We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bloomin' Brands, Inc.’s (BLMN - Free Report) shares have surged 49.2% over the past six months, against the industry’s 13.1% decline. The stock’s strong performance reflects growing investor attention toward the company’s Outback Steakhouse turnaround, improving restaurant execution, better sales mix and raised earnings guidance.
Bloomin’ Brands’ efforts to strengthen customer experience while controlling costs have improved its financial outlook. However, with the stock’s substantial gains, investors should evaluate whether operational improvements can support further earnings growth and justify its current valuation.
In the same time frame, the stock has also outperformed other industry players like Darden Restaurants, Inc. (DRI - Free Report) and Shake Shack Inc. (SHAK - Free Report) .
Price Performance
Image Source: Zacks Investment Research
Outback Turnaround Supports Growth Prospects
Bloomin’ Brands’ turnaround strategy centers on improving Outback Steakhouse’s food quality, service, affordability and brand relevance. Management reported that Outback’s Guest Metric Scores improved for the fourth consecutive quarter in the second quarter of fiscal 2026. Service, atmosphere, value, intent to return and food quality all recorded year-over-year improvements.
A key initiative has been the introduction of a new service model that reduces the number of tables assigned to each server during peak hours from six to four. Management stated that Outback’s service scores exceeded 90% in the top-box category, reflecting improved customer satisfaction.
The company also continues to benefit from its revamped steak menu. Customers are increasingly upgrading to premium cuts, while combo meals, premium sides and desserts are supporting higher spending. These developments are helping improve Outback’s sales mix and strengthening the potential returns from turnaround investments.
Comparable Sales and Earnings Show Improvement
Bloomin’ Brands reported fiscal second-quarter revenues of $1.02 billion, up 1% year over year. U.S. comparable restaurant sales increased 2.3%, while the average check grew 4.2%. Adjusted EPS rose to 39 cents from 32 cents in the prior-year quarter.
Adjusted operating margin improved to 4% from 3.5%, supported by restaurant margin improvements, favorable labor costs and non-guest-facing productivity savings. However, commodity inflation of 5.7% during the quarter continued to pressure costs.
The company also raised its fiscal 2026 adjusted EPS guidance to 90 cents to $1, compared with the previous range of 75-90 cents. The improved outlook reflects stronger year-to-date performance, favorable sales mix trends and better cost controls.
Management expects full-year U.S. comparable restaurant sales growth of 1-2%, suggesting that earnings growth will depend on continued operational improvements and cost discipline.
Lower Turnaround Costs Could Support Profitability
Bloomin’ Brands has reduced its expected 2026 turnaround investment to $36 million from $50 million. The company continues to target $30 million in productivity savings, resulting in an anticipated net investment of $6 million.
The reduction in investment requirements could improve the financial efficiency of the turnaround program. Nevertheless, the company must maintain spending on restaurant improvements and customer experience to support long-term growth.
Restaurant Refreshes Offer Long-Term Potential
Bloomin’ Brands plans to refresh nearly all Outback restaurants by the end of 2028. The company expects to spend approximately $350,000-$400,000 per location and remains on track to complete around 85 refreshes in 2026.
Management indicated that refreshed restaurants have generated traffic improvements of approximately 100-200 basis points within six months to a year after completion. If this trend continues, restaurant investments could support comparable sales and customer retention over time.
Traffic Recovery Remains a Key Challenge
Despite improvements in guest satisfaction and comparable sales, Outback’s traffic declined 2.8% in the fiscal second quarter. This highlights the challenge of converting better customer experiences into sustained traffic growth.
Management expects commodity inflation of 4.5-5.5% for the full year, while pricing is projected at approximately 4.5%. This relatively narrow pricing-cost relationship could limit margin expansion if commodity pressures persist.
The company is increasing full-year advertising spending by approximately $15 million, including $10 million for Outback. Its marketing strategy will emphasize steak offerings, affordability and digital channels.
BLMN Estimate Revisions
Analysts have raised their fiscal 2026 earnings estimate for Bloomin' Brands from 86 cents to 98 cents per share over the past 60 days. Despite this upward revision, the company’s earnings are projected to decline 14% year over year in fiscal 2026. In comparison, Darden Restaurants and Shake Shack are expected to report earnings growth of 5.8% and decline 15.3% for the current year, respectively.
Image Source: Zacks Investment Research
BLMN’s Valuation
From a valuation point of view, the stock is still trading at a premium despite the recent decline. Bloomin' Brands' forward 12-month price-to-earnings ratio stands at 8.75, much lower than the industry’s 20.48.
P/E (F12M)
Image Source: Zacks Investment Research
How to Play BLMN Stock Now?
For investors considering BLMN, the investment case rests on its improving operating execution, strengthening Outback brand and more favorable earnings outlook. The turnaround is gaining traction as better food quality, enhanced service, value-focused offerings and restaurant investments improve guest satisfaction and sales mix.
At the same time, tighter cost controls and lower turnaround spending could support profitability as the recovery progresses. Upward earnings estimate revisions also indicate improving analyst expectations, while the stock’s relatively modest forward valuation provides some support to the investment case. However, the key catalyst will be whether stronger guest engagement eventually translates into sustained traffic growth and broader margin improvement. Overall, BLMN offers exposure to a restaurant turnaround story in which operational improvements, earnings recovery and valuation could provide multiple avenues for shareholder returns.
View the Zacks #1 Rank List
Image: Bigstock
Bloomin' Brands Surges 49% in 6 Months: How to Play the Stock Now?
Key Takeaways
Bloomin' Brands, Inc.’s (BLMN - Free Report) shares have surged 49.2% over the past six months, against the industry’s 13.1% decline. The stock’s strong performance reflects growing investor attention toward the company’s Outback Steakhouse turnaround, improving restaurant execution, better sales mix and raised earnings guidance.
Bloomin’ Brands’ efforts to strengthen customer experience while controlling costs have improved its financial outlook. However, with the stock’s substantial gains, investors should evaluate whether operational improvements can support further earnings growth and justify its current valuation.
In the same time frame, the stock has also outperformed other industry players like Darden Restaurants, Inc. (DRI - Free Report) and Shake Shack Inc. (SHAK - Free Report) .
Price Performance
Image Source: Zacks Investment Research
Outback Turnaround Supports Growth Prospects
Bloomin’ Brands’ turnaround strategy centers on improving Outback Steakhouse’s food quality, service, affordability and brand relevance. Management reported that Outback’s Guest Metric Scores improved for the fourth consecutive quarter in the second quarter of fiscal 2026. Service, atmosphere, value, intent to return and food quality all recorded year-over-year improvements.
A key initiative has been the introduction of a new service model that reduces the number of tables assigned to each server during peak hours from six to four. Management stated that Outback’s service scores exceeded 90% in the top-box category, reflecting improved customer satisfaction.
The company also continues to benefit from its revamped steak menu. Customers are increasingly upgrading to premium cuts, while combo meals, premium sides and desserts are supporting higher spending. These developments are helping improve Outback’s sales mix and strengthening the potential returns from turnaround investments.
Comparable Sales and Earnings Show Improvement
Bloomin’ Brands reported fiscal second-quarter revenues of $1.02 billion, up 1% year over year. U.S. comparable restaurant sales increased 2.3%, while the average check grew 4.2%. Adjusted EPS rose to 39 cents from 32 cents in the prior-year quarter.
Adjusted operating margin improved to 4% from 3.5%, supported by restaurant margin improvements, favorable labor costs and non-guest-facing productivity savings. However, commodity inflation of 5.7% during the quarter continued to pressure costs.
The company also raised its fiscal 2026 adjusted EPS guidance to 90 cents to $1, compared with the previous range of 75-90 cents. The improved outlook reflects stronger year-to-date performance, favorable sales mix trends and better cost controls.
Management expects full-year U.S. comparable restaurant sales growth of 1-2%, suggesting that earnings growth will depend on continued operational improvements and cost discipline.
Lower Turnaround Costs Could Support Profitability
Bloomin’ Brands has reduced its expected 2026 turnaround investment to $36 million from $50 million. The company continues to target $30 million in productivity savings, resulting in an anticipated net investment of $6 million.
The reduction in investment requirements could improve the financial efficiency of the turnaround program. Nevertheless, the company must maintain spending on restaurant improvements and customer experience to support long-term growth.
Restaurant Refreshes Offer Long-Term Potential
Bloomin’ Brands plans to refresh nearly all Outback restaurants by the end of 2028. The company expects to spend approximately $350,000-$400,000 per location and remains on track to complete around 85 refreshes in 2026.
Management indicated that refreshed restaurants have generated traffic improvements of approximately 100-200 basis points within six months to a year after completion. If this trend continues, restaurant investments could support comparable sales and customer retention over time.
Traffic Recovery Remains a Key Challenge
Despite improvements in guest satisfaction and comparable sales, Outback’s traffic declined 2.8% in the fiscal second quarter. This highlights the challenge of converting better customer experiences into sustained traffic growth.
Management expects commodity inflation of 4.5-5.5% for the full year, while pricing is projected at approximately 4.5%. This relatively narrow pricing-cost relationship could limit margin expansion if commodity pressures persist.
The company is increasing full-year advertising spending by approximately $15 million, including $10 million for Outback. Its marketing strategy will emphasize steak offerings, affordability and digital channels.
BLMN Estimate Revisions
Analysts have raised their fiscal 2026 earnings estimate for Bloomin' Brands from 86 cents to 98 cents per share over the past 60 days. Despite this upward revision, the company’s earnings are projected to decline 14% year over year in fiscal 2026. In comparison, Darden Restaurants and Shake Shack are expected to report earnings growth of 5.8% and decline 15.3% for the current year, respectively.
Image Source: Zacks Investment Research
BLMN’s Valuation
From a valuation point of view, the stock is still trading at a premium despite the recent decline. Bloomin' Brands' forward 12-month price-to-earnings ratio stands at 8.75, much lower than the industry’s 20.48.
P/E (F12M)
Image Source: Zacks Investment Research
How to Play BLMN Stock Now?
For investors considering BLMN, the investment case rests on its improving operating execution, strengthening Outback brand and more favorable earnings outlook. The turnaround is gaining traction as better food quality, enhanced service, value-focused offerings and restaurant investments improve guest satisfaction and sales mix.
At the same time, tighter cost controls and lower turnaround spending could support profitability as the recovery progresses. Upward earnings estimate revisions also indicate improving analyst expectations, while the stock’s relatively modest forward valuation provides some support to the investment case. However, the key catalyst will be whether stronger guest engagement eventually translates into sustained traffic growth and broader margin improvement. Overall, BLMN offers exposure to a restaurant turnaround story in which operational improvements, earnings recovery and valuation could provide multiple avenues for shareholder returns.
BLMN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.