BLMN — Bloomin' Brands, Inc.

Summary of BLMN Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $975 million, slightly up from $972 million year-over-year.
• U.S. Comparable Restaurant Sales: Flat, with traffic up 50 basis points.
• Adjusted Diluted Earnings Per Share: $0.26, compared to $0.22 last year, within guidance of $0.23 to $0.28.
• GAAP Diluted Loss Per Share: $0.14, down from earnings of $0.12 last year.
• Adjusted Operating Margins: 3.4%, down from 3.5% year-over-year.
• Total Debt: $728 million, with $241 million repaid in 2025.
• Leverage Metrics: 3.9x lease-adjusted net leverage and 2.4x net debt to adjusted EBITDA.

2. Strategic Updates and Business Highlights

• Turnaround Strategy: Focused on Outback, emphasizing operational consistency in food, service, experience, and value.
• Guest Metrics Improvement: Positive trends in guest satisfaction and traffic, particularly at Outback, which saw its first quarter of positive traffic growth since Q4 2021.
• Menu Innovations: Introduction of a new steak lineup, with strong guest satisfaction scores.
• Marketing Strategy Shift: Moving towards a 60% digital and 40% linear TV mix for marketing spend in 2026, with an increase in marketing budget concentrated in the second half of the year.
• Investment Plans: Approximately $50 million planned for 2026 to enhance food quality, service experience, and managing partner compensation.

3. Forward Guidance and Outlook

• Fiscal 2026 U.S. Comparable Restaurant Sales Guidance: Expected to be between 0.5% and 2.5%.
• Adjusted Diluted Earnings Per Share Guidance: Projected range of $0.75 to $0.90.
• Capital Expenditures: Expected between $185 million and $195 million, with a focus on remodels and maintenance.
• First Quarter 2026 Guidance: U.S. comparable restaurant sales expected to be flat to up 1%, with adjusted diluted earnings per share between $0.57 and $0.62.

4. Bad News, Challenges, or Points of Concern

• Traffic Decline: Notable step-down in traffic during the last six weeks of Q4, attributed to external factors such as weather.
• Comp Sales Performance: Outback's comp sales were down 60 basis points, indicating challenges in maintaining sales momentum.
• Inflation Pressures: Commodity inflation projected at 4.5% to 5.5%, with labor inflation similar to last year at 3% to 3.5%.
• Operational Execution: Consistency of execution remains a significant challenge, with management emphasizing the need for improved operational standards.

5. Notable Q&A Insights

• Sequential Trends: Management noted a strong start to Q1 2026 but acknowledged that weather negatively impacted sales by approximately 2.2%.
• Service Model Testing: Positive feedback from test locations regarding the new service model, which aims to improve guest interaction by reducing the server-to-table ratio.
• Marketing Spend: Q4 marketing spend was down slightly, but a significant increase is planned for the second half of 2026.
• Managing Partner Investments: Emphasis on competitive compensation for managing partners to reduce turnover and improve operational performance.
• Test Locations: The 42 test locations showed encouraging results in traffic and guest satisfaction, validating the strategic initiatives being implemented.

Overall, while Bloomin' Brands has made progress in its turnaround strategy, challenges remain in maintaining traffic and managing inflationary pressures. The company is cautiously optimistic about its future performance, supported by strategic investments and operational improvements.