Bloomin’ Brands Inc. (NASDAQ:BLMN) stock fell Friday despite the restaurant operator reporting better-than-expected third-quarter results and raising its full-year earnings outlook.
Declining customer traffic, weaker adjusted margins and a disappointing fourth-quarter forecast weighed on investor sentiment.
Bloomin’ Brands Beats Earnings Estimates
Bloomin’ Brands reported an adjusted loss of 17 cents per share, narrower than Wall Street’s expected loss of 24 cents.
Revenue rose 1.7% to $944.35 million, beating the $925.23 million estimate.
Revenue growth reflected higher comparable sales and a $13.2 million benefit from revised gift card breakage estimates. Restaurant closures and openings partly offset those gains.
CEO Mike Spanos outlined four priorities for Outback Steakhouse’s turnaround. These include improving dining experiences, strengthening brand appeal, rebuilding restaurant culture and upgrading locations.
Customer Traffic Falls As Margins Tighten
U.S. comparable restaurant sales rose 1.9%, as a 3.7% increase in average check offset a 1.8% decline in traffic.
Bonefish Grill led with 5.3% sales growth, followed by Outback Steakhouse at 1.9%. Carrabba’s Italian Grill gained 0.6%, while Fleming’s sales remained flat.
Outback’s guest satisfaction scores improved for the fifth straight quarter.
GAAP operating margin improved to 2% from negative 3.9%. However, adjusted operating margin narrowed to 0.3% from 0.8%.
Adjusted restaurant-level margin slipped to 9.3% from 9.5%. Adjusted EBITDA fell to $44 million from $52 million.
Higher food and labor costs, along with increased advertising spending, pressured profitability.
The company ended the quarter with $90.7 million in cash and $768 million in debt.
Bloomin’ Brands Raises 2026 Outlook
Bloomin’ Brands raised its full-year adjusted earnings forecast to 97 cents to $1.02 per share from 90 cents to $1. Analysts expect 97 cents.
The company also increased its GAAP earnings forecast to $1.06 to $1.11 per share from 85 cents to 95 cents.
However, its fourth-quarter outlook fell short of expectations.
Management forecast adjusted earnings of 7 cents to 12 cents per share, below the 14-cent estimate.
The company expects full-year U.S. comparable sales growth of 1% to 1.5%. It also projects commodity inflation of 4.5% to 5.5% and wage inflation of 3% to 3.5%.
BLMN Price Action: Bloomin’ Brands shares fell 2.01% to $10.26 in Friday’s premarket trading, according to Benzinga Pro.
Image via Shutterstock
Recent Comments