Bloomin' Brands swings to Q1 loss, is exploring 'strategic alternatives' for Brazil business

By James Rogers

Bloomin' Brands Inc. swung to a loss in its first-quarter results Tuesday morning, and announced that it is exploring strategic alternatives for its Brazil operations.

In a separate announcement, the owner of Outback Steakhouse, Carrabba's Italian Grill and Bonefish Grill announced that Chief Executive Officer David Deno will be retiring after 12 years with the company, including the last five as CEO. Bloomin' Brands (BLMN) shares were up 0.2% in premarket trades.

The Tampa, Fla.-based restaurant chain reported a first-quarter loss of $83.9 million, or 96 cents a share, after a profit of $91.3 million, or 93 cents a share, in the prior year's quarter. On an adjusted basis, Bloomin' Brands reported earnings of 70 cents a share, below the FactSet consensus estimate of 75 cents a share.

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First-quarter revenue was $1.195 billion, down from $1.245 billion in the same period last year, but in line with analysts' estimate of $1.196 billion. Bloomin' Brands said that its first-quarter 2024 fiscal calendar began one week later than the first quarter of 2023, with the prior year's period including several high-volume days between Dec. 26 and Dec. 31, which were excluded from this year's quarter. The shift had a negative impact of approximately $16.5 million on comparable restaurant sales and 6 cents on adjusted earnings per share, the company said.

"The first quarter was a solid start to the year, as sales and profit met our expectations," said CEO Deno, in a statement. "After a slower start, sales trends strengthened throughout the quarter. Our sales performance is well ahead of the casual dining industry as our marketing and operations initiatives are paying off, especially at Outback."

Bloomin' Brands' comparable restaurant sales in the U.S. were negative 1.2% in the quarter and its international comparable restaurant sales at Outback Steakhouse in Brazil were negative 0.7%. Analysts surveyed by FactSet were looking for total comparable restaurant sales of negative 0.4%. The restaurant chain also said that it is exploring and evaluating strategic alternatives for its Brazil operations "that have the potential to maximize value for our shareholders."

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The company said that the decrease in total revenue included the impact of the one-week shift in the fiscal calendar, the net impact of restaurant closures and openings and the impact of the Brazil value-added tax exemptions during 2023. This decrease was partially offset by the effect of foreign-currency translation, according to Bloomin' Brands.

Bloomin' Brands lowered its fiscal 2024 earnings outlook to between 79 cents and 94 cents a share, from $2.27 to $2.46 a share, but maintained its adjusted earnings forecast of $2.51 to $2.66 a share. Analysts surveyed by FactSet are looking for adjusted earnings of $2.55 a share. For the second quarter, the company expects U.S. comparable restaurant sales of flat to 1.5%, earnings of 53 cents to 58 cents a share and adjusted earnings of 55 cents to 60 cents a share. Analysts surveyed by FactSet are looking for comparable store sales of 1% and adjusted earnings of 69 cents a share.

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Bloomin' Brands shares are down 11.3% in 2024, compared with the S&P 500 index's SPX gain of 8.6%.

-James Rogers

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05-07-24 0836ET

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