Bloomin’ Brands (NASDAQ:BLMN) management highlighted early momentum in traffic trends and guest metrics during its fiscal fourth-quarter 2025 earnings call, while framing fiscal 2026 as an “investment year” focused on an Outback Steakhouse turnaround. Executives pointed to improving leading indicators, a new steak lineup, and a planned service model change as key near-term drivers, alongside productivity initiatives and a shift in marketing strategy.
Fourth-quarter results: traffic improves as value remains a focus
CEO Mike Spanos said 2025 centered on aligning the organization around operational priorities, emphasizing consistency in “food, service, experience, and value.” The company reported flat fourth-quarter U.S. comparable restaurant sales, with traffic up 50 basis points. Spanos noted the company trailed the Black Box casual dining industry metric on comparable sales by 40 basis points, but narrowed the gap by 280 basis points versus the prior quarter.
By brand, the company reported the following fourth-quarter U.S. comparable sales and traffic results:
- Outback Steakhouse: comp sales down 60 basis points; traffic up 90 basis points (Spanos said it was Outback’s first quarter of positive traffic growth since Q4 2021).
- Carrabba’s Italian Grill: comp sales up 160 basis points; traffic down 90 basis points.
- Bonefish Grill: comp sales down 10 basis points; traffic up 230 basis points (first quarter of positive traffic comp growth since Q1 2022, according to management).
- Fleming’s Prime Steakhouse & Wine Bar: comp sales up 10 basis points; traffic down 240 basis points.
Spanos singled out Outback’s Aussie 3-Course offering as a traffic driver, supported by loyalty member frequency and recruitment of new users. The company said the value platform has three tiers starting at $14.99, and management estimated about 60% of guests trade up to the $17.99 and $20.99 tiers.
Financial snapshot: adjusted EPS beats prior year, but GAAP loss reflects impairment and closures
EVP and CFO Eric Christel said fourth-quarter total revenue was $975 million, up slightly from $972 million a year ago. Restaurant sales increased due to the net impact of openings and closures, while franchise revenue declined because the royalty rate on Brazil was lower than the intercompany royalty received in 2024.
The company posted a GAAP diluted loss per share of $0.14, compared with GAAP diluted earnings per share of $0.12 a year earlier. On an adjusted basis, diluted EPS was $0.26 versus $0.22 last year, landing within the company’s guidance range of $0.23 to $0.28. Christel said the difference between GAAP and adjusted results included roughly $46 million of adjustments, primarily tied to Bonefish goodwill impairment, restaurant closures and impairments, and transformational and restructuring activities.
Adjusted operating margin was 3.4%, down 10 basis points year over year. Christel said restaurant margin declined 80 basis points, pressured by 4.7% commodity inflation and 3.2% labor inflation, as well as an unfavorable product mix due to value offerings and higher health insurance claim expense. These pressures were partially offset by lower other operating expenses, including lower advertising and lower general liability insurance expense.
Off-premises sales represented 24% of total U.S. sales, consistent with the prior-year quarter. Christel said Outback’s off-premises mix was 26% and Carrabba’s was 35%.
Turnaround plan: four platforms centered on Outback execution, service, marketing, and remodels
Management reiterated a four-part turnaround strategy focused on Outback: (1) deliver a remarkable dine-in experience, (2) drive brand relevancy, (3) reignite a culture of ownership and fun, and (4) invest in restaurants. Spanos said initiatives are being phased, with work already underway on the dine-in experience, restaurant investments, and non-guest-facing productivity savings.
On food, Spanos said Outback’s steak excellence starts with a new steak lineup launched in November 2025, highlighting improving guest satisfaction and reorder intent scores. He called out the sirloin, a new bone-in ribeye, and a new half-pound burger, and also noted the introduction of a 15 oz Delmonico ribeye, which he said is unique among casual diners.
Operationally, Spanos said Outback completed an in-depth Steak Excellence Certification for multi-unit leaders, with leaders required to pass certification tests before coaching restaurant leadership. He said the company is using guest feedback collected via Ziosk tabletop devices to measure and rank locations and identify coaching opportunities. Management also pointed to improvements in brand metrics, including a seven-point year-over-year increase in Outback brand trust and gains across food, service, value, and atmosphere scores.
On service, Spanos said Outback plans to introduce a revised service model in Q2, shifting from a one-server-to-six-table ratio to a one-server-to-four-table ratio during peak hours. In Q&A, he said test results showed improved scores on intent to return, attentiveness, and likelihood to recommend the server, and that the change involves labor redeployment, including moving some server assistants into server roles.
On marketing, Spanos said Outback will sharpen its steakhouse positioning and shift its media mix to more digital. Management expects 2026 media mix to be about 60% digital and 40% linear TV, compared with roughly 33% digital and 67% linear TV in 2025. Christel later added that advertising was about 2.4% of revenue in 2025 (2.2% in Q4) and is expected to be in the mid- to high-2% range in 2026, primarily in the second half, aligned with the service model rollout.
On restaurant investment, Spanos said the company aims to “touch nearly all” Outback locations by the end of 2028, with targeted interior and exterior refresh initiatives of $350,000 to $400,000 per location. Executives also said Outback will expand char grill capacity to support the steak lineup, expected to be completed by the end of the year. Christel said the company expects to complete about 100 remodels per year for the next three years.
2026 outlook: investments and productivity, with weather impacting early Q1
For fiscal 2026, the company guided to U.S. comparable restaurant sales of 0.5% to 2.5% and adjusted diluted EPS of $0.75 to $0.90. Christel said the company expects commodity inflation of 4.5% to 5.5%, driven largely by high-single-digit beef inflation, and labor inflation of 3% to 3.5%.
Christel said the company plans about $50 million of turnaround investments in 2026, offset by about $30 million of non-guest-facing productivity initiatives, for a net investment of about $20 million. He outlined the $50 million as including approximately $25 million for center-of-the-plate food quality and menu redesign, about $7 million for service and guest experience, about $8 million for managing partners, and about $10 million in incremental marketing. He said most investments will occur from Q2 through Q4, while productivity initiatives will be spread relatively evenly throughout the year. Management reaffirmed a three-year target of $80 million in productivity savings from 2026 to 2028.
The company also guided to capital expenditures of $185 million to $195 million, with about 60% allocated to remodels and maintenance, about 20% to new units (with plans to open six to eight), and the remainder to IT and infrastructure. Christel said maintenance capital is about $75 million annually.
In Q&A, management addressed near-term volatility, noting that winter weather negatively impacted first-quarter-to-date U.S. comparable sales by about 2.2% and adjusted EPS by about $0.08. The company said this impact is included in guidance. For Q1 2026, Bloomin’ Brands expects U.S. comparable sales between flat and up 1%, and adjusted diluted EPS between $0.57 and $0.62.
Balance sheet: debt reduction aided by Brazil proceeds
Christel said total debt net of cash was $728 million at year-end, reflecting about $241 million of debt repaid in 2025, largely driven by proceeds from the Brazil refranchising transaction. He said the company received a second installment in November and applied proceeds to its revolver, totaling about $124 million including about $13 million of interest income on the receivable, net of withholding taxes.
At the end of 2025, Christel said lease-adjusted net leverage was 3.9x and net debt to adjusted EBITDA was 2.4x. The company also recorded equity method losses tied to its 33% retained ownership in Brazil, including a $1.3 million loss in Q4 and a $4.7 million loss for the full year; management expects a negative $3 million to $4 million impact from Brazil in 2026 within its adjusted EPS guidance.
About Bloomin’ Brands (NASDAQ:BLMN)
Bloomin’ Brands, Inc engages in the ownership, operation and franchising of casual dining restaurants worldwide. The company’s portfolio includes five full-service restaurant chains: Outback Steakhouse, known for its Australian-inspired steakhouse concept; Carrabba’s Italian Grill, offering Italian-American cuisine; Bonefish Grill, specializing in handcrafted seafood dishes; Fleming’s Prime Steakhouse & Wine Bar, focusing on premium steak and wine experiences; and Aussie Grill by Outback, featuring a streamlined menu of signature items.
