Greetings and welcome to the Bloomin' Brands, Inc. 4th Quarter 2025 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. Please note, this event is being recorded. It is now my pleasure to introduce your host, Tara Kurian, Senior Vice President, Investor Relations, FP&A and International. Thank you. Ms. Kurian, you may begin.

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. By now, you should have access to our fiscal fourth quarter 2025 earnings release and our investor presentation slides, both of which can be found on our website at www.bloomenbrands.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. 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 fourth quarter 2025, current thoughts on fiscal 2026 guidance, and an update on our turnaround strategy. Once we've completed these remarks, we'll open up the call for questions. With that, I would now like to turn the call over to Mike Spanos.

Thanks, Tara, and good morning, everyone. On today's call, I will discuss our fourth quarter results and provide an update on our turnaround strategy focused on Outback. Eric will then review the financials and 2026 guidance, starting with our fourth quarter results. 2025 was centered on aligning the organization around operational priorities to build the foundation for our turnaround strategy. The focus on consistency of execution in food, service, experience, and value to deliver a great guest experience. We are seeing continued improvements in guest metric scores and traffic gains, reinforcing that our focus is driving momentum. We were pleased with our fourth quarter results and the steady gains we are seeing on traffic growth. Our Q4 comp sales were flat with U.S. traffic up 50 basis points. Although we trailed the industry as defined by black box by 40 basis points on comp sales, we narrowed the gap versus the industry by 280 basis points quarter over quarter. On traffic, we outperformed black box by 190 basis points in the quarter for the first quarter in 2025 that we beat the industry. Our beat reflected a quarter-over-quarter improvement of 400 basis points from the third quarter. All of our casual dining brands executed affordable entry price points to meet the guests where they were economically. Between consistency of execution and providing affordable price points, we will continue to improve the what you get for what you pay for value equation. In Q4, Outback's comp sales were down 60 basis points with traffic up 90 basis points. This was the first quarter of positive traffic growth for Outback since quarter four of 2021. Outback continues to drive traffic from the Aussie 3 course offering, both from increased frequency of use from our loyal Dine Rewards members and from recruitment of new users into the brand. With three value tiers starting with an entry price point of $14.99, we continue to see about 60% of the guests trading up to the higher tiers of $17.99 and $20.99. Caraba's comp sales were up 160 basis points with traffic of negative 90 basis points. In-restaurant experiential wine dinners, lunch, catering, and off-premises all continue to provide positive results and guest satisfaction. Bonefish's comp sales were down 10 basis points with traffic of positive 230 basis points. Bonefish has steadily improved traffic growth in 2025, and this was the first quarter of positive traffic comp growth for the brand since Q1 of 2022. Improvements in traffic are the result of the team remaining focused on compelling day-of-the-week offers like the Martini Mondays and Bang Wednesdays, and value offers such as the Ocean Mix Grill and Prefix Lunch. Fleming's comp sales were up 10 basis points, with traffic down 240 basis points. Fleming's has maintained its sales momentum, driven by experiential dinners, elevated service, and events and catering. I will now review the key elements of our turnaround strategy that we discussed during our last earnings call, primarily focused on Outback. We feel confident in our results and the strong foundation we established to launch our turnaround strategy in November of 2025. 2026 will be an investment year to generate sustained traffic and profit growth. Our strategy is based on four strategic platforms, which are to, one, deliver a remarkable dine-in experience, Two, drive brand relevancy. Three, reignite a culture of ownership and fun. Four, invest in our restaurants. These platforms will be supported by non-guest-facing productivity savings, balanced capital allocation, and a strong management team. We have a phased approach with the turnaround initiatives and investments, starting with delivering a remarkable dine-in experience. We have also kicked off work on the last strategic platform to invest in our restaurants, as well as on generating non-guest-facing productivity savings. As we move throughout the year, we will communicate transparently our progress across each of the platforms. I will now provide an update on our platform starting with Deliver a Remarkable Dine-In Experience. We know delivering a remarkable dining experience at Outback starts with a commitment to steak excellence. In November last year, we launched our new steak lineup, and the results are encouraging. We have strong and improving guest satisfaction and reorder intense scores, driven by our standout sirloin, new bone-in ribeye, and new half-pound burger. The sirloin, bone-in ribeye, and burger all demonstrated immediate improvements in both guest satisfaction, reorder, intense scores, while all new steak items are in the top box of menu satisfaction scores. Our sewer lines are tracking to where our fillets are on reorder intent, and we consider our fillets to be best in class in casual dining. Additionally, we've introduced a 15-ounce Delmonico ribeye, a cut that we are very proud of and is demonstrating very encouraging satisfaction scores. Outback Steakhouse is the only casual diner with this steak offering. Steak excellence also means a commitment to coaching and training to ensure our restaurant field leaders are subject matter experts on steaks. We completed an in-depth steak excellence certification training for our multi-unit leaders at Outback. Each leader is required to pass steak certification tests before they coach, train, and certify their restaurant leadership. Combined with guest feedback by restaurant, gathered by using our ZEOS tabletops, we are measuring and ranking each location, enabling our multi-unit leaders and managing partners to quickly coach and recognize executional opportunities. Within the Outback principles and beliefs, we commit that close is never good enough for Outbackers. We're getting back to our roots on stake leadership and will ensure stake certification training is part of our culture. Our training and certification reinforces another element of delivering a remarkable dining experience, which is consistency of execution. Our trained and certified leaders are in the restaurants during peak hours to focus on operational excellence and accountability to standards. Coaching and KPI center on stake accuracy, quality, guest intent to return, and satisfaction. action. We believe our focus on consistency of execution has translated into improved brand scores. In Q4, we saw a year-over-year increase in Outback's brand trust by 7 points. Guest scores across food increased 5 points, service by 5 points, value by 3 points, and atmosphere by 3 points. The strong guest and team member response we are seeing in stake leadership in brand scores gives us the conviction to launch our next turnaround element of a remarkable dining experience, which is craveable service. We remain on schedule to introduce a revised service model in Q2 of this year. Last year, we identified that our one-server to six-table station ratio during peak hours didn't provide the right level of guest interaction and outbacker satisfaction. We believe a reduced ratio of four tables per server during peak hours, which is more in line with casual dining best practices and gets us back to our Outback roots will allow our Outbackers to provide a more consistent and enhanced experience for our guests. As we improve our new steak lineup and service model, we also need to drive brand relevancy at Outback and differentiate the brand. We will embrace the core of our Aussie brand roots by inviting customers to come as our guests, leave as our mate. Sharpened brand positioning starts with our leadership as a steakhouse. Stake-centric brand communication will serve as the foundational element of our turnaround, helping to recruit new guests, re-engage lapsed users, and drive increased frequency amongst our loyals. We are shifting our marketing approach to more digital than linear TV. In 2026, our media mix will be approximately 60% digital and 40% linear TV, compared to approximately 33% digital and 67% linear TV in 2025. We are encouraged with our improved media ROIs. With discipline in communicating the right message in the right channels and at the right times, we are driving efficiency and effectiveness. We plan to increase marketing spend year over year, concentrated in the second half of the year as we are confident in the consistency of execution in the stake lineup and service model enhancements. Eric will provide more details on the phasing of investments. Tonight, a culture of ownership and fun is our third platform. Our people are the key to our turnaround, and we remain focused on our managing partners. They are our owners and leaders. To retain and recruit the best partners, they need to be compensated competitively, incentivized to drive the operational priorities. We are committed to our people, and we know that when we take care of them, our Outbackers serve each other and the guests with pride and ownership. An update on the fourth platform, which is to invest in our restaurants. As I've said on prior calls, we need to invest back in our restaurants. Our goal is to touch nearly all of the Outback restaurants by the end of 2028, with targeted initiatives to refresh the interior and exterior, spending between $350,000 and $400,000 per location. With this asset refresh approach, we will focus on guest-facing areas, areas that make a positive impact on restaurant ambiance. Additionally, we will begin expanding charbroke capacity in our Outback locations to support the new steak lineup we expect to be done by the end of this year. Lastly, we will maintain a test and learn culture at Outback. We have integrated the 42 test cell locations with steak quality, menu innovation, enhanced service models, and value components. We will continue to use these restaurants to test innovation, value offerings, menu design, and new ideas. We are confident that we have the right plan in place and are pleased with our progress Let me turn it over to Eric to review our financial performance for the quarter and how we are thinking about guidance for 2026.

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 fourth quarter of 2025. Q4 total revenues were $975 million compared to $972 million last year. Restaurant sales were up, driven by the net impact of restaurant openings and closures. This was partially offset by a decline in franchise revenue, as the royalty rate on Brazil this year is less than the intercompany royalty received in 2024. As Mike mentioned, U.S. comparable restaurant sales were flat, and traffic was up 50 basis points. While comparable sales were below the casual dining industry, our traffic beat the industry by 190 basis points. the first quarter this happened in 2025. Average check declined by 50 basis points compared to 2024 as we continue to invest in affordable offers for our guests. Off-premises sales were 24% of total U.S. sales in the quarter, consistent with Q4 last year. Outback's off-premises mix of sales were 26% in the quarter, and Carrabba's were 35%. Our gap diluted loss per share was $0.14 cents compared to earnings of 12 cents per share last year. Our Q4 adjusted diluted earnings was 26 cents per share versus earnings of 22 cents per share last year. 26 cents was within our guidance range of 23 cents to 28 cents. The difference between gap and adjusted gap operating results is approximately 46 million of adjustments in Q4 2025, primarily as a result of bonefish goodwill impairment, restaurant closures and impairments, and transformational and restructuring activities. Q4 adjusted operating margins were 3.4% versus 3.5% last year. The 10 basis point difference between this year and last year was driven by an 80 basis point decline in restaurant margin that was offset by lower G&A expenses as well as lower impairment and closure costs. Within restaurant margin, COGS and labor were both elevated compared to last year, driven by commodities inflation of 4.7%, labor inflation of 3.2%, unfavorable product mix as we offered more value to our guests, and an increase in health insurance claim expense. COGS and labor were offset by lower other restaurant operating expenses, driven by lower advertising spend and lower general liability insurance expense. As it relates to our 33% retained ownership in Brazil, which is classified using equity method investment accounting, we recognized a loss of $1.3 million in Q4. The full year loss was $4.7 million. Turning to our capital structure in Q4, total debt net of cash is $728 million, which reflects approximately $241 million of debt repaid in 2025. This was in large part driven by the proceeds received from the Brazil refranchising transaction. We received the second installment in November and applied the proceeds to our revolver. The second installment was approximately $124 million, which included approximately $13 million of interest income on the receivable net of withholding taxes. As of the end of 2025, our leverage metrics were 3.9 times on a lease-adjusted net leverage basis and 2.4 times on a net debt-to-adjusted EBITDA basis. We have reduced our total debt from over $1 billion at the end of 2024 to $787 million at the end of 2025 through the Brazil proceeds and our discipline prioritization on capital allocation. Before I get into the specifics of guidance, I want to reiterate the magnitude and phasing of our planned turnaround investments in 2026. We plan to invest approximately $50 million this year, which will be offset by approximately $30 million of non-guest-facing productivity for a net investment of approximately $20 million. The $50 million will support the investments in center-of-the-plate food quality, including steak excellence improvements and menu redesign, of approximately $25 million, investments in service and the guest experience of approximately $7 million, and investments in our managing partners of approximately $8 million. We also intend to increase our marketing by approximately $10 million as part of the overall $50 million investment. In terms of phasing of the investments, the majority of the investments will be made in Q2 through Q4. We expect to see a step up in marketing spend in the back half of this year. Productivity initiatives are in areas that are non-guest-facing and will total approximately $30 million in 2026, spread relatively evenly throughout the year. Across both the brands and at the corporate level, we are renegotiating costs with suppliers, optimizing product selections, and eliminating unnecessary vendor spending. We are also focused on tighter processes in the restaurants, leveraging technology for increased data visibility, and outlier management. We are optimizing labor scheduling and focusing on areas where we can simplify operations in the back of the house. We remain committed to our three-year target of $80 million in productivity savings from 2026 to 2028. Turning to our guidance this year, as it relates to fiscal 2026, we expect U.S. comparable restaurant sales to be between 0.5% and 2.5%. We expect total commodity inflation to be between 4.5% and 5.5%, driven in large part by beef inflation of high single digits. Our supply chain team has worked diligently to keep inflation in both beef and other categories in check. We expect labor inflation to be similar to last year in the 3 to 3.5% range. We expect our adjusted diluted earnings per share range to be 75 cents to 90 cents. Similar to last year, we are in a tax benefit situation driven by FICA tip credits relative to earnings. We expect an adjusted tax benefit in the range of approximately $15 to $18 million in 2026, which reflects a negative annual effective tax rate. We expect our 33% Brazil EMI ownership to reflect approximately negative three to four million dollars of impact this year, which is included in the adjusted diluted earnings per share guidance. We expect capital expenditures to be between 185 and 195 million dollars for the full year. We are shifting capital dollars away from new units to refresh type remodels. Across remodels and normal course maintenance, this will be roughly 60 percent of our capital spend. We remain committed to refreshing nearly all of our Outback fleet by 2028 and expect to make good progress towards this in 2026. We expect to open six to eight new units and this total will reflect approximately 20% of spend and the remainder will be for IT and infrastructure investments. As we mentioned in the last call, our capital allocation priorities are to, one, invest in the base business, and two, pay down debt. First quarter of 2026, thus far into the quarter, we have been negatively affected by the winter weather by approximately 2.2% on U.S. comparable restaurant sales and approximately $0.08 of adjusted diluted earnings per share. This weather is included in our guidance. Additionally, we expect Q1 U.S. comparable restaurant sales to be between flat and up 1%. We expect Q1 adjusted diluted earnings per share to be between 57 cents and 62 cents. We expect the tax benefit to be the highest in the first quarter. Let me now turn it back over to Mike. Thanks, Eric. While it is still early days in

our turnaround, we are highly confident that our strategy will put Outback Steakhouse on the right course for sustainable, long-term, profitable growth. We have a strong management team in place and a foundation rooted in operational excellence and consistent execution. We are pleased with our improvements in guest leading indicators, including two quarters of growth in brand scores and guest feedback. We are highly encouraged by our initial progress in the new stake lineup with positive feedback from our guests and our Outbackers. We have a solid strategy in place, which is to, one, deliver a remarkable dining experience through improved state 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. or invest in our restaurants to refresh approximately 100% of outbacks by 2028. The strategy is supported by non-guests facing productivity savings with a balanced capital allocation. Our leadership team is aligned and committed to the turnaround. We will continue to be transparent in our progress and our actions. Lastly and most importantly, I want to thank our people in the restaurants and Restaurant Support Center. Their hard work and resilience during the recent snowstorms has been superb, operating safely and reopening quickly to serve our local communities. Thank you for your commitment. With that, let me open up the call for questions.

We'll now begin the question and answer session. To ask a question, you may press star than 1 on your telephone keypad. To withdraw your question from Q, please press star than 2. We do ask that you please pick up your handset before pressing the keys. today's first question comes from jeffrey bernstein at barclays please go ahead great

thank you very much uh my first question is just on the uh the comp trends you're seeing if you could maybe share the sequential trend you saw through the fourth quarter uh looks like comps came in a little bit light of expectation um and maybe any color on the first quarter quarter to date. I'm just wondering whether the comp at Outback and the broader system, where it sits relative to the flat to 1% guidance, I'm trying to figure out what you're assuming for the remainder of the quarter. Obviously, it's been choppy thus far, but any sequential trends that you can share would be helpful. And then I had one follow-up. Yeah, good morning, Jeff. How are you doing?

I'd start with, in terms of Q4, which is where I think you were going, we did see a change in trend. In the first half of the quarter, we saw some strong trends, but in the back half, consistent with the industry, predominantly the last six weeks of the quarter, we did see a noticeable step down in traffic. To Q1, we saw a very strong start to the initial part of 2026 until we started dealing with some pretty extreme weather. I will point out Valentine's Week and Valentine's week was very strong in terms of sales and profits. I'll leave it at that in terms of Q1.

Okay, but your confidence level in that flat to a plus one, I know you mentioned 220 base point hit to weather. Are you assuming any change in underlying consumer or is that purely just extrapolating what you've seen thus far and therefore the flat to plus one

reasonable? Yeah, the latter. We don't see a big change in the trend of the underlying consumer. That's correct.

Got it. My follow-up, but just more broadly speaking, it seems like you're encouraged. I mean, it's only been a few months since you announced the turnaround plan, but positive traffic at Outpac, definitely encouraging. I'm just wondering if you kind of thought about what inning are you in in this turnaround? I assume it's quite early, but maybe what aspect do you believe is going to prove the most challenging to address? Clearly, you're having success in some components, but just wondering your feedback from consumers and operators, what do you think is going to be the most difficult part to turn?

Yeah, Jeff, I'd say the second part of your question, the biggest hurdle and challenge and where we're most focused is on consistency of execution. What we're really oriented on is the long-term, getting the leading indicators, what matters to the guests, what matters to our Outbackers. And I start there. I like our numbers there. As I said in the prepared remarks, we like the executional focus. It's yielding results. When you look at Outback and you look at Technomic, we saw brand trust grow by seven points. We saw food grow by four points, service by four points, value by three points, atmosphere by three points. And that was consistent with growth in Q3 as well. It is early innings. We've got other things to do. What I also like is we've been really focused on the phasing. So if you think about the other area I really like, and it's consistent with what we articulated in the last calls, I really liked our steak execution lineup launch. I thought it was really good. The Outbackers are excited about it. We like what we did in November 25. The sirloin, the fillets, the bone and ribeye burger are really shown great scores. And I really give a big hats off to Pat Hafner. The steak excellence certification of our JVPs, multi-unit operators, was tremendous. And that's going to flow into the managing partners in terms of coaching and recognition. The last thing I would say on that, Jeff, which I like a lot, is remember, we got the team in place broadly in Q4. And the fact that we've got brand presidents that are just seasoned operators that average about 34 years of experience per operator running restaurants is a big deal when you think about the long-term potential of the business.

Understood. Thank you.

And our next question today comes from Brian Harbour at Morgan Stanley. Please go ahead.

Yeah, thanks. Good morning, guys. I wonder if you could also just talk about, you know, sort of value in the fourth quarter, like the Aussie 3 course and such, and how, you know, that sort of contributed to the results.

Brian, how are you doing? So Aussie 3 course, as I said, we continue, I'll start there, we continue to feel real good about that. And as I said in the prepared remarks, we like the fact about 60% of the guests are trading up to $17.99 and $20.99. And we're getting a good uptick in dessert upspends from the cheesecake to the other desserts. That's been running over 10%. It continues to grow. And good balance of more frequency out of oils and some good recruitment out of new guests as well. We'll continue to evaluate that. So that's point one. Second, maybe to the broader issue, we're test and learn culture. And we had some really strong traffic, and it was definitely punched up during the holiday periods. And so we know we've got to turn the dial a bit on this. Our plan is to be right around that two points of mix into the pricing and getting the PPA, and we'll stay balanced. And I think that's the key is we're going to be very balanced in terms of the consumer value proposition, what we're doing with inflation to deal with the commodities, to spend back on mix to meet the guests where they are and how that gets into the PPA traffic equation.

Okay, thanks. And can you remind us sort of the timing you expect for some of the remodels you're doing and how some of the most recent ones have performed?

Yeah, hey, Brian, it's Eric. So consistent with what we said in the fall, we expect to touch nearly all of our outbacks over the next three years. We expect 2026 to make really good progress towards that goal. We're a little bit more back half-weighted on the reset – I'm sorry, the refresh timing. That's just more timing. And we referenced this last fall, but we've seen really, really good traffic pickup in Carrabba's. When they did a light refresh program, they saw one to two points of traffic growth. And so we're not necessarily betting on that, but we're encouraged by the results we saw in Carrabba's, and we expect, you know, something similar for Outback as well. Yeah, and the level of investment is essentially about $350,000 to $400,000 per restaurant, and that's fully contemplated in our capital plan.

Thank you. And our next question today comes from Christine Chow at Goldman Sachs. Please go ahead.

Yes, thank you for taking my question. So could you help us unpack some of the key variables in your 0.5% to 2.5% comp guidance for the year? How should we think about composition of price, mixed traffic, particularly for Outback? And what are some of the factors that would get you closer to the high end of that range?

Sure. Hey, Christine, it's Eric. Thanks for the question. Yeah, so to unpack the comp sales guidance, essentially you start with pricing. We see pricing in the mid-4s, so-called 4.5% range of pricing. Just what Mike mentioned, we have an implied mix investment of about two points to continue to deliver value to our guests. That puts the average check, PPA, in at about 2.5 to 3. And so the pricing at mid-4s is essentially we see commodities 4.5 to 5.5, and we see total inflation 4 to 5.

for a full year. Great. Thank you so much, Eric. Another one on the investment and savings plans. I think you mentioned a couple of buckets where you can derive savings. Are there specific initiatives that are critical to achieving that $30 million in non-guest-facing productivity gains? And how confident are you in delivering the full $30 million in 26 without impacting kind of the restaurant-level execution to support? Thank you.

Yeah, it's a good question. Yeah, we're very confident. First reference point, I would say, is we delivered $25 million of productivity in 2025. So the $30 million, while not easy, it gives us confidence we can do that. Second, I would say the composition, consistent with what we said in the fall, it's non-guest-facing. It hits the buckets of indirect labor and G&A. And, you know, a couple examples, you know, we're basically finding a lot of opportunity in essentially negotiating with our vendors, you know, proactively to try to basically go after spend and also reduce spend. We're finding a lot of, you know, opportunity as we look at each brand and also look at concentrated spend across the brands. Yeah, a lot of it boils down to contract negotiations, Christine, and we're just finding a lot of opportunity there.

Great. Appreciate the color.

Thank you. And our next question today comes from Jeff Farmer at Gordon Haskett. Please go ahead.

Thank you, guys. A lot of moving pieces, obviously, but how should we be thinking about the restaurant-level margin for the full year?

Yeah, hey, Jeff, it's Eric again. Essentially, restaurant margins, you should think about that in the sort of mid-11s range for the year. basically impacted mainly by the plan investments that we have, you know, in plan.

And then tougher question to respond to, but in terms of the tax benefit range that's captured in

your 2026 EPS guidance, any sort of help you can provide there? Yeah, so $15 to $18 million in full year tax benefit, and we feel like it's the highest we're going to see is actually in Q1. It's all related to the FICA TIP credits that we have, and so as the quarters have more or less earnings, we're able to use those FICA TIP credits as much as possible. So it's basically $15 million to $18 million full year benefit. Thank you.

Thank you. And our next question today comes from Brian Mullen at Piper Sandler. Please go ahead.

Okay, thank you. And just coming back to Outback, you know, it sounds like stake excellence, seeing a positive response, you know, presumably service and execution is going to get better with the labor changes soon. You know, with that in mind, can you just talk about where you think the awareness stands on some of the changes you are making and then what the marketing message will be as you ramp up the spending in the back half of the year and beyond?

Yeah, good question. I'd start with the brand overall has incredible awareness. If I just look at the brand, that is not an issue as we've done studies. Now, as far as the awareness of what we're doing from driving a remarkable dine-in experience, we're going to focus the marketing in the back half of the year. First, as I said, we're going to be very sequential because I want to be sequential in terms of the outbackers dealing with the change management and very chunk-sized bites. The first bite was launching the stake lineup in November of 2025. We're going to still stay very focused on that. Step two becomes rolling out the service model. And then we're also going to be rolling out some MP compensation elements, which we'll describe live directly to our MPs. When we're feeling good about the consistency of execution, the ability to deal with that change management will then start being clear with our marketing message. Because we know marketing brings folks in, but I want repeat. And repeat is driven by executing every day in a great way so they feel great about the quality, the service, and the overall restaurant experience. That cumulative effect brings them back.

Okay, thank you. And then just a question on the guidance, clarification on a prior answer around productivity. Can you speak to what is embedded in the guidance from a G&A dollar perspective for 2026?

Yeah, G&A of $215 million.

Okay, very helpful. Thank you.

If you look at the percent of sales, that's about 5.3 percent of sales.

Thank you for that.

Thank you. And our next question today comes from John Ivanko with J.P. Morgan. Please go ahead. Hi, thank you.

So first, the question on remodels, $350,000 to $400,000 for a freestand casual dining box with some age on it is not a high number. So the question I would ask is, are you limited by balance sheet and just overall cash allowances, the amount that you can spend? In other words, how did you land on that $350,000 to $400,000? And, you know, I ask that in the context of, is this just one part of what might be a multi-phase remodel as Caslo and overall brand economics, you know, permit?

Yeah, good morning, John. Hope you're doing well. We feel real good about the asset refresh plan. We're being very prudent. We're being very focused and disciplined. And remember, we did a very detailed outside maintenance survey by restaurant in 2025. And we've been really dealing with solving those specific issues by rooftop. And so we do feel good about the 350 to 400. As we've said before, remember, about half of the locations have been already hit over the last few years, whether they're new or they're remodeled. So we're really dealing with about half of the fleet over the next three years. So what we learned from Carrabba's, we've seen some good results when you do a good interior and exterior light touch. You hit the tables, you hit the chairs, you hit the floors, you hit the ceilings. On the outside, we're going to be sharp on the paint, the landscape, and the lighting. We feel good about that, and we're focused on what's meaningful to the guests.

And just so I understand, the $350,000 to $400,000, that's not on average for all of your units. That's just for the half that need to be done. Is that correct?

Yeah, exactly right, John. That's an average. You're going to have some that will spend more, and there may be some we don't spend, given what we've already done with them. So that is an average. We got that average down. We communicated previously about $400,000. We're seeing the average number, sort of that range between the $350,000 and $400,000 number.

Okay, so maybe I misunderstood this. So maybe half of your units are spending $700,000 to $800,000, and then another half are spending close to zero? Or am I oversimplifying that?

Yeah, that would be an oversimplification that you could spend up where we're doing a true remodel. But the broad amount of the outbacks, okay, the broad amount, the median, would be right in that $350,000 to $400,000 range.

Okay, I think I understand that. Okay, and the next question, you mentioned in your prepared remarks a couple things, but a lot of things, actually. You know, tighter controls, I think specifically, you know, maybe around just cost and tolerance at the store level. But you also have, you know, I think an admirable intention to increase employee satisfaction in the amount of fun working environment that they have. Now, I mean, a lot of us know from a lot of different ways. It's like, you know, kind of the tighter the controls, you know, maybe the less fun the employee actually has. You know, so, you know, hopefully that question is kind of coming across, you know, kind of correctly. So, you know, in a very human resource kind of dynamic, you know, environment, you know, how do we balance, you know, improved employee satisfaction with what sounds to be, you know, even tighter controls around tolerances at the store level?

Yeah, John, I like the question. I would describe it as connected autonomy. We're an entrepreneurial culture, and that's not changing. If you look at our principles and beliefs, we define success at the restaurant by the sales and profit growth that is enabled by that managing partner that serves that guest. That's not going away. So part of that is, and I'll get to the MP comp. We have got to be competitive. Part of that reducing turnover, having a lot of fun, is people walking in the door at the partner level feeling they've got a competitive wage, competitive total compensation, so we can retain and recruit the best talent. That's good for the team. It's good for turnover. It's good for the brand. It's good for the guest experience. Now, there's also things, John, second we're finding that we can lift and shift great ideas from the restaurants, use technology where we're not burdening our partners with a lot of work where we can get productivity. That can be technology on labor. That can be in our indirect spends, the way we deal with a lot of the suppliers, the way we buy toys that go into the drinks, you name it. So that's what we're balancing. And so we know we're very local and we're local to our communities. That's not going to change.

Thank you. Thank you. And our next question today comes from Andrew Strelzik at BMO. Please go ahead.

Good morning. Thanks for taking the questions. First, I was hoping you could talk a little bit about what you're seeing in terms of the new service model test, maybe in terms of traffic or frequency, guest metrics versus the rest of the system, or any other learnings from that test. and maybe how that's built through the course of the test as you get ready for the two-key rollout.

Yeah, Andrew, how are you doing? Yeah, so we really like the service model in terms of what we saw in the test. As I mentioned on a previous call, and we continue to see it where we had it running and test, when we saw intent to return, attendiveness to the server, likelihood to recommend the server, those scores all popped positively, and we also got good feedback from our outbackers. And remember, we're using our Z-OPS data, our tabletops, to understand how this is working by location and by shift. Feel really good about it. So, again, we'll go from one server to six table station ratio to one server to four tables during peak, and we think that's the right level of interaction. We think that's consistent with the balance of casual dine. It really goes back to the root of the brand when we started as well. It's about a $7 million investment because the nice thing with this one is there's a lot of redeployment of labor. We've got a pretty heavy essay or server assistant pool that's out there. So a lot of those folks get redeployed into server roles. And this is why we're also being very sequential and thoughtful. You've got to train up all the folks that are going into server roles, whether you're recruiting from the outside or you're training up your essays into those roles. And I want to make sure we get stake excellence right first before we start putting that additional change management on the partners.

That's helpful. And then just on the commodity inflation, how much visibility do you have to that at this point? Maybe how much you have locked in and kind of the cadence of that inflation through the year?

Hey, Andrew, thank you. Good question. So on commodities, you know, just as a reminder, you know, we have a pretty unique supplier relationship. We probably just lock in beef. So we've locked that in for the year, basically high single digits. That's part of our overall guidance. We feel good about that. And at this point in the year, you know, approximately 70% to 80% of our costs are already locked up.

Thank you very much.

Thank you. And our next question today comes from Lauren Silverman with Deutsche Bank. Please go ahead.

Thanks so much. I wanted to just start on the average check. I know most of the mixed pressure you're seeing is intentional initiatives. Outside of that, are you seeing any signs of check management, changes in behavior, whether that's attachment on apps, alcohol, or anything else to call out?

Yeah, Lauren, if I look at Q4 specific to that, the only place we probably did see some sensitivity was in some of the older cohorts. They manage their checks across all the brands a bit. When I look at all of our mixed levers or attachments, be it desserts, appetizers, or BWL, we really didn't see any changes that were material at all. So it's really that elderly cohort that we saw a little bit of sensitivity on check management.

Great. Thank you. And then I just want to follow up on the restaurant margin cadence, how we should think about pressure or puts and takes the rest line items as we move through the year. We assume a little bit more pressure in the back half given the investments that you're making or any color that you can give there. I don't know if commodity inflation, you expect pretty similar, you know, in the four and a half to five and a half range throughout the year. Thank you.

Yeah. Hey, Lauren, thank you for your question. So first quarter we expect to have the highest and then basically lowest as we get to the –

Thank you. Thank you. And our next question today comes from Dennis Geiger at UBS. Please go ahead.

Great. Morning, guys. Thank you. I wanted to ask about the 42 test locations. And maybe when you guys spoke to the service model and test, maybe you were kind of covering those 42 test locations. But if not, is there anything incremental to share on those locations? What kind of sales lift maybe you're seeing? I don't know if that would make sense, given they are just test locations. Anything more to share on the latest update on those locations?

No, Dennis, what I would say is we really encouraged what we saw in the initial stages of the 42 test locations. We had really good cumulative results in terms of state quality, service model, experience marketing, and the value components. And they showed nicely and highly encouraging across traffic, guest satisfaction, value scores, and the Outbacker feedback. So all positive. It definitely validated what we're doing. It validated that we got the right strategic plan, we're confident that we can grow traffic and execute the platforms with success, and it really helped us know we got some no-regret investments, which I like to call them. We know we got to get state quality right, service right, and that hospitality experience right. Where we're pivoting as we've integrated those 42 test locations, we're really now focused on leveraging them to learn on menu design, innovation, affordable opening price points and value. So it'll enhance our test and learn culture. And as we learn more, it'll allow us to launch and learn a lot faster.

That's great. Makes good sense. And then just on the comp outlook for the year, I'm curious on the cadence. Obviously, you gave us the first quarter, so we've got a good sense for where the next three quarters have to be, of course. Anything, though, in thinking through the cadence there over the 2Q through 4Q as you layer in the marketing and some of the initiatives through the year? Do we see a strengthening of the traffic of the expectation as you go through the year? Any color there to share?

Well, I'd say first we're cautiously optimistic on what we're doing across the board, and I think that's very clear in the guidance we laid out there. Obviously, we're learning as we go. We want to start with steak. We want to start with service, and then the back half of the year, we want to ramp up the marketing. But our focus is on what we can control. We're focused on the strategic horizon. We're focused on controlling execution, getting the consistency right. And if we do that well, the numbers will follow.

Makes good sense. Thank you very much. Thank you. And our next question today comes from Brian Vaccaro at Raymond James. Please go ahead.

Hi, thanks, and good morning. And thanks for all the color on the initiatives. You noted some investments that you're going to be making in the managing partners. Can you just remind us or elaborate on what that investment looks like and if there are structural changes there or new incentive targets that you're implementing?

Hey, Brian. I won't get into the specifics because I do want the managing partners to hear that from Pat directly. What I would say is this. It's consistent with what I answered in the previous question, which is we need to start with making sure we have our folks in a competitive position in the market, whether we're retaining or recruiting our partners. They've got to be competitive, and that reduces turnover in the restaurant. Of course, we're going to always want them tied to the P&L of the restaurant, while we also make sure they're feeling good about that base salary. what we want is a competitive wage, and we want success to be amplified, which is defined by growing the sales and profits of our restaurants. Understood. Okay, thank you. And sorry if I

missed it earlier, but on CapEx, did you say, how many remodels do you expect to complete in 26? And what's a good sort of annual maintenance CapEx run rate to be thinking about?

Yeah, hey, Brian, it's Eric. The way you should think about it is approximately 100 a year for the next three years, that puts us in the zone of touching all the remaining outbacks.

Okay.

And then your other question was on maintenance capital or?

Maintenance capex within the cash flow statement, not R&M on the P&L, but in the capex number.

It's about $75 million a year. Pretty consistent. We're not expecting that to really go massively up or down versus prior year.

And then last one, just on marketing, you noted it was down in the fourth quarter. Could you level set – I know it will be in the 10K, but could you level set where marketing spend came in for the year overall? And then is first half marketing down year-on-year in those first two quarters, or should we think about it more as flat year-on-year and then it's up year-on-year in the back half of the year? Thanks again.

Yeah, so advertising came in for the full year 2025 at about 2.4% of revenue. Q4 came in at about 2.2, so just slightly less than the full year. And then for the full year 2026, we see it basically being mid to high twos. And that's mostly driven by the Outback investments. And it's mostly second half, again, to correspond with the phased investments that come right after the service model.

Okay, great. Thank you.

And that concludes our question and answer session. I'd like to turn the conference back over to Mike Spanos for the closing remarks.

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.

And that concludes our conference call for today. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.