Bloomin' Brands (BLMN)

Restaurant company Bloomin’ Brands (NASDAQ:BLMN) reported revenue ahead of Wall Streets expectations in Q3 CY2025, but sales fell by 10.6% year on year to $928.8 million. Its non-GAAP loss of $0.03 per share was 76% above analysts’ consensus estimates.

Company Overview

Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ:BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.

Multi-brand full-service restaurant competitors include Brinker International (NYSE:EAT), Darden (NYSE:DRI), Dine Brands (NYSE:DIN), Texas Roadhouse (NASDAQ:TXRH), and The Cheesecake Factory (NASDAQ:CAKE).

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $3.95 billion in revenue over the past 12 months, Bloomin' Brands is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions. However, its scale is a double-edged sword because there is only so much real estate to build restaurants, placing a ceiling on its growth. To accelerate system-wide sales, Bloomin' Brands likely needs to optimize its pricing or lean into new chains and international expansion.

As you can see below, Bloomin' Brands struggled to increase demand as its $3.95 billion of sales for the trailing 12 months was close to its revenue six years ago (we compare to 2019 to normalize for COVID-19 impacts). This was mainly because it didn’t open many new restaurants.

This quarter, Bloomin' Brands’s revenue fell by 10.6% year on year to $928.8 million but beat Wall Street’s estimates by 2.7%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer menu offerings will fuel better top-line performance, it is still below the sector average.

Number of Restaurants

The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.

Bloomin' Brands operated 1,483 locations in the latest quarter, and over the last two years, has kept its restaurant count flat while other restaurant businesses have opted for growth.

When a chain doesn’t open many new restaurants, it usually means there’s stable demand for its meals and it’s focused on improving operational efficiency to increase profitability.

Same-Store Sales

The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.

Bloomin' Brands’s demand within its existing dining locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and we’d be skeptical if Bloomin' Brands starts opening new restaurants to artificially boost revenue growth.

In the latest quarter, Bloomin' Brands’s same-store sales rose 1.2% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Bloomin' Brands has bad unit economics for a restaurant company, signaling it operates in a competitive market and has little room for error if demand unexpectedly falls. As you can see below, it averaged a 16.1% gross margin over the last two years. That means Bloomin' Brands paid its suppliers a lot of money ($83.88 for every $100 in revenue) to run its business.

Bloomin' Brands’s gross profit margin came in at 10.9% this quarter, marking a 2.8 percentage point decrease from 13.6% in the same quarter last year. Bloomin' Brands’s full-year margin has also been trending down over the past 12 months, decreasing by 4.8 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as ingredients and transportation expenses).

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Bloomin' Brands was profitable over the last two years but held back by its large cost base. Its average operating margin of 3.1% was weak for a restaurant business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Bloomin' Brands’s operating margin decreased by 2.6 percentage points over the last year. Bloomin' Brands’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, Bloomin' Brands generated an operating margin profit margin of negative 3.9%, down 5.6 percentage points year on year. Since Bloomin' Brands’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Bloomin' Brands, its EPS declined by 5.1% annually over the last six years while its revenue was flat. This tells us the company struggled because its fixed cost base made it difficult to adjust to choppy demand.

In Q3, Bloomin' Brands reported adjusted EPS of negative $0.03, down from $0.21 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Bloomin' Brands’s full-year EPS of $1.10 to stay about the same.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Bloomin' Brands has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.5%, lousy for a restaurant business.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although Bloomin' Brands hasn’t been the highest-quality company lately because of its poor revenue and EPS performance, it historically found a few growth initiatives that worked. Its five-year average ROIC was 11.9%, higher than most restaurant businesses.

Bloomin' Brands reported $66.48 million of cash and $962.2 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $274.9 million of EBITDA over the last 12 months, we view Bloomin' Brands’s 3.3× net-debt-to-EBITDA ratio as safe. We also see its $50.14 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Bloomin' Brands beat analysts’ EPS expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. On the other hand, its EBITDA missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 3.3% to $7.49 immediately following the results.

Updated: December 3, 2025 at 9:45 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Bloomin' Brands.

We cheer for all companies serving everyday consumers, but in the case of Bloomin' Brands, we’ll be cheering from the sidelines. To kick things off, its revenue has declined over the last six years. And while its favorable reputation gives it meaningful influence over consumers’ dining decisions, the downside is its projected EPS for the next year is lacking. On top of that, its gross margins make it more challenging to reach positive operating profits compared to other restaurant businesses.

Bloomin' Brands’s P/E ratio based on the next 12 months is 7x. While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $7.48 on the company (compared to the current share price of $6.96).