BLMN — Bloomin' Brands, Inc.

Summary of BLMN Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $929 million, up from $910 million year-over-year.
• U.S. Comparable Restaurant Sales: Increased by 120 basis points; traffic was flat, an improvement from Q2.
• Outback Comp Sales: Up 40 basis points, marking its first positive comp sales since Q2 2023.
• Adjusted Diluted Loss Per Share: $0.03, better than the guidance range of negative $0.10 to negative $0.15.
• GAAP Diluted Loss Per Share: $0.54 compared to a loss of $0.01 last year.
• Adjusted Operating Margins: 0.8%, down from 2.3% year-over-year, impacted by inflation in COGS and labor.
• Total Debt: $896 million, with leverage metrics of 4.3x lease-adjusted net leverage and 2.9x net-debt-to-adjusted-EBITDA.

2. Strategic Updates and Business Highlights

• Turnaround Strategy: Focused on Outback Steakhouse, emphasizing operational priorities such as simplifying menus, enhancing guest experience, and improving steak quality.
• Leadership Changes: New brand presidents with extensive operational experience were appointed, aimed at reinforcing the company culture and execution.
• Menu Simplification: Reduced SKUs by 10-20% to streamline operations and enhance guest experience.
• Technology Integration: Ziosk devices installed in Outback restaurants improved payment efficiency and guest feedback collection.
• Successful Promotions: The Aussie 3-Course offering has driven positive traffic and sales, with two-thirds of guests opting for higher-priced options.

3. Forward Guidance and Outlook

• U.S. Comp Sales Guidance: Raised to flat to positive 50 basis points for the full year.
• Adjusted Diluted Earnings Per Share Guidance: Increased to $1.10 to $1.15, benefiting from tax credits.
• Q4 Expectations: U.S. comparable restaurant sales projected between positive 50 to 150 basis points, with continued positive impact from the Aussie 3-Course promotion.
• Long-term Investments: Plans to invest approximately $75 million in turnaround initiatives from 2026 to 2028, with a focus on steak quality, service improvements, and restaurant refreshes.

4. Bad News, Challenges, or Points of Concern

• Operating Margin Decline: Adjusted operating margins fell due to inflationary pressures on COGS and labor costs, which are expected to continue.
• Traffic Concerns: While overall traffic improved, U.S. traffic was still negative by 10 basis points, indicating ongoing challenges in customer footfall.
• Franchise Revenue Decline: Decrease in franchise and other revenue due to lower royalty rates from Brazil.
• Restaurant Closures: Closure of 21 underperforming restaurants, with potential for more evaluations in the future.

5. Notable Q&A Insights

• Sustained Momentum: Q3 trends have continued into Q4, with positive consumer engagement across various demographics.
• Consumer Behavior: Despite some concerns about macroeconomic conditions, dining out remains a priority for consumers, indicating a resilient market for casual dining.
• Marketing Strategy: Plans to shift marketing focus towards digital channels to better reach younger cohorts and improve ROI, with a phased approach to increase spending as operational execution stabilizes.
• Steak Quality Improvements: Upcoming enhancements to steak offerings are expected to significantly boost guest satisfaction and sales metrics.
• Operational Execution: Emphasis on leadership presence in restaurants during peak hours is seen as a key factor in improving execution and guest experience.

Overall, Bloomin' Brands is navigating a challenging environment with a focused turnaround strategy for Outback Steakhouse, showing early signs of improvement in sales and guest satisfaction metrics while addressing operational and financial challenges.