Greetings and welcome to the Bloomin' Brands' Fiscal Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Vice President of Investor Relations. Thank you. Mr. Graff, you may begin.

Thank you and good morning, everyone. With me on today's call are Liz Smith, our CEO; and Dave Deno, Executive Vice President and Chief Financial and Administrative Officer. By now, you should have access to our fiscal third quarter 2017 earnings release. It can also be found at our website at 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 on our earnings release and 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 growth strategies and financial guidance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are mentioned in our earnings release. Others are discussed in our SEC filings, which are available at sec.gov. During today's call, we'll provide a recap of our financial performance for the fiscal third quarter 2017, an overview of company highlights and a discussion regarding progress on key strategic objectives. Once we've completed these remarks, we'll open up the call for questions. With that, I'd now like to turn the call over to Liz Smith.

Thanks, Mark, and welcome to everyone listening today. As noted in this morning's earnings release, adjusted third quarter diluted earnings per share was $0.12 and combined U.S. comp sales were down 1%. Importantly, we made meaningful progress at Outback where we posted positive comp sales and traffic. This is the third consecutive quarter of improving traffic trends at Outback. The investments in the core experience continue to gain traction. Outback's Q3 performance is particularly notable as it comes amidst further industry declines and the effects of two large hurricanes. Hurricanes Harvey and Irma had a significant impact on communities throughout Texas and Florida. In addition to the personal toll these events had, they also had a pronounced effect on the businesses within the areas hit by the storms. As it relates to our company, we preemptively closed locations in the storm's path to allow our team members sufficient time to prepare or evacuate. And following the storm, area flooding and power outages delayed the reopening of certain restaurants. In total, lost operating days from the hurricanes negatively impacted U.S. comp sales by an estimated 100 basis points and EPS by $0.04 in Q3. Absent these lost days, our U.S. comp sales were estimated to be flat for the quarter; and absent the hurricane impact, our adjusted EPS would have been an estimated $0.16, consistent with expectations. The category experienced broader softness in Q3 beyond the hurricane, and Knapp (3:24) traffic was down 4.8%. Outside of Q4 2016, this was the worst quarterly performance for the category since the recession in 2009 and was significantly softer than when we've (03:34) seen thus far for 2017. Although the severity of the decline was larger than expected, we see the volatility in the industry is being driven by the same factors that we…

Well, thank you, Liz, and good morning, everyone. I'll kick off with discussion around sales and profit performance for the quarter. As a reminder, when I speak to results, I'll be referring to adjusted numbers that excludes certain costs and benefits. Please see the earnings release reconciliations between non-GAAP metrics and their most directly comparable U.S. GAAP measures. We also provide a discussion of the nature of each adjustment. With that in mind, our third quarter financial results versus the prior year are as follows. GAAP diluted earnings per share for the quarter was $0.05 versus $0.18 in 2016. Adjusted diluted earnings per share was $0.12 versus $0.19 last year. Excluding estimated $0.04 impact from the hurricane, we estimate adjusted EPS would have been $0.16. GAAP earnings are lower than adjusted earnings in the third quarter of 2017 primarily due to $17.5 million of asset impairment excluded from our adjusted earnings. This was partially offset by $7.6 million of other income primarily associated with a gain on the sale of one Carrabba's restaurant in the third quarter. Total revenues decreased 5.6% to $949 million in the third quarter. This decrease was driven primarily by our successful refranchising both domestically and internationally, and the net decline from restaurant closures and openings. This was partially offset by an increase in franchise and other revenues. Combined U.S. comp sales finished Q3 down 1%; this included an estimated negative 1% comp sales impact from Hurricanes Harvey and Irma. Excluding the lost operating days from the hurricanes, we estimate U.S. comp sales would have been flat for the quarter. At Outback, Q3 comp sales are up 60 basis points with traffic up 10 basis points. This is Outback's third consecutive quarter with positive comps and more importantly traffic was positive despite the negative impact of…

Thank you. The floor is now open for questions. Our first question today is coming from Michael Gallo of C.L. King & Associates. Please go ahead. Michael W. Gallo - C.L. King & Associates, Inc.: Hi. Good morning.

Good morning.

Good morning, Michael. Michael W. Gallo - C.L. King & Associates, Inc.: Yeah. So, obviously, good to see the improvement in traffic and another positive quarter at Outback, but it just seems like over the last couple of years, whether it's Outback doing well and the other brands having a hard time and the other brands doing better and Outback struggling, that you haven't been able to kind of pull them all together simultaneously. I know you've been through brand repositioning at a number of the brands, and I know you had the hurricane noise in the quarter. But looking at the operating margins versus the rest of your peers, certainly, this quarter particularly, it just doesn't appear that you've been able to bring them up to the average. So, help us think about – when you think about the portfolio of brands – why you still think the integrated model is working and whether there's opportunity to prune the portfolio further over time. Thanks.

Sure. So a couple of pieces to that. I'll talk to the portfolio, the trends, and then Dave will chime in on the margins. First of all, as we've always said, we continually look at our portfolio to evaluate what is the absolute best go-to-market. And I think we've shown that if there is a difference – we love our brands, but we're not wedded to one particular go – we have to kind of look at the best means to go-to-market. We've showed a willingness to do that, whether it was disposing of – selling Roy's, or whether it was the refranchising of Korea, et cetera. So, we constantly are evaluating what is the best go-to-market position. We feel good about we have a tightly edited portfolio of brands that we have employed the same playbook over the last year-and-a-half which is getting out of this discounting, reinvesting in the customer experience. And you're right, there's tremendous volatility from quarter to quarter, and that's why you have to look at the medium to long term on this. And so, we started our reinvestment back in the brands at different tranches and experiences. We're seeing the same strengthening in brand metrics across the brands, but they come in at different periods and at different times. We still see that as being the right selection. We still see increasing the experience as being a real net gainer for us. We see the growing off-premise as being a big opportunity for us. In fact, when you put Carrabba's and Outback together as we have in our first Express unit, you really begin to see the leverage of having a portfolio to be able to take advantage of off-premise. Okay, so that's going to be growing. The other thing is, is that after…

Sure. Michael, on the margin side, we knew that 2017 was going to be a challenging year for our margins. We're making investments in food and service at Outback, and you're seeing that pay off in sequential sales gains, which is we're very pleased about. Service measures across the business are improving, and obviously customer measures are improving. Labor inflation is up; for the industry, up 4% to 5%. And importantly, we do have a big restaurant base in Florida and Texas, and this quarter, we did have an impact to labor And reminder too that our sale leaseback program does impact margins by negative 20 basis points. And we make that economic trade every day, if you look at the cash that we've gotten. So going forward what do we expect? We still expect operating margins to expand by 150 basis points to 200 basis points. Got the sales growth that Liz talked about. We've got continued productivity and I draw your attention to our food cost management initiatives this quarter and looking what that did for our margins, and supply chain efficiencies, labor cost management with our tools and overhead. And finally our international margins as I mentioned in my prepared remarks were up 130 basis points year-on-year. So, as international becomes a bigger part of the portfolio, we're going to have margin expansion. So, we still feel good about where we can go on operating margins even though Q3 and this year has been challenging for us. Michael W. Gallo - C.L. King & Associates, Inc.: Thank you.

Thank you. Our next question is coming from Gregory Francfort of Bank of America. Please go ahead.

Hey. Just one quick housekeeping question then another one. Just any help on the magnitude of the 53rd week in terms of cents or percentages. Just any help there would be appreciated. And then the second question is we've heard from other casual diners about kind of given the experiences that happened last November and December, part of the reason why they may be confident that the turnaround they've seen in the last month could sustain is because they're approaching this holiday season differently in terms of maybe actually going out marketing to the guests rather than kind of just knowing that they would be around. How are you approaching this holiday differently than you did and how much does last year's experience color kind of the approach that you're making and the changes that you're instituting.

Sure. I'll take the 53rd week first. We haven't gotten to that kind of detail but I can tell you is that holiday week between Christmas and New Year's which is the big week for casual dining. But to quantify, we've tried to stay away from that. But if you can imagine, that's a big week.

Yeah. And let me take the holiday discussion. As you know, we talked about it, and the obvious thing is our trends are really strong in October. So, then why are you taking a cautious outlook and here's how we look at it. Last year, no one could have predicted that December was going to be down 7%. You had this structural shift in the landscape and how people – I don't think we know yet what the new normal is. We don't have a crystal ball, and so you still are seeing the shifting landscape. So, I think it's prudent to assume that it's going to be challenging again in November, December. And we absolutely, with this in mind, have developed a holiday program that addresses that. And we feel really good about the work we've been doing in off-premise and delivery that that's going to be able to really benefit us as we look to service people's holiday needs whether they want to dine at home, or whether they want delivery. So, we absolutely have geared – and I don't want to get too granular for competitive purposes, but we absolutely have geared a lot of our Q4 programming around dine-in with us. But also here is holiday platters for off-premise and delivery, and we will be supporting some of that off-premise opportunity to celebrate with our brands and holiday at home with advertising and marketing. But for competitive purposes, I don't want to go into any more detail on that. I will also tell you that our efforts on being ahead and being first mover in this area are really paying off and going to pay off. And our off-premise business was up double digits in Q3 as we kind of really push out and develop our muscles. And we're looking forward to having that arsenal even more developed for Q4. But honestly, no one has a crystal ball. I think it makes a lot of sense to assume November-December are going to be challenged and somewhat volatile, and we feel like to the extent possible we absolutely have to focus the brands and have built the capability to take advantage of that shifting landscape.

I was hoping you had a crystal ball. Thank you, guys. I appreciate it.

Thank you. Our next question is coming from Jeffrey Bernstein of Barclays. Please go ahead.

Great. Thank you very much. Happy Friday.

Happy Friday.

Two questions. Thank you. First just on the updated 2017 guidance and, Dave, you walked through much of it, but if you took a step back, you lowered the guidance by $0.10. And I think you acknowledged that the hurricane was maybe $0.04. Otherwise, I mean, I think we knew the commodity shift was going on last quarter. So, I'm just trying to figure out the other nickel that you're talking about in terms of the guidance reduction. I know you mentioned caution into the holidays. But last quarter was the quarter where you were encouraging the Street I believe to – that we were underestimating and we should be raising the fourth quarter estimates. And at that time, you'd already knew that you were going to be lapping a very volatile November-December. So, I would have thought that would have been in your numbers. And now October you said is much better. So I'm just surprised to see the significant further reduction in the fourth quarter kind of implied EPS guidance especially when much of this was already known, so just hoping for more color. And then I had one follow-up.

Yeah. Sure. If you step back and look at our guidance, Jeff, you've got the impact of the hurricane, which is $0.04 which includes the impact of lost sales and inventories and compensating hourly employees. We did tighten our commodity outlook as things have changed during the quarter due to unexpected inflation in some of unlocked positions, dairy, produce and some cuts of beef. We're seeing additional labor pressure as impacting results. And as Liz mentioned, we took a more cautious outlook of CDR with the holiday season. And if you recall, Q3 had a pretty big step-down decline even though we were well ahead of Q3 in the industry, a pretty big step-down decline quarter-to-quarter in the casual dining industry. So, when you take a look at even though we are encouraged by October results, we think it's prudent to take that into account as we look at Q4 especially since much of our sales will come in the month of December. So, Jeff, it's the hurricane, a tightened commodity outlook, some additional labor pressures, and the sales that we just talked about. Now, lastly if you look at the top end of our range, if you add the $0.04 back, we get back to the $1.04 that we talked about in the bottom end of our range. But those are the four key items in our guidance that we put together.

I guess the only thing that I would add to what Dave said is that we do think it's important to take kind of the medium – long-term views. And so what does that mean? Well, last speaking with you all, we didn't see a negative 4.8% in traffic for Q3 on the horizon. That's the softest traffic the industry has had except last Q4 since the recession. So, I think you have to be prudent and cautious. Now, as Dave said, we really like what we're seeing in October. But the lion's share of the volume in this category happens in November and December. And so, we don't want to be surprised at all. And I think Dave also talked about if we like what we're seeing. If the trends keep up, we have line of sight into the low end of that range. But we're going to be prudent and we think this is the right place to be.

Understood. And then just the follow-up question was kind of color, I guess, broadly on your initial thought on 2018. So, it sounds like labor is going to be up 4%. I think that's where it's up in 2017. And now you're saying food is going to be up low-single digit. I'm assuming the annual productivity savings are still intact, but we will wait for that final word. But where does that leave you in terms of directionally restaurant margin? I mean, it would just seem like that's a lot of pressure, and if you just tie that in again with your thoughts on menu pricing as you shift away from discounting, it just seemed like you'd need more pricing to protect the margin, but I know you're hesitant to do so. So, how do you think about that? Maybe what comps you need to hold the restaurant margin in that environment? Thanks.

Sure. Jeff, at this point, we're giving similar detail like we did in our current past practice, and we're going to update everybody on 2018 on what that looks like in our longer-term growth algorithm. We think that's prudent given the challenging nature of this environment. But we do have some levers behind us that look good, there could be some tailwinds, and that would be the sales trends we're seeing, the productivity that we've demonstrated in years past going forward, that would be international, that would be off-premise. Those are just a few of the things that would be a big part of our plans. And also the lever we talk about, there's two other ones would be our loyalty program that Liz has talked about, and we're continuing to see good progress in our exterior and now soon-to-be interior remodels at Outback Steakhouse. So, yes, there are some headwinds, but we call those out on labor costs and commodities, but we have significant tailwinds that we think that we can see going forward, and we'll be providing more details on the February call on 2018 and beyond.

Great. Thank you.

Thank you. Our next question is coming from John Ivankoe of JPMorgan. Please go ahead.

Hi. Thank you. You've talked about the sales priorities, but I was hoping that you could talk about some of the capital priorities for fiscal 2018. I assume you want to continue to open as many units in Brazil as you can, but you did talk about a shift from exterior remodels, which are typically more expensive than interior remodels. And if interior remodels are a bigger part of the plan in 2018. And you also mentioned relocations as well. So, obviously, an important part of any casual dining story is free cash flow generation. So just want to get your sense at least at this point for fiscal 2018, what kind of CapEx we should be thinking about.

Yeah. On the priorities, John, we'll give more details on the overall CapEx number, but if you look over the last few years, that number hasn't changed that much, but we'll give more detail in 2018. But as far as priorities goes, I mean, you're right. I mean, that Brazil business, you look at, again, positive same-store sales growth lapping Rio Olympics, I mean, the capital return, the capital efficiency down there is terrific. And we've got the Outback business, we've got the Abbraccio business, so what a great place to put capital, first of all. Secondly, we're wrapping up the exterior remodel program at Outback Steakhouse. It's getting a lift that we had expected. And now we need to turn to interiors, because like Liz has mentioned many times, interior refreshes are a big part of this business. And we've got some restaurants that haven't been refreshed for five, six, seven years. So it's time. So that will be a big part of our capital priority as well. We'll do some new Outback restaurants as warranted. And then lastly, we're very pleased with how we're building the relocation pipeline at Outback. And so we're going to do 15 this year. We've seen anywhere between 25% and 40% same-store sales growth. We move to a new location. So that's been very, very good for us and the pipeline's building. So international, interior remodels, and then we have our relocation program and, of course, international. And I think we've done a really, really good job managing cash flow and returning cash to shareholders, and that lens (37:21)will continue.

Can I ask a completely separate question? The current promotion at Outback certainly got my attention with the steak and unlimited shrimp at $15.99. Just talk about how important those type of national price pointed promotions are for the brand and what you think the direction of the average ticket is over the next couple of years. In other words, is the Outback average ticket at a point that it shouldn't increase or maybe even should be lower and you need to focus more on traffic. Just can you put the current promotion in the context of what you think the current or the future direction of the average ticket should be?

Yeah. So great question. As you know, we always look at value as total benefits divided by price, right. So you need to give the customer what they expect for a certain price, right. So we're not going to go back into the value play. The, this is get it as cheap as you can, or lowest price point, you see a lot of intense discounting right now. We've taken our lumps and weaning ourself out of that. We're not returning to that. However, it's always going to be important to provide a superior brand experience, and steak and unlimited shrimp is one of those which has been very successful for us. This is the third time we've had it. It's becoming somewhat of a really popular evergreen program for us. And it's one of the lower price points. But then you have experiences like with Big Australia last year where the price point was more in the $20s. And so we're going to have some price point variation in there. We're not going to be heavy value. And we're also going to have commercials and have had without price points in them. So I don't want to get at – in Q4 you'll see a different message for us, coincident with how strong we think the Outback brand is, the quality of the traffic that we're getting, and the quality of the food that we're serving. So I think the name of the game is just knowing your total brand value equation and delivering on surprise and delight benefits at affordable pricing. And for us, we're not going to let ourselves get out of whack on either of those, but we're going to provide surprise and delight at a reasonable range of price point for us.

So at least I can say that you don't have an intention to take the average ticket down. I mean, that seems to be clear from what you just said.

Yeah. I mean, we don't have any stated intention to have a deflationary look at our menu. But we will always provide, okay, opportunities across the price point range to surprise and delight.

Thank you.

Thank you. Our next question is coming from Alex Slagle of Jefferies. Please go ahead.

Thanks. Good morning.

Good morning.

Good morning.

Wondered if you could – good morning – talk a little bit more about the improvements into October. It sounds like seeing improvements across multiple geographies and brands. And perhaps you could just expand upon what you've seen and given the broad portfolio of different brands, I mean, if you could glean any additional insight on what the consumer is feeling right now and what's driving the pickup in October?

Sure. So given the volatility, we and everybody else have gotten further into discussing monthly trends. And that's understood – they're more comfortable with it. That's understandable because of the hurricane, there's a lot of question of, okay, so what was the rebound? And so I think for everyone, you saw some rebound in October. As I think I've said for our brands, we're pleased with the strength that we're seeing and we're seeing it in geographies beyond the hurricane, right. So this is not a hurricane rebound story for us. I also would say, as you have heard from us, we're cautious about extrapolating October's trends into November, December given really a great deal of November, December is driven by the retail landscape and the consumer behavior there. And so all I can do is look at the metrics that we have been patient in investing in, whether it's been loyalty, whether it's been off-premise, whether it's been back into the experience, see the positive metrics associated with that and feel good about the fact that the investments I'm making for the medium to long term are right and good and going to serve us well. We're pleased with October, but if you look at last year's – the story of last year's Q3 was about December being down 7% in the category. So we think it's prudent to have our eye on the fact that the retail landscape still hasn't really settled and that we have the programs to appropriately address that, and we feel good about the progress we're seeing on the new playbook that we've been kind of consistently talking to you guys about and investing in.

Thanks. And then a follow-up on the remodels with them shifting to the interior, do you have a rough idea of how many you might consider and what kind of lift we should think about relative to the exterior remodels?

Yeah. We'll provide more detail on that. Typically, people see on interior remodels 3%, 4% increases in sales. But we'll provide more detail on that. It's going to be a three-year type program, right. But it's something that we now need to turn to because the exterior program has worked out so well. So more detail to come in Q4.

Yeah. And I also just want to say, we started the interior remodel program, as you know, in 2010 having not touched the interiors, as you guys know, for 20 years, right. And we said at the time, we're never going to get behind again because design is even growing with increased frequency. So when you think about it, when we start looking at the interiors again, we're touching stores that haven't been touched for eight and nine years, right. And we've said before, we're going to like pinpoint that 10-year cycle because things don't look as fresh as they used to for as long as they used to. The other thing that I will tell you, and I don't want to get into any more details is that we have so much conviction and belief in our off-premise business that part of what we're going to be looking at and part of what we aren't looking at in these remodels is how big our to-go rooms have to be to bump out to support the kind of traffic that we are seeing so that we can just adequately support. We have firm conviction that our off-premise business will grow to 25% of sales. And so part of the interior is going to be making sure that we're in a place where our to-go rooms frankly are expanded and able to absorb that capacity. So that's part of the – that's not an insignificant part of the remodel. That will more than pay for itself when we look at the incrementality that we believe off-premise represents. So we'll be prudent with capital but this is about refreshing, but it's also about making sure we have the asset capability to serve a growing off-premise business.

Makes sense. Thank you.

And probably the other part – sorry to interrupt, probably the other piece of that off-premise business will be continuing to – we've got one Express location which combines the Outback kitchen with the Carrabba's kitchen open for takeout and delivery. We'll be opening another three to four over the next two months and that's going to be very much part of our – into geographies that we know will support even more delivery. That's going to be part of our plan to leverage that as well.

Thanks.

Thank you. Our next question is coming from Jason West of Credit Suisse. Please go ahead. Jason West - Credit Suisse Securities (USA) LLC: Yeah. Thanks. A couple of questions. I guess the first one, I think on the last call you guys had talked about holding off on taking some price at Outback in the third quarter. Just wondering if you have now taken some price there going into 4Q? Or are you still holding back on that?

Yeah, we don't want to get into too much detail about that, but pricing will be part of our activity. For competitive reasons we don't want to get into the magnitude or the timing. But, yes, it's part of our activity. And we're always looking at the value equation at Outback Steakhouse and our other brands just to make sure that we fit right there. Jason West - Credit Suisse Securities (USA) LLC: Okay. Got it. And then the margins again in the quarter were down pretty significantly even with a pretty good comp at Outback. And obviously the hurricane had a little bit to do with that, but as you look at the brands, is all the margin pressure really coming from the brands that are not comping well, like for the non-Outback brands? Or are you also seeing some pressure at Outback as well just as you're maybe driving the comp with less price, more traffic that that kind of thing?

No. As I talked, there's nothing in particular about any particular brand or things, but as I talked earlier about margins and as we look this year and then as we go forward, we knew if you step back, we knew that the investments in food and service at Outback was going to have some impact on margins. But that's paying off now in higher sales for us. We've got the labor inflation piece that I talked about in the quarter. We did pay people, employees for lost hours due to the hurricane, and we had inventory and our NIM matters. And if you look at the restaurant margin line, the sale leaseback impacts restaurant margins by 50 basis points and operating margins by 20 basis points. Again, like I mentioned, that's still a fantastic economic trade. S, those are the things that are impacting us now. Now, Jason, we still think that we have 150-basis point to 200-basis point margin opportunity through sales growth, through continued productivity, through our growing international business where our margins are up 130 basis points. All of that will help us as we go forward. And we've done a good job on productivity in the past, and we've got a good pipeline going forward. And I'd ask you to take a look at how we managed food cost this quarter as an example of that. Jason West - Credit Suisse Securities (USA) LLC: Okay. Got it. Thank you.

Thank you. Our next question is coming from John Glass of Morgan Stanley. Please go ahead. John Glass - Morgan Stanley & Co. LLC: Thanks very much. First maybe, Liz or Dave, if you could just update us on how you are doing in delivery, how many stores are doing it, for example. And other casual diners, at least one other, had talked about it meaningfully lower check on the delivery business, which is really different than what the fast food industry is experiencing, which is a meaningfully higher check. How do you see check average in the delivery business?

Yeah. So I love answering that question. We are in 246 locations, and we're hanging there because of, as I said to you, the opportunity is looking very robust, and we want to make sure we have the space, the staff, and the pacing to deliver on consumers' expectations which we believe is that 30- to 40-minute delivery time. And so we want to make sure we're kind of going slower to go fast, getting it absolutely right in those 246 stores that it's in, right. So we feel really good about that. We are actually seeing the opposite of what you said. We are seeing a higher delivery check than we are seeing with the curbside delivery. And we really like that. We think that that's something that is behaviorally driven. You think – you tend to call ahead for curbside. There's a lot of that, but then when you're ordering a delivery, I think you get anecdotally you're at home and a lot of people are adding things on to the order, et cetera. So delivery check average has been certainly above our curbside, and we see this potential continuing to grow. Dave, I don't know if you want to add anything?

No. No, I think, Liz, you mentioned all of the off-premise opportunities that we have. And we are really focusing in on the key things that drive delivery, and most importantly about off-premise for us is we have the people capability in the building that have off-premise and delivery experience to help us make this happen. So we're very enthusiastic about where this is going. John Glass - Morgan Stanley & Co. LLC: If you could just clarify, does that higher check include like some catering component, either at Carrabba's or at Outback, or is that simply just individual orders?

No. This is just individual orders. John Glass - Morgan Stanley & Co. LLC: And then, Dave, you talked about the 150-basispoint, 200basispoint margin opportunity. I think that's been a long-standing goal. It's been harder to realize over the last couple of years. What structurally has to change in the business? I mean, I know this is labor. Does that require labor inflation to somehow normalize? What other components have to really change and maybe what's a reasonable timeframe to think about that over?

Yeah. And I think we've talked about over the next few years and I've talked about the sales growth opportunities that we have. And, John, you see the sales trends that we have. We've got continued productivity and as we manage our cost structure and like a lot of restaurant companies won't give the details, but technology and things like that are part of what we're thinking through. We have an international business that has expanding margins in what we have there. So I think as we go forward, John, between the sales growth, the continued progress we're making on productivity, I'd ask again to take a look at the food cost management side of this piece, and also as we get into international becomes a bigger part of the business. Now, as you look at operating margin, obviously we're always looking to make our organization as efficient and as effective as possible. And we've done a good job with that over the years. So, as you look down to our operating margins, you can take a look at that. And then lastly, I just want to remind everybody, we made some excellent economic trades on sale-leaseback. It impacts restaurant margins by 50 basis points. It impacts operating margin by 20 basis points. So obviously we'll begin to lap that now. But that was a fantastic economic trade.

The only other thing I would add, John, is that structurally our go-to-market is shifting to being higher ROI, less what I'd call resource intensive as we move from mass marketing to mass personalization. I think one of the big assets that we're building is this proprietary relationship in our Dine Rewards program, which is up to 4.6 million members. And we're catching up from a system standpoint but also a data science standpoint on how to market individually in a personalized manner to each one of those because we know about those folks, we know their habits. And when we talk to them in a personalized way and contact with them, we get a significant bump on opening rates, return on investment, et cetera. So I don't want to get too far ahead of our skis, but we're investing a lot in the ability to mine our data. We have $9 million email database that we've built for marketing muscle. And when we couple that with the personalization journey that we are on that becomes very efficient and very powerful. John Glass - Morgan Stanley & Co. LLC: Thank you.

Thank you. Our next question is coming from Karen Holthouse of Goldman Sachs. Please go ahead. Karen Holthouse - Goldman Sachs & Co. LLC: Hi. Another question on delivery. Looks like 250 stores is pretty similar to what you reported having last quarter, so a little bit of pause in the rollout. Working through operations, how long do you think it'll take before you'll feel like you have the model sorted and can maybe start expanding the base of stores again.

Yeah. So what we'll do is we don't have a particular three months, six months, whatever it might be, but we do know the operating measures and the customer service that we want to provide. We think we can get after that pretty quickly, and we've seen great progress on that. We're very happy with what we're seeing from a sales and customer standpoint. But we want to make sure, like Liz said, to get this right because it's a very, very big opportunity for us and we're making really, really, really good progress. So, we've got efforts up against that on all of the customers' side and the operating side.

Yeah. And I think just – I think we're going to go slow to get it right to go fast. Because it has such potential, it has asset implications, staffing implications, all of that. We do have very specific work stream and resources against that. But I think we anticipate next year, we'll be in the position to take the learnings from the 240 restaurants and expand that. But everything is about that 30- to 40-minute delivery time expectations and appropriate staffing, because at the same time, we want to continue to grow our in-store experience measures, which we've seen on Outback, and so we're not willing to compromise either. Karen Holthouse - Goldman Sachs & Co. LLC: Great. Thank you.

Thank you.

Thank you. Our next question is coming from Brian Vaccaro of Raymond James. Please go ahead. Brian M. Vaccaro - Raymond James & Associates, Inc.: Thank you and good morning. Just a quick follow-up on the hurricane impact and then a question on labor, if I could. But you quantified the impact on the third quarter. Can you break that down to exposure by... (55:22)?

We're not going to break that down into great detail, but it covers the lost operating days and it covers inventory, R&M, and labor. And it's $0.04 a share for us in the quarter. And I think we handled it extremely well as a company. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. And curious if you have a ballpark estimate of how much of a benefit you're seeing on the hurricane rebound in October? Just a ballpark.

We don't have a ballpark, Brian. But like Liz said, this is not like Florida is going crazy, and the rest of the country is not doing that well. It's a broad-based performance by our company, especially Outback. So this is not a huge, huge, huge bounce-back, and it's not we're only seeing in a particular part of the country. It's broad-based. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay.

Yeah. Just to build on that. We don't see – the strength in October is across all geographies, across all brands, right. So, certainly, like everybody else, there was some rebound in October, but that definitely hasn't what's been driving the overall – the key thing that's been driving the overall strength. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. That's helpful. And then the question on the labor line. This year your labor cost, if you look at it on a per-operating-week basis has been running up 6% to 7% year-on-year. Can you parse that out a little between wage inflation you're seeing versus investments that you've made to improve the service standards? And then as we think about that line into 2018, shouldn't that per week sort of cost trend mellow out a bit even assuming 4% labor inflation like you just guided to?

Yeah. We aren't going to get into 2018 details right now, but clearly, as we talked about before, 2017, Brian, was a year of additional service investment at Outback. So we'll be able to lap that starting in 2018. And we called out between 4%, 4.5% labor inflation and then the rest of it is the investments that we're making in the business Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. And if I could just squeeze one more in. The previous expectation, if we go back to third quarter comps for Outback, you previously had expected I think average check to be down year-on-year in the third quarter. Just curious what drove the increase versus that expectation, and if any comment on average check trends that we should be thinking about in the fourth quarter or into 2018. Thank you.

Yeah. No, we're not going to get into detail for competitive reasons on average check, but we did want to call out average check in Q3 because we saw potentially a softening in PP (58:07) at Outback. But the mix around a little more higher price items was the biggest difference. It wasn't a pricing item or anything like that, a little more favorable mix than we anticipated. Brian M. Vaccaro - Raymond James & Associates, Inc.: Thank you.

Thank you. Our next question is coming from Matthew DiFrisco of Guggenheim Securities. Please go ahead.

Thank you. Just got a couple of follow-up questions here. Question on development in 2018, can you just give us a little early-stage context of what we should think about heading into it in relation to what you did in 2017?

Yeah. No, we talked about it earlier, Matt. We talked about the capital – to John's question, the capital utilization. We're going to talk about that in February, but I want to make sure people know our priorities, right, our priority is international, right. Brazil is just doing terrifically well. The interior remodel program at Outback, and the relocation. So we'll get more details in 2018, but we just wanted to talk briefly about our capital allocation philosophy.

Understood. And then I guess if you look at the fourth quarter, the extra operating week being so powerful, I know you don't want to quantify it, but I guess at least for understanding how 2018 might progress, I would assume that 1Q 2018 is going to have a significant headwind by losing that week. So if whatever, it would be somewhat of a muted earnings growth year in context apples-to-apples to the other quarters?

Yeah. We talked about 2018 being 52 weeks versus 53 weeks and with the biggest impact coming in Q1, correct.

Right. So it's Q1, not 4Q? Excellent.

Correct.

Okay. And then just lastly, if you look at the labor pressure you're talking about, you mentioned 4% wage pressure. However, you've done some new items of – or at least the lunch rollout in Outback I'm thinking most significantly that brought in incremental potentially lower-margin business or lower-capacity business than dinner. Is there an opportunity over the next year or two to take a look at optimizing labor potentially and curbing hours, especially around those periods where some restaurants might be significantly lower capacity?

Yeah. Yes, we're always looking to optimize labor with our existing labor tools and looking at our capacity. Lunch still continues to be really a good thing for us, and we're very glad we rolled it out, so that's not particularly, I think, something that we need to address per se. But obviously, utilizing labor during, what we call, shoulder periods and things like that will be extremely important as we go forward and innovation and technology around that. So, we will continue to optimize labor, Matt, but we will continue to support our lunch program.

The other thing I would just add is that, as you know, on all of our brands, particularly on Outback and Carrabba's, we've really driven for menu simplification, right, because we had a lot of complexity. One of the key things on Outback is that we took a significant number of the items off. Same thing at Carrabba's. I don't want to get into specifics, but we are seeing that payoff not only in terms of kind of better customer service as it becomes less complex. But obviously that has some labor possibilities over the medium to long term.

So, would it be, I guess, too aggressive to assume that 2018, you'd have some offsets regarding labor? Or is it just going to be pretty much a tough year to get any sort of leverage?

More to follow, Matt. I've talked about some of the tailwinds we have on productivity and sales trends, but that will be more to come in February.

But I think everybody is talking, it's been a tough labor market in 2017, and I think everybody has the same outlook for 2018.

Understood. Thank you.

Thank you. Our next question is coming from Sharon Zackfia of William Blair. Please go ahead. Sharon Zackfia - William Blair & Co. LLC: Hi. Good morning.

Good morning.

Hi, Sharon. Sharon Zackfia - William Blair & Co. LLC: Two questions. On the holidays, I appreciate everything you're saying. I'm just curious whether any of the levers that you've built up like loyalty or off-premises might position you better for the holidays if there are ways that you can use that to buffer yourselves against what could occur? And then secondarily, I think at one point you had $18 million in incentive comp kind of built into this year's plan, I'm just wondering where that stands today?

Yeah. We always look at our incentive comp as it relates to our guidance. We did make some adjustment this quarter, but we don't want to get into any kind of details. And a lot of what we'll be doing on our incentive comp is dependent on what that all-important Q4 looks like, especially December. So, some judgments will be needed to be made there. So, that's how we're handling incentives.

Yeah. And in terms of the Q4 environment, Sharon, you're absolutely right. I think our taking a cautious approach and looking at the trends which is this notion of dining with your loyal members and off-premise has certainly guided our thinking as we developed our marketing programs. So, I don't want to, for competitive purposes, get any further than that. But that certainly is the focus that we have going into Q4. And I do like where we're heading and what we have with that. But, again, we all just have to see where the retail landscape shapes out, but that has certainly shaped our thinking as we put together our Q4 programs. Sharon Zackfia - William Blair & Co. LLC: Great. Thank you.

Thank you. Our next question is coming from Andrew Strelzik of BMO Capital Markets. Please go ahead.

Hey, good morning. Thanks for taking the question. I had two things. The first, can you give us the number of exterior remodels that are left for the fourth quarter? And the second thing on what you talked about with exploring the organizational structure and then reinvesting those savings, it sounds like it's more cost neutral than the investments you've been making the last two years. So, just conceptually, is the thought that that reinvestment can ultimately take the place of the investments that you've been doing, or is that really touching different pieces of the business and given the sales lifts that you've been seeing from the reinvestments that it makes sense to kind of layer that on top? Just wondering conceptually how those two things are interrelated. Thanks.

Sure. Andrew, we have just a handful of exterior remodels left, and we may have a few more going into Q1 but not many. The number escapes me but not anything meaningful. We're pretty much done with the program.

And on the organizational front, it's really the holistic look of how do we need to be organized to drive these growth levers that we've been nurturing and that we're seeing coming up, okay. And so that means doubling down our investment in digital, in data science, in data management. At the same time, it means decreasing our investments and de-resourcing both from a capital and a focused, de-resourcing areas that are no longer part of the go-forward playbook. And so this organizational look is about nimbleness, it's about agility, but I would describe it as, it has a big E in terms of effectiveness, but there's also a little E in terms of efficiency. So, net, I think that there's the opportunity for efficiency, but as we de-resource some areas to pivot into investing more in digital and data. So, we're viewing it as an agility play, but there'll also be some efficiencies.

Okay. And so, I guess, the other side of that is, does it make sense given the lifts that you're seeing to go for round three of the reinvestments in the stores or do you feel like based on where the customer scores are and things like that that you really got into the place where you want to be?

Yeah. We'll always continue to look at how we improve the customer experience, whether it's in restaurants, whether it's how we go to market, whether it's off-premise, et cetera. And Liz just mentioned about the big E on effectiveness and the little E on efficiency. Those are things that are going into our thoughts as we go forward from a company and financially.

Great. Thank you very much.

Thank you. At this time, I would like to turn the floor back over to Ms. Smith for any closing comments.

Great. Thanks, operator. We appreciate everyone for joining us today and we look forward to updating you on the portfolio on the Q4 call. Thanks again.

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. You may disconnect your lines at this time and have a wonderful day.