Bloomin’ Brands faced a challenging Q2, with the market reacting sharply to its declining sales and margin pressures despite modest improvements in U.S. traffic and a slight revenue beat. Management attributed the quarter’s performance to ongoing operational changes, including menu simplification and renewed focus on Outback Steakhouse’s guest experience. CEO Michael Spanos acknowledged, “We are still losing share in the industry as defined by Black Box,” highlighting the uphill battle against broader casual dining headwinds. Executives also pointed to cost inflation, particularly in labor and product inputs, as key factors affecting profitability.
Is now the time to buy BLMN? Find out in our full research report (it’s free).
Bloomin' Brands (BLMN) Q2 CY2025 Highlights:
- Revenue: $1.00 billion vs analyst estimates of $988.7 million (10.4% year-on-year decline, 1.4% beat)
- Adjusted EPS: $0.33 vs analyst estimates of $0.29 (13.1% beat)
- Adjusted EBITDA: $80.02 million vs analyst estimates of $83.72 million (8% margin, 4.4% miss)
- Adjusted EPS guidance for the full year is $1.05 at the midpoint, missing analyst estimates by 14.8%
- Operating Margin: 3%, down from 4.1% in the same quarter last year
- Locations: 1,479 at quarter end, up from 1,465 in the same quarter last year
- Same-Store Sales were flat year on year, in line with the same quarter last year
- Market Capitalization: $568.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Bloomin' Brands’s Q2 Earnings Call
- John William Ivankoe (JPMorgan): Asked about adjusting Outback general manager compensation to drive better performance. CEO Michael Spanos replied that the company remains committed to a variable compensation model tied to sales and profit growth, with ongoing assessment as part of the strategic plan.
- Jeffrey Andrew Bernstein (Barclays): Inquired about prioritizing initiatives within the Outback turnaround. Spanos reiterated the focus on service model, steak quality, and value, describing progress as being in the "early innings" and emphasizing continued testing and learning.
- Alexander Russell Slagle (Jefferies): Requested more detail on the Aussie 3-course offering’s impact on guest behavior. Spanos shared that the value deal increased traffic and guest satisfaction, with a significant portion of guests trading up for premium options, although some profit mix headwinds remain.
- Jeffrey Daniel Farmer (Gordon Haskett): Asked what learnings from the initial Outback test restaurants are most impactful. Spanos highlighted the cumulative effect of changes to service, quality, and value, as well as the importance of consistent execution and change management to build momentum.
- Brian Hugh Mullan (Piper Sandler): Queried about menu reduction outcomes and further plans. Spanos noted both employees and guests responded positively, allowing for better product execution, with continued menu reduction likely as part of ongoing innovation and simplification.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will focus on (1) the effectiveness and guest response to Outback’s expanded test initiatives and menu innovation, (2) progress in operational efficiency and cost control amid inflationary pressures, and (3) the pace and impact of restaurant remodels and asset optimization efforts. Additional attention will be paid to leadership transitions and any signs of sustained market share recovery within the casual dining segment.
Bloomin' Brands currently trades at $6.68, down from $8.98 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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