GICS Sector : Consumer Cyclical
Bloomin' Brands, Inc., through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants in the United States and internationally.The company operates through two segments, U.S. and International.Its restaurant portfolio has four concepts, including Outback Steakhouse, a casual steakhouse restaurant; Carrabba's Italian Grill, a casual Italian restaurant; Bonefish Grill; and Fleming's Prime Steakhouse & Wine Bar, a contemporary steakhouse.
Bloomin' Brands reported a strong financial performance in the third quarter, with U.S. comparable restaurant sales up 120 basis points and traffic down 10 basis points. The company's revenue growth was driven by a 3.7% price increase in Q3, with a consistent mix across their four brands. The actual EPS came out at '-0.03' relative to estimates at '-0.12', indicating a significant improvement. The company's efforts to simplify menus, improve guest experiences, and enhance steak quality are starting to pay off.
Publication Date: Nov -12
The company's leadership team has focused on three operating priorities: simplifying the agenda, delivering a great guest experience, and turning around Outback. They have refranchised in Brazil, streamlined corporate structure, reduced menu SKUs, and introduced everyday value offers. As Mike Spanos, CEO, noted, "We believe consistency of execution is key to delivering a remarkable dining experience." The company is leveraging technology, such as Ziosk, to help restaurant leaders check for outliers and guest metric scores.
The company's turnaround strategy is based on four strategic platforms: delivering a remarkable dine-in experience, driving brand relevancy, improving operational efficiency, and enhancing the guest experience. They plan to invest $50 million in 2026, with a focus on steak excellence improvements, menu redesign, service and guest experience, and people development. The company expects to offset these investments with approximately $30 million of productivity savings in 2026.
Based on the current valuation metrics, the company's P/E Ratio is -9.36, P/B Ratio is 1.57, and P/S Ratio is 0.14. The EV/EBITDA ratio is 9.14, indicating a relatively reasonable valuation. The Dividend Yield is 10.87%, which is attractive for income investors. Analysts estimate next year's revenue growth at 0.4%, which is relatively modest. The company's ROE is -18.37%, and ROIC is -8.0%, indicating that the company still has challenges to overcome.
The company is confident in its strategy to deliver a remarkable dining experience, drive brand relevancy, and reignite a culture of ownership and fun. With the right team in place, Bloomin' Brands is seeing initial improvements in metrics such as guest satisfaction and intent to return. The company's incremental marketing efforts will begin in the second half of 2026, with a focus on steak-centric messaging and emotional connection.
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Bloomin' Brands, Inc.'s 2.5% growth is driven by increasing same-store sales, successful menu innovation, and effective marketing strategies. Additionally, expansion into new markets, improved operational efficiency, and a strong brand reputation contribute to the growth. Furthermore, the company's focus on digital transformation, including online ordering and delivery, also supports the growth momentum.
Bloomin' Brands' Franchise and Other segment growth of 1.5% is driven by increasing royalty fees from franchisees, expansion of international locations, and higher revenue from company-owned restaurants. Additionally, strategic partnerships, menu innovation, and effective marketing campaigns contribute to the growth, while cost savings initiatives and operational efficiencies also support the segment's performance.
Casual dining restaurant chain serving high-quality steaks, seafood, and pasta dishes in a rustic Australian-themed atmosphere.
Upscale casual dining restaurant chain serving Italian-American cuisine with a focus on wood-fired grilled meats and pasta dishes.
Casual dining restaurant chain serving seafood and wood-grilled specialties in a vibrant, upscale atmosphere.
Upscale steakhouse chain offering premium steaks, seafood, and fine wines in an elegant atmosphere.
Bloomin' Brands, Inc. faces moderate threat from substitutes, as customers have various dining options available. While the company's brands, such as Outback Steakhouse and Carrabba's Italian Grill, have a strong reputation, customers can easily switch to other casual dining restaurants or cook at home.
Customers have significant bargaining power due to the high level of competition in the casual dining industry. Bloomin' Brands, Inc. must focus on providing excellent customer service and competitive pricing to retain customers.
Suppliers have limited bargaining power due to the company's large scale of operations and diversified supply chain. Bloomin' Brands, Inc. can negotiate favorable prices and terms with its suppliers.
The threat of new entrants is moderate, as starting a new restaurant chain requires significant investment and expertise. However, the casual dining industry is highly competitive, and new entrants can still pose a threat to Bloomin' Brands, Inc.'s market share.
The intensity of rivalry in the casual dining industry is high, with many established players competing for market share. Bloomin' Brands, Inc. must focus on differentiating its brands and providing excellent customer service to maintain its competitive edge.
| Value | |
|---|---|
| Debt Weight | 83.61% |
| Debt Cost | 3.95% |
| Equity Weight | 16.39% |
| Equity Cost | 14.08% |
| WACC | 5.61% |
| Leverage | 510.31% |
Value: 5.3
Growth: 5.0
Quality: 6.6
Yield: 4.0
Momentum: 8.5
Volatility: 6.3
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