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.
BLMN Stock Rallies 35% YTD, Pulls Back 13% in a Month: Buy the Dip?
Read MoreHide Full Article
Key Takeaways
Bloomin' Brands is gaining from better Outback execution, guest satisfaction and a stronger sales mix.
BLMN cut its 2026 turnaround investment outlook while raising adjusted EPS guidance to 90 cents to $1.
Outback refreshes and higher marketing spending could help drive traffic recovery and strengthen the brand.
Bloomin’ Brands, Inc. (BLMN - Free Report) stock has gained 35.2% year to date as investors have responded to improving execution and progress in its turnaround strategy. The recovery at Outback Steakhouse, the key brand, has been central to the improving sentiment. Management is focusing on food quality, service, value and restaurant execution, with early signs indicating that these efforts are gaining traction.
Outback’s Guest Metric Scores improved year over year for the fourth consecutive quarter, with gains in service, atmosphere, value, intent to return, food and brand trust. The company is also seeing customers increasingly trade up to premium steak cuts, while combo offerings, premium sides, toppings and desserts are supporting a healthier sales mix. These improvements suggest that better execution is beginning to strengthen the value proposition for guests.
The turnaround is also becoming more financially efficient. Bloomin’ Brands reduced its expected 2026 turnaround investment to $36 million from $50 million, while productivity savings remain on track at $30 million. As a result, expected net turnaround investment has fallen to $6 million. Management also raised its full-year adjusted EPS guidance in the range of 90 cents to $1 from the previous band of 75-90 cents, supported by better mix trends and cost controls.
In the year to date period, 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
Why Has BLMN Stock Pulled Back 13% in a Month?
Despite the strong year-to-date gain, BLMN’s shares have declined 13% in the past month as investors remain concerned about restaurant traffic, value sensitivity and the pace of the Outback recovery. While guest satisfaction is improving, Outback traffic has not yet turned positive. Management acknowledged that converting better guest experiences into sustainable traffic growth will take time.
The company is also taking a more disciplined approach to promotions. Management chose not to repeat certain profit-dilutive traffic offers from the prior year. Although this should support healthier sales economics, it can weigh on near-term traffic. The company expects full-year comparable restaurant sales to increase 1-2%, with better mix partly offset by slightly lower traffic.
Cost inflation is another pressure point. Commodity inflation was 5.7% in the second quarter, while management expects it to remain at 4.5-5.5% for 2026. Pricing is expected to be about 4.5%, leaving limited room to fully offset cost increases without potentially affecting the brand’s value proposition.
Outback Turnaround Offers Long-Term Upside
The fundamental investment case for BLMN remains closely tied to Outback’s ability to generate sustainable traffic while improving profitability. Management’s turnaround plan is built around four priorities: delivering a better dining experience, strengthening brand relevance, rebuilding a culture of ownership and investing in restaurants.
The company has made meaningful progress on the dining experience. Outback’s new steak lineup continues to receive strong customer feedback, while the new service model has now been rolled out across all locations. The model reduces the peak-hour server-to-table ratio from one server for six tables to one for four, and management said guest feedback has been positive.
This focus on execution could prove more valuable than relying heavily on promotions. Management believes that customers respond positively when Outback consistently delivers on food quality, service and hospitality. The objective is therefore to build sustainable traffic by improving the overall dining experience rather than simply purchasing traffic through discounts.
Another encouraging development is the improvement in sales mix. Guests are increasingly upgrading to premium steak cuts, while premium sides, steak toppers, desserts and non-steak proteins are also gaining traction. Management said these trends have been better than expected, helping reduce the investment needed to support the turnaround.
Restaurant Refreshes Could Drive Traffic
Restaurant investments represent another important long-term catalyst. Bloomin’ Brands plans to refresh nearly all Outback restaurants by 2028, focusing on targeted interior and exterior improvements rather than costly full-scale remodels. The company expects to spend approximately $350,000-$400,000 per location. Management expects to complete about 85 refreshes in 2026 and ultimately reach approximately 100 locations annually. More importantly, the company has observed a 100-200-basis-point traffic lift six to 12 months after completing these refreshes. If this performance is replicated across a larger portion of the restaurant base, remodels could become an important driver of Outback’s traffic recovery.
Marketing to Reinforce Outback’s Brand
Bloomin’ Brands is also stepping up marketing investment, particularly behind Outback. Full-year advertising spending is expected to increase about $15 million, including roughly $10 million of additional spending on Outback. The company plans to emphasize the steakhouse identity, affordability and Aussie positioning while shifting more of its marketing toward digital and social channels.
This strategy is designed to reinforce the improvements being made inside restaurants. Stronger brand messaging can bring guests in, while better food, service and hospitality are expected to encourage them to return. Over time, this combination could create a virtuous cycle of improving guest satisfaction, traffic and profitability.
BLMN Estimate Revisions
Analysts have raised their 2026 and 2027 EPS estimates for Bloomin’ Brands, signaling improving expectations for its earnings prospects. However, BLMN’s earnings are still projected to decline 15.8% year over year in 2026, before rebounding with an estimated 12.2% increase in 2027.
Image Source: Zacks Investment Research
Among its peers, Darden Restaurants is expected to deliver 5.8% earnings growth in 2026, while Shake Shack is projected to see a 15.3% earnings decline. This indicates that although BLMN faces near-term earnings pressure, the expected return to growth in 2027, combined with recent upward estimate revisions, points to improving earnings momentum.
BLMN’s Valuation
From a valuation point of view, the stock is still trading at a discount. Bloomin' Brands' forward 12-month price-to-earnings ratio stands at 7.93, much lower than the industry’s 19.77.
P/E (F12M)
Image Source: Zacks Investment Research
Is BLMN Stock a Buy?
The 13% monthly pullback has tempered BLMN’s strong year-to-date rally, but its fundamental recovery remains encouraging. Improvements in guest satisfaction, stronger sales mix, reduced turnaround spending, restaurant refreshes and increased brand investment provide several potential catalysts.
The key risk is traffic. The company still needs to demonstrate that better guest experiences can translate into sustained traffic growth. Commodity inflation and the decision to avoid profit-dilutive promotions could also create near-term pressure.
Nevertheless, the raised EPS outlook, improved sales mix and more efficient turnaround investment strengthen the long-term case. With BLMN sporting a Zacks Rank #1 (Strong Buy), the recent weakness could provide an attractive entry point for investors willing to look beyond near-term traffic challenges and wait for the Outback turnaround to translate into stronger traffic and profitability.
View the Zacks #1 Rank List
Image: Bigstock
BLMN Stock Rallies 35% YTD, Pulls Back 13% in a Month: Buy the Dip?
Key Takeaways
Bloomin’ Brands, Inc. (BLMN - Free Report) stock has gained 35.2% year to date as investors have responded to improving execution and progress in its turnaround strategy. The recovery at Outback Steakhouse, the key brand, has been central to the improving sentiment. Management is focusing on food quality, service, value and restaurant execution, with early signs indicating that these efforts are gaining traction.
Outback’s Guest Metric Scores improved year over year for the fourth consecutive quarter, with gains in service, atmosphere, value, intent to return, food and brand trust. The company is also seeing customers increasingly trade up to premium steak cuts, while combo offerings, premium sides, toppings and desserts are supporting a healthier sales mix. These improvements suggest that better execution is beginning to strengthen the value proposition for guests.
The turnaround is also becoming more financially efficient. Bloomin’ Brands reduced its expected 2026 turnaround investment to $36 million from $50 million, while productivity savings remain on track at $30 million. As a result, expected net turnaround investment has fallen to $6 million. Management also raised its full-year adjusted EPS guidance in the range of 90 cents to $1 from the previous band of 75-90 cents, supported by better mix trends and cost controls.
In the year to date period, 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
Why Has BLMN Stock Pulled Back 13% in a Month?
Despite the strong year-to-date gain, BLMN’s shares have declined 13% in the past month as investors remain concerned about restaurant traffic, value sensitivity and the pace of the Outback recovery. While guest satisfaction is improving, Outback traffic has not yet turned positive. Management acknowledged that converting better guest experiences into sustainable traffic growth will take time.
The company is also taking a more disciplined approach to promotions. Management chose not to repeat certain profit-dilutive traffic offers from the prior year. Although this should support healthier sales economics, it can weigh on near-term traffic. The company expects full-year comparable restaurant sales to increase 1-2%, with better mix partly offset by slightly lower traffic.
Cost inflation is another pressure point. Commodity inflation was 5.7% in the second quarter, while management expects it to remain at 4.5-5.5% for 2026. Pricing is expected to be about 4.5%, leaving limited room to fully offset cost increases without potentially affecting the brand’s value proposition.
Outback Turnaround Offers Long-Term Upside
The fundamental investment case for BLMN remains closely tied to Outback’s ability to generate sustainable traffic while improving profitability. Management’s turnaround plan is built around four priorities: delivering a better dining experience, strengthening brand relevance, rebuilding a culture of ownership and investing in restaurants.
The company has made meaningful progress on the dining experience. Outback’s new steak lineup continues to receive strong customer feedback, while the new service model has now been rolled out across all locations. The model reduces the peak-hour server-to-table ratio from one server for six tables to one for four, and management said guest feedback has been positive.
This focus on execution could prove more valuable than relying heavily on promotions. Management believes that customers respond positively when Outback consistently delivers on food quality, service and hospitality. The objective is therefore to build sustainable traffic by improving the overall dining experience rather than simply purchasing traffic through discounts.
Another encouraging development is the improvement in sales mix. Guests are increasingly upgrading to premium steak cuts, while premium sides, steak toppers, desserts and non-steak proteins are also gaining traction. Management said these trends have been better than expected, helping reduce the investment needed to support the turnaround.
Restaurant Refreshes Could Drive Traffic
Restaurant investments represent another important long-term catalyst. Bloomin’ Brands plans to refresh nearly all Outback restaurants by 2028, focusing on targeted interior and exterior improvements rather than costly full-scale remodels. The company expects to spend approximately $350,000-$400,000 per location.
Management expects to complete about 85 refreshes in 2026 and ultimately reach approximately 100 locations annually. More importantly, the company has observed a 100-200-basis-point traffic lift six to 12 months after completing these refreshes. If this performance is replicated across a larger portion of the restaurant base, remodels could become an important driver of Outback’s traffic recovery.
Marketing to Reinforce Outback’s Brand
Bloomin’ Brands is also stepping up marketing investment, particularly behind Outback. Full-year advertising spending is expected to increase about $15 million, including roughly $10 million of additional spending on Outback. The company plans to emphasize the steakhouse identity, affordability and Aussie positioning while shifting more of its marketing toward digital and social channels.
This strategy is designed to reinforce the improvements being made inside restaurants. Stronger brand messaging can bring guests in, while better food, service and hospitality are expected to encourage them to return. Over time, this combination could create a virtuous cycle of improving guest satisfaction, traffic and profitability.
BLMN Estimate Revisions
Analysts have raised their 2026 and 2027 EPS estimates for Bloomin’ Brands, signaling improving expectations for its earnings prospects. However, BLMN’s earnings are still projected to decline 15.8% year over year in 2026, before rebounding with an estimated 12.2% increase in 2027.
Image Source: Zacks Investment Research
Among its peers, Darden Restaurants is expected to deliver 5.8% earnings growth in 2026, while Shake Shack is projected to see a 15.3% earnings decline. This indicates that although BLMN faces near-term earnings pressure, the expected return to growth in 2027, combined with recent upward estimate revisions, points to improving earnings momentum.
BLMN’s Valuation
From a valuation point of view, the stock is still trading at a discount. Bloomin' Brands' forward 12-month price-to-earnings ratio stands at 7.93, much lower than the industry’s 19.77.
P/E (F12M)
Image Source: Zacks Investment Research
Is BLMN Stock a Buy?
The 13% monthly pullback has tempered BLMN’s strong year-to-date rally, but its fundamental recovery remains encouraging. Improvements in guest satisfaction, stronger sales mix, reduced turnaround spending, restaurant refreshes and increased brand investment provide several potential catalysts.
The key risk is traffic. The company still needs to demonstrate that better guest experiences can translate into sustained traffic growth. Commodity inflation and the decision to avoid profit-dilutive promotions could also create near-term pressure.
Nevertheless, the raised EPS outlook, improved sales mix and more efficient turnaround investment strengthen the long-term case. With BLMN sporting a Zacks Rank #1 (Strong Buy), the recent weakness could provide an attractive entry point for investors willing to look beyond near-term traffic challenges and wait for the Outback turnaround to translate into stronger traffic and profitability.
You can see the complete list of today’s Zacks #1 Rank stocks here.