Bloomin Brands Inc. (BLMN) has released its third-quarter financial results for 2024, reporting diluted earnings per share (EPS) of $0.08 and an adjusted diluted EPS of $0.21. As the company navigates a period of transition under new CEO Mike Spanos, the report also highlights Bloomin’ Brands’ strategic initiatives and updates to its fiscal guidance for the remainder of 2024.
This quarter, the company announced a significant re-franchising of its Brazilian operations to Vinci Partners, a move aimed at bolstering future growth.
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Key Insights from Bloomin’ Brands’ Earning Report:
Bloomin’ Brands reported a 3.8% decline in revenue year-over-year, ending Q3 with $1.04 billion in total revenue, down from $1.08 billion in Q3 2023. Operating income margins decreased to 1.7%, with an adjusted operating margin at 3.0%. Key factors contributing to this decline include rising operational costs, inflation, and the closure of certain international locations. Restaurant-level operating margins also fell, particularly due to increased labor and commodity costs, which impacted the overall profitability.
CEO Mike Spanos, who joined Bloomin’ Brands just two months ago, highlighted the resilience of the team in light of recent challenges, including two hurricanes affecting U.S. operations. Spanos expressed optimism about the company’s path forward, noting a focus on strengthening Outback Steakhouse’s guest experience as part of their strategy for sustainable growth.
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Management Discussion and Analysis:
According to Spanos, Bloomin’ Brands is strategically positioned to capitalize on its established market presence, particularly in Brazil. The decision to re-franchise a portion of its Brazilian operations to Vinci Partners is anticipated to drive local growth and profitability. This partnership will allow Bloomin’ Brands to maintain a revenue stream through royalties, while Vinci’s market expertise could amplify the brand’s footprint in the Brazilian market. Domestically, Bloomin’ Brands has been recalibrating its expenses and revising its guidance to mitigate recent revenue and cost pressures.
The company’s updated 2024 guidance reflects its anticipated financial performance, with projected U.S. comparable restaurant sales expected to stabilize slightly below last year’s levels. Additionally, Bloomin’ Brands aims to mitigate inflationary impacts, revising its projected commodity inflation to approximately 1%.
Stock Target Advisor’s Analysis on Bloomin’ Brands:
Stock Target Advisor’s outlook on Bloomin’ Brands is rated as “Neutral,” based on a blend of positive and negative indicators. Analysts forecast an average target price of USD 22.55, reflecting a 29.12% projected price increase over the next year. While Bloomin’ Brands benefits from a high market capitalization, positive cash flow, and strong returns on equity and assets, its stock volatility, high leverage, and slower revenue growth remain areas of concern.
The stock’s high price-to-earnings and price-to-book ratios suggest it may be somewhat overvalued relative to peers. Nonetheless, the company’s robust five-year earnings growth of 130.99% places it among the top-performing companies in its sector for this metric.
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Conclusion:
Bloomin’ Brands’ Q3 2024 results underscore the company’s resilience amid operational and financial challenges. Under new leadership, the company is prioritizing both domestic improvements and international growth through strategic partnerships like the recent re-franchising in Brazil.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
