Bloomin' Brands has revised its earnings outlook for 2024, forecasting a range of adjusted earnings between $1.72 and $1.82, a significant drop from the previously projected $2.10 to $2.30. This adjustment comes as the parent company of Outback Steakhouse reported a third-quarter profit that nearly halved compared to the previous year, influenced by declining traffic trends. Analysts surveyed by Capital IQ anticipated a normalized EPS of $2.08.
For the current quarter, Bloomin' Brands expects adjusted EPS to fall between $0.32 and $0.42, with comparable sales expected to decrease by 1% to 2%. The consensus holds a normalized EPS forecast of $0.67. Stocks of Bloomin' Brands experienced a notable drop, plummeting nearly 10% in trading on Friday. During an earnings conference call, Chief Executive Mike Spanos noted the challenges facing the industry, including the recent impacts from hurricanes and the company's operational execution.
He stated, “We are not pleased with our performance.” Spanos took on the chief executive role in early September. For the quarter ending on September 29, Bloomin' Brands reported adjusted earnings of $0.21 per share, down from $0.41 in the same period last year, but slightly above the expected consensus of $0.20.
Revenue decreased by 3.8% to $1.04 billion, aligning closely with analyst estimates. Further insights from the company indicated that US comparable restaurant sales fell by 1.5% year over year, with a notable 4.4% drop in traffic. Internationally, comparable sales, which include Outback Steakhouse in Brazil, showed a decrease of 3.6%. In a strategic move, Bloomin' Brands has agreed to sell a 67% stake in its Brazil operations for 1.4 billion Brazilian reais (approximately $243.5 million) to Vinci Partners.
This transaction is valued at a total enterprise value of 2.06 billion reais, with the expectation that the deal will finalize on or before December 31. The company remarked, “This strategic re-franchise includes an on-going royalty stream.” Over half of the transaction amount is due at the closing of the deal, while the remaining 48% will be paid at the first anniversary date of the deal's closure.
Bloomin' Brands also holds an option to divest its remaining stake in the Brazil operations by 2028..