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Bloomin' Brands, Inc. (BLMN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 came in mixed: revenue declined 1.8% YoY to $1.05B, but beat S&P Global consensus; adjusted EPS was $0.59, within guidance and a slight beat vs consensus, while EBITDA missed consensus amid margin compression . Values retrieved from S&P Global.*
  • U.S. comps were -0.5% with traffic -3.9%; Carrabba’s (+1.4%) and Fleming’s (+5.1%) offset Outback (-1.3%) and Bonefish (-4.0%). Management acknowledged underperforming the industry and share losses (Black Box) .
  • FY25 guidance reaffirmed, but management now expects results at the low end of the adjusted EPS range ($1.20–$1.40); Q2 guide embeds negative comps (-2.5% to -1.5%) and $0.22–$0.27 adjusted EPS, reflecting a choppy consumer and value investments .
  • Catalysts: accelerated value efforts (Aussie 3 Course moving to core menu in June), operational simplification, and Ziosk/AI-enabled service improvements; near-term risk skew from tariff implementation (20–40 bps restaurant-level margin headwind, not in guidance) and consumer softness for <$100k households .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue and EPS in line to slightly better vs expectations: adjusted diluted EPS $0.59 within $0.55–$0.60 guidance; revenue beat S&P consensus (see Estimates Context) . Values retrieved from S&P Global.*
    • Digital/service initiatives: Ziosk rolled across Outback; 85% of guests pay at-table, improving table turns by ~5 minutes; data integrated with AI tools for real-time ops insights .
    • Portfolio diversity: Carrabba’s (+1.4%) and Fleming’s (+5.1%) comps positive; combined average check +3.4% supports topline amidst traffic declines .

  • What Went Wrong

    • Industry share loss and negative Outback/Bonefish comps; U.S. traffic -3.9% with Outback -4.1% and Bonefish -9.4% .
    • Margin pressure: adjusted operating margin fell 170 bps to 6.1% and adjusted restaurant-level margin dropped 160 bps to 13.9% on inflation in labor/operating/commodities and unfavorable product mix .
    • Macro/value mix headwinds: management cited choppy demand (Valentine’s/Easter softer) and plans more abundant value (mix down 1–2% expected in Q2), pressuring near-term margins; note <$100k households show most pressure .

Financial Results

Quarterly trend (oldest → newest)

MetricQ3 2024Q4 2024 (Cont. Ops)Q1 2025
Total Revenues ($USD Millions)$1,038.8 $972.0 $1,049.6
GAAP Operating Income Margin1.7% 1.7% 5.5%
Adjusted Operating Income Margin3.0% 3.5% 6.1%
Adjusted Restaurant-level Operating Margin12.5% 12.4% 13.9%
GAAP Diluted EPS$0.08 $0.12 $0.50
Adjusted Diluted EPS (Cont. Ops)$0.21 $0.22 $0.59

YoY comparison – Q1 2025 vs Q1 2024

MetricQ1 2024Q1 2025YoY
Total Revenues ($USD Millions)$1,069.1 $1,049.6 -1.8%
GAAP Operating Income Margin6.6% 5.5% -110 bps
Adjusted Operating Income Margin7.8% 6.1% -170 bps
Adjusted Restaurant-level Operating Margin15.5% 13.9% -160 bps
GAAP Diluted EPS (Cont. Ops)$(1.00) $0.50 NM
Adjusted Diluted EPS (Cont. Ops)$0.64 $0.59 -$0.05

Q1 2025 vs S&P Global consensus

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$1,032.1*$1,049.6 Beat*
Primary EPS ($)$0.57*$0.58*Beat*
EBITDA ($USD Millions)$111.0*$101.5*Miss*

Values retrieved from S&P Global.*

Segment results – Q1 2025 vs Q1 2024

SegmentQ1 2024 Revenue ($M)Q1 2025 Revenue ($M)Q1 2024 Op Inc ($M)Q1 2025 Op Inc ($M)
U.S.$1,043.1 $1,030.9 $97.5 $87.7
International Franchise$10.1 $9.3 $9.7 $9.0
Reconciliation/All other$15.9 $9.4 $(0.5) $0.3
Total$1,069.1 $1,049.6 $70.9 $57.2

KPIs (U.S., company-owned unless noted)

KPIQ1 2024Q1 2025
U.S. Comparable Sales (Combined)-1.6% -0.5%
Outback SSS-1.2% -1.3%
Carrabba’s SSS+0.4% +1.4%
Bonefish SSS-4.9% -4.0%
Fleming’s SSS-2.0% +5.1%
U.S. Traffic (Combined)-4.3% -3.9%
U.S. Average Check (Combined)+2.7% +3.4%
Off-premises Mix (U.S.)—23% of U.S. sales
3P Delivery Mix (U.S.)—11% of U.S. sales

Guidance Changes

MetricPeriodPrevious Guidance (2/26/25)Current (5/7/25)Change
U.S. Comparable SalesFY 2025(2.0%) to Flat Reaffirmed Maintained
Adjusted Diluted EPSFY 2025$1.20 to $1.40 Reaffirmed; expect low end Maintained; bias to low end
GAAP Diluted EPSFY 2025$1.08 to $1.28 Reaffirmed Maintained
Effective Tax RateFY 2025~0% No update (reaffirmed) Maintained
Commodity InflationFY 20252.5%–3.5% No change Maintained
Labor InflationFY 20254%–5% No change Maintained
Capital ExpendituresFY 2025$190M–$210M Low end of range expected Maintained; low end
New Co.-owned RestaurantsFY 202518–20 Reaffirmed Maintained
New Franchised RestaurantsFY 2025~30 Reaffirmed Maintained
U.S. Comparable SalesQ2 2025—(2.5%) to (1.5%) New quarterly outlook
Diluted EPSQ2 2025—$0.20 to $0.25 New quarterly outlook
Adjusted Diluted EPSQ2 2025—$0.22 to $0.27 New quarterly outlook
Tariffs (margin impact)FY 2025—20–40 bps potential; not in guide Risk disclosed
Brazil equity incomeFY 2025Assumed profit neutral Now -$5M to -$7M impact; tax benefit extinguished Negative vs prior assumption

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
Value/Price architectureQ3–Q4: Strategic initiative fees tied to revenue growth mgmt; comps negative; check growth supported sales “We’re priced higher than our competition”; Aussie 3 Course core in June; mix down 1–2% expected in Q2 Increasing focus on value; near-term margin trade-off
Macro/consumerQ3: Weather/hurricanes; updated FY24 guide lower; Q4: choppy demand into FY25 Softer Valentine’s/Easter; <$100k households most pressured; cautious consumer embedded in Q2/FY Macro headwinds persist
Ops simplificationQ3–Q4: Closure/impairment actions; margin pressure Menu reduced 10–20% by brand; eliminate seasonal LTOs; org redesign lowers FY G&A by ~$10M to ~$215M Execution simplification accelerating
Tech/AINot highlighted in prior PRsZiosk rolled across Outback; 85% pay at table; ~5 min faster turns; AI tools analyzing feedback New technology deployment
Regional trendsNot detailedSofter in TX/FL/Southeast/Southwest; performance depends on consistency of execution Monitoring regional softness
Commodities/beefQ3: Inflation headwinds Beef contracts protect downside; overall commodity outlook unchanged Stable hedged posture
Tariffs/supply chainNot cited in prior PRsPotential 20–40 bps restaurant-level margin headwind if implemented; not in guide New emerging risk
Brazil refranchisingQ3: Announced Vinci deal ; Q4: Completed sale; FY25 guide set 33% ownership now a -$5M to -$7M FY25 EPS headwind after tax benefit eliminated Less favorable equity impact

Management Commentary

  • “We continue to make progress on our operating priorities to simplify the business and consistently deliver a great guest experience… turn around Outback and drive sustainable sales and profit growth.” — CEO, Mike Spanos .
  • “We underperformed the industry and lost share as defined by Black Box. We are dissatisfied with our financial and market share results and know we need to do better.” — CEO .
  • “Ziosk has been successfully rolled out across our Outback restaurants… Over 85% of guests are using the tabletops to pay at the table, increasing table turns on average by about 5 minutes… Combined with AI tools, we will leverage this information…” — CEO .
  • “We know right now, we’re priced higher than our competition… we need to fix [the] value proposition strategically.” — CEO .
  • “We expect to be at the low end of our full year adjusted diluted EPS range of $1.20 to $1.40… Brazil tax benefit [was] extinguished… now expect our 33% ownership in Brazil to be an approximate $5 million to $7 million negative impact.” — CFO .

Q&A Highlights

  • Value and Mix: Management expects a 1–2% mix headwind in Q2 as value is emphasized (Aussie 3 Course has a lower check), with traffic lift expected later in Q2 and more in 2H as they lap weaker 2024 promotions .
  • Labor/Service Model: Testing staffing levels and station ratios to enhance consistency; any labor investments are not in guidance yet .
  • Macro/Holidays: Valentine’s and Easter were softer than anticipated; caution embedded for Mother’s/Father’s Day; <$100k income households are most pressured; alcoholic beverage incidence ticking down .
  • Tariffs: Potential 20–40 bps restaurant-level margin impact in 2025 (mostly 2H) if implemented; not included in guidance; mitigation via supplier actions and sourcing shifts .
  • Commodities/Beef: No change to outlook; beef protected via contracting structure .
  • Brazil: Equity method now a headwind after tax benefit removed; still receiving royalties and remain constructive on long-term Brazil growth with Vinci .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $1,049.6M vs $1,032.1M consensus (beat), Primary EPS $0.58 vs $0.57 (beat), EBITDA $101.5M vs $111.0M (miss). Values retrieved from S&P Global.*
  • FY 2025 consensus: EPS ~$1.12,* revenue ~$3.96B,* EBITDA ~$315M.* With management biasing to the low end of $1.20–$1.40 adjusted EPS and incremental value investments plus tariff risk, consensus may need to reflect lower margin trajectory near term . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Topline resilient vs expectations but quality of beat mixed: revenue and EPS in line-to-better, yet EBITDA and margins under pressure as value and inflation weigh — expect near-term margin trade-offs to support traffic . Values retrieved from S&P Global.*
  • Turnaround lens: Outback value repositioning, menu simplification, and Ziosk/AI-enabled execution are central; success measured by traffic stabilization and closing share gap vs industry (Black Box underperformance acknowledged) .
  • Guidance credible but conservative: FY25 reaffirmed with explicit low-end bias; Q2 guide embeds negative comps and mix pressure, with holiday caution; watch for 2H acceleration as value programs lap and operations normalize .
  • Risk watchlist: potential tariffs (20–40 bps restaurant-level margin hit not in guide), <$100k consumer softness, and Brazil equity method headwind after tax benefit removal .
  • Balance sheet/capital allocation: Proceeds from Brazil used to reduce revolver; net leverage ~2.5x (ND/Adj. EBITDA) with target <3.0x lease-adjusted; dividend maintained; buybacks paused ($96.8M authorization remaining) .
  • Trading setup: Near-term print/call skewed by mix-down and margin compression into Q2; catalysts include evidence of traffic lift from Aussie 3 Course (now core), early readouts from service model tests, and tariff clarity .
  • Medium-term thesis: If Outback value/quality reset plus operational simplification improve traffic without structurally impairing margins, earnings power can normalize toward the upper half of the range; watch KPIs (traffic, comps by brand, restaurant-level margins) for traction .