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Bloomin' Brands, Inc. (BLMN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was mixed: consolidated revenue declined 8.2% YoY to $1.10B on the 53rd week lap and closures, GAAP diluted EPS was $(0.93) while adjusted diluted EPS was $0.38, within the company’s prior Q4 guidance range of $0.32–$0.42 .
  • Continuing operations showed margin compression: GAAP operating income margin fell to 1.7% (from 4.6%), adjusted operating income margin to 3.5% (from 7.7%), and restaurant-level margin to 12.4% (from 15.9%) YoY .
  • 2025 outlook implies a reset: U.S. comps (2.0%) to flat, adjusted EPS $1.20–$1.40, commodity inflation 2.5%–3.5% (beef mid-single digits), labor inflation 4%–5%, capex $190–$210M; Q1 2025 adjusted EPS guided to $0.55–$0.60 .
  • The board cut the quarterly dividend to $0.15 ($0.60 annualized) from $0.24, citing the Brazil refranchising impact and desire to align payout to post-transaction earnings; management highlighted Outback turnaround, menu simplification, Ziosk rollout (80% pay-at-table adoption in tests), and ~$22M annualized G&A savings as 2025 catalysts .

What Went Well and What Went Wrong

  • What Went Well

    • Flemings comp sales +3.0% in Q4; average check in U.S. up 4% with value-led trade-ups in Aussie 3‑Course (“hero” traffic driver) .
    • Operational simplification underway: 10%–20% menu reduction across brands, everyday value replacing frequent LTOs, and Ziosk enabling 80% pay-at-table in tests to improve guest experience .
    • Strategic portfolio action: sold 67% of Brazil, moved to franchise royalties with reduced earnings volatility; plan to earn interest on second installment and refocus capital on remodels .

  • What Went Wrong

    • Industry underperformance: lost share by ~260 bps on sales and ~410 bps on traffic versus Black Box; U.S. comps −1.1% and combined U.S. traffic −5.1% in Q4 .
    • Margin pressure: adjusted consolidated operating margin fell to 4.4% (from 7.5%); restaurant-level margins compressed on labor, operating, commodity, insurance/legal and advertising costs .
    • Impairments and discontinued ops dragged GAAP: $31M domestic asset impairments; discontinued Brazil operations loss impacted EPS (GAAP diluted $(0.93) vs adjusted $0.38) .

Financial Results

Consolidated metrics (sequential trend)

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Billions)$1.119 $1.039 $1.097
GAAP Operating Income Margin (%)4.1% 1.7% (3.6%)
Adjusted Operating Income Margin (%)5.7% 3.0% 4.4%
Restaurant-level Operating Margin (%)14.3% 12.5% 13.8%
Adjusted Restaurant-level Operating Margin (%)14.3% 12.5% 13.8%
GAAP Diluted EPS ($)$0.32 $0.08 $(0.93)
Adjusted Diluted EPS ($)$0.51 $0.21 $0.38

Continuing operations (YoY comparison)

MetricQ4 2023Q4 2024
Total Revenues ($USD Billions)$1.072 $0.972
GAAP Operating Income Margin (%)4.6% 1.7%
Adjusted Operating Income Margin (%)7.7% 3.5%
Restaurant-level Operating Margin (%)15.9% 12.4%
Adjusted Restaurant-level Operating Margin (%)15.3% 12.4%
Adjusted Diluted EPS ($)$0.63 $0.22

Segment breakdown (Q4 YoY)

SegmentQ4 2023 Revenues ($USD MM)Q4 2024 Revenues ($USD MM)Q4 2023 Income from Ops ($USD MM)Q4 2024 Income from Ops ($USD MM)
U.S.$1,042.4 $952.5 $73.3 $34.0
International Franchise (royalty)$10.6 $10.0 $10.0 $9.7

KPIs – Comparable sales, traffic, average check by brand (U.S.; % YoY)

Comparable sales

BrandQ2 2024Q3 2024Q4 2024
Outback Steakhouse(0.1%) (1.3%) (1.8%)
Carrabba’s Italian Grill2.0% (1.5%) (0.9%)
Bonefish Grill(2.0%) (4.1%) (1.5%)
Fleming’s Prime Steakhouse & Wine Bar(1.1%) 1.2% 3.0%
Combined U.S.(0.1%) (1.5%) (1.1%)

Traffic

BrandQ2 2024Q3 2024Q4 2024
Outback Steakhouse(4.1%) (3.9%) (4.7%)
Carrabba’s Italian Grill(1.8%) (3.4%) (4.5%)
Bonefish Grill(4.8%) (8.5%) (8.7%)
Fleming’s Prime Steakhouse & Wine Bar(8.2%) (7.3%) (3.5%)
Combined U.S.(3.8%) (4.4%) (5.1%)

Average check per person

BrandQ2 2024Q3 2024Q4 2024
Outback Steakhouse4.0% 2.6% 2.9%
Carrabba’s Italian Grill3.8% 1.9% 3.6%
Bonefish Grill2.8% 4.4% 7.2%
Fleming’s Prime Steakhouse & Wine Bar7.1% 8.5% 6.5%
Combined U.S.3.7% 2.9% 4.0%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
U.S. Comparable Restaurant Sales (%)FY 2024(1.0%) to (0.5%) (2.0%) to Flat Lowered
Adjusted Diluted EPS ($)FY 2024$1.72 to $1.82 $1.20 to $1.40 (FY 2025) Lower baseline year; reset lower
GAAP Diluted EPS ($)FY 2024$(0.26) to $(0.16) $1.08 to $1.28 (FY 2025) Return to profitability (different year)
Effective Tax RateFY 2024 Adj.6% to 7% Close to 0% (FY 2025) Lowered
Commodity Inflation (%)FY 2024Approx. 1% 2.5% to 3.5% (FY 2025) Raised
Labor Inflation (%)FY 2025N/A4% to 5% New
Capital Expenditures ($USD MM)FY 2024$260 to $270 $190 to $210 (FY 2025) Lowered
New Company-owned Restaurants (#)FY 2025N/A18 to 20 New
New Franchised Restaurants (#)FY 2025N/A~30 New
Q1 Comparable Sales (%)Q1 2025N/A(1.5%) to (0.5%) New
Q1 Adjusted Diluted EPS ($)Q1 2025N/A$0.55 to $0.60 New
Total G&A ($USD MM)FY 2025N/A~$225 (incl. $17M realized savings; $12M bonus reload; $10M IT/Ziosk) New
Dividend (Quarterly) ($)Ongoing$0.24 (Q4 declaration) $0.15 (Q1 declaration) Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Value strategy/LTOsEmphasis on value, updated FY guidance amid softer industry; strategic fees for revenue growth mgmt (Outback) Shift from frequent LTOs to “abundant everyday value”; Aussie 3‑Course highlighted as strongest 2024 promo Consolidating around fewer, durable value platforms
Menu simplificationNot explicit in Q2/Q3 PRsReduce menu items by 10%–20% across brands to improve execution and satisfaction Accelerating simplification
Technology (Ziosk)Not explicit in Q2/Q3 PRsZiosk rollout by end of April; ~80% pay-at-table adoption in test restaurants Rolling out at scale
Supply chain/commoditiesFY 2024 commodity inflation ~1% 2025 commodities 2.5%–3.5%, beef mid-single digits; ~76% locked Inflation pressure rising (beef)
Traffic vs industryQ2/Q3 comps negative, traffic down Underperformed industry; lost ~260 bps sales/~410 bps traffic share per Black Box Share loss acknowledged; turnaround priority
Brazil refranchisingAnnounced franchise partnership with Vinci Closed sale (67%); royalties recognized; reduced volatility; minor post-tax contribution expected Portfolio de-risking executed
Capital allocationRepurchases and $0.24 quarterly dividend Dividend reset to $0.15; leverage target <3x lease-adjusted; capex toward remodels Rebalanced to delever/remodels
G&A/Org designStrategic initiative fees; transition costs ~$22M annualized G&A savings; $17M realized in 2025; brand-level empowerment Cost discipline, decentralization

Management Commentary

  • “Although our fourth quarter results were within our expected guidance range, we underperformed the industry and lost share… by 260 basis points on sales and 410 basis points on traffic.” — CEO Mike Spanos .
  • “We are reducing our menu items in all brands by 10% to 20% in 2025… transitioning to abundant value as part of our everyday menu offering.” — CEO Mike Spanos .
  • “We will now have immediate guest feedback at Outback through our partnership with Ziosk… in our test restaurants, approximately 80% of our guests are using Ziosk pay at the table.” — CEO Mike Spanos .
  • “We have transitioned [Brazil] to a franchise model… a more stable revenue stream… we do not anticipate that the post-tax contribution will produce a meaningful contribution to our net income in 2025.” — CFO Michael Healy .
  • “Our new annual dividend will be $0.60 per share compared to $0.96 per share previously.” — CEO Mike Spanos .

Q&A Highlights

  • Demand/consumer: Management sees “choppy” conditions and “choosy” consumers; Q1 comps guided down 0.5% to 1.5%, with traffic −4% to −5% and pricing ~4% .
  • Cost outlook: 2025 commodities 2.5%–3.5% (beef mid-single digits), ~76% locked; labor inflation ~4% .
  • Outback turnaround: Focus on consistency of execution, quality, value, guest experience; testing in 14 stores, aiming for 50% of stores touched via remodel in 2–3 years and slower unit growth starting 2026 .
  • G&A and investments: 2025 total G&A ~$225M; ~$22M annualized savings (≈$17M realized in 2025), $10M IT/Ziosk/product enhancements, $12M bonus reload .
  • Marketing shift: Everyday value allows ~$10M non-working marketing savings; potential redeployment to working media if returns justify .

Estimates Context

  • We attempted to retrieve S&P Global consensus estimates for Q4 2024 and Q1 2025, but access was unavailable due to a daily request limit being exceeded. As a result, we cannot provide definitive beat/miss vs Wall Street consensus for this quarter. Values intended for estimates would have been retrieved from S&P Global; however, they are unavailable at this time [SPGI daily limit error].
  • Company provided Q1 2025 adjusted EPS guidance of $0.55–$0.60 and U.S. comps of (1.5%) to (0.5%) .

Key Takeaways for Investors

  • Margin reset and traffic recovery are central: adjusted operating margin compression and traffic underperformance vs industry make the Outback turnaround (menu simplification, everyday value, execution focus) the key near-term narrative driver .
  • 2025 guidance is conservative amid inflation: steeper commodity (beef) and labor inflation, flat-to-down comps, and investment in IT/Ziosk suggest patience is warranted as initiatives scale through 2H 2025 .
  • Capital allocation pivot lowers risk: Brazil refranchising reduces earnings volatility; dividend reset and leverage target (<3x lease-adjusted) prioritize balance sheet health and remodel ROI over new units .
  • Segment dynamics mixed: U.S. segment revenue and operating income fell sharply YoY; International franchise royalties are stable; Flemings’ comps strength indicates premium brand resilience .
  • Execution KPIs to watch: Ziosk rollout completion by April, guest satisfaction uplift, frequency gains, restaurant-level margin trajectory, and U.S. traffic stabilization across Outback, Carrabba’s, and Bonefish .
  • Q1 headwinds baked in: Weather/holiday shifts are a ~4¢ EPS drag; comps down modestly; better momentum expected in 2H as everyday value scales, though guidance embeds choppiness .
  • Potential stock catalysts: Evidence of share recapture vs industry (Black Box), improving traffic on Aussie 3‑Course, tangible remodel ROI, and execution of G&A savings could shift sentiment .