Q2 2026 Bloomin' Brands Inc Earnings Call

August 5, 2026

Speaker #1: Greetings, and welcome to the Bloomin' Brands Fiscal Second Quarter 2026 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.

Operator: Greetings, welcome to the Bloomin' Brands fiscal Q2 2026 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. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. Please note this event is being recorded. It is now my pleasure to introduce your host, Tara Kurian, Senior Vice President, IR, FP&A, and International. Thank you, Ms. Kurian. You may begin.

Speaker #1: please signal a conference specialist by pressing the star key followed by zero. Please note this event is being recorded. It is now my pleasure to introduce your host, Tara Kurian, Senior Vice President, IR, FP&A, and International. You may begin.

Speaker #1: Thank you, Ms. Kurian.

Speaker #2: Thank you, and good morning, everyone. With me on today's call are Mike Spanos, our Chief Executive Officer, and Eric Christel, Executive Vice President and Chief Financial Officer.

Speaker #2: Thank you, and good morning, everyone. With me on today's call are Mike Spanos, our Chief Executive Officer, and Eric Christel, Executive Vice President and Chief Financial Officer. should have access to our fiscal second quarter 2026 earnings release and our investor presentation slides, both of which can be found on our website at www.bloominbrands.com in the Investors section.

Tara Kurian: Thank you, good morning, everyone. With me on today's call are Michael Spanos, our Chief Executive Officer, and Eric Christel, Executive Vice President and Chief Financial Officer. By now, you should have access to our fiscal Q2 2026 earnings release and our investor presentation slides, both of which can be found on our website at www.bloominbrands.com in the Investors section. Throughout 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 and investor presentation 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.

Speaker #2: 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.

Speaker #2: These statements are subject to numerous risks and uncertainties that could cause actual results to differ in a material way 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 www.sec.gov.

Tara Kurian: These statements are subject to numerous risks and uncertainties that could cause actual results to differ in a material way 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 www.sec.gov. During today's call, we'll provide a brief recap of our financial performance for the fiscal Q2 2026, current thoughts on fiscal 2026 guidance, and an update on our turnaround strategy. Once we've completed these remarks, we'll open the call up for questions. With that, I would now like to turn the call over to Michael Spanos.

Speaker #2: During today's call, we'll provide a brief recap of our financial performance for the fiscal second quarter 2026, as well as a current update on our turnaround strategy.

Speaker #2: Once we've completed these remarks, we'll open the call up for questions. With that, I would now like to turn the call over to Mike Spanos.

Speaker #3: Thanks, Tara, and good morning, everyone. I will discuss our second quarter results and provide an update on our turnaround. Eric will then review the financials and our thoughts on guidance.

Michael Spanos: Thanks, Tara, good morning, everyone. I will discuss our Q2 results and provide an update on our turnaround. Eric will then review the financials and our thoughts on guidance. First, I want to congratulate our team on the progress on both the Outback turnaround plan and our financial results. Our focus on consistency of execution on food quality, service, experience, and providing affordable offers is making an impact. As Pat Haffner, president of Outback, told his team at our managing partner conference in June, Motivation gets you going. Consistency of execution keeps you growing. We remain committed to consistency of execution that delivers a cumulative impact in delivering a great guest experience. While our success will not be linear, we believe these commitments will lead to sustainable and profitable growth in the long term. Turning to our Q2 results.

Mike Spanos: Thanks, Tara, good morning, everyone. I will discuss our Q2 results and provide an update on our turnaround. Eric will then review the financials and our thoughts on guidance. First, I want to congratulate our team on the progress on both the Outback turnaround plan and our financial results. Our focus on consistency of execution on food quality, service, experience, and providing affordable offers is making an impact. As Pat Haffner, president of Outback, told his team at our managing partner conference in June, Motivation gets you going. Consistency of execution keeps you growing. We remain committed to consistency of execution that delivers a cumulative impact in delivering a great guest experience. While our success will not be linear, we believe these commitments will lead to sustainable and profitable growth in the long term. Turning to our Q2 results.

Speaker #3: First, I want to congratulate our team on the progress on both the outback turnaround plan and our financial results. Our focus on consistency of execution on food quality, service, experience, and providing affordable offers is making an impact.

Speaker #3: As Pat Hafner, President of Outback, told his team at our managing partner conference in June, motivation gets you going, consistency of execution keeps you growing.

Speaker #3: We remain committed to consistency of execution that delivers a cumulative impact in delivering a great guest experience. While our success will not be linear, we believe these commitments will lead to sustainable and profitable growth in the long term.

Speaker #3: Turning to our second quarter results, Outback's guest metric scores continue to improve, with year-over-year gains for the fourth consecutive quarter, reinforcing that we are getting better every day.

Michael Spanos: Outback's guest metric scores continue to improve with year-over-year gains for the fourth consecutive quarter, reinforcing that we are getting better every day. This is the power of consistency of execution. In Q2 of this year compared to Q2 of last year, Outback's guest scores increased across service by 7 points, atmosphere by 7 points, value by 6 points, intent to return by 5 points, food by 4 points, and brand trust by 2 points. I will share more details of our Outback turnaround progress shortly. Our Q2 US comparable restaurant sales were +230 basis points with traffic down 190 basis points. We have continued to narrow the gap versus the industry as defined by Black Box each quarter, and our Q2 comp sales were in line with Black Box, while traffic trailed by 110 basis points.

Mike Spanos: Outback's guest metric scores continue to improve with year-over-year gains for the fourth consecutive quarter, reinforcing that we are getting better every day. This is the power of consistency of execution. In Q2 of this year compared to Q2 of last year, Outback's guest scores increased across service by 7 points, atmosphere by 7 points, value by 6 points, intent to return by 5 points, food by 4 points, and brand trust by 2 points. I will share more details of our Outback turnaround progress shortly. Our Q2 US comparable restaurant sales were +230 basis points with traffic down 190 basis points. We have continued to narrow the gap versus the industry as defined by Black Box each quarter, and our Q2 comp sales were in line with Black Box, while traffic trailed by 110 basis points.

Speaker #3: This is the power of consistency of execution. In Q2 of this year, compared to Q2 of last year, Outback's guest scores increased across service by 7 points, atmosphere, by 7 points, value by 6 points, intent to return by 5 points, food by 4 points, and brand trust by 2 points.

Speaker #3: I will share more details of our outback turnaround progress shortly. Our Q2 U.S. comparable restaurant sales were positive 230 basis points, with traffic down 190 basis points.

Speaker #3: We have continued to narrow the gap versus the industry as defined by Black Box each quarter, and our Q2 comp sales were in line with Black Box, while traffic trailed by 110 basis points.

Speaker #3: Affordable entry price points at our casual dining brands combined with consistent execution and craveable service is improving our what-you-get-for-what-you-pay-for value equation. Outback's Q2 comp sales were up 140 basis points, with traffic down 280 basis points.

Michael Spanos: Affordable entry price points at our casual dining brands, combined with consistent execution and craveable service, is improving our what you get for what you pay for value equation. Outback's Q2 comp sales were up 140 basis points with traffic down 280 basis points. As we mentioned in our Q1 earnings call, we chose not to lap some dilutive traffic offerings from Q2 2025, particularly in our third-party delivery space. While third-party delivery remains a key part of our business and plays an important role for convenience, our focus is on delivering a remarkable dine-in experience to drive sustainable traffic growth. Outback continues to drive traffic and loyalty from the Aussie three-course affordability offering, with about 60% of the guests consistently trading up from the entry price point into the higher price tiers and approximately 20% trading up on the dessert option.

Mike Spanos: Affordable entry price points at our casual dining brands, combined with consistent execution and craveable service, is improving our what you get for what you pay for value equation. Outback's Q2 comp sales were up 140 basis points with traffic down 280 basis points. As we mentioned in our Q1 earnings call, we chose not to lap some dilutive traffic offerings from Q2 2025, particularly in our third-party delivery space. While third-party delivery remains a key part of our business and plays an important role for convenience, our focus is on delivering a remarkable dine-in experience to drive sustainable traffic growth. Outback continues to drive traffic and loyalty from the Aussie three-course affordability offering, with about 60% of the guests consistently trading up from the entry price point into the higher price tiers and approximately 20% trading up on the dessert option.

Speaker #3: As we mentioned in our first quarter earnings call, we chose not to lapse some dilutive traffic offerings from Q2 2025. Particularly in our third-party delivery space.

Speaker #3: While third-party delivery remains a key part of our business and plays an important role for convenience, our focus is on delivering a remarkable dining experience to drive sustainable traffic growth.

Speaker #3: Outback continues to drive traffic and loyalty from the Aussie 3 course affordability offering with about 60% of the guests consistently trading up from the entry price point into the higher price tiers, and approximately 20% trading up onto dessert option.

Speaker #3: Corabas comp sales were up 170 basis points, with traffic of negative 250 basis points. Similar to Outback, we chose to not lapse some dilutive third-party delivery offerings from prior year.

Michael Spanos: Carrabba's comp sales were up 170 basis points with traffic of -250 basis points. Similar to Outback, we chose to not lap some dilutive third-party delivery offerings from prior year. This is the sixth consecutive quarter that Carrabba's drove positive comp sales, driven by continued focus on the in-restaurant experience and delivering elevated, authentic Italian food with warm hospitality. We are seeing positive results and increased guest satisfaction from our updated day of week offers and continued strong interaction with our experiential wine dinners. Bonefish's comp sales were up 810 basis points with traffic of +450 basis points. Bonefish continues to steadily improve traffic growth with momentum in day of the week offers such as Margarita and Martini Mondays and Bang Bang Shrimp Wednesdays.

Mike Spanos: Carrabba's comp sales were up 170 basis points with traffic of -250 basis points. Similar to Outback, we chose to not lap some dilutive third-party delivery offerings from prior year. This is the sixth consecutive quarter that Carrabba's drove positive comp sales, driven by continued focus on the in-restaurant experience and delivering elevated, authentic Italian food with warm hospitality. We are seeing positive results and increased guest satisfaction from our updated day of week offers and continued strong interaction with our experiential wine dinners. Bonefish's comp sales were up 810 basis points with traffic of +450 basis points. Bonefish continues to steadily improve traffic growth with momentum in day of the week offers such as Margarita and Martini Mondays and Bang Bang Shrimp Wednesdays.

Speaker #3: This is the sixth consecutive quarter that Carrabba's drove positive comp sales, driven by a continued focus on the in-restaurant experience and delivering elevated, authentic Italian food with warm hospitality.

Speaker #3: We are seeing positive results in increased guest satisfaction from our updated day-of-week offers and continued strong interaction with our experiential wine dinners. Bonefish's comp sales were up 810 basis points, with traffic of positive 450 basis points.

Speaker #3: Bonefish continues to steadily improve traffic growth with momentum in day-of-the-week offers, such as Margherita and Martini Mondays, and Bang Bang Shrimp Wednesdays, the team has done an excellent job of engaging guests with an energetic bar and a polished casual seafood environment, leveraging our core menu items for exciting, affordability offers.

Michael Spanos: The team has done an excellent job of engaging guests with an energetic bar in a polished, casual seafood environment, leveraging our core menu items for exciting affordability offers. Fleming's comp sales were up 160 basis points with traffic down 280 basis points and achieving the eighth consecutive quarter of positive comp sales growth. The team continues to provide memorable special occasions for our guests through disciplined execution and approachable offers. I will now update you on our turnaround focused on Outback Steakhouse. The turnaround is anchored on four strategic platforms as previously communicated, which are, first, deliver a remarkable dine-in experience. Second, drive brand relevancy. Third, reignite a culture of ownership and fun. Fourth, invest in our restaurants. These platforms will be supported by non-guest-facing productivity savings, balanced capital allocation, and a strong management team. Starting with an update on the first platform to deliver a remarkable dine-in experience.

Mike Spanos: The team has done an excellent job of engaging guests with an energetic bar in a polished, casual seafood environment, leveraging our core menu items for exciting affordability offers. Fleming's comp sales were up 160 basis points with traffic down 280 basis points and achieving the eighth consecutive quarter of positive comp sales growth. The team continues to provide memorable special occasions for our guests through disciplined execution and approachable offers. I will now update you on our turnaround focused on Outback Steakhouse. The turnaround is anchored on four strategic platforms as previously communicated, which are, first, deliver a remarkable dine-in experience. Second, drive brand relevancy. Third, reignite a culture of ownership and fun. Fourth, invest in our restaurants. These platforms will be supported by non-guest-facing productivity savings, balanced capital allocation, and a strong management team. Starting with an update on the first platform to deliver a remarkable dine-in experience.

Speaker #3: Fleming's comp sales were up 160 basis 280 basis points, and achieving the eighth consecutive quarter of positive comp sales growth. The team continues to provide memorable special occasions for our guests through disciplined execution and approachable offers.

Speaker #3: I will now update you on our turnaround focused on Outback Steakhouse. The turnaround is anchored on four strategic platforms as previously communicated, which are: first, deliver a remarkable dining experience; second, drive brand relevancy; third, reignite a culture of ownership and fun; fourth, invest in our restaurants; these platforms will be supported by non-guest-facing productivity savings, balanced capital allocation, and a strong management team.

Speaker #3: Starting with an update on the first platform to deliver a remarkable dining experience. The first step was the launch of our new steak lineup in November of last year.

Michael Spanos: The first step was the launch of our new steak lineup in November of last year. We continue to see our steak score in the top box. Consistent with Technomic, our Ziosk guest scores are showing noteworthy improvements year over year across intent to return, food quality, service, steak temperature, and value. The commitment to consistency of execution has driven four consecutive quarters of year over year improvements in Outback guest metric scores. Moving to the next element of a remarkable dine-in experience, craveable service. As we have previously communicated, we identified that our 1 server to 6 table station ratio during peak hours didn't provide the right level of guest interaction and satisfaction. In Q2, we successfully rolled out our new service model to all Outbacks, reducing our ratio to 4 tables per server during peak hours. We are receiving positive guest feedback from this change.

Mike Spanos: The first step was the launch of our new steak lineup in November of last year. We continue to see our steak score in the top box. Consistent with Technomic, our Ziosk guest scores are showing noteworthy improvements year over year across intent to return, food quality, service, steak temperature, and value. The commitment to consistency of execution has driven four consecutive quarters of year over year improvements in Outback guest metric scores. Moving to the next element of a remarkable dine-in experience, craveable service. As we have previously communicated, we identified that our 1 server to 6 table station ratio during peak hours didn't provide the right level of guest interaction and satisfaction. In Q2, we successfully rolled out our new service model to all Outbacks, reducing our ratio to 4 tables per server during peak hours. We are receiving positive guest feedback from this change.

Speaker #3: We continue to see our steak score in the top box. Consistent with technomic, our Zios guest scores are showing noteworthy improvements year over year across intent to return, food quality, service, steak temperature, and value.

Speaker #3: The commitment to consistency of execution has driven four consecutive quarters of year over year improvements in Outback guest metric scores. Moving to the next element of a remarkable dining experience, craveable service.

Speaker #3: As we have previously communicated, we identified that our one-server-to-six-table station ratio during peak hours didn’t provide the right level of guest interaction and satisfaction.

Speaker #3: In Q2, we successfully rolled out our new service model to all Outbacks. Reducing our ratio to four tables per server during peak hours. We are receiving positive guest feedback from this change.

Speaker #3: Our Q2 absolute service scores were over 90% top box, and increased by nearly 3 points year over year. Like our steak quality, guests are telling us they see the difference in our enhanced service model improving the what-you-get-for-what-you-pay-for value equation.

Michael Spanos: Our Q2 absolute service scores were over 90% top box and increased by nearly 3 points year over year. Like our steak quality, guests are telling us they see the difference in our enhanced service model, improving the what you get for what you pay for value equation. Our Outbackers continue to leverage the tabletop Ziosk data to drive accountability and close any gaps in performance in each restaurant. We will continue our commitment to delivering a great guest experience with training for front of the house Outbackers this month on our enhanced hospitality experience model to deliver a fun, casual, Aussie, no rules, just right experience. Our second strategic platform is driving brand relevancy at Outback to differentiate the brand. We will embrace the core of our Aussie brand roots by inviting customers to come as our guests and leave as our mate.

Mike Spanos: Our Q2 absolute service scores were over 90% top box and increased by nearly 3 points year over year. Like our steak quality, guests are telling us they see the difference in our enhanced service model, improving the what you get for what you pay for value equation. Our Outbackers continue to leverage the tabletop Ziosk data to drive accountability and close any gaps in performance in each restaurant. We will continue our commitment to delivering a great guest experience with training for front of the house Outbackers this month on our enhanced hospitality experience model to deliver a fun, casual, Aussie, no rules, just right experience. Our second strategic platform is driving brand relevancy at Outback to differentiate the brand. We will embrace the core of our Aussie brand roots by inviting customers to come as our guests and leave as our mate.

Speaker #3: Our Outbackers continue to leverage the tabletop, ZIOS data, to drive accountability and close any gaps in performance in each restaurant. We will continue our commitment to delivering a great guest experience with training for front-of-the-house Outbackers this month on our enhanced hospitality experience model to deliver a fun, casual, Aussie "No Rules, Just Right" experience.

Speaker #3: Our second strategic platform is driving brand relevancy, at Outback to differentiate the brand. We will embrace the core of our Aussie brand roots by inviting customers to come as our guests and leave as our mate.

Speaker #3: Our brand communication will primarily showcase the quality of our steak lineup with a balance of brand equity and the affordability of our Aussie 3 course offer, and craveable service.

Michael Spanos: Our brand communication will primarily showcase the quality of our steak lineup with a balance of brand equity and the affordability of our Aussie 3-Course Meal and craveable service. We are increasing our marketing spend year over year in H2 of this year, and we'll continue to shift our marketing mix into social and digital channels. Marketing will bring them in with a no rules, just right Aussie irreverence, and our relentless focus on consistent execution will bring guests back. Reignite a culture of ownership and fun is our third strategic platform. Our people are the key to our turnaround, and we are focused on having strong leadership throughout our restaurants, starting with our managing partners. Reigniting a culture of ownership and fun begins with recognizing the achievements of our partners and Outbackers. We held our Outback Managing Partners Conference in June.

Mike Spanos: Our brand communication will primarily showcase the quality of our steak lineup with a balance of brand equity and the affordability of our Aussie 3-Course Meal and craveable service. We are increasing our marketing spend year over year in H2 of this year, and we'll continue to shift our marketing mix into social and digital channels. Marketing will bring them in with a no rules, just right Aussie irreverence, and our relentless focus on consistent execution will bring guests back. Reignite a culture of ownership and fun is our third strategic platform. Our people are the key to our turnaround, and we are focused on having strong leadership throughout our restaurants, starting with our managing partners. Reigniting a culture of ownership and fun begins with recognizing the achievements of our partners and Outbackers. We held our Outback Managing Partners Conference in June.

Speaker #3: We are increasing our marketing spend year over year in the second half of this year, and will continue to shift our marketing mix into social and digital channels.

Speaker #3: Marketing will bring them in with a no rules just right Aussie irreverence and our relentless focus on consistent execution will bring guests back. Reignite a culture of ownership and fun is our third strategic platform.

Speaker #3: Our people are the key to our turnaround, and we are focused on having strong leadership throughout our restaurants starting with our managing partners. Reigniting a culture of ownership and fun begins with recognizing the achievements of our partners and Outbackers.

Speaker #3: We held our Outback managing partners conference in June. This was the first time since 2019 that we have had our partners together and it was a great event to get them energized around the elements of the turnaround.

Michael Spanos: This was the first time since 2019 that we have had our partners together, and it was a great event to get them energized around the elements of the turnaround. We have great partners, and they are clear on their ownership to deliver a great guest experience. We were privileged to have one of our Outback founders, Tim Gannon, who invented the Bloomin' Onion, spend 2 days with our team, inspiring them on the core of the brand, our special culture, and the potential of our business based on the turnaround plan. What was particularly motivating was Tim's feedback that we are doing the right things to turn around Outback. I want to congratulate Market Vice President Robert Atkins, for being named Outbacker of the Year.

Mike Spanos: This was the first time since 2019 that we have had our partners together, and it was a great event to get them energized around the elements of the turnaround. We have great partners, and they are clear on their ownership to deliver a great guest experience. We were privileged to have one of our Outback founders, Tim Gannon, who invented the Bloomin' Onion, spend 2 days with our team, inspiring them on the core of the brand, our special culture, and the potential of our business based on the turnaround plan. What was particularly motivating was Tim's feedback that we are doing the right things to turn around Outback. I want to congratulate Market Vice President Robert Atkins, for being named Outbacker of the Year.

Speaker #3: We have great partners and they are clear on their ownership to deliver a great guest experience. We were privileged to have one of our Outback founders, Tim Gannon, who invented the Bloomin' Onion, spent two days with our team, inspiring them on the core of the brand.

Speaker #3: Our special culture and the potential of our business based on the turnaround plan. What was particularly motivating was Tim's feedback that we are doing the right things to turn around Outback.

Speaker #3: I want to congratulate Market Vice President Robbie Atkins for being named Outbacker of the Year. Robbie exemplifies our principles and beliefs as a leader, setting the standard that success is growth in sales and profits, and is the result of taking care of our people and guests.

Michael Spanos: Robbie exemplifies our principles and beliefs as a leader, setting the standard that success is growth in sales and profits, and is the result of taking care of our people and guests. Congratulations, Robbie. Additionally, consistent with what we communicated in our previous earnings call, we implemented the first phase of an updated MP compensation model during Q2. The first phase of our MP compensation program has two key goals. First, to ensure total cash compensation is competitive with the local market, starting with a competitive base salary. Second, to ensure that total cash compensation remains tied to the growth of sales and profit of the restaurant. Lastly, let me update you on our fourth strategic platform, invest in our restaurants.

Mike Spanos: Robbie exemplifies our principles and beliefs as a leader, setting the standard that success is growth in sales and profits, and is the result of taking care of our people and guests. Congratulations, Robbie. Additionally, consistent with what we communicated in our previous earnings call, we implemented the first phase of an updated MP compensation model during Q2. The first phase of our MP compensation program has two key goals. First, to ensure total cash compensation is competitive with the local market, starting with a competitive base salary. Second, to ensure that total cash compensation remains tied to the growth of sales and profit of the restaurant. Lastly, let me update you on our fourth strategic platform, invest in our restaurants.

Speaker #3: Congratulations, Robbie. Additionally, consistent with what we communicated in our previous earnings call, we implemented the first phase of an updated MP compensation model during Q2.

Speaker #3: The first phase of our MP compensation program has two key goals. First, to ensure total cash compensation is competitive with the local market, starting with a competitive-based salary, and second, to ensure that total cash compensation remains tied to the growth of sales and profit of the restaurant.

Speaker #3: Lastly, let me update you on our fourth strategic platform, Invest in Our Restaurants. We are on track with our goal to touch nearly all of the Outback restaurants by the end of 2028, with targeted initiatives to refresh the interior and exterior expecting to spend on average between $350 and $400,000 per refreshed location.

Michael Spanos: We are on track with our goal to touch nearly all of the Outback restaurants by the end of 2028, with targeted initiatives to refresh the interior and exterior, expecting to spend on average between $350,000 and $400,000 per refresh location. We have completed approximately 31 Outback refreshes through the end of July, and are on track to complete around 85 for the full year of 2026. This asset refresh approach focuses on improving guest ambiance in the restaurant interior and exterior, which will improve the dine-in experience. Additionally, we have completed the rollout of our char grill expansion across Outback. This cooking platform enhancement allows our Outbackers to have the optimal cooking platform for our new steak proteins and non-steak proteins. Let me now turn it over to Eric to review our financial performance for Q2 and guidance for Q3 and full year fiscal 2026.

Mike Spanos: We are on track with our goal to touch nearly all of the Outback restaurants by the end of 2028, with targeted initiatives to refresh the interior and exterior, expecting to spend on average between $350,000 and $400,000 per refresh location. We have completed approximately 31 Outback refreshes through the end of July, and are on track to complete around 85 for the full year of 2026. This asset refresh approach focuses on improving guest ambiance in the restaurant interior and exterior, which will improve the dine-in experience. Additionally, we have completed the rollout of our char grill expansion across Outback. This cooking platform enhancement allows our Outbackers to have the optimal cooking platform for our new steak proteins and non-steak proteins. Let me now turn it over to Eric to review our financial performance for Q2 and guidance for Q3 and full year fiscal 2026.

Speaker #3: We have completed approximately 31 Outback refreshes through the end of July, and are on track to complete around 85 for the full year of 2026.

Speaker #3: refresh approach focuses on improving guest ambiance in the restaurant interior and exterior. Which will improve the dining experience. Additionally, we have completed the rollout of our char grill expansion across Outback.

Speaker #3: This cooking platform enhancement allows our Outbackers to have the optimal cooking platform for our new steak proteins and This asset non-steak proteins. it over to Eric to review our financial performance for Q2 and guidance for Q3 and full year fiscal 2026.

Speaker #2: Thank you, Mike, and good morning, everyone. I would like to start by providing a recap of our continuing operations' financial performance for the fiscal second quarter of 2026.

Eric Christel: Thank you, Mike, and good morning, everyone. I would like to start by providing a recap of our continuing operations financial performance for the fiscal Q2 of 2026. Q2 total revenues were $1.02 billion compared to $1 billion last year, reflecting a 1% increase. Restaurant sales were up, driven by positive comparable restaurant sales of 230 basis points. We remain very focused on narrowing the gap to the industry in the near term and positioning ourselves to lead the industry in the long term. Average check increased by 420 basis points compared to 2025, with pricing partially offset by negative mix as we continue to invest in affordable offers for our guests. We are seeing an improvement in our mix compared to our original forecast, driven by the leadership and efforts of our Outback team in three key areas.

Speaker #2: Q2 total revenues were $1.02 billion compared

Speaker #2: Q2 total revenues were $1.02 billion compared to $1 billion last year, reflecting a 1% increase. Restaurant sales were up, driven by positive comparable restaurant sales of $230 basis points.

Speaker #2: ...term and positioning ourselves to lead the industry in the long term. Average check increased by 420 basis points compared to 2025, with pricing partially offset by negative mix as we continue to invest in affordable offers for our guests.

Speaker #2: We are seeing an improvement in our mix compared to our original forecast, driven by the leadership and efforts of our Outback team in three key areas.

Speaker #2: First, we have enhanced our menu design to incent our guests to enjoy our combo offerings, which feature our outstanding steak and non-steak proteins together.

Eric Christel: First, we have enhanced our menu design to incent our guests to enjoy our combo offerings, which feature our outstanding steak and non-steak proteins together. Second, we are seeing guests trade up to more premium steak cuts once they engage with our servers and see the steaks on the menu. Third, we are seeing continued momentum from our non-alcoholic mocktails, providing a premium and experiential beverage experience to include low-calorie options such as our Strawberry Peach Refresher to complement our Aussie-themed Mock Crock and Sharky Temple. As a result of what we are seeing in mix, this has a positive impact on the turnaround investment dollars, which I will explain in detail shortly. Off-premises sales were 24% of total US sales in the quarter, consistent with Q2 last year. Outback's off-premises mix were 26% in the quarter, and Carrabba's were 34%.

Speaker #2: Second, we are seeing guests trade up to more premium steak cuts once they engage with our servers and see the steaks on the menu.

Speaker #2: Third, we are seeing continued momentum from our non-alcoholic mocktails, providing a premium and experiential beverage experience to include low-calorie options such as our strawberry peach refresher to complement our Aussie themed mock crock and sharkey temple.

Speaker #2: As a result of what we are seeing in mix, this has a positive impact on the turnaround investment dollars, which I will explain in detail shortly.

Speaker #2: Off-premises sales were 24% of total U.S. sales in the quarter, consistent with Q2 last year. Outback's off-premises mix was 26% in the quarter, and Carrabba's was 34%.

Speaker #2: Our gap-diluted earnings per share was $37 compared to earnings of $29 per share last year. Our Q2 adjusted diluted earnings was $39 per share versus earnings of $32 per share last year.

Eric Christel: Our GAAP diluted earnings per share was $0.37 compared to earnings of $0.29 per share last year. Our Q2 adjusted diluted earnings was $0.39 per share versus earnings of $0.32 per share last year. The difference between GAAP and adjusted GAAP operating results is approximately $3 million of adjustments in Q2 2026, primarily as a result of transformational and restructuring activities. Q2 adjusted operating margins were 4.0% versus 3.5% last year. The 50 basis point difference between this year and last year was driven by improved restaurant margins. Within restaurant margin, COGS was elevated compared to last year, driven by commodities inflation of 5.7%. Labor was favorable, driven by the lap of higher health insurance costs in the prior year, and other restaurant operating expense favorability was driven by non-guest-facing productivity.

Speaker #2: The difference between gap and adjusted gap operating results is approximately $3 million of adjustments in Q2 2026, primarily as a result of transformational and restructuring activities.

Speaker #2: Q2 adjusted operating margins were $4.0% versus $3.5% last year, the 50 basis point difference between this year and last year was driven by improved restaurant margins.

Speaker #2: Within restaurant margin, COGS was elevated compared to last year, driven by commodities inflation of 5.7%. Labor was favorable, driven by the lap of higher health insurance costs in the prior year.

Speaker #2: And other restaurant operating expense favorability was driven by non-guest-facing productivity. As it relates to our 33% retained ownership in Brazil, which is classified as an equity method investment, we recognize the loss of approximately $900,000 in Q2.

Eric Christel: As it relates to our 33% retained ownership in Brazil, which is classified as an equity method investment, we recognized a loss of approximately $900,000 in Q2. We still expect the full year loss to be approximately $3 to 4 million. Turning to our capital structure in Q2, total debt net of cash is $636 million. As of the end of Q2 2026, our leverage metrics were 3.7x on a lease-adjusted net leverage basis and 2.0x on a net debt to adjusted EBITDA basis. Our long-term lease-adjusted net leverage ratio goal remains 3.0x. Capital expenditures in the quarter were $44 million. We expect to complete a large amount of refreshes in Q3 of this year and taper off in Q4 as we focus on serving our guests during peak season.

Speaker #2: We still expect the full year loss to be approximately $3 to $4 million. Turning to our capital structuring Q2, total debt net of cash is $636 million.

Speaker #2: As of the end of Q2 2026, our leverage metrics were 3.7 times on a lease-adjusted net leverage basis and 2.0 times on a net debt to adjusted EBITDA basis.

Speaker #2: Our long-term lease adjusted net leverage ratio goal remains 3.0 times. Capital expenditures in the quarter were $44 million. We expect to complete a large amount of refreshes in Q3 of this year and taper off in Q4 as we focus on serving our guests during peak season.

Speaker #2: We still expect the full year capital expenditures to be in the range of $185 to $195 million. Consistent with our previous communication, our capital allocation priorities are to, one, invest in the base business, and two, pay down debt.

Eric Christel: We still expect the full year capital expenditures to be in the range of $185 to 195 million. Consistent with our previous communication, our capital allocation priorities are to, one, invest in the base business, and two, pay down debt. The teams are committed to these priorities to provide a platform for the turnaround and a strong balance sheet to support growth. As I mentioned, we are seeing improved mix trends at Outback, which has a positive impact on the turnaround investment needed in 2026. We'd allocated $25 million for food investments, of which $18 million was specifically for mix. We now expect the mix investment to be $4 million. The turnaround investments now total $36 million, down from $50 million. Productivity savings remain on track for $30 million, for a net investment in 2026 of $6 million. Turning to our guidance this year.

Speaker #2: The teams are committed to these priorities to provide a platform for the turnaround and a strong balance sheet to support growth. As I mentioned, we are seeing improved mixed trends at Outback, which has a positive impact on the turnaround investment needed in 2026.

Speaker #2: We had allocated $25 million for food investments, of which $18 million was specifically for mix. We now expect the mix investment to be $4 million.

Speaker #2: The turnaround investments now total $36 million down from $50 million. Productivity savings remain on track for $30 million, for a net investment in 2026 of $6 million.

Speaker #2: Turning to our guidance this year, as it relates to the full year fiscal 2026, we expect US comparable restaurant sales to be between 1% and 2%.

Eric Christel: As it relates to the full year fiscal 2026, we expect US comparable restaurant sales to be between 1% and 2%. We expect sales mix to improve by approximately 100 basis points, offset by slightly lower traffic as we make the strategic decision to not repeat profit dilutive offers from last year. We now expect our adjusted diluted earnings per share to be between $0.90 and $1.00. Our previous guidance was between $0.75 and $0.90. The increase in our earnings per share guidance range is attributable to our year-to-date performance, improved mix trends, and better middle of the P&L cost controls. As it relates to Q3 2026, we expect Q3 US comparable restaurant sales to be between 1% and 2%. We expect Q3 adjusted diluted earnings per share to be between -$0.27 and -$0.22.

Speaker #2: We expect sales mix to improve by approximately 100 basis points, offset by slightly lower traffic as we make the strategic decision not to repeat profit-dilutive offers from last year.

Speaker #2: We now expect our adjusted diluted earnings per share to be between $0.90 and $1.00. Our previous guidance was between $0.75 and $0.90. The increase in our earnings per share guidance range is attributable to our year-to-date performance, improved mix trends, and better middle-of-the-P&L cost controls.

Speaker #2: As it relates to the third quarter of 2026, we expect Q3 US comparable restaurant sales to be between 1 and 2%. We expect Q3 adjusted diluted earnings per share to be between negative $27 and negative $22.

Speaker #2: We expect to have a tax expense of approximately $5 million in the quarter. Our full-year tax rate is expected to be negative, which will drive a tax expense in Q3 due to our negative earnings outlook.

Eric Christel: We expect to have a tax expense of approximately $5 million in the quarter. Our full year tax rate is expected to be negative, which will drive a tax expense in Q3 due to our negative earnings outlook. We expect our 33% Brazil EMI to be approximately -$2 million. Let me now turn it back over to Mike.

Speaker #2: We expect our 33% Brazil EMI to be approximately negative $2 million. Let me now turn it back over to Mike.

Speaker #3: Thanks, Eric. Overall, we are on track with our Outback turnaround—implementing and executing what we said we would do. We are building momentum, and our guest feedback and Outbacker feedback tell us our strategy is sound.

Michael Spanos: Thanks, Eric. Overall, we are on track with our Outback turnaround, implementing and executing what we said we would do. We are building momentum. Our guest feedback and Outbacker feedback tells us our strategy is sound. Our strategy is consistent and is, one, deliver a remarkable dining experience through improved steak quality, enhanced service, and consistency of execution. Two, drive brand relevancy to differentiate Outback. Three, reignite a culture of ownership and fun with a commitment to our people. Four, invest in our restaurants to refresh approximately 100% of Outbacks by 2028. Investment in the turnaround is supported by non-guest-facing productivity savings with a balanced capital allocation led by an outstanding set of leaders that are seasoned restaurant operators. We acknowledge that success is not linear, and we will continue to responsibly pace and sequence the investments to deliver a great guest experience and foster positive team member engagement.

Mike Spanos: Thanks, Eric. Overall, we are on track with our Outback turnaround, implementing and executing what we said we would do. We are building momentum. Our guest feedback and Outbacker feedback tells us our strategy is sound. Our strategy is consistent and is, one, deliver a remarkable dining experience through improved steak quality, enhanced service, and consistency of execution. Two, drive brand relevancy to differentiate Outback. Three, reignite a culture of ownership and fun with a commitment to our people. Four, invest in our restaurants to refresh approximately 100% of Outbacks by 2028. Investment in the turnaround is supported by non-guest-facing productivity savings with a balanced capital allocation led by an outstanding set of leaders that are seasoned restaurant operators. We acknowledge that success is not linear, and we will continue to responsibly pace and sequence the investments to deliver a great guest experience and foster positive team member engagement.

Speaker #3: Our strategy is consistent and is, one, deliver a remarkable dining experience through improved steak quality, enhanced service, and consistency of execution. Two, drive brand relevancy to differentiate Outback.

Speaker #3: Three, reignite a culture of ownership and fun with a commitment to our people. Four, invest in our restaurants to refresh approximately 100% of Outbacks by 2028.

Speaker #3: Investment in the turnaround is supported by non-guest-facing productivity savings with a balanced capital allocation, led by an outstanding set of leaders that are seasoned restaurant operators.

Speaker #3: We acknowledge that success is not linear, and we will continue to responsibly pace and sequence the investments to deliver a great guest experience and foster positive team member engagement.

Speaker #3: The leadership team continues to be committed to our strategy to provide long-term, sustainable profit growth and improving everyday in how we operate our business.

Michael Spanos: The leadership team continues to be committed to our strategy to provide long-term, sustainable profit growth and improving every day in how we operate our business. We will continue to be transparent in our progress. I want to close today's call by thanking all of our teams in the restaurants and restaurant support center. Our current results and our future potential would not be possible without the dedication, hard work, and commitment of our Outbackers, our Mikos, our Anglers, and our associates to deliver a remarkable guest experience every day. With that, let me open up the call for questions.

Mike Spanos: The leadership team continues to be committed to our strategy to provide long-term, sustainable profit growth and improving every day in how we operate our business. We will continue to be transparent in our progress. I want to close today's call by thanking all of our teams in the restaurants and restaurant support center. Our current results and our future potential would not be possible without the dedication, hard work, and commitment of our Outbackers, our Mikos, our Anglers, and our associates to deliver a remarkable guest experience every day. With that, let me open up the call for questions.

Speaker #3: We will continue to be transparent in our progress. I want to close today's call by thanking all of our teams in the restaurants and restaurant support center.

Speaker #3: Our current results and our future potential would not be possible without the dedication, hard work, and commitment of our Outbackers, our MECOs, our anglers, and our associates to deliver a remarkable guest experience every day.

Speaker #3: With that, let me open up the call for questions.

Speaker #1: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1, on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Alex Slagle with Jefferies. Please go ahead.

Speaker #1: If you’re using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster.

Speaker #1: The first question comes from Alex Lagle with Jefferies. Please go ahead.

Speaker #4: Thanks, good morning, everyone. I just wanted to ask on, I guess, as you're looking at the outcomes of the steak upgrade, service changes, I mean, are there any notable surprises to sort of how you're seeing the improved performance and experience metrics shake out?

Alex Slagle: Thanks. Good morning, everyone.

Michael Spanos: Morning.

Mike Spanos: Morning.

Alex Slagle: Wanted to ask on, I guess, as you're looking at the outcomes of the steak upgrade, service changes, are there any notable surprises to sort of how you're seeing the improved performance and experience metrics shake out? I don't know if it's fairly broad-based and even or if it's still more varied and dependent upon quality of the teams and the management teams you have in place. Also, the improved mix and check performance that drove the guidance upside. Is that really more a direct reflection of some of the service changes and menu changes? Just trying to get at the core of that.

Speaker #4: I don't know if it's fairly broad-based and even, or if it's still more varied and dependent upon quality of the teams and the management teams you have in place and also the improved mix and check performance that drove the guidance upside.

Speaker #4: Is that really more a direct reflection of some of the service changes and menu changes? Just trying to get at the core of that.

Speaker #3: Yeah, morning, Alex. It's Mike. So I'll break that down based on what seems to be three questions there. So on steak, we're really excited about what we're seeing in the steak lineup.

Michael Spanos: Yeah. Morning, Alex. It's Mike. I'll break that down based on what seems to be three questions there. On steak, we're really excited about what we're seeing in the steak lineup. It's performing really well. Our Outbackers are excited to sell it. Our back of the house is really excited as well executing, and we're seeing top box scores across the board. Second piece on steak, which has been a nice surprise, and it gets also to your mix question. We are seeing guests trade up more and more into the premium cuts. That's been better than what we had seen in our tests when we did the test in 2025.

Mike Spanos: Yeah. Morning, Alex. It's Mike. I'll break that down based on what seems to be three questions there. On steak, we're really excited about what we're seeing in the steak lineup. It's performing really well. Our Outbackers are excited to sell it. Our back of the house is really excited as well executing, and we're seeing top box scores across the board. Second piece on steak, which has been a nice surprise, and it gets also to your mix question. We are seeing guests trade up more and more into the premium cuts. That's been better than what we had seen in our tests when we did the test in 2025.

Speaker #3: It's performing really well. Our Outbackers are excited to sell it. Our back of the house is really excited as well executing, and we're seeing top-box scores across the board.

Speaker #3: And second piece on steak, which has been a nice surprise, and it gets also to your mix question, we are seeing guests trade up more and more into the premium cuts.

Speaker #3: That's been better than what we had seen in our tests when we did the test in 2025. The third thing I would say, and this also gets to your mix question, is what's also been very encouraging is seeing the combo reaction to not only the new steak lineup, but guests also engaging in what are our differentiated non-steak proteins.

Michael Spanos: The third thing I would say, this also gets to your mix question, is what's also been very encouraging is seeing the combo reaction to not only the new steak lineup, but guests also engaging with our differentiated non-steak proteins. When I look at all that, I feel really good. We're still focused on consistency of execution, leveraging Ziosk to get it right. That's the steak lineup. I think Pat and the team have done a great job. The other adjacent point on that too is having the chargrill expansion done. That just gives us a lot more capacity to nail the lineup, and we feel really good about our optimal cooking platforms. In terms of your question on the service, that one is playing out in early stages exactly as we wanted it to.

Mike Spanos: The third thing I would say, this also gets to your mix question, is what's also been very encouraging is seeing the combo reaction to not only the new steak lineup, but guests also engaging with our differentiated non-steak proteins. When I look at all that, I feel really good. We're still focused on consistency of execution, leveraging Ziosk to get it right. That's the steak lineup. I think Pat and the team have done a great job. The other adjacent point on that too is having the chargrill expansion done. That just gives us a lot more capacity to nail the lineup, and we feel really good about our optimal cooking platforms. In terms of your question on the service, that one is playing out in early stages exactly as we wanted it to.

Speaker #3: So, when I look at all that, I feel really good. We're still focused on consistency of execution, leveraging Zios to get it right. So, that's the steak lineup.

Speaker #3: I think Pat and the team have done a great job. And the other adjacent point on that, too, is having the charred grill expansion done that just gives us a lot more capacity to nail the lineup.

Speaker #3: And we feel really good about our optimal cooking platforms. In terms of your question on the service, that one is playing out in the early stages exactly as we wanted it to.

Speaker #3: Meaning, as we said, we wanted to get to one server for table station ratio during peak, that has worked really well. What has been really encouraging as we looked at the results is the pay of servers is almost exactly the same as it was before.

Michael Spanos: Meaning, as we said, we wanted to get to one server for table station ratio during peak. That has worked really well. What has been really encouraging as we looked at the results is the pay of servers is almost exactly the same as it was before. We're seeing tips up as a percentage, tip share down. What we think is starting and we're seeing happening is we're just back to the ownership culture we had where the server owns the table. That's just so core to what Outback Steakhouse was back when it was great, and that's good. We want to make sure we felt good about where the servers were. We want to feel good about the guests were. Our Ziosk results are showing us that in terms of likelihood to recommend a server, intent to return, feel good about that.

Mike Spanos: Meaning, as we said, we wanted to get to one server for table station ratio during peak. That has worked really well. What has been really encouraging as we looked at the results is the pay of servers is almost exactly the same as it was before. We're seeing tips up as a percentage, tip share down. What we think is starting and we're seeing happening is we're just back to the ownership culture we had where the server owns the table. That's just so core to what Outback Steakhouse was back when it was great, and that's good. We want to make sure we felt good about where the servers were. We want to feel good about the guests were. Our Ziosk results are showing us that in terms of likelihood to recommend a server, intent to return, feel good about that.

Speaker #3: We're seeing tips up as a percentage, tip share down. And what we think is starting and we're seeing happening is we're just back to the ownership culture we had where the server owns the table.

Speaker #3: That's just so core to what Outback was good. So we want to make sure we felt good about where the servers were. We want to feel good about the guests were, and our Zios results are showing us that in terms of the likelihood to recommend a server, intent to return, feel good about that.

Speaker #3: The last thing I'll say to your question on mix that I didn't cover, the other part that was really positive on mix, the team did a great job on the menu design.

Michael Spanos: The last thing I'll say to your question on mix that I didn't cover. The other part that was really positive on mix, the team did a great job on the menu design, and I mentioned guests trading up on the premium cuts. We've got really nice leverage on sides. Premium sides, steak toppers have been just well received by guests. That gives us nice tailwind. We also did some work on premium sides, which is really nice. Whether we have a Parmesan Creamed Corn that we introduced that has done very well. Our desserts have been up as well, whether it's guests trading up on the Chocolate Thunder or the Chocolate Chip Skillet. That's been a nice surprise. We're seeing guests spending when they feel great in a restaurant.

Mike Spanos: The last thing I'll say to your question on mix that I didn't cover. The other part that was really positive on mix, the team did a great job on the menu design, and I mentioned guests trading up on the premium cuts. We've got really nice leverage on sides. Premium sides, steak toppers have been just well received by guests. That gives us nice tailwind. We also did some work on premium sides, which is really nice. Whether we have a Parmesan Creamed Corn that we introduced that has done very well. Our desserts have been up as well, whether it's guests trading up on the Chocolate Thunder or the Chocolate Chip Skillet. That's been a nice surprise. We're seeing guests spending when they feel great in a restaurant.

Speaker #3: And I mentioned guest trading up on the premium cuts. But we've got really nice leverage on sides. Premium side steak toppers have been just well received by guests.

Speaker #3: That gives us nice tailwind. And we also did some work on premium sides, which is really nice, whether we have a Parmesan cream corn that we introduced that has done very well.

Speaker #3: Our desserts have been up as well, whether it's guests trading up on the Chaga Thunder or the chocolate chip skillet. That's been a nice surprise.

Speaker #3: We're seeing guests spend more when they feel great in a restaurant.

Alex Slagle: Great. Thanks for that.

Speaker #4: Great. Thanks for that.

Speaker #1: Thank you. The next question comes from Sarah Senator with Bank of America. Please go ahead.

Operator: Thank you. The next question comes from Sara Senatore with Bank of America. Please go ahead.

Speaker #5: Hi, this is Ashling on for Sarah. Congrats on the results. So you noted in the prepared remarks, Outback's guest metrics improved for a fourth consecutive quarter, and you called out positive guest feedback from the full rollout of the new service model.

[Analyst] (Bank of America): Hi, this is Aisling on for Sara. Congrats on the results. You noted in the prepared remarks Outback's guest metrics improved for a fourth consecutive quarter, and you called out positive guest feedback from the full rollout of the new service model. Outback's traffic was still down 2.5% in Q2. How should we think about the bridge from better guest scores to actual traffic conversion? Are there any early markets or restaurants where these guest metric gains are already translating into higher frequency by customers?

Aisling Grueninger: Hi, this is Aisling on for Sara. Congrats on the results. You noted in the prepared remarks Outback's guest metrics improved for a fourth consecutive quarter, and you called out positive guest feedback from the full rollout of the new service model. Outback's traffic was still down 2.5% in Q2. How should we think about the bridge from better guest scores to actual traffic conversion? Are there any early markets or restaurants where these guest metric gains are already translating into higher frequency by customers?

Speaker #5: But Outback's traffic was still down two and a half percent in Q2. How should we think about the bridge from better guest scores to actual traffic conversion?

Speaker #5: Are there any early markets or restaurants where these guest metric gains are already translating into higher frequency by customers?

Speaker #3: Yeah. Hey, Ashling. Morning. As I've said, our focus is long-term. Our focus is sustainable traffic, profitable traffic. And as I've said, our success is not going to be linear.

Michael Spanos: Hey, Aisling. Morning. As I've said, our focus is long-term. Our focus is sustainable traffic, profitable traffic. As I've said, our success is not going to be linear. There's a cumulative effect, especially in this industry, when our average guest frequency is about twice a year. You combine what is momentum in the steak lineup, the service lineup, a service model that we have, the experience we're going to be rolling out in hospitality experience training over the next few weeks, and then the affordability offers. My experience in turnarounds, there's a flywheel on this. It takes time. I also know our Outbackers are telling us we're on the right path. I know our guests are telling us we're on the right path. One of our co-founders at a conference just said we are absolutely on the right path.

Mike Spanos: Hey, Aisling. Morning. As I've said, our focus is long-term. Our focus is sustainable traffic, profitable traffic. As I've said, our success is not going to be linear. There's a cumulative effect, especially in this industry, when our average guest frequency is about twice a year. You combine what is momentum in the steak lineup, the service lineup, a service model that we have, the experience we're going to be rolling out in hospitality experience training over the next few weeks, and then the affordability offers. My experience in turnarounds, there's a flywheel on this. It takes time. I also know our Outbackers are telling us we're on the right path. I know our guests are telling us we're on the right path. One of our co-founders at a conference just said we are absolutely on the right path.

Speaker #3: There's a cumulative effect especially in this industry when our average guest frequency is about twice a year, where you combine what is momentum in the steak lineup, the service lineup, a service model that we have, the experience that we're going to be rolling out, and hospitality experience training over the next few weeks.

Speaker #3: And then the affordability offers. My experience in turnarounds, there's a flywheel on this. It takes time. I also know our Outbackers are telling us we're on the right path.

Speaker #3: I know our guests are telling us we're on the right path. One of our co-founders at a conference just said, "We are absolutely on the right path." And we have locations, whether there's franchisees or current restaurants, when they have been doing what is true to the core of the brand, we grow traffic and we grow comp sales sustainably.

Michael Spanos: We have locations, whether there's franchisees or current restaurants, when they have been doing what is true to the core of the brand, we grow traffic and we grow comp sales sustainably. The last thing I would say is I'm going to be super transparent and candid with our results about what's happening and what has happened. We're going to be careful not to over-project what we think is going to happen in terms of future traffic, et cetera. Confident it's going to come because we're seeing the results.

Mike Spanos: We have locations, whether there's franchisees or current restaurants, when they have been doing what is true to the core of the brand, we grow traffic and we grow comp sales sustainably. The last thing I would say is I'm going to be super transparent and candid with our results about what's happening and what has happened. We're going to be careful not to over-project what we think is going to happen in terms of future traffic, et cetera. Confident it's going to come because we're seeing the results.

Speaker #3: So, the last thing I would say is, I'm going to be super transparent and candid with our results, about what's happening and what has happened.

Speaker #3: And we're going to be careful not to over-project what we think is going to happen in terms of future traffic, etc. But confident it's going to come because we're seeing the results.

Speaker #5: Great. Thank you for that color. I'll pass it back.

[Analyst] (Bank of America): Great. Thank you for that color. I'll pass it back.

Aisling Grueninger: Great. Thank you for that color. I'll pass it back.

Speaker #1: Thank you. The next question comes from John. Ivankoff with JP Morgan. Please go ahead.

Operator: Thank you. The next question comes from John Ivankoe with J.P. Morgan. Please go ahead.

Speaker #4: Hi. Thank you. It's definitely interesting to kind of see your success in actually pushing—or having your customers push—the Outback brand higher through premium steak, sides, toppings, what have you.

John Ivankoe: Hi. Thank you. It's definitely interesting to kind of see your success in actually pushing or having your customers push the Outback brand higher through premium steak sides

John Ivankoe: toppings, what have you. That's obviously an achievement, and says a lot about your historic brand. The question, I guess is, kind of on the other side, which is the opportunity that you have to achieve value through price points. In other words, the brand I know was promoting things kind of in the mid-teens for a while, three course, what have you. Does it make sense to kind of come back and really reestablish that part of the menu and maybe engage in a core high-low? Or should we just be focused on the core and the higher end part of the menu for this point?

Speaker #4: So that's obviously an achievement. It says a lot about your historic brand. So the question, I guess, is kind of on the other side, which is the opportunity that you have to achieve value through price points.

Speaker #4: In other words, the brand, I know, was promoting things kind of in the mid-teens for a while, three course, what have you. Does it make sense to kind of come back and really reestablish that part of the menu and maybe engage in a core high-low?

Speaker #4: Or should we just be focused on the core and the higher-end part of the menu for this point?

Speaker #3: Yeah. Morning, John. How are you doing? I think we're doing that. What I mean by that is in all the casual dine brands, and I'll stick to Outback, which is your question.

Michael Spanos: Yeah. Morning, John. How you doing? I think we're doing that. What I mean by that is, in all the casual dine brands, I'll stick to Outback, which is your question, we've been real sharp on providing barbell pricing. When you look at it, that really starts with Aussie three course, that is the entry point. That's the entry point of affordability, and that's especially the entry point for those households that are running under $100,000. We're seeing good retention and frequency of use. There's a lot of good items in there. You got chopped steak, you got teriyaki skewers, you got a great burger at the entry price point. Somebody can come in at $14.99 and feel really good about that value.

Mike Spanos: Yeah. Morning, John. How you doing? I think we're doing that. What I mean by that is, in all the casual dine brands, I'll stick to Outback, which is your question, we've been real sharp on providing barbell pricing. When you look at it, that really starts with Aussie three course, that is the entry point. That's the entry point of affordability, and that's especially the entry point for those households that are running under $100,000. We're seeing good retention and frequency of use. There's a lot of good items in there. You got chopped steak, you got teriyaki skewers, you got a great burger at the entry price point. Somebody can come in at $14.99 and feel really good about that value.

Speaker #3: We've been real sharp on providing barbell pricing. When you look at it, and that really starts with Aussie three course, that is the entry point.

Speaker #3: That's the entry point of affordability, and that's especially the entry point for those households that are running under $100,000. And we're seeing good retention and frequency of use.

Speaker #3: And there's a lot of good items in there. You've got chopped steak, you've got teriyaki skewers, you've got a great burger—all at the entry price point.

Speaker #3: So somebody can come in at $14.99 and feel really good about that value. The other end, which we've seen, is we and especially in the K-shaped economy this plays, we're also seeing guests trade up to the premium cuts.

Michael Spanos: The other end, which we've seen is, we and especially in the K-shaped economy this plays, we're also seeing guests trade up to the premium cuts. They can get the strip, they can get our selection of ribeyes, which is everything from a 13 ounce to 15 ounce in the boneless, 20 ounce bone-in. We're seeing really good results there. We're seeing that trade up as well. I don't think there's going to be any change there. The other thing we've been really zoned in on is just consistency of execution. Regardless of who it is, they love the brand. What we hear from our guests is they love our brand when we do it right. I think that's going to be the approach, and that we're seeing working right now.

Mike Spanos: The other end, which we've seen is, we and especially in the K-shaped economy this plays, we're also seeing guests trade up to the premium cuts. They can get the strip, they can get our selection of ribeyes, which is everything from a 13 ounce to 15 ounce in the boneless, 20 ounce bone-in. We're seeing really good results there. We're seeing that trade up as well. I don't think there's going to be any change there. The other thing we've been really zoned in on is just consistency of execution. Regardless of who it is, they love the brand. What we hear from our guests is they love our brand when we do it right. I think that's going to be the approach, and that we're seeing working right now.

Speaker #3: So they can get the strip. They can get our selection of ribeyes, which is everything from a 13-ounce to 15-ounce in the boneless, 20-ounce bone-in. We're seeing really good results there.

Speaker #3: And so we're seeing that trade up as well. So I don't think there's going to be any change there. The other thing we've been really zoned in on is just consistency of execution.

Speaker #3: Regardless of who it is, they love the brand. What we hear from our guests is they love our brand when we do it right.

Speaker #3: So I think that's going to be the approach. And that's we're seeing working right now.

Speaker #4: Okay. Thank you. And if I can on a on a follow-up, in terms of the remodel, interior and exterior, for 350 to 400 thousand, I don't need to tell you this, I don't think, but for a casual diner, especially with some age on it, that's a really low number.

John Ivankoe: Okay. Thank you. If I can on a follow-up. In terms of the remodel interior and exterior for $350,000 to 400,000, I don't need to tell you this, I don't think, but for a casual diner, especially with some age on it, that's a really low number. Firstly, congratulations on being able to achieve that. Mike, the question I'll ask you is, would you like to spend more if you could spend more? In other words, are we kind of nailing it at this $350,000 to 400,000 to where we won't have to revisit it for 10 years? Or might this remodel be kind of what's necessary as part of maybe a multi-stage remodel process as your overall financials allow you to?

Speaker #4: So firstly, congratulations on being able to achieve that. And Mike, the question I'll ask you is, would you like to spend more if you could spend more?

Speaker #4: So in other words, are we kind of nailing it? At this 350 to 400 where we won't have to revisit it for 10 years, or might this remodel be kind of what's necessary as part of maybe a multi-stage remodel process as your overall financials allow you to?

Speaker #3: Yeah, John. It is enough. And I say this on the last earnings call. First of all, we're focused on the right ambiance and the right touchpoints interior and exterior.

Michael Spanos: Yeah, John, it is enough. I stated this on the last earnings call. First of all, we're focused on the right ambiance and the right touch points interior and exterior. One that gives the guest the feel on the interior that we've updated items that matter to them, as well as on the exterior, which sends a signal to those driving by some things have changed. One, I'll focus on what we're doing and then the numbers. On the inside, it's predominantly tables, chairs, floors, some ceilings. We're also doing some touch-up on bar, the TV package. When you look at the exterior, there's a landscape, there's some painting, and there's lights. That's what it is, and that gets to that average of $350,000 to 400,000. Now, if you look at the numbers, John, I mentioned this on the last call.

Mike Spanos: Yeah, John, it is enough. I stated this on the last earnings call. First of all, we're focused on the right ambiance and the right touch points interior and exterior. One that gives the guest the feel on the interior that we've updated items that matter to them, as well as on the exterior, which sends a signal to those driving by some things have changed. One, I'll focus on what we're doing and then the numbers. On the inside, it's predominantly tables, chairs, floors, some ceilings. We're also doing some touch-up on bar, the TV package. When you look at the exterior, there's a landscape, there's some painting, and there's lights. That's what it is, and that gets to that average of $350,000 to 400,000. Now, if you look at the numbers, John, I mentioned this on the last call.

Speaker #3: One that gives the guest a feel on the interior that we've updated items that matter to them, as well as on the exterior, which sends a signal to those driving by some things have changed.

Speaker #3: And so one, I'll focus on what we're doing and then the numbers. On the inside, it's predominantly tables, chairs, floors, some ceilings. We're also doing some touch-up on bar, the TV package.

Speaker #3: When you look at the exterior, there's a landscape, there's some painting, and there's lights. That's what it is, and that gets to that average of $350 to $400.

Speaker #3: Now, if you look at the numbers, John, I mentioned on the last call, if you just assume roughly just short of 600 total Outbacks, roughly half of them have already had either their new or had pretty heavy remodels in the last few years.

Michael Spanos: If you just assume roughly just short of 600 total Outbacks, roughly half of them have already had either their new or had pretty heavy remodels the last few years. That leaves you a remainder of about 300 Outbacks, and we're looking to get to about 100 a year. We think we'll get to approximately 85 this year, and that's the plan. As I said before, the results we've seen is we like the traffic lift after we've done those. We see a nice 100 to 200 basis point lift about six months to a year after we get those done.

Mike Spanos: If you just assume roughly just short of 600 total Outbacks, roughly half of them have already had either their new or had pretty heavy remodels the last few years. That leaves you a remainder of about 300 Outbacks, and we're looking to get to about 100 a year. We think we'll get to approximately 85 this year, and that's the plan. As I said before, the results we've seen is we like the traffic lift after we've done those. We see a nice 100 to 200 basis point lift about six months to a year after we get those done.

Speaker #3: So that leaves you a remainder of about 300 Outbacks. And we're looking to get to about 100 a year. We think we'll get to approximately 85 this year.

Speaker #3: And that's the plan. And as I said before, the results we've seen is we like to traffic lift after we've done those. We see a nice 100 to 200 basis point lift, about six months to a year after we get those done.

Speaker #4: Thank you. And I look forward to more time in restaurants.

John Ivankoe: Thank you, and I look forward to more time in restaurants.

Speaker #3: Yeah. We'd like that, John.

Michael Spanos: Yeah. We'd like that, John.

Mike Spanos: Yeah. We'd like that, John.

Speaker #1: Thank you. The next question comes from Jeff Farmer with Gordon Haskett. Please go ahead.

Operator: Thank you. The next question comes from Jeff Farmer with Gordon Haskett. Please go ahead.

Speaker #3: Thanks. A couple for you guys. So I'm just curious, what the menu pricing versus commodity inflation spread will look like as you get into the back half of the year, just sort of what that dynamic will look like and potentially how it will impact your margins as you move forward.

Jeff Farmer: Thanks. A couple for you guys. I'm just curious, what the menu pricing versus commodity inflation spread will look like as you get into H2 of the year, just sort of what that dynamic will look like, and potentially how it will impact your margins as you move forward.

Eric Christel: Sure. Hey, this is Eric. We still see commodity inflation running basically 4.5% to 5.5% for the year. That's been consistent. We see pricing in about the 4.5% range, so pretty balanced. That's been our approach all year and will continue to be our approach.

Speaker #5: Eric. So we still see commodity inflation running basically four and a half to five and a half for the year. That's been consistent. We see pricing in about the four and a half range.

Speaker #5: So, pretty balanced. That's been our approach all year, and it will continue to be our approach.

Speaker #3: Okay. And then you did touch on it, but as it relates to advertising weights, just as you move into the back half of this year, can you give us some context in terms of what that will look like in terms of advertising dollars versus what it was in the back half of 2025?

Jeff Farmer: Okay. You did touch on it, but as it relates to advertising weights, just as you move into the H2 of this year, can you give us some context in terms of what that will look like in terms of advertising dollars versus what it was in the H2 of 2025? Just a little bit more color as it relates to how you guys are going to use those advertising dollars.

Speaker #3: And then just a little bit more color as it relates to how you guys are going to use those advertising dollars.

Speaker #5: Yeah. I'll go ahead and give the dollars, and then I'll let Mike comment on the sort of strategy. Essentially, we're going to be up roughly 15 million versus prior year for the full year.

Michael Spanos: Yeah. I'll go ahead and give the dollars, and then I'll let Mike comment on the sort of strategy. Essentially, we're going to be up roughly $15 million versus prior year for the full year. That's roughly 3% of sales for the full year. It's about $10 million more in Outback, and then the rest of the brands have a couple million a piece. Just right in line with our plan. A lot of that is H2 weighted as well, so right in plan. About $15 million for all four brands, about $10 million more for Outback. Yeah. Jeff, it's Mike. First on the pricing, which I think is important too before I go to the market. Remember that the check's going to probably move by about 3.5% because the mix impact.

Mike Spanos: Yeah. I'll go ahead and give the dollars, and then I'll let Mike comment on the sort of strategy. Essentially, we're going to be up roughly $15 million versus prior year for the full year. That's roughly 3% of sales for the full year. It's about $10 million more in Outback, and then the rest of the brands have a couple million a piece. Just right in line with our plan. A lot of that is H2 weighted as well, so right in plan. About $15 million for all four brands, about $10 million more for Outback. Yeah. Jeff, it's Mike. First on the pricing, which I think is important too before I go to the market. Remember that the check's going to probably move by about 3.5% because the mix impact.

Speaker #5: That's roughly 3% of sales for the full year. It's about $10 million more in Outback, and then the rest of the brands have a couple million apiece.

Speaker #5: So just right in line with our plan, a lot of that is second half weighted. As well. So right in plan. But about 15 million for all four brands, about 10 million more for Outback.

Speaker #3: Yeah. Jeff, it's Mike. First, on the price in which I think is important too before I go to the market. Remember, the check's going to probably move by about three and a half percent because the mix impact.

Michael Spanos: It's called out about 2.5% last call, but as Eric mentioned in the prepared remarks, we've just seen that mix improvement as the Outback team's done a better job, as I mentioned. That's what's moving that number up. On marketing, consistent with what I've been saying. First of all, I'm really excited what I'm seeing out of the marketing team in terms of the work that they've put together. From a strategic brand position, we're going to be all about the brand. The brand is about Aussie, it's about being a steakhouse, and that's the core of the brand with that irreverence. We're going to punch that up. The brand communication will absolutely be steak centric, and that's going to reinforce what we're doing on steak excellence. It'll have the affordability and there will be equity in there. We'll start to increase that in the H2.

Mike Spanos: It's called out about 2.5% last call, but as Eric mentioned in the prepared remarks, we've just seen that mix improvement as the Outback team's done a better job, as I mentioned. That's what's moving that number up. On marketing, consistent with what I've been saying. First of all, I'm really excited what I'm seeing out of the marketing team in terms of the work that they've put together. From a strategic brand position, we're going to be all about the brand. The brand is about Aussie, it's about being a steakhouse, and that's the core of the brand with that irreverence. We're going to punch that up. The brand communication will absolutely be steak centric, and that's going to reinforce what we're doing on steak excellence. It'll have the affordability and there will be equity in there. We'll start to increase that in the H2.

Speaker #3: It's called out about two and a half percent last call, but as Eric mentioned, the prepared remarks, we've just seen that mix improvement as the Outback team's done a better job, as I mentioned.

Speaker #3: So that's what's moving that number up. On marketing, consistent with what I've been saying, first of all, I'm really excited what I'm seeing out of the marketing team.

Speaker #3: In terms of the work that they've put together, and we're going to, from a strategic brand position, we're going to be all about the brand.

Speaker #3: The brand is about Aussie. It's about being a steakhouse. And that's the core of the brand with that irreverence. We're going to punch that up.

Speaker #3: The brand communication will absolutely be stake-centric. And that's going to reinforce what we're doing on steak excellence. It'll have the affordability and there will be equity in there.

Speaker #3: We'll start to increase that in the second half. We've got what we're calling our hospitality training, which is going to further train up the front of the house.

Michael Spanos: We've got what we're calling our Aussie hospitality training, which is going to further train up the front of the house on how to bring that experience and energy into the restaurant. You'll start to see that, and we'll have that split between equity communication and affordability. That'll be centered on Aussie three course. Eric already touched on the financials. The last thing I would say is just the mix. We'll continue to move the mix more into about a 60% digital, 40% linear TV as we move forward because the linear is important. As we recruit more Gen X, Gen Zs, millennials, we need to be more in that social digital space, which is where we're shifting.

Mike Spanos: We've got what we're calling our Aussie hospitality training, which is going to further train up the front of the house on how to bring that experience and energy into the restaurant. You'll start to see that, and we'll have that split between equity communication and affordability. That'll be centered on Aussie three course. Eric already touched on the financials. The last thing I would say is just the mix. We'll continue to move the mix more into about a 60% digital, 40% linear TV as we move forward because the linear is important. As we recruit more Gen X, Gen Zs, millennials, we need to be more in that social digital space, which is where we're shifting.

Speaker #3: On how to bring that experience and energy into the restaurant. So you'll start to see that. And we'll have that split between equity communication and affordability.

Speaker #3: That'll be centered on Aussie three course. Eric already touched on the financials. The last thing I would say is just the mix. We'll continue to move the mix more into about a 60% digital, 40% linear TV.

Speaker #3: As we move forward, because the linear is important, but as we recruit more Gen X, Gen Zs, millennials, we need to be more in that social digital space, which is where we're shifting.

Speaker #3: Okay. Thank you.

Jeff Farmer: Okay. Thank you.

Speaker #1: Thank you. The next question comes from Brian Malin with Piper Sandler. Please go ahead.

Operator: Thank you. The next question comes from Brian Mullan with Piper Sandler. Please go ahead.

Speaker #6: Hello. This is Alison Archeron for Brian. Thank you for the question.

Allison Acker: Hello, this is Allison Acker on for Brian. Thank you for the question.

Speaker #2: Sure. Do you have a question?

Operator: Sir, do you have a question?

Speaker #1: Okay. Go ahead.

Operator: Okay. Go ahead.

Speaker #6: Okay. Thank you. Hi. This is Alison Archeron for Brian. Thank you for the question. You hosted the managing partners summit for Outback for the first time since 2019.

Allison Acker: Okay. Thank you. Hi, this is Allison Acker on for Brian Mullan. Thank you for the question. Wanted to ask about anything interesting or surprising that you learned from a boots on the ground perspective from the operators. Thank you.

Speaker #6: So I wanted to ask about anything interesting or surprising that you learned from the boots-on-the-ground perspective from the operators? Thank you.

Speaker #3: Yeah. Thanks for the question. Hey, it was an awesome session. The biggest takeaway to me was how energized our partners were with the Outback turnaround plan.

Michael Spanos: Yeah. Thanks for the question. It was an awesome session. The biggest takeaway to me was how energized our partners were with the Outback turnaround plan. The engagement was extremely important, and Pat and the team did such a good job. There was an element of fun, there was an element of recognition, but there was an element of training and ownership. Everybody knows their roles and responsibilities and what exactly has got to be done because that's our culture of accountability. I start there. What was also very special was having Tim Gannon there, as I mentioned. When you have one of your co-founders there for two days telling the team we're doing the right things, and Tim, he's got it. He is on and he was very clear with we're doing the right things. It was just great to have him there.

Mike Spanos: Yeah. Thanks for the question. It was an awesome session. The biggest takeaway to me was how energized our partners were with the Outback turnaround plan. The engagement was extremely important, and Pat and the team did such a good job. There was an element of fun, there was an element of recognition, but there was an element of training and ownership. Everybody knows their roles and responsibilities and what exactly has got to be done because that's our culture of accountability. I start there. What was also very special was having Tim Gannon there, as I mentioned. When you have one of your co-founders there for two days telling the team we're doing the right things, and Tim, he's got it. He is on and he was very clear with we're doing the right things. It was just great to have him there.

Speaker #3: So the engagement was extremely important. And Pat and the team did such a good job. There was an element of fun. There was an element of recognition.

Speaker #3: But there was an element of training and ownership. So everybody knows their roles and responsibilities and what exactly has got to be done. Because that's our culture of accountability.

Speaker #3: So I start there, just what and what was also very special was having Tim Gannon there, as I mentioned. When you have one of your co-founders there, for two days, telling the team, "We're doing the right things," and Tim is he's got it.

Speaker #3: I mean, he is on and he was very clear with, "We're doing the right things." It was just great to have him there. So we all walked away as Pat said, motivation gets you going, but it's about consistency of execution that keeps you growing.

Michael Spanos: We all walked away. As Pat said, motivation gets you going, but it's about consistency of execution that keeps you growing. That's where we're at.

Mike Spanos: We all walked away. As Pat said, motivation gets you going, but it's about consistency of execution that keeps you growing. That's where we're at.

Speaker #3: That's where we're at.

Speaker #6: Awesome. Thank you.

Allison Acker: Awesome. Thank you.

Speaker #1: Thank question and answer session. I would like to turn the conference back over to Mike Spanos for any closing remarks.

Operator: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Michael Spanos for any closing remarks.

Speaker #3: Thank you once again for your investment and support in Bloomin' Brands. I want to close by thanking our people for their passion and commitment to each other and to our guests.

Michael Spanos: Thank you once again for your investment and support of Bloomin' Brands. I want to close by thanking our people for their passion and commitment to each other and our guests. Thank you.

Mike Spanos: Thank you once again for your investment and support of Bloomin' Brands. I want to close by thanking our people for their passion and commitment to each other and our guests. Thank you.

Speaker #3: Thank you.

Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2026 Bloomin' Brands Inc Earnings Call

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