Bloomin’ Brands (NASDAQ:BLMN) raised the lower end of its full-year adjusted earnings forecast even as third-quarter traffic fell and the restaurant operator projected a slowdown in fourth-quarter comparable sales.
The company, which owns Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar, also disclosed plans to bid for 61 restaurants operated by bankrupt Outback franchisee Out West. Chief Executive Officer Mike Spanos said the restaurants continue to operate normally while the bankruptcy process proceeds.
Third-quarter revenue rose to $944 million from $929 million a year earlier, though Chief Financial Officer Eric Christel said the latest figure included about $13 million in gift card revenue from a change in an accounting estimate. Excluding that item, revenue was essentially flat.
The adjusted diluted loss from continuing operations widened to $0.17 per share from $0.03 a year earlier. Adjusted operating margin declined to 0.3% from 0.8%, while adjusted restaurant margin slipped approximately 20 basis points to 9.3%.
Traffic declines despite higher comparable sales
U.S. comparable restaurant sales increased 1.9% in the quarter, as a 3.7% increase in average check more than offset a 1.8% decline in traffic. Spanos said both sales and traffic metrics were below the industry Black Box measure.
Outback comparable sales rose 1.9%, while traffic fell 1.5%. Carrabba’s posted a 0.6% comparable-sales increase and a 2.9% traffic decline. Bonefish comparable sales rose 5.3% despite a 0.8% traffic decline, while Fleming’s comparable sales were flat and traffic fell 1.9%.
Christel said pricing lifted average checks, partly offset by negative mix as the company invested in affordability offers. Cost-of-goods inflation was 4.6% and labor inflation was 3.5%. He said restaurant expenses also reflected Outback turnaround investments, including food quality, service, training and advertising.
Spanos said consumers remain financially resilient but are cautious and discerning about dining out. He noted some check sensitivity among households earning less than $75,000 and among older guests.
Outback turnaround and franchisee bid
Spanos said the company’s turnaround remains focused on improving Outback’s dine-in experience, increasing brand relevance, strengthening restaurant leadership and investing in locations. He pointed to a fifth consecutive quarter of year-over-year improvement in Outback’s Technomic guest scores.
Outback has reduced the number of tables assigned to each server during peak hours to four, from a historical level of six, Spanos said. He added that service scores improved and that servers were making the same amount of money or slightly more under the model.
The company launched its “Best Steaks Ever” campaign in October, including a limited-time $15.99 entry tier for its Aussie 3-Course offer with a 6-ounce sirloin. Spanos said initial consumer engagement and traffic responses were encouraging. He also said Bloomin’ increased marketing spending by $10 million for 2026, weighted toward the second half.
Bloomin’ had completed approximately 61 Outback refreshes through the end of October and expects to complete about 85 in 2026. Christel said the company expects approximately 100 more next year. The planned average cost is $350,000 to $400,000 per refreshed location, with nearly all Outback restaurants targeted by the end of 2028.
Separately, Bloomin’ entered a stalking horse purchase agreement for Out West’s 61 restaurants, establishing an initial bid in the bankruptcy sale process. Spanos said the franchisee’s situation was specific to that business and not reflective of other franchisees or company-owned operations. He expects the process to take a couple of months.
Christel said the company does not anticipate a material fourth-quarter impact from Out West or a measurable effect from a potential acquisition on its target of reaching a 3.0-times lease-adjusted net leverage ratio by the end of 2028.
Full-year earnings outlook raised
Bloomin’ now expects full-year adjusted diluted earnings of $0.97 to $1.02 per share, compared with its previous range of $0.90 to $1.00. It forecast U.S. comparable restaurant sales growth of 1% to 1.5% for the year and an approximately 3.5% increase in average check.
For the fourth quarter, the company projected comparable-sales growth of 0% to 1% and adjusted diluted earnings of $0.07 to $0.12 per share. Christel said holiday shifts and the comparison with a prior-year holiday promotion would create an approximately 2% traffic headwind. Bloomin’ also delayed planned fourth-quarter pricing increases at Outback and Bonefish.
Spanos said the pricing decision reflected a balance between inflation and meeting customers’ needs. Asked about beef costs, Christel said the company was still seeing high-single-digit beef inflation this year and would provide an update on 2027 in February.
Net debt stood at approximately $677 million at quarter-end, down from $896 million a year earlier. The company completed a $1.2 billion refinancing of its revolving credit facility during the quarter and expects full-year capital expenditures of approximately $185 million.
About Bloomin’ Brands (NASDAQ:BLMN)
Bloomin’ Brands, Inc is a restaurant company that owns, operates and franchises a portfolio of casual dining and upscale restaurant concepts. Its principal brands include Outback Steakhouse, known for steaks and other Australian-inspired dishes; Carrabba’s Italian Grill, which serves Italian-American cuisine; Bonefish Grill, focused on seafood and contemporary dishes; and Fleming’s Prime Steakhouse & Wine Bar.
The company’s restaurants offer a range of dine-in, takeout, delivery and catering services, with menus generally centered on full-service meals, specialty beverages and hospitality-oriented dining experiences.
