Bloomin' Brands outlines $75M Outback turnaround plan with refreshed marketing and asset investments through 2028

Earnings Call Insights: Bloomin' Brands (BLMN) Q3 2025

MANAGEMENT VIEW

* CEO Michael Spanos reflected on his first year and noted the company is executing operational priorities set in February to simplify the agenda, deliver a great guest experience, and turnaround Outback. He announced that all brand presidents are new to their roles this year, with an average of 34 years of restaurant industry experience, and highlighted the appointment of Pat English as Fleming's brand President. Spanos stated, "Our recently announced Fleming's brand President, Pat English, exemplifies a passion for the team, our guests and consistency of execution."
* Management discussed addressing critical challenges such as overly complex menus, unclear brand positioning, inconsistent guest experiences, a gap in steak quality, and diminishing value perception. Spanos outlined actions taken: "We refranchised our restaurants in Brazil, streamlined our corporate structure by removing layers, reduced menu SKUs by 10% to 20% and reduced LTOs that added complexity in the restaurants."
* The CEO emphasized guest-centric initiatives like introducing everyday value offers, including the Aussie 3-Course at Outback, and the installation of Ziosk technology, noting, "Over 85% of our guests use Ziosk to pay for their meal, saving them time and improving table turns by about 5 to 7 minutes."
* Spanos detailed Outback's expanded test initiatives, now at 42 restaurants, focusing on steak quality, menu innovation, service models, and value components. He reported, "Outback comp sales were up 40 basis points with traffic flat. This was the first quarter of positive comp sales for Outback since Q2 of 2023."
* CFO Eric Christel commented, "Total revenues were $929 million compared to $910 million last year. Restaurant sales were up, driven by the net impact of restaurant openings and closures as well as U.S. comparable restaurant sales."

OUTLOOK

* Management raised full-year U.S. comp sales guidance to between flat and positive 50 basis points, citing current momentum. Adjusted diluted earnings per share guidance was updated to $1.10 to $1.15 for 2025. For Q4, U.S. comparable restaurant sales are expected to be between positive 50 basis points and positive 150 basis points, with Q4 adjusted diluted earnings per share expected between $0.23 and $0.28. Christel stated, "We are raising our U.S. comp sales guidance range for the full year to be between flat to positive 50 basis points, driven primarily by our current momentum."
* Management indicated detailed 2026 guidance would be provided in February, noting ongoing monitoring of beef inflation and tariff impacts.

FINANCIAL RESULTS

* The company reported total revenues of $929 million for Q3 2025. GAAP diluted loss per share was ($0.54) compared to a loss of ($0.01) per share last year. Q3 adjusted diluted loss was ($0.03) per share versus earnings of $0.11 per share last year. Christel noted, "Negative $0.03 was above our guidance range of negative $0.10 to negative $0.15."
* Adjusted operating margins were 0.8% versus 2.3% last year, with the 150 basis point decline driven by COGS inflation, labor inflation, and higher operating and supply expenses. Off-premises sales remained 24% of total U.S. sales, consistent with the prior year.
* The company closed 21 underperforming restaurants and identified 22 more for lease non-renewal.

Q&A

* Anisha Datt, Barclays: Asked if Q3 strength continued into October and about macro weakness. CEO Spanos responded, "Our Q3 trends have continued into Q4, and our Q4 guidance and full year guidance assumes that those trends maintain."
* Jeffrey Farmer, Gordon Haskett: Inquired about outperforming Q3 same-store sales guidance. Spanos cited execution consistency and value offers: "We're just executing with more consistency of execution, and that starts with our leaders."
* Jon Tower, Citi: Asked about the Aussie 3-Course mix and menu redesign. Spanos said, "Two-thirds of the guests are trading up and that's $17.99, $20.99...Menu redesign is definitely a journey. I like what we did when we reduced 10% to 20% of the SKUs this last year."
* Brian Mullan, Piper Sandler: Queried on marketing phasing and closure plans. Spanos indicated incremental marketing will begin in the second half of 2026, "That's $10 million. And then as Eric said, we would look to add another $10 million in '27 and another $10 million in '28."
* Sara Senatore, BofA: Asked about menu pricing and Ziosk. CFO Christel replied, "Our Q3 pricing was up 3.7%...So pretty balanced."
* Edward Farley, Goldman Sachs: Asked about marketing to lapsed and younger guests. Spanos confirmed a shift to 60% digital marketing and a focus on brand communication.

SENTIMENT ANALYSIS

* Analysts focused on sustainability of sales momentum, effectiveness of value propositions, operational improvements, and investment returns, with a tone that was neutral to slightly positive.
* Management was confident and detailed, frequently referencing operational improvements, guest-centric strategies, and testing outcomes. Spanos used phrases such as "we are highly confident our strategy will firmly place Outback Steakhouse on the right course for sustainable, long-term and profitable growth."
* Compared to the previous quarter, both management and analysts demonstrated increased optimism, supported by improved comps and operational execution.

QUARTER-OVER-QUARTER COMPARISON

* The company moved from negative to positive comp sales growth at Outback and all brands, a reversal from the prior quarter's negative trends.
* Guidance was raised for U.S. comp sales and adjusted EPS, compared to more cautious targets in Q2.
* Management shifted focus from testing and early-stage planning to the official announcement and rollout of the Outback turnaround strategy, with explicit multi-year investment plans.
* Analyst tone was more constructive, with fewer questions on risk and more on implementation and returns.

RISKS AND CONCERNS

* Management noted ongoing inflation in COGS (4.9% in Q3) and labor (3.3% in Q3), with full-year COGS inflation expected between 3% and 3.5% and labor inflation about 3.5%.
* Monitoring of beef inflation and tariff impacts will influence 2026 guidance.
* Restaurant closures and asset reviews remain a focus for capital deployment and operational efficiency.

FINAL TAKEAWAY

Bloomin' Brands’ leadership emphasized a decisive shift towards a holistic turnaround for Outback Steakhouse, committing approximately $75 million in strategic investments through 2028 to enhance steak quality, service, guest experience, and marketing. The company reported early traction in improved comps and guest satisfaction, supporting raised guidance for 2025 and a more optimistic operational outlook. Management remains focused on disciplined execution, productivity savings, and strategic capital allocation to drive sustainable growth and market share gains.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/blmn/earnings/transcripts]

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