, Okay and then the core question for me so mid single digit wage rate inflation in 2022 so.

I'm just looking for a little additional color on the components here, there's the Florida piece of it but beyond that in terms of thinking about wage rates across your system are you tackling that on a market by market basis or have you gotten to a point, where you're just sort of have mandated and increasing wage.

Across the system.

Are you tackling getting a level of wage trucks.

Employees moving forward.

No its not a national thought it really is a market by market market specific thought every market has a different.

Sort of elements in play that we have to adjust to so it really is not a national thought but it certainly is playing out that way is that it seems like pressures are pretty systemic across the country.

Alright, thank you.

Our next question comes from the line of John I haven't co with Jpmorgan. You May proceed with your question Hi.

Hi, Thank you.

Was curious about the 10% traffic impact that you think he saw.

From promotions.

That also apply to October.

And I guess the elimination of those promotions did apparently helped the third quarter dollar profit is it also helping the fourth quarter dollar profit.

Yeah. So the one promotion we did discuss the steak and lobster promotion that runs right that ran in 2019, all the way up through the middle of November. So that is certainly something that we continue to see impacting the same store sales comparability for outback.

And there is no question that given the discount that was associated with that steak and lobster promotion and 19, not replicating that activity has a positive impact on profitability and margins.

Okay, Alright interesting.

And secondly, you also I mean.

I think a lot of people are going to focus on that.

October Outback comp, which I think is underperforming.

The industry. So I just I do want you to just kind of think a little bit more about what some of that cause may be you know what maybe it is 100% or more than 100% due to that promotion and ask. This question are you seeing any incremental staffing challenges or incremental operating hours. What have you in the month of October that you didn't necessarily.

In the third quarter, just trying to understand that trend change that we saw on outback relative to the industry.

Jonathan if I may I may respectfully disagree with you about the outback piece.

If you look at our revenue per week at Outback. It continues to be very good and continues to consistently outperformed the industry in 2021 on a weekly basis.

Feel very good about that so the difference is clearly tied to 2019 activities, which we've spelled out in great detail and believe Thats 10 percentage points in traffic. So we chose not to replicate that for many good reasons, but if you look at the U S.

I'll Cook Outback revenue trends, we feel good about where we stand on the second part of your question.

Incremental pieces, we have not seen that our staffing levels, we have some pockets of challenges, but we're in good shape.

And I recognize I kind of asked the same the same question in two different ways in October, but youre very clear Dave. Thank you for the.

For the clarification and then secondly, I mean as we look at commodities. Obviously your team did a great job in 'twenty.

When you think about 'twenty, one I mean, I guess why is why 10% the right number in commodities I mean, why shouldn't that number be.

Something materially worse as you are basically you know you had such a difficult comparison in 'twenty and even if we think about you know kind of first half second half is obviously, we have to have quarterly expectations. We do.

For 2022 might be a very unbalanced year, where the first half of 'twenty, one could be something materially worst than 10% and then theres a quote unquote hope that it normalizes in the second half of the year.

I'll take the first question, Jon I'll turn over to Chris about the timing.

For us we.

We haven't completely finished our supply chain work yet that's always done in December and we think that 10% look that we have right. Now is is extremely accurate.

We do the market basket, we have concepts outside of beef, we've got a lot of pasta seafood et cetera, and so that just can't translate I know youre not doing that John because you just can't translate the beef inflation into.

Until the entire basket of commodities, so theres other aspects of the of the commodity basket that are helping us out.

Adding that a bit but.

Knowing what we know today, we think that that 10% guidance appropriate I'll turn it over to Chris well and the way that we would think about locking in and again, we always try to maintain flexibility in how we think about locking in for commodities, but the thought that I offer the 10% guidance is the thought that we would lock in for the full year on beef and that takes some of the very.

Ability out of the potential first half second half dynamic, but theres no question beef is only 35, it's the <unk>.

Third of our overall commodity basket. So when you do think about the first half second half dynamic I would absolutely think there is going to be a little more elevated level of commodity inflation in the first half and then as you get to lapping some of these elevated level from 21 in the back half that would come down a little bit below the 10%, but because with the thought is more of a whole.

<unk>, we try to lock in a lot of these goods for the full year. It takes some of the variability out of the first half second half dynamic, but obviously, we get into these conversations and we realize there may be opportunity, if we hold off a little bit unlocking full supply for the back half of the year, because there isn't an opportunity to get a lower price in the back half then we will take advantage of that.

And we Havent talked to I don't think we've ever talked about chicken is a commodity for you from a contract perspective can you remind us where you are in the chicken contracting.

Pose a potential risk in 'twenty two versus 21.

At its annual but the one thing about chicken was that it was more elevated this year.

So you know I think that you can expect chicken next year to be either at or below where we guided that 10%.

Okay interesting. Thank you.

Our next question comes from the line of Jared Garber with Goldman Sachs. You May proceed with your question.

Hi, Thanks for taking the question Chris It was encouraging to hear that you are looking at pricing activity of about that 3% to offset some of the inflationary headwinds can you help frame where the price will flow through obviously, you've got a couple of brands to think about here and I think one of the things over the last year or 18 months has been kind of right sizing that outback value.

So just wanted to get a sense of how youre thinking about that 3% across the brands.

Yeah. So we take a look it's very accurate point, we take a look brand by brand by brand as to what we're going to do and we made significant.

Headway last year, when we looked at how we went to market with Outback will fund projects and pricing and so we're very careful about what we're gonna do at Outback and how we're going to get a price there, but overall each of our ports each of our adding it up together, we will get to 3% there might be some differences by restaurant chain as to what we're going to do spin.

Typically and I prefer not to get into that for competitive reasons, but we do you're exactly right. We do take where we stand in the value equation with our customer as we look at the various pricing opportunities that we have importantly, we haven't taken price in 2019, and and so I'm not saying that we've got all kinds of headroom and opportunity of that.

Take price, but we certainly on a good position in the industry on the pricing front, yes, so and we preserved all of the tenants at Outback of the price decreases we took with the new menu.

Give you. An example, we lowered the prices on our eight ounce steaks to reduce the gap between the six and the eight to encourage trade up we preserve that gap for example, so all the tenants are the things that we did with the Outback price reductions are still in place and again as Dave said. This is still our pricing is still well below inflation and we believe we're a lot of the competitor.

I've said Atlantic.

Great. Thanks, and then just one quick follow up I appreciate all the the margin color this quarter, but can you help remind us where the level of marketing spend in marketing activity is right now.

We only 19, yeah. So it's been pretty consistent I think we're at like 131, 4% of sales in Q3 $20 million below we've kept a pretty consistent gap in just overall spend now of course, the <unk> the <unk> and the things that we're supporting and a different but but.

It's been pretty consistent in terms of how we've approached the year versus 2019 why would your background would you expect that level to continue into next year.

Yes, like we said I think that we're going to reserve the right next year to potentially increase the level of marketing spend it really is going to depend on a lot of factors, including the competitive marketplace, where the consumer headset is.

We've always said if you look at that margin framework that the <unk>. The long term margin for marketing, we would approach that 3% of sales range that doesn't mean, we're going to spend 3% of sales in 2022, and it just depends on where things play out, but we do believe that longer term for our business. The key longer term now that we've got our margin.

It's an order is topline growth through unit expansion in same store as healthy same store sales growth and so part of that is going to be investing in our marketing engine over time. It just is a question of when we turn that back on and just want to add.

During the pandemic, we learned a lot.

About marketing return on investment where it has been the marketing the digital marketplace. The tools that have in place we've made significant progress in our outback App and we've seen that the opportunities come from that so there's a lot that we've learned and as we think about marketing going forward, Chris talked about some of the key things that we will be looking at but we have the tools and <unk>.

To make this happen.

Great. Thank you.

Our next question comes from the line of.

Alex Slagle with Jefferies. You May proceed with your question.

Hey, good morning on the off premise profitability approaching the dine in.

Just wondering how close to the third party delivery is to parity or should we continue to think about that as stronger carryout margins offsetting the lower delivery margins and then just curious if you see this overall off premise profitability stable at this level or is there room for further improvement down the road.

Yes. So the first part of the question was third party and in the math there, Yes third party is going to be a little lower than you are in restaurant experience and it's going to be lower than your curbside experience. The important thing for us is the curbside experience.

In some some of our calculus is actually a little better than our in restaurant margin just given the lack of service labor. So I think we've really honed and refined the margin for our off premises opportunity curbside, leading the way with that and it does help to offset some of the lower margin third party, but again I got to remind everybody that the third party profitability is not prohibitively low.

I mean, we we have a little extra pricing on the third party vehicles and it does give us help us offset some of that so we are pretty good we feel pretty good about where our third party margins are.

On the third party sales front.

We're clearly seeing a new customer there.

Can tell by when they order how they order what they are ordering the channel is growing.

We're excited about the future opportunities of that particular channel so that is.

Something we'll obviously keep a very close eye on it and I'm really glad that our profitability has.

<unk> has come into shape for the company.

That's great. Thank you.

Our next question comes from the line of Brian Vaccaro with Raymond James You May proceed with your question.

Thank you and good morning, just wanted to circle back on recent sales trends and just trying to sort through and <unk> kind of that promotional mismatch and Chris I think you made that comment about average weekly sales volumes, maintaining a consistent positive weekly gap since the end of July can you just expand on that a little bit is that the case for <unk>.

Back specifically or is that an overall U S comp comment and maybe you could just frame the 70000, a week youre seeing at Outback in October how much has that improved sequentially versus what you were seeing in August and September.

Yes, so I'll handle the first one and we'll get some data help to answer the second one so.

We're fortunate to have two really strong industry benchmarks in Knapp and black box Black box for Black box <unk> box provides a weekly average unit volume calculation for casual dining if you compare that benchmark to Outback weekly average unit volumes that volume gap has stayed consistent.

Since we shared our July results on the last earnings call. So this takes the per note than what I like about that calculation is it takes the promotion promotion noise from 2019 out of the calculation and that's honestly what gives us confidence that outback sales continued to be strong and profitable.

Yes.

Yes, sorry.

We'll get to the second piece in terms of the progression of <unk>.

The outback sort of sales, but it's pretty consistent story, we saw at Outback is pretty consistent with what we talked about for the total company in the total portfolio. Carrabba's is maintained as you saw on the comp they've made because they've maintained such a high level of off premises business, they've been a little bit stronger actually throughout the that same time period.

Alright, great that's helpful and on the commodity front, what was Q3 commodity inflation and what does or what does the fourth quarter.

Or what is the updated annual guide implied for the fourth quarter in terms of inflation, yes.

Yes, so commodities were 2.5% in Q3, and they would jump up to four 5% in Q4.

Great and then last one for me I just wanted to ask you about the equipment and technology opportunities and see into next year, just given the tight supply chains around the world can you speak to your ability to source these items and what's a reasonable number of units or a pace. You think you could roll these changes to moving through 'twenty, two and perhaps into 'twenty three.

Yes.

It is it's a challenge and we have in our restaurants and working and.

I think it's a little premature to roll off the pace, Brian I'd like a little more time to understand the supply chain better, but we'd like to get it in as soon as possible over the next 18.

Months, you know I don't know, but we'll see how quickly we can move on the supply chain piece. That's on the equipment side. That's the most important thing. The most important thing though is we've got something that we know that works that improve the customer experience and helps us manage labor.

Alright, Thank you I'll pass it along.

Our next question comes from the line of Lauren Silberman with Credit Suisse. You May proceed with your question.

Thanks for the question can you talk about where you are with on premise sales in on premise transactions versus 2019.

Off premise sales.

Sales dollars that is out there.

The quarter and into <unk> or does it mirror a similar trend to the overall business.

Yeah on the in restaurant side, we still have an opportunity to grow our in restaurant dining as dining rooms open back up and customers get more used to coming back in and were actually hoping that from a from a.

Standpoint.

The holidays and things that could be a tailwind for us as we think about things moving forward. So there is still some capacity in the dining rooms that we can take advantage of and then on the off premise aside our job is to grow that business, especially on the carryout side on the delivery side.

We're seeing Chris if you could add some color on the details, but our job on the delivery side to carry outside especially in third party is to grow the overall off premises sales dollar.

Yes, so a couple of data points that might be helpful. So are in restaurants.

Sales in Q3 were down 8%. So obviously were still getting a real real nice buffer our real nice tailwind from our off premises opportunity. The one data point that Dave talked about from an <unk> standpoint is that as in restaurant volume has improved over the last couple of quarters, you have seen curbside come back a little bit the third.

Piece, which is the one piece that we know is very incremental and it's very exciting to us that's actually held pretty steady in fact over the last four weeks, it's actually grown it was that it's actually now at 11% of sales. So it continues to grow and that is something that to watch out for it because that's pretty exciting for us.

Great. Thanks, and then as you think about commodity inflation beyond the near term how do you think about the transitory versus permanent nature of some of these elevated cost level, just given the increasing labor cost across the supply chain trying to understand what is more normalized from a cost level versus what you would expect that sort of come down from these levels.

Sure.

Yes on the commodity side, it really does remain to be seen.

It's very elevated you have this perfect storm of a very tight supply and high demand both in the U S and overseas the demand overseas as high as well so.

That's what's reflected in the current estimate that we gave in the current pricing that you see in the spot markets out there.

It remains to be seen how long that demand remains with these elevated level of pricings, but we feel good about visibility in the first half of 2022, but beyond that we're just going to have to wait and see.

Thank you guys.

Our next question comes from the line of Jon Tower with Wells Fargo. You May proceed with your question.

Awesome, a lot have been answered, but a couple of follow ups, just first and foremost what's the rationale for buying in the carrabba's founders during the quarter.

And the timing around that and then second Dave you had mentioned the idea of restarting unit growth, particularly at Outback and.

And potentially fleming's in the future. So it's hoping one you could offer some some metrics around new store prototypes like cash on cash return expectations.

And what sort of growth is embedded in your longer term targets of 8% EBITDA margin and then our EBIT margin excuse me and then also just your commentary around the brands that you're thinking about growing it was outback and flemings, but noticeably absent or carrabba's and.

Bonefish, So I'm curious to know if there's anything to read into that thanks.

Hi, John.

The impact there so I'll do the best I can if I Miss anything but.

On the Carrabba's royalty piece.

Bought for one simple reason, it's a great value for the company.

We.

The brands are doing extremely well as you see we've got a great relationship with the founders all financial measures would indicate that there was a very smart decision for our company and Youre going to see that benefit moving forward and we get to enjoy the full profitability of the business. One that's doing extremely well right now on.

On the prototype and the cost we're going to unpack our view on the new unit development opportunity, which we think is.

Very significant in the February call.

We're going to talk about.

Brand, we see to expand and why.

Talk about some of the costs and returns associated with it I can tell you that we have in test in Brazil and in the U S being rolled out a smaller footprint outback that still has a large number of seats is off premise delivery enabled has very high returns and we will talk more about that.

In February I can say that our average unit volumes for our relocations that are opening are $4 $5 million and the new units that we're opening have volumes above $4 million. So we feel extremely good about outback Fleming's.

The results speak for themselves and we're doing extremely well in California, and Florida and.

That is a very very attractive return and then Carrabba's and Bonefish will see I didn't mentioned it because we're not far enough along right now two two mentioned.

Other other news, but those brands are performing very well and could have expansion opportunities in the future, but our priorities right now are outback and flemings and the U S. And then our Brazil business continues to do remarkably well if you look at the rapid bounce back in the business in Q4, if you look at the op.

Opportunity, we have there to expand if you look at the market position that business. The margins, we expect a really good year out of Brazil in 2022, and it'll be as Chris laid out will be one way that we will offset some of the headwinds that we have in our company on the inflation side.

And just following up on the Carrabba's piece, what was the royalty that you're paying and how did it hit the P&L was it on the sales side or on the cost side.

So it was about a one 2% or so overall royalty at hidden restaurant operating expense, so we're going to pick up.

Call it close to $7 $7 million on an annual basis.

From the repurchase of that royalty, which that will add another 20 basis points of margin or so so it really is a I think a very efficient way for us to add bottom line of the company moving forward, particularly given how strong that business is performing.

Thank you.

Ladies and gentlemen, we have reached the end of today's question answer session I would like to turn this call back over to Mr. David Deno for closing remarks.

Well, thank you everybody.

Per the discussion today this.

We'll wrap up our discussion until February about Q4 and 2021.

2021, we will exit 2000, 22021, a completely different company than we were in 2019 on many measures.

In the February call, we look forward to talking to you about our Q4 results and providing some guidance on 2022. Thank you.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation enjoyed the rest of your day.

[music].

Greetings and welcome to the woman brands fiscal third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow management's prepared remarks. It is now my pleasure to introduce your host Mark Graff Senior Vice President of Investor Relations. Thank you. Mr. Graff you may begin.

Presentation.

Thank you and good morning, everyone with me on today's call are David Deno, Our Chief Executive Officer, and Chris Meyer Executive Vice President and Chief Financial Officer.

By now you should have access to our fiscal third quarter 2021 earnings release.

It can also be found on our website at Goldman brand Dot com in the investors section.

Some of these risks are mentioned in our earnings release, others are discussed in our SEC filings, which are available at SEC Gov. During today's call. We'll provide a brief recap of our financial performance for the fiscal third quarter 2021 <unk>.

And reaffirm our ability to deliver on key commitments and drive even more sustainable growth.

This success is directly tied to the planning and hard work that has taken place in our company over the last few years in.

In 2019, we presented a comprehensive plan to build a stronger leaner operations centered company, one focused on providing even better service and food to customers. This plans designed to significantly improve total shareholder return.

Where we get into the details of the third quarter I wanted to take a few minutes to review the initiatives from the 2019 plan, which are the driving force behind the strength of our results.

As a result, we are taking market share in the third quarter U S. Same store sales were up nine 5% on a two year basis versus 2019. This was 600 basis points ahead of the industry.

During the third quarter the company generated over $236 million in U S off premise sales, representing approximately 27% of total U S sales importantly.

Importantly profit margins in the off premise channel are approaching the margins of the in restaurant business. This was the result of initiatives that were completed the last few quarters, we expect off premises to remain a large and growing part of the business going forward.

We also reduced reliance on discounting and promotional lts and pivoted advertising spend towards more targeted higher ROI digital initiatives.

In addition, we remained disciplined in managing the middle of the P&L and are aggressively pursuing efficiencies in food labor and overhead.

Shortly several technological and equipment innovations are in test that we intend to roll out to the restaurants in the coming quarters. These innovation should further improve customer service and reduce costs.

Margins in the third quarter were ahead of this long range goal, we remain steadfast in our efforts to achieve the margin framework, we committed to and we'll continue leveraging recent learnings to more efficiently run and support restaurants.

Fourth becoming even more digitally savvy company in Q3, approximately 70% of total U S off premises sales were through digital channels of 251% increase over 2019 levels over.

Over the past year, we have implemented a new online ordering system and mobile app to support our digital business. Both of these have outperformed expectations you can expect to see more activity on these fronts in the coming quarters.

Healthy balance sheet also provides great flexibility to return cash to shareholders through share buybacks and dividends as well as pursue business opportunities that will enhance shareholder value.

One of the areas that we are excited about accelerating as new unit growth at Outback and Flemings Outback is a leading brand substantial opportunity for unit growth. The success of the Outback relocation program is a clear indicator of this demand in the past five years, we have relocated approximately 50 restaurants with sales lifts of 30.

5% and average unit volumes of $4 $6 million, we recently developed a new less expensive prototype that will enable more meaningful restaurant growth with healthy returns.

Accordingly, New Opex are also opening about $4 million and average unit volumes. We also have the opportunity to open additional fleming's in California, and Florida two of our best performing markets. Let me to the proven category leader and will be a source of growth for the company. We are actively building a pipeline for growth and look forward to discussing this in the coming quarter.

<unk>.

In February we will outline our new restaurant development plan for a meaningful increase in unit growth in the coming years.

Now turning to Q3 and current business trends.

Recently, there have been some discussions regarding product shortages in the restaurant industry.

<unk> because of the strength of the relationship with our suppliers and the hard work of our supply chain team, we have not encountered any major shortages. We continue to actively manage our network to ensure the restaurants are appropriately supplied with product to meet the growing consumer demand.

There's also been discussion in the industry around staffing challenges, while we are not immune to these issues. We have made significant investments in our people.

For instance, during the pandemic, we did not have any layoffs or furloughs.

This decision has contributed to the retention and employee engagement scores that are among the best in the industry.

In addition, our turnover is better than industry averages. This enabled us to better serve our guests and deliver the hospitality that our customers expect.

Now for our sales update.

Combined U S comp sales were up nine 5% in Q3 versus 2019.

The quarter started out strong through July however in August we saw some moderation from the resumption of traditional seasonality and concerns over the Delta variant.

Additionally, we made the decision not to replicate significant promotional activity that ran in 2019 at Outback Steakhouse. The offers we chose not to repeat include the.

The steak and lobster promotion for $16 99.

Steak and unlimited shrimp at a discounted price and offers tied to the launch of our third party delivery channel.

These programs started in early August of 2019, and had a collective traffic impact of approximately 10 percentage points over the last eight weeks of Q3 2019.

Although there were merits this activity repeating his promotion to 2021 did not make sense for our company in the current environment. While there was a negative traffic impact in Q3. It did have a positive impact on profitability in Q3, 2021 U S. Adjusted restaurant level operating margins grew by 430 basis points over 2019.

<unk>.

Confidence in the momentum of the business.

And with that I'll now turn the call over to Chris to provide more detail on Q3, what we expect for Q4 and provide preliminary thoughts on 2022.

Performance.

<unk> <unk>.

Dollars per week range in late August and early September as we did see impact from the emergence of the Delta Varian, coupled with some resumption of traditional seasonality.

Since the middle of September we have seen weekly sales momentum build as weekly sales volumes have now accelerated back closer to $68000 per week as Dave discussed we did see a larger degree of comp sales compression versus 2019 in September and into October driven almost entirely by not.

<unk> 2019 promotional activity to give some additional context, our 2021 average unit volumes have maintained a consistent weekly gap to 2021 average unit volumes for the industry since the end of July.

6% of sales at Carrabba's.

19 turned positive at the beginning of August and are up 7% on average versus 2019 over the past eight weeks.

Our team in Brazil continues to execute at an extremely high level and we are confident in their ability to navigate the current environment.

As it relates to other aspects of our Q3 financial performance.

GAAP diluted earnings per share for the quarter was three.

Adjusted diluted earnings per share was <unk> 57 versus <unk> of adjusted diluted earnings per share in 2019.

In terms of our Q3 adjusted performance by cost category Cogs was 105 basis points favorable to 2019, driven primarily by waste reduction and increases in average check.

Our labor line was 120 basis points favorable to 2019.

On the G&A front Q3 was down $4 $9 million from 2019 net of adjustments. This includes the ongoing benefit of cost savings initiatives that we have detailed on prior calls.

<unk> ratio, we will evaluate further debt paydown or other uses of cash to enhance shareholder value.

Our guidance for total revenues assumes weekly average unit volumes to increase to approximately $71000 in the U S for the balance of the quarter, excluding Thanksgiving week.

As a reminder, Thanksgiving week is traditionally a much lower volume week than other weeks in Q4 due to the lost operating day.

We expect adjusted EBITDA to be at least $115 million, we expect GAAP EPS to be at least 45.

With adjusted EPS of at least 50.

These profitability measures for EBITDA and EPS would represent significant growth levels versus 2019 for perspective in 2019, our fourth quarter adjusted EPS was <unk> 32.

We believe our Q4 guidance reflects continued optimism for our current performance in the U S and a more bullish outlook on Brazil as they finish out their quarter.

In terms of full year 2021 guidance, we have two items that need to be updated first we now expect commodity inflation to be approximately one 5% versus our previous guidance of approximately 1%.

Though we are locked on beef, we are seeing pressures in some commodities that we are unable to lock into longer term arrangements.

Finally, although it is early I wanted to provide some initial thoughts on commodity and labor inflation for 2022, we will provide much more fulsome guidance on 2022 in February.

Packaging are contributing to increases as well while this risk has been minimized in 2021 due to the great work of our supply chain team and favorable contracting we expect to see these elevated levels of inflation continue into next year, we have not taken any significant contracting positions.

At this point in time as we typically make these decisions in early December we will provide additional visibility on the call in February.

While the inflationary pressures from commodities and labor will be significantly elevated relative to historical periods. We are confident that we have offsets to mitigate these headwinds. These offsets include technology, driven productivity opportunities overhead reduction menu pricing and a significant recovery in Brazil and.

In terms of pricing, we are taking a 3% increase in late November as a reminder, we have not taken a material men menu price increase since late 2019, we will continue to monitor current inflationary trends for further potential pricing actions.

We will provide more details on all aspects of our 2022 guidance, including sales inflation margins and capital in the February earnings call in.

At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to move your question from the queue for participants using speaker equipment, it may be necessary to pick up.

<unk> said before pressing the star keys, please limit yourself to one question and one follow up one moment, while we poll for questions.

Our first question comes from the line of Jeffrey Bernstein with Barclays. You May proceed with your question.

Great. Thank you very much.

I had one question and then one follow up question on the margin side of things.

It seems like you guys are fairly confident.

And your ability to.

Combat the headwinds in achieving our margin targets I'm just wondering in terms of time frame for this to be achieved.

Possible to see margin expansion in 'twenty two despite the cost headwinds and I think you mentioned in your confidence still and are committed to the 8% operating margin I'm. Just wondering if you can talk specifically about when you think that might be achieve considering the more recent structural cost pressures, we're seeing and then one follow up.

Yes, sure, Jeff Hey, it's Chris Good morning.

$100 million of upside to help offset the 170, then we also talked about Brazil, let's give context around Brazil, Brazil made $30 million in 2019 in 2021, Theyre tracking to breakeven for the year and now they've added new restaurants over the last couple of years, So Brazil could represent a very significant tailwind.

If necessary, we're not no we're not.

Beyond taking a little more menu pricing if thats necessary. They are absolutely when you add all of those levers up there is a path to offsetting the inflation pressures that we could see next year and holding on to the 8% operating margins now. The question that you asked is where does that fit in well there's still a lot more to think about in terms of traffic and marketing ROI and how that comes.

Back into the business, but we will get more into that in February when we had a little better a little better visibility once we get past the holiday season. The important thing I think for you and for our investors is that we feel very good about our ability to manage the inflation pressures that we see in front of us.

I just want to add to Jeff we're very committed to the 8% margin. If you look at our Q3 numbers and our operating profit margin is up significantly versus.

2019, and you look at our Q4 discussion up significantly versus 2019. So we've got the levers in place to make that happen and I think one more thing to add.

That's why the Q4 margins a little more muted than what you might see next year.

Understood.

And then my follow up was just more broadly on the consumer Dave obviously with your overview of multiple brands and you've got a wide range of consumers and I'm just wondering what your outlook is.

On spending maybe to close this year and into 'twenty two it would just seem like the consumer is.

Finally, absorbing outside of inflation, and therefore seeing higher prices on everything and Thats seems hard to sustain unless incomes will go and buy that level, which doesn't seem likely so I'm. Just wondering from your perspective, how does this play out when do you see a reality check in terms of maybe a spending pullback from the consumer's perspective. Thank you.

Well thanks, Jeff.

Certainly we are very hopeful that this is a robust holiday season.

If people can't get goods, they can get services and they can.

Enjoy in restaurants, and other places and if you look at just the outsized sales gains at <unk> for instance, just a remarkable performance by our <unk> team and also I'll call. It. The Carrabba's team you can see what what's going on in the business. So it's a little too early I think Jeff to talk about 2022, we have to see the pandemic.

Flow through it to see what happens with the consumer, but we remain optimistic as a company and we're seeing really good demand in our restaurants.

Great. Thank you very much.

Our next question comes from the line of Brian Mullan with Deutsche Bank. You May proceed with your question.

Okay. Thank you just a question on the sales deceleration in the in the fourth quarter.

Versus 2019, you ran through some of the promotional activity at Outback Youre lapping that was helpful. It sounds like that and then a couple of weeks, but it looks like Carrabba's and bonefish have slowed a bit in October as well relative to the third quarter trend. So are their promotional activity at those two brands that you also decided not to pursue or were those only specific to outback.

While there were definitely promotional opportunities.

Things that we did at bonefish as well that we elected not to do this year.

Four in Q3 of 2019, we ran steak and lobster for $60 99, steak and unlimited shrimp at a discounted price. If you did some offers tied to the new delivery channel you add all those up at Outback Thats worth 10 percentage points in traffic and we decided not to run that because we want to build the brand for the long term and we had substantial.

Margin increases in the brand and during the in the company during the time periods.

Some of the rationale and what not.

The only thing I would add to that is if you look at the Carrabba's. They did run <unk>. They ran limited time offers back in 2019 similar to Outback the big difference between what Youre looking at it in Outback, maybe relative to our Carrabba's is the two <unk> that we ran between mid August in mid November the steak and unlimited shrimp and then the the stake in <unk>.

Mr promotion those are the two most effective traffic driving promotions that we run, albeit at a at a.

A discounted price, but they are very effective at driving traffic and that that's the real delta between what youre seeing at Outback and maybe some of the other brands.

Okay. Thank you and then just as a follow up you know as you look at making pricing decisions in the coming months on top of the 3% that you just took.

Could you discourage us from thinking that way just trying to.

Understand how youre going to think about pricing on top of 8%.

8% margin is that a target for us are going to stick to and move forward as a company now we have many levers and Chris talked about that right I mean pricing.

Pricing plus productivity offset inflation.

Keep our value traded in place we wont pursue everything we can possibly pursuing our company.

To not to take the pricing.

I want to or need to beyond 3% now if we need to of course, we will as the economy unfolds, but Chris talked about some of the opportunities the Brazil come back some of the initiatives, we've got going into our restaurants on the technology side all of those things come into play to help achieve our profitability objectives and our margin of.

<unk>.

Our next question comes from the line of Brett Levy with.

<unk> partners you May proceed with your question.

Thanks appreciate taking the question.

When you think about where you are right now in terms of your labor positioning.

You are on solid footing and we've heard some other companies out there really sound like Theyre more focused on.

Driving traffic, even if it's a little bit more of a hit to cost how are you thinking about that holistically in terms of.

Really trying to gain that market share trying to drive that traffic and maybe get leverage and volume as opposed to just the protection of.

Of margins and costs from pricing.

And just streamlining the business yes.

Yes, Brett we want both right, we want traffic gains and we want to preserve our margins. So that's really what we're trying to do it.

<unk> labor profile to grow the business and I just want to underscore to you and all of our investors and analysts our job is to do both manage the margins and grow traffic and we will definitely do that.

And then just one more question on the just on the consumer.

Yes.

Can you give any more detail into are you seeing any pockets of variance either incremental pressure or outside gains across brands across the regions. Thanks.

Well.

Chris Chris can talk to some of the geography may be but overall.

Flemming if you look at those Fleming's numbers I mean, they are remarkable.

And so the high end is doing extremely well all of our restaurants are doing well on the demand side and the <unk> numbers are particularly attractive and its really a great business. There are among the very best in fine dining so.

That's a pocket of business that I would that I would talk to but.

Chris I don't know you want to add anything else well and others. There is.

<unk> still regional differences, both on the sales side and even on the labor side right and it still despite vacation we continue to have strength in the southeast, Georgia, North Carolina, Texas same St players, Tennessee same place we've been talking about continues to do really well.

Pockets in the northeast and the Midwest, whether it's Michigan, New York State et cetera, where we have a little more issue in terms of driving volume, but for the record, though on a two year basis. Those states still are positive. It's just they're not as positive as the balance of the system and in that same goes for the labor side, the pockets, where we've had challenging issues with staffing they tend to be more on the <unk>.

Northeast and the Midwest.

Our next question comes from the line of John Glass with Morgan Stanley. You May proceed with your question.

Thanks, and good morning.

Chris just a follow up on your fourth quarter guide and the assumption of average weekly sales improving is that just a function of seasonality or do you assume that once you lap. This promotion things improve how do you build to that and I think you said that excludes Thanksgiving is there a way to think about the total quarter as reported in the fourth quarter and average weekly sales basis.

It probably goes down to about 70000 per week. If you include Thanksgiving week.

And in terms of just the overall.

Guide. It does include both seasonality and a step up in volume.

As the quarter progresses, but again, if youre talking about the lapping of activity thats not going to have an impact this year on an overall absolute volumes. It really is more of a product or just the seasonality step up as the quarter progresses.

And John just as you know right the last three weeks of the quarter.

<unk> for us and so we will be prepared for that but you're prepared for a great holiday season, but the last three weeks are big yes, I mean, it's an at least guidance for a reason.

This year has been anything but typical and there's so many unknowns over those last three weeks and we'll see how they come together.

Appreciate it and you talked about technology and equipment investments I think maybe some of that is going into the restaurants now at least that's my recollection. They went from what you said or my notes.

Can you Dimensionalize, what you think that opportunity is for labor labor savings standpoint, So we understand how you might be able to mitigate some of this wage inflation for those sort of newer ideas or non traditional benefits.

John I'm, not going get into great detail for competitive reasons as to what we think the.

The labor paid people be but I'm extremely optimistic about the.

The equipment's in test, it's getting ready to roll this is at Outback.

Cooking equipment as far as what we can do to manage labor moving forward. It can really help us out. So that's part of the equation, but also the equipment from a sales standpoint, the product comes out faster table turns will be better the cooking accuracy will improve and this is not just the phase III. This is in test.

We are rolling out as quickly as we can as the supply chain lets us really equipment supply chain left us and so we have this in place ready to go on the front of the house, we have like a lot of restaurant companies have technology enabled products to help our servers.

There and we can also have greater cable coverage, so I'm not going to get into the pieces parts and the details on how much will that will do to labor, but just know that these are two initiatives that we have well along in place and will be part of our plans for 2022 and beyond.

Thank you.

Driven by staffing shortfalls that drove roughly a 3% to 4% same store sales headwind in the quarter.

Did you see any level of that dynamic play out.

Across the quarter for any of your concepts.

No we really didn't there's pockets of things that we've got to manage and things and Chris talked about some of the parts of the country that we manage but.

Jeff.

Payroll practices, we had in our values and separately paid off for us and we we we didn't let anybody go during the pandemic and we had the team in place and so we haven't seen that kind of.

Headwind, Okay and then the core question for me so mid single digit wage rate inflation in 2022 so.

Just looking for a little additional color on the components here, there's the Florida piece of it but beyond that in terms of thinking about wage rates across your system are you tackling that on a market by market basis or have you gotten to a point, where you're just sort of have more.

Mandated and increasing wage.

Across the system.

Are you tackling.

Getting a level of wage that attracts.

And employees moving forward.

No its not a national thought it really is a market by market market specific thought every market has a different.

Sort of elements in play that we have to adjust to so it really is not a national thought.

It certainly is playing out that way is that it seems like pressures are pretty systemic across the country.

Alright, thank you.

Our next question comes from the line of John <unk> with Jpmorgan. You May proceed with your question Hi.

Hi, Thank you.

Was curious about the 10% traffic impact that you think he saw from promotions.

That also apply to October.

And I guess the elimination of those promotions did apparently helped the third quarter dollar profit is that also helping the fourth quarter dollar profit.

And there is no question that given the discount that was associated with that steak and lobster promotion and 19, not replicating that activity has a positive impact on profitability and margins.

Okay, Alright interesting.

And secondly, you also I mean.

I think a lot of people are going to focus on that October outback comp, which I think is underperforming.

In the third quarter does this trying to understand that trend change that we saw on outback relative to the industry.

John If I may have made respectfully disagree with you about the Opex piece.

You look at our revenue per week at Outback. It continues to be very good and continues to consistently outperformed the industry in 2021 on a weekly basis. So we feel very good about that so the difference is clearly tied to 2019 activities, which we've spelled out in great detail and believe that <unk>.

Percentage points in traffic. So we chose not to replicate that for many good reasons, but if you look at the <unk>.

I'll put up Outback revenue trends, we feel good about where we stand on the second part of your question.

Incremental pieces, we have not seen that our staffing levels, we have some pockets of challenges, but we're we're in good shape.

And I recognize I kind of asked the same the same question in two different ways in October, but youre very clear Dave. Thank you for the for.

For the for the clarification and then secondly, I mean as we look at commodities. Obviously your team did a great job in 'twenty.

When you think about 'twenty, one I mean, I guess why is why 10% the right number in commodities I mean, why shouldn't that number be something materially worse. As you are basically you know you had such a difficult comparison in 'twenty and even if we think about kind of first half second half is obviously, we have to have quarterly expectations. We do.

I'll take the first question, Jon I'll turn over to Chris about the timing.

For us we.

We haven't completely finished our supply chain work yet that's always done in December and we think that 10% look that we have right. Now is is extremely accurate.

Until the entire basket of commodities, so theres other aspects of the of the commodity basket that are helping us out.

That a bit but.

Ability out of the potential first half second half dynamics, but theres no question beef is only 35 <unk>.

<unk>, we try to lock in a lot of these goods for the full year. It takes some of the variability out of the first half second half dynamic, but obviously, if we get into these conversations and we realize there may be opportunity. If we hold off a little bit unlocking full supply for the back half of the year, because there isn't an opportunity to get a lower price in the back half then we will take advantage of that.

And we Havent talked to I don't think we've ever talked about chicken is a commodity for you from a contract perspective can you remind us where you are in the chicken contract.

How is this potential risk in 22 versus <unk> 21.

Its annual but the one thing about chicken was that it was more elevated this year.

So I think that you can expect chicken next year to be either at or below where we guide at that 10%.

Okay interesting. Thank you.

Our next question comes from the line of Jared Garber with Goldman Sachs. You May proceed with your question.

Hi, Thanks for taking the question Chris It was encouraging to hear that you are looking at pricing activity around that 3% to offset some of the inflationary headwinds can you help frame where the price will flow through obviously, you've got a couple of brands to think about here.

I think one of the things over the last year or 18 months has been kind of right sizing that outback value proposition. So just wanted to get a sense of how youre thinking about that 3% across the brands.

Yeah. So we take a look it's very accurate point, we take a look brand by brand by brand as to what we're going to do and we made significant.

<unk> last year, when we looked at how we went to market with Outback will fund projects and pricing and so we're very careful about what we're going to do at Outback and how we're going to get a price there, but overall each of our ports each of our adding it up together, we will get to 3% there might be some differences by restaurant chain as to what we're going to do spin.

Typically and I'd prefer not to get into that for competitive reasons, but we do youre exactly right. We do take where we stand in the value equation with our customer as we look at the various pricing opportunities that we have importantly, we haven't taken price in 2019, and and so I'm not saying, we've got all kinds of headroom and opportunity of that.

Price, but we certainly are in a good position.

Industry on the pricing front, yes, so and we preserved all of the tenants at Outback of the price decreases we took with the new menu.

Give you. An example, we lowered the prices on our eight ounce steaks to reduce the gap between the six and the eight to encourage trade up we preserve that gap for example, so all the tenants are the things that we did with the Outback price reductions are still in place and again as Dave said this is still our pricing still well below inflation and we believe we're a lot of the competitor.

I've said Atlanta.

Great. Thanks, and then just one quick follow up I. Appreciate all the margin color this quarter, but can you help remind us where the level of marketing spend in marketing activity is right now.

Yeah. So it's been pretty consistent I think we're at like 131, 4% of sales in Q3 $20 million below we've kept a pretty consistent gap in just overall spend now of course the.

The <unk> and the things that we're supporting and a different but but it's been pretty consistent in terms of how we've approached the year versus 2019 why would you report back on would you expect that level to continue into next year.

We've always said if you look at that margin framework, that's the mark the long term margin for marketing, we would approach that 3% of sales range that doesn't mean, we're going to spend 3% of sales in 2022, it just depends on where things play out.

But we do believe that longer term for our business. The key longer term now that we've got our margin house in order is topline growth through unit expansion in same stores healthy same store sales growth and so part of that is going to be investing in our marketing engine over time. It just is a question of when we turn that back on and just want to add.

During the pandemic, we learned a lot about.

<unk> marketing return on investment where it has been the marketing to digital marketplace. The tools that have in place.

Made significant progress in our Outback App and we've seen that the opportunities come from that so there's a lot that we've learned and as we think about marketing going forward, Chris talked about some of the key things that we will be looking at but we have the tools in place to make this happen.

Great. Thank you.

Our next question comes from the line of Alex Slagle with Jefferies. You May proceed with your question.

Hey, good morning Andre.

The off premise profitability approaching the dine in.

Just wondering how close to the third party delivery is the parity or should we continue to think about that as stronger carryout margins offsetting the lower delivery margins and then I was curious if you see the overall off premise profitability stable at this level or is there room for further improvement down the road.

Yes. So the first part of the question was third party in the math there, Yes third party is going to be a little lower than you are in restaurant experience and it's going to be lower than your curbside experience. The important thing for us is the curbside experience.

In some some of our calculus is actually a little better than our in restaurant margin just given the lack of service labor. So I think we've really honed and refined the margin for our off premises opportunity curbside, leading the way with that and it does help to offset some of the lower margin third party, but again I got to remind everybody to third party profitability is not prohibitively low.

We we have a little extra pricing on a third party vehicles and it does give us help us offset some of that so we are pretty good we feel pretty good about where our third party margins are on.

On the third party sales front.

We're clearly seeing a new customer there.

You can tell by when they order how they order what they are ordering the channel is growing.

And we're excited about for the future opportunities of that particular channel so that is.

Something we'll obviously keep a very close eye on it and I'm really glad that our profitability.

He has come into shape for the company.

That's great. Thank you.

Our next question comes from the line of Brian Vaccaro with Raymond James You May proceed with your question.

Thank you and good morning.

Circle back on recent sales trends and just trying to sort through and through and part of that promotional mismatch and Chris I think you made that comment about average weekly sales volumes, maintaining a consistent positive weekly gap since the end of July can you just expand on that a little bit is that the case for outback, specifically or is that an overall.

Comp comment and maybe you could just frame the 70000, a week youre seeing at Outback in October how much has that improved sequentially versus what you were seeing in August and September.

Yes, so I'll handle the first one and we'll get some data help to answer the second one so.

We're fortunate to have two really strong industry benchmarks in Knapp and black box Black box Blackstock Black box provides a weekly average unit volume calculation for casual dining and if you compare that benchmark to Outback weekly average unit volumes that volume gap has stayed consistent.

Yes.

Yes, sorry.

We'll get to the second piece in terms of the progression of <unk>.

The outback sort of sales, but it's pretty consistent story, we saw at Outback is pretty consistent with what we talked about for the total company in the total portfolio. Carrabba's is maintained as you saw on the comp they've made because they've maintain such a high level of off premises business, they've been a little bit stronger actually throughout the that same time period.

Alright, great that's helpful and on the commodity front, what was Q3 commodity inflation and what does or what does the fourth quarter.

Or what is the updated annual guide implied for the fourth quarter in terms of inflation.

Yes, so commodities were 2.5% in Q3, and they would jump up to four 5% in Q4.

Great and then last one for me I just wanted to ask about the equipment and technology opportunities and see into next year, just given the tight supply chains around the world.

Speak to your ability to source these items and what's a reasonable number of units or a pace. You think you could roll these changes to moving through 'twenty, two and perhaps only 23.

Yes.

It's a challenge and we have in our restaurants and working and.

I think it's a little premature to roll off the pace, Brian I'd like a little more time to understand the supply chain better, but we'd like to get it in as soon as possible over the next eight.

18 months I don't know, but we'll see how quickly we can move on the supply chain piece. That's on the equipment side. That's the most important thing. The most important thing though is we've got something that we know that works that improve the customer experience and helps us manage labor.

Alright, Thank you I'll pass it along.

Our next question comes from the line of Lauren Silberman with Credit Suisse. You May proceed with your question.

Thanks for the question can you talk about where you are with on premise sales in on premise transactions versus 2019.

Off premise sales.

Sales dollars steady to up.

The quarter and into <unk> or does it vary.

<unk> overall business.

Standpoint.

The holidays and things that could be a tailwind for us as we think about things moving forward. So there is still some capacity in the dining rooms that we can take advantage of and then on the off premise side, our job is to grow that business, especially on the carryout side on the delivery side.

We're seeing Chris if you could.

Some color on the details, but our job on the delivery side to carry outside especially in third party is to grow the overall off premises sales dollars.

Yes, so a couple of data points that might be helpful. So are in restaurants.

Sales in Q3 were down 8%. So obviously were still getting a real real nice buffer our real nice tailwind from our off premises opportunity. The one data point that Dave talked about from an O. PD standpoint is that as in restaurant volume has improved over the last couple of quarters, you have seen curbside come back a little bit the third.

Piece, which is the one piece that we know is very incremental and it's very exciting to us that's actually held pretty steady in fact over the last four weeks. It's actually grown it was that's actually now at 11% of sales. So it continues to grow and that is something that to watch out for it because that's pretty exciting for us.

Great. Thanks, and then as we think about commodity inflation beyond the near term how do you book It that's a transitory versus permanent nature of some of these elevated cost level, just given the increase in labor costs.

Supply chain trying to understand what is more normalized from a cost level.

What you would expect to sort of come down from these levels.

Yes on the on the commodity side, it really does remain to be seen.

It's very elevated you have this perfect storm of a very tight supply and high demand both in the U S and overseas the demand overseas as high as well so.

That's what's reflected in the current estimate that we gave in the current pricing that you see in the spot markets out there.

Thank you guys.

Our next question comes from the line of Jon Tower with Wells Fargo. You May proceed with your question.

Awesome, a lot have been answered, but a couple of follow ups, just first and foremost what's the rationale for buying in the carrabba's founders during the quarter.

And the timing around that and then second Dave you had mentioned the idea of restarted unit growth, particularly at Outback and.

And potentially fleming's in the future. So it's hoping one you could offer some some metrics around new store prototypes like cash on cash return expectations.

Bonefish, so I'm curious to know if theres anything to read into that thanks.

Hi, John.

Unpacked there so I'll do the best I can if I Miss anything but.

On the Carrabba's royalty piece.

Bought it for one simple reason, it's a great value for the company.

The brands doing extremely well as you see.

Got a great relationship with the founders all financial measures would indicate that it was a very smart decision for our company and Youre going to see that benefit moving forward and we get to enjoy the full profitability of the business. One that's doing extremely well right now.

On the prototype and the cost.

Pak our view on the new unit development opportunity, which we think is very.

Very significant in the February call.

We're going to talk about.

Brands, we see to expand and why we're going to talk about some of the costs and returns associated with it I can tell you that we have in test in Brazil and in the U S being rolled out a smaller footprint outback. There still has a large number of seats is off premise delivery enabled has very.

High returns and we will talk more about that in February.

Curious I can say that our average unit volumes for our relocations that are opening are $4 $5 million and the new units that we're opening have volumes above $4 million. So we feel extremely good about outback Fleming's.

The results speak for themselves and we're doing extremely well in California, and Florida and.

That is a very very attractive return and then Carrabba's and Bonefish will see I didn't mentioned it because we're not far enough along right now too you mentioned other.

<unk>, we have there to expand if you look at the market position that business. The margins, we expect a really good year out of Brazil in 2022, and it'll be as Chris laid out will be one way that we will offset some of the headwinds that we have in our company on the inflation side.

And just following up on the Carrabba's piece of what was the royalty that you were paying and how did it hit the P&L was it on the sales side or on the cost side, yes.

So it was about a one 2% or so overall royalty at hidden restaurant operating expense, so we're going to pick up.

At close to $7 $7 million on an annual basis.

The repurchase of that royalty, which that will add another 20 basis points of margin or so so it really is a I think a very efficient way for us to add bottom line of the company moving forward, particularly given how strong that business is performing.

Thank you.

Ladies and gentlemen, we have reached the end of today's question answer session I would like to turn this call back over to Mr. David Deno for closing remarks.

Well, thank you everybody.

Per the discussion today.

We'll wrap up our discussion until February about Q4 in 2021 2020. One we will exit 2000 22021, a completely different company than we were in 2019 on many measures.

In the February call, we look forward to talking to you about our Q4 results and providing some guidance on 2022. Thank you.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation enjoyed the rest of your day.

Q3 2021 Bloomin' Brands Inc Earnings Call

Request a DemoDemo

BLMN

Bloomin' Brands

Earnings