Bloomin' Brands (BLMN) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenues: $1.02 billion, up 1% from $1 billion in Q2 2025.

U.S. Comparable Restaurant Sales: Increased by 230 basis points; traffic down 190 basis points.

Adjusted Diluted Earnings Per Share: $0.39, compared to $0.32 in the prior year.

GAAP Diluted Earnings Per Share: $0.37, up from $0.29 last year.

Adjusted Operating Margins: 4.0%, improved from 3.5% year-over-year.

Commodity Inflation: 5.7% impacting COGS.

Total Debt: $636 million with a lease-adjusted net leverage of 3.7x.

2Strategic Updates and Business Highlights

Outback Turnaround Plan: Focus on improving guest experience, service quality, and brand relevancy.

Guest Metric Scores for Outback improved for the fourth consecutive quarter.

New service model implemented, reducing server-to-table ratio from 1:6 to 1:4 during peak hours.

Enhanced steak lineup and successful combo offerings driving guest satisfaction and sales.

Marketing Strategy: Increased marketing spend by $15 million for the year, focusing on digital and social channels.

Restaurant Refreshes: On track to refresh approximately 85 Outback locations in 2026, with an average spend of $350,000 to $400,000 per location.

3Forward Guidance and Outlook

Full-Year Fiscal 2026 Guidance:

U.S. comparable restaurant sales expected to be between 1% and 2%.

Adjusted diluted earnings per share guidance raised to $0.90 - $1.00 from $0.75 - $0.90.

Q3 2026 Expectations:

U.S. comparable restaurant sales projected between 1% and 2%.

Adjusted diluted earnings per share expected to be between -$0.27 and -$0.22 due to tax expenses.

4Bad News, Challenges, or Points of Concern

Traffic Decline: Despite improved guest metrics, Outback's traffic was down 2.5%, raising concerns about converting positive guest feedback into actual visits.

Inflationary Pressures: Commodity inflation remains a concern, with costs impacting margins.

Competitive Pressures: Ongoing competition in the casual dining sector may affect traffic and sales growth.

5Notable Q&A Insights

Guest Experience and Traffic Conversion: Management acknowledged the challenge of translating improved guest scores into higher traffic, emphasizing a long-term focus on sustainable growth rather than immediate results.

Steak and Service Improvements: Positive feedback on the new steak lineup and service model was noted, with guests increasingly trading up to premium offerings.

Marketing Strategy: A shift towards a more balanced marketing approach, focusing on digital channels to attract younger demographics, was discussed.

Managing Partner Engagement: The recent Managing Partners Summit energized leadership and reinforced commitment to the turnaround strategy, with positive feedback from co-founder Tim Gannon. Overall, Bloomin' Brands is making progress in its turnaround strategy, with improved financial metrics and guest satisfaction, but faces challenges in traffic growth and inflationary pressures.