Bloomin' Brands, Inc. (BLMN) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary presents a mixed picture with several negative factors outweighing positives. Financial performance is weak, with declining revenues, EPS, and operating margins. The guidance is also negative, expecting further declines in sales and EPS. Despite some positive elements like increased average check and off-premises sales, the market strategy and financial health are concerning, with high debt and inflation pressures. The Q&A section reveals early-stage turnaround efforts and lack of clarity in management responses, further dampening sentiment. Given the small-cap nature, stock is likely to see a negative reaction.
Key Financial Performance
Total revenues $1 billion compared to $999 million last year, showing a slight increase. The increase was driven by net impact of restaurant openings and closures, offset by a decline in franchise and other revenue due to a lower royalty rate on Brazil this year.
U.S. comparable restaurant sales Down 10 basis points year-over-year. Traffic was down 200 basis points. The decline was attributed to investments in value offers for guests and challenges in the casual dining industry.
Average check Increased by 1.9% compared to 2024. This was due to investments in value offers for guests.
Off-premises sales 24% of total U.S. sales in the quarter, consistent with Q2 last year. Outback's off-premise sales were 26%, and Carrabba's was 35%.
GAAP diluted earnings per share $0.29 compared to $0.28 last year, showing a slight increase.
Adjusted diluted earnings per share $0.32 versus $0.45 last year, showing a decline. The decline was due to transformational and restructuring activities and foreign currency forward contracts.
Adjusted operating margins 3.5% versus 6.0% last year, showing a decline of 250 basis points. The decline was driven by higher costs, including COGS inflation of 3.3%, labor inflation of 3.4%, and increased health insurance and operating expenses.
COGS inflation 3.3%, driven by higher-priced inventory and negative product cost mix.
Labor inflation 3.4%, driven by inflationary pressure on wages.
Off-premises sales percentage 24% of total U.S. sales, consistent with the previous year.
Net debt $867 million at the end of Q2. The company received $104 million from the first installment of the Brazil refranchising transaction and applied it to the revolver balance.
Leverage metrics 2.7x on a net debt to adjusted EBITDA basis and 4.1x on a lease-adjusted net leverage basis.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Aussie 3-course offering: Contributed to traffic improvement at Outback in Q2. Positioned as an everyday value offer, easy to execute, and provides great value for guests.
Menu simplification: Streamlined menus across brands, removing low-performing items and seasonal LTOs to focus on everyday execution.
Ziosk/Tablemates: Rolled out at Outback, improving table turns by 5-7 minutes and gathering real-time feedback through surveys.
Steak quality and menu innovation: Testing enhanced product specs, updated execution processes, and opening price points to improve guest experience.
International expansion: New CFO-elect, Eric Christel, has experience in international expansion, which may influence future strategies.
Brazil refranchising: Received $104 million from the first installment and expects $96 million in December 2025, focusing on debt reduction.
Leadership restructuring: Significant changes in senior leadership to enhance operational and strategic capabilities.
Operational priorities: Focus on simplifying the agenda, driving consistency, and turning around Outback brand.
Cost-saving initiatives: Engaged external partners to identify savings in indirect expenses, contracts, and supplies.
Outback turnaround: Expanded testing to 42 restaurants focusing on service models, steak quality, and value components.
Brand positioning: Working on sharper positioning and consumer communication for Outback to differentiate within casual dining.
Remodeling strategy: Plans to remodel 10 Outback locations in 2025 with varying spending scopes to inform future strategies.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Traffic Decline: U.S. traffic was down 2% in Q2, and the company is losing market share in the industry as defined by Black Box. This indicates challenges in attracting and retaining customers.
Outback Turnaround Challenges: The turnaround of Outback is the highest priority, but it faces challenges in improving steak quality, service, and value. Testing and investments are ongoing, but results will take time to materialize.
Cost Pressures: The company is experiencing inflationary pressures on wages (3.4% increase) and health insurance costs, as well as higher operating and supply expenses. These are impacting restaurant-level margins.
General Liability Insurance Costs: Higher general liability insurance claim costs are driven by the pace and cost of older cases working through the court system. This is expected to result in $6 million to $8 million in additional expenses.
Bonefish Grill Traffic Trends: Traffic trends at Bonefish Grill have been challenging, posing risks to the brand's performance.
Brazil Transaction Impact: The 33% retained ownership in Brazil has resulted in a negative $1.8 million impact in Q2 due to depreciation, amortization, and interest expenses.
Debt Leverage: The company has a lease-adjusted net leverage ratio of 4.1x, which is above its target of less than 3.0x. Reducing debt remains a priority, but it is contingent on the success of the Outback turnaround.
Testing and Investment Costs: The expansion of tests to 42 restaurants for Outback turnaround requires approximately $3 million in investments in 2025, which was not included in prior guidance.
Supply Chain and Inflation: COGS inflation of 3.3% and challenges in sourcing and logistics are impacting profitability.
Operational Execution: Inconsistent execution in restaurants, particularly at Outback, is a significant challenge. Efforts to simplify menus and improve service models are ongoing but require time to show results.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Expectations: The company expects U.S. comparable restaurant sales to be between flat and negative 100 basis points for Q3 2025. Adjusted diluted earnings per share for the full year is revised to a range of $1 to $1.10.
Margin Projections: Restaurant level margins are expected to be impacted by approximately $6 million in tariff costs and $6-8 million in general liability insurance claim costs spread across Q3 and Q4. These factors are included in the updated full-year guidance.
Capital Expenditures: Capital expenditures for the full year are expected to be on the low end of the guidance range, approximately $190 million. The company plans to repurpose capital dollars from new restaurant openings towards remodels over the next few years.
Strategic Plans for Outback Turnaround: The company is expanding its test of service models, steak quality, menu innovation, and value components to 42 restaurants by the end of September 2025. Approximately $3 million will be invested in these tests in 2025, primarily impacting Q4. The company is also conducting a thorough assessment of its restaurant network to prioritize remodels and refreshes.
Market Trends and Business Segment Performance: Traffic trends at Bonefish Grill remain challenging, and risks in this brand have been incorporated into the guidance. The company is focusing on improving traffic trends and addressing challenges in the Outback brand through strategic tests and operational changes.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Quarterly Dividend: The Board declared a quarterly dividend of $0.15 per share, payable on September 3, 2025.
Share Repurchase Program: The company has $97 million remaining under its share authorization program, which expires on August 13, 2025. However, the company does not plan to execute share repurchases at this time.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Are there any changes being considered at the GM level to create desired financial or operational outcomes?
A:The goal is to pay at the market average in terms of compensation. The current structure is good, and it is being assessed as part of the strategic plan. The focus remains on a variable component to drive growth in sales and profits.
Q:What is the priority in the Outback turnaround, and what stage is the process in?
A:The turnaround is in the early innings and takes time. The focus is on improving the service model, steak quality, value components, and testing and learning.
Q:What insights have been gained from the Aussie 3 course offering?
A:The offering has increased traffic, value satisfaction, and frequency among loyal customers. About 2/3 of guests are trading up to higher price levels, and 20% are trading up on desserts. There is a mix headwind, but it is included in the guidance.
Q:What are the findings from the initial 14 Outback test restaurants?
A:The brand has tremendous potential, and guests appreciate the food and casual environment. Key learnings include the importance of service model, steak quality, value, and ambience. Execution consistency and change management are critical. The test is expanding to 42 restaurants for broader learning.
Q:What drove the improved traffic performance at Outback during the quarter?
A:The Aussie 3 course offering was a better option than the previous Dine Under. Improved execution consistency, recipe adherence, and marketing efforts also contributed to the momentum.
Q:How is the menu reduction at Outback progressing, and is there room for further reductions?
A:The menu has been reduced by about 15%, improving operations and guest satisfaction. The goal is to reduce further to the mid-60s in terms of menu items.
Q:What is driving the positive same-store sales and traffic at Carrabba's?
A:Daypart conversion, experiential line dinners, catering momentum, and Bistro sandwiches are driving growth. Off-premise dining (OPD) is also growing.
Q:Why was there a pullback on advertising, and how has it impacted operations?
A:The pullback was not a reduction but a focus on more effective marketing spend, reducing nonworking marketing, and improving ROI.
Q:What is the status of labor investments and labor cost management?
A:Labor investments include reallocating costs for server-to-table ratios and using AI laboring tools to flex labor efficiently. Labor inflation has been consistent at around 4%.
Q:What are the findings from the repair and maintenance survey, and what is the plan for remodels?
A:The survey prioritized asset conditions over site quality. Ten remodels are planned for 2025, with three different scopes being tested. Dollars are being shifted from new restaurants to remodels and refreshes.
Q:Has there been any change to the expected G&A expense of $215 million for the year?
A:No changes are anticipated to the $215 million G&A expense.
Q:How is Outback performing across different regions of the country?
A:Performance was consistent across all geographies in Q2.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the scope of work needed for older assets, the exact structural savings expected from G&A expense reductions, and the specific regions where Outback might need better positioning.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aussie course
Campbell
Chain
Chief Information
Co Research
Davidson Hospitality
Division Jeffrey
Group
Outback turnaround
President Chief
Research Division
Senior Vice
VP
approach
brand positioning
career
culture
day
expansion
finance
hospitality
leader
menu value
passion
progress priority
quality menu
reduction
restaurant test
role
server
service model
steak quality
survey
table
team
transformation
year experience
BLMN Transcript
Bloomin' Brands, Inc. (BLMN) Q1 2026 Earnings Call Transcript
Positive5-6
The earnings call highlighted strong financial results with a 5% revenue increase and improved margins, alongside strategic initiatives for international expansion and digital enhancements. Despite acknowledging risks, the positive revenue and margin outlook, combined with a solid Q1 performance, suggest a favorable market reaction. The mid-single-digit revenue growth and improved operational efficiencies further support a positive sentiment.
Bloomin' Brands, Inc. (BLMN) Q4 2025 Earnings Call Transcript
Positive2-25
The earnings call highlights several positive factors: increased guidance for U.S. restaurant sales and EPS, a strategic shift in marketing, and a comprehensive plan for restaurant refreshes. The Q&A section reinforced confidence in productivity gains and strategic investments, despite some unclear management responses. The raised guidance and strategic investments suggest a positive outlook, likely resulting in a stock price increase over the next two weeks, especially given the company's small market cap.
Bloomin' Brands, Inc. (BLMN) Q3 2025 Earnings Call Transcript
Unknown11-6
The earnings call reflects mixed signals. Financial performance and strategic updates are positive, with consistent Q4 trends, successful marketing initiatives, and no further closures. However, challenges persist with flat traffic at Outback, potential beef inflation, and lack of specific guidance on remodel costs and manager compensation. The company's market cap suggests moderate sensitivity to news. Overall, the sentiment is neutral, with no strong catalysts for significant stock movement in either direction.
Bloomin' Brands, Inc. (BLMN) Q2 2025 Earnings Call Transcript
Unknown8-6
The earnings call summary presents a mixed picture with several negative factors outweighing positives. Financial performance is weak, with declining revenues, EPS, and operating margins. The guidance is also negative, expecting further declines in sales and EPS. Despite some positive elements like increased average check and off-premises sales, the market strategy and financial health are concerning, with high debt and inflation pressures. The Q&A section reveals early-stage turnaround efforts and lack of clarity in management responses, further dampening sentiment. Given the small-cap nature, stock is likely to see a negative reaction.
BLMN Slides
BLMN Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
