Bloomin' Brands Q1 Earnings Call Highlights

Key Points

• Outback turnaround is showing early traction with guest metrics improving for a third consecutive quarter (brand trust +4 points) even as Outback comps were down 30 bps and traffic down 240 bps; management is rolling out a new steak lineup, a 4-tables-per-server service model, and a refresh program to touch nearly all Outback restaurants by 2028 at about $350–$400K each.
• Q1 financials and guidance: revenue was $1.06 billion (+1%) and adjusted EPS $0.67 (vs. $0.59 prior year), adjusted operating margin 5.9%; Bloomin’ reiterated full-year guidance and provided Q2 targets of U.S. comparable sales +1% to +2% and adjusted EPS $0.27–$0.32, with full-year capex guided to $185–$195 million and net debt of $681 million.
• Marketing and consumer trends: management plans ~ $10M of incremental Outback marketing in H2 while shifting the mix toward digital (about 60% digital/40% linear), and cites the Aussie 3-Course offer as driving trade-ups and increased frequency across age and income cohorts.

Bloomin' Brands NASDAQ: BLMN executives used the company’s fiscal first-quarter 2026 earnings call to highlight early progress in its Outback Steakhouse turnaround efforts, while reiterating full-year guidance and outlining near-term expectations for the second quarter.

First-quarter results and sales trends

Executive Chairman and CEO Michael Spanos said the turnaround strategy, launched in the fourth quarter of last year, is centered on “consistent execution across food, service, experience, and value” at Outback. He said the focus is beginning to show up in guest sentiment, with Outback guest metric scores improving year-over-year for the third consecutive quarter.

Spanos cited a 4-point increase in brand trust versus the prior-year quarter, alongside higher guest scores in service (+6), value (+5), atmosphere (+5), food (+4), and intent to return (+4). He added that because the average guest visits about twice per year, the company expects “the cumulative impact of these initiatives to become increasingly visible in traffic momentum” as more guests experience the changes.

On the topline, Spanos said U.S. comparable restaurant sales rose 90 basis points in the quarter, while traffic declined 180 basis points. The company estimated weather reduced results by about 240 basis points, compared with a 130-basis-point weather headwind in the prior-year period. Spanos said Bloomin’ Brands trailed the Black Box industry benchmark by 30 basis points on comparable sales and 70 basis points on traffic, but noted the gap has narrowed quarter after quarter.

Brand-level comparable sales performance

Spanos broke out performance across the company’s major concepts:

• Outback Steakhouse: comparable sales down 30 basis points; traffic down 240 basis points. Spanos said the Aussie 3-Course offer continues to drive loyalty and traffic, with about 60% of guests trading up from the $14.99 entry price to higher tiers ($17.99 and $20.99), and about 20% trading up on dessert.
• Carrabba’s Italian Grill: comparable sales up 130 basis points; traffic down 270 basis points. Spanos said this marked Carrabba’s fifth consecutive quarter of positive same-store sales growth, supported by initiatives including wine dinners, a revamped happy hour, and new day-of-week offers.
• Bonefish Grill: comparable sales up 610 basis points; traffic up 300 basis points. Spanos attributed the improvement to day-of-week offers such as Martini Mondays and Bang Wednesdays, as well as prix fixe lunch affordability offers.
• Fleming’s Prime Steakhouse & Wine Bar: comparable sales up 80 basis points; traffic down 290 basis points, representing the seventh consecutive quarter of positive comparable sales growth, according to Spanos.

Outback turnaround: operational changes and investments

Spanos outlined four strategic platforms for the Outback turnaround: delivering a “remarkable dine-in experience,” driving brand relevancy, reigniting a culture of ownership and fun, and investing in restaurants. He said these efforts are supported by non-guest-facing productivity savings, balanced capital allocation, and a strengthened management team.

On food, Spanos pointed to a new steak lineup launched in November as part of a commitment to “steak excellence.” He said Outback is seeing high menu satisfaction and improving reorder intent on items including the tender sirloin, barrel-cut filet, Delmonico boneless ribeye, and a new 20-ounce bone-in ribeye, as well as a new half-pound burger.

On consistency, he said the brand is using Ziosk tabletop data and guest feedback to coach performance and close gaps. The company is also conducting monthly steak reviews and training led by multi-unit leaders.

On service, Spanos said Outback identified that a 1-server-to-6-table station ratio during peak hours was not delivering the intended guest interaction. Testing supported a reduced ratio of four tables per server during peak times, and the company began a national rollout of the new service model in April. He said the company is tracking guest and team-member feedback along with Ziosk metrics such as intent to return and server attentiveness, and expects to provide a fuller update next quarter.

Spanos also discussed changes to Outback Managing Partner compensation, saying the updated model is intended to keep total compensation competitive locally while aligning pay to restaurant sales and profit growth. He said the rollout began in April and will continue through the remainder of the year.

For restaurant investments, Spanos said the company aims to “touch nearly all” Outback restaurants by the end of 2028 through targeted refresh initiatives that average $350,000 to $400,000 per location and focus on guest-facing areas. In response to analyst questions, Spanos said the company has seen refreshes in other brands typically generate a 100 to 200 basis point traffic tailwind immediately following completion. Management added that the refresh scope generally does not require permits and can be completed without restaurant downtime.

Spanos also said Outback is expanding char grill capacity to support the new steak lineup and expects to complete that work by mid-year. In the Q&A, he emphasized the effort is designed to provide sufficient “capacity on the flame” while still using clamshell equipment for certain items, and said the line changes can improve flow and visibility for kitchen teams.

Financial results, margin drivers, and guidance

Executive Vice President and CFO Eric Christel reported first-quarter revenue of $1.06 billion, up 1% from $1.05 billion a year earlier. He said restaurant sales increased due to positive comparable sales, partially offset by lower franchise revenue because the prior-year quarter included one additional month of intercompany Brazil royalties.

Christel said average check increased 270 basis points year-over-year, with pricing offset by negative mix as the company continued investing in affordable offers. Off-premises sales represented 23% of total U.S. sales, in line with the prior-year quarter. Outback’s off-premises mix was 25% and Carrabba’s was 33%.

On earnings, Christel reported GAAP diluted EPS of $0.64 versus $0.50 last year, and adjusted diluted EPS of $0.67 versus $0.59. He said first-quarter adjustments totaled about $3 million, primarily tied to transformational and restructuring activities.

Adjusted operating margin was 5.9% compared with 6.1% a year ago. Christel said restaurant-level costs reflected commodity inflation of 4.6% and labor inflation of 3.1%, along with higher health insurance expense, partially offset by lower other restaurant operating expenses due to reduced advertising spend and productivity improvements. In response to a question on commodities, Christel said the quarter came in “a little bit favorable due to dairy and poultry primarily,” while the company maintained its full-year commodity inflation outlook of 4.5% to 5.5% and noted it was roughly 85% locked on its commodity basket, with beef locked in.

Christel also updated capital structure metrics, reporting total debt net of cash of $681 million. Leverage at quarter-end stood at 3.8x on a lease-adjusted net leverage basis and 2.2x on a net debt to adjusted EBITDA basis. Capital expenditures were $25 million in the quarter, and the company reiterated full-year capex guidance of $185 million to $195 million, with spending expected to ramp as refresh and remodel activity increases. Christel reiterated that capital allocation priorities are investing in the base business and paying down debt.

For outlook, Christel said Bloomin’ Brands reiterated full-year fiscal 2026 guidance previously provided in February. For the second quarter, the company expects:

• U.S. comparable restaurant sales: 1% to 2%
• Adjusted diluted EPS: $0.27 to $0.32
• Tax benefit: $4 million to $5 million
• Brazil equity-method investment: loss of approximately $1.2 million to $1.7 million

Christel also said Bloomin’ Brands recorded an equity-method investment loss of about $200,000 in the first quarter related to its 33% retained ownership in Brazil, and maintained expectations for a full-year loss of about $3 million to $4 million.

Marketing cadence and consumer commentary

Spanos said the company continues to plan for higher year-over-year marketing spend at Outback, concentrated in the second half of fiscal 2026 after operational investments in steak quality and service enhancements. He described a shift in mix away from “70% linear TV, 30% digital” toward “60% digital, 40% linear TV,” and said the company is seeing improved returns from marketing mix models. Management said overall marketing is expected to be in the “low 2s to mid 2s” as a percentage of revenue for the year, and that the incremental marketing investment of about $10 million is planned for the back half.

On consumer behavior, Spanos said guests remain engaged, describing eating out as “a very affordable luxury.” In response to a question about demographics, he said older Outback guests (above roughly age 55 to 60) with household incomes under $75,000 are “managing their checks” but are adding frequency, with the Aussie 3-Course offer resonating particularly well. At the same time, he said younger cohorts with higher household incomes are trading up into the higher-priced Aussie 3-Course tiers.

Looking at trend cadence, Spanos said the quarter started strong but was impacted by winter weather in late January and early February. He noted strong performance around Valentine’s Day, when he said all four brands grew both traffic and comparable sales, and said Easter week also delivered year-over-year comparable sales growth across brands. He added that the company saw sequential improvement in March versus January and February, with a further step up in April, and said early reads for Mother’s Day were positive based on reservation pacing.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.