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Bloomin' Brands Earnings: Outback Turnaround in Focus as EPS Beats Guidance

  • Writer: Hardik Shah
    Hardik Shah
  • Aug 6
  • 3 min read
Bloomin' Brands Restaurants

TLDR


📈 Revenue Strength: Q2 revenue rose slightly to $1.002B, driven by new restaurant openings.

📉 Margin Trends: Adjusted operating margin fell to 3.5% from 6% YoY, pressured by inflation and value promotions.

🔭 Forward Outlook: FY EPS guidance revised to $1.00–$1.10 amid turnaround investments and macro cost pressures.


Business Overview


Bloomin’ Brands, Inc. (NASDAQ: BLMN) is one of the largest casual dining companies globally, with over 1,450 restaurants across 46 U.S. states and 12 countries. The company’s founder-inspired brand portfolio includes:

  • Outback Steakhouse (steak-focused casual dining)

  • Carrabba’s Italian Grill (handcrafted Italian cuisine)

  • Bonefish Grill (seafood and seasonal dishes)

  • Fleming’s Prime Steakhouse & Wine Bar (premium steak and wine experience)


The company operates through a mix of company-owned and franchised locations, with strong off-premises capabilities and a growing focus on digital integration.


Bloomin' Brands Earnings Q2'25


  • Revenue: $1.002B (+0.3% YoY)

  • Adjusted EPS: $0.32 (vs. $0.45 YoY), exceeding guidance of $0.22–$0.27

  • GAAP EPS: $0.29 (vs. $0.28 YoY)

  • Adjusted Operating Margin: 3.5% (↓250 bps YoY)

  • Adjusted Restaurant-Level Margin: 12.0% (↓200 bps YoY)

  • Adjusted EBITDA: $77M (↓24% YoY)


Drivers:

  • Traffic declines at Bonefish (-5.8%) offset Carrabba’s and Fleming’s gains.

  • Average check rose 1.9%, but promotions like Aussie Three-Course added mix pressure.

  • Cost pressures included 3.3% commodity inflation and 3.4% labor inflation.

  • Insurance and health benefits expenses were also up YoY.


Forward Guidance


  • Full-Year EPS (Adjusted): Revised to $1.00–$1.10 from prior range, reflecting:

    • ~$6M in Brazil-related FX contract costs

    • ~$6–8M in legal reserve adjustments

    • ~$3M in Outback turnaround investments

  • Q3 EPS (Adjusted): ($0.15) to ($0.10)

  • Q3 Comp Sales: Expected to range from flat to -1%

  • FY Capital Expenditures: ~$190M


Risks & Opportunities

  • Risks: Tariffs, inflation, rising insurance costs, legal settlements

  • Opportunities: Turnaround momentum at Outback, digital and off-premise channels, brand simplification


Operational Performance


Outback Turnaround CEO Mike Spanos emphasized:

“Turnaround at Outback is our highest priority. We're investing in quality, service, and value as the foundation for sustainable growth.”

Key changes and progress:

  • Menu streamlined; LTOs removed for consistency

  • Aussie Three-Course Value Menu showing traction

  • TableMate (Ziosk) rollout completed, improving table turns by 5–7 minutes

  • Traffic down 2% YoY but improved sequentially by 190 bps

  • Test initiatives expanded from 14 to 42 locations, with focus on:

    • Steak quality upgrades

    • New service model (1:4 server ratio vs. 1:6)

    • Opening price points and guest feedback loops


Market Insights


  • Outback still underperforming broader casual dining (per Black Box data)

  • Carrabba’s comp sales rose 3.9%, driven by catering and wine dinners

  • Fleming’s posted 3.8% comp growth on holiday traffic and event dining

  • Off-premises accounted for 24% of U.S. sales, including 26% for Outback and 35% for Carrabba’s

  • Bonefish continues to face challenges; outlook remains cautious


Consumer Behavior & Sentiment


  • Value-seeking behavior evident as average check rose modestly

  • Over 85% of guests now use TableMates (Ziosk) for payment

  • Guest metrics on food and intent to return improved at Outback

  • Frequency remains low (~2x/year per guest), requiring sustained marketing and operational improvements


Strategic Initiatives


  • Talent Overhaul: 10+ executive changes to strengthen transformation capabilities

  • Brand Positioning: Sharpening Outback’s casual, craveable image

  • Digital & Data: Enhanced feedback loops, AI-enabled sentiment analysis

  • Restaurant Network Assessment: Remodels underway, capital shifted from openings to refreshes

  • Testing & Innovation: New service model and menu changes undergoing rigorous trial


Capital Allocation


  • Dividends: $0.15/share approved for Q3

  • Buybacks: $97M authorization remains, but no plans to execute in near-term

  • Debt Position:

    • Net debt: $867M

    • Lease-adjusted net leverage: 4.1x (targeting <3.0x)

    • Next Brazil sale installment ($96M) expected in Q4


The Bottom Line


Bloomin’ Brands is firmly in turnaround mode, particularly at Outback, where leadership is investing in guest experience, value perception, and operational simplicity. The Q2 earnings beat offers a glimmer of momentum, but margin pressure, legal costs, and macro headwinds continue to weigh on results.


For investors:

  • Watch: Results from the 42-store test cohort and margin progress in Q4

  • Risk: Continued traffic underperformance relative to industry

  • Upside: Brazil monetization, remodel payoff, and disciplined cost optimization may unlock value



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