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Bloomin' Brands (BLMN) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Aug 5, 2026

Source: earnings call transcript

Executive summary

Bloomin' Brands Q2 FY26 — Outback Turnaround Progress Drives EPS Beat and Raised Guidance

Bloomin' Brands delivered a strong second quarter, driven by continued progress in the Outback Steakhouse turnaround, which is yielding improved guest metrics and a better sales mix. The company's strategic focus on enhanced dining experience, brand relevancy, and restaurant investments is gaining traction, leading to an upward revision in full-year EPS guidance. While traffic remains a challenge due to intentional decisions to forgo dilutive promotions, management is confident in the long-term, sustainable growth trajectory.

Highlights

5

  • Q2 adjusted diluted EPS of $0.39, exceeding prior year's $0.32 and beating guidance.

  • Q2 U.S. comparable restaurant sales positive 230 basis points, narrowing gap to industry.

  • Outback's guest metric scores improved for the fourth consecutive quarter, with service up 7 points and value up 6 points YoY.

  • Full-year FY26 adjusted diluted EPS guidance raised to $0.90-$1.00 from $0.75-$0.90.

  • Bonefish Grill comp sales up 810 basis points with traffic positive 450 basis points.

Concerns

4

  • Outback's Q2 traffic was down 280 basis points, and Carrabba's traffic was down 250 basis points, due to strategic decision to not lap dilutive offers.

  • Commodities inflation of 5.7% elevated COGS compared to last year.

  • Brazil equity method investment recognized a loss of approximately $0.9 million in Q2 FY26.

  • Q3 FY26 adjusted diluted EPS expected to be negative $0.27 to negative $0.22.

Guidance & targets

CategoryTargetConfidence
Full-year FY26 U.S. comparable restaurant sales
1%-2%
high materiality
High
Full-year FY26 adjusted diluted EPS
$0.90-$1.00
high materiality
High
Full-year FY26 capital expenditures
$185M-$195M
medium materiality
High
Full-year FY26 Brazil EMI loss
$3M-$4M
low materiality
High
Q3 FY26 U.S. comparable restaurant sales
1%-2%
medium materiality
High
Q3 FY26 adjusted diluted EPS
negative $0.27 to negative $0.22
high materiality
High
Q3 FY26 tax expense
approximately $5M
low materiality
High
Q3 FY26 Brazil EMI loss
approximately negative $2M
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
U.S. Comparable Restaurant Sales
Narrowed the gap versus the industry (Black Box) each quarter, Q2 comp sales in line with Black Box.
Traffic: down 190 bps
—230 bps——
Outback Steakhouse
Did not lap dilutive traffic offerings from Q2 2025, particularly in third-party delivery. Aussie 3-course affordability offering sees 60% trade-up to higher price tiers and 20% trade-up on dessert.
Traffic: down 280 bpsOff-premises mix: 26%
—140 bps——
Carrabba's Italian Grill
Sixth consecutive quarter of positive comp sales. Did not lap dilutive third-party delivery offerings from prior year. Driven by in-restaurant experience, day-of-week offers, and wine dinners.
Traffic: negative 250 bpsOff-premises mix: 34%
—170 bps——
Bonefish Grill
Steady improvement in traffic growth with momentum in day-of-the-week offers like Margarita and Martini Mondays and Bang Bang Shrimp Wednesdays.
Traffic: positive 450 bps
—810 bps——
Fleming's Prime Steakhouse & Wine Bar
Eighth consecutive quarter of positive comp sales growth. Focus on memorable special occasions through disciplined execution and approachable offers.
Traffic: down 280 bps
—160 bps——

Risks & headwinds

Traffic decline due to strategic decisions Q2 FY26

Outback traffic down 280 bps, Carrabba's traffic down 250 bps in Q2 FY26.

Mitigation:Strategic decision to not repeat profit-dilutive offers from last year; focus on sustainable traffic growth through improved dining experience and brand relevancy.

Commodities inflation FY26

5.7% inflation in Q2 FY26, expected 4.5%-5.5% for full year.

Mitigation:Menu pricing in about the 4.5% range, aiming for a balanced approach.

Negative earnings outlook for Q3 FY26 Q3 FY26

Q3 adjusted diluted EPS expected to be negative $0.27 to negative $0.22.

Mitigation:Not explicitly stated as a risk to be mitigated, but rather an expectation factored into guidance, with focus on long-term profitable growth.

What to watch in Q3 FY26

Outback traffic trends

next quarter
Current down 280 bps in Q2 FY26
Target narrowing gap to industry, showing signs of sustainable growth

Why it matters

Traffic recovery is key to the Outback turnaround and overall sales growth, especially as the company foregoes dilutive offers.

Outback's Q2 comp sales were up 140 basis points with traffic down 280 basis points. As we mentioned in our first quarter earnings call, we chose not to lapse some dilutive traffic offerings from Q2 2025, particularly in our third-party delivery space.

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Q&A highlights

Are there any surprises in Outback's improved performance metrics, particularly regarding the steak upgrades and service changes? Is the improved mix and check performance a direct result of these changes?

Management is very positive on the new steak lineup, noting better-than-expected guest trade-up to premium cuts and strong combo offerings. The service model rollout is performing as expected, with server pay remaining stable and guest satisfaction improving. Menu design and premium sides/desserts also contributed to the positive mix.

“We are seeing gas trade up more and more into the premium cuts. That's been better than what we had seen in our tests when we did the test in 2025.”

asked by Alex Slagle · answered by Michael Spanos

2 min read 6 chapters

Detailed narrative

Outback Turnaround Progress

The Outback Steakhouse turnaround plan is showing significant progress, with guest metric scores improving for the fourth consecutive quarter. Key areas like service, atmosphere, value, intent to return, and food quality have seen year-over-year gains. The new steak lineup, launched in November, continues to perform well, and the recent rollout of a new service model (reducing server-to-table ratio to 1:4 during peak hours) is receiving positive guest feedback and maintaining server pay levels.

Strategic Platforms and Investments

The turnaround is anchored on four strategic platforms: delivering a remarkable dining experience, driving brand relevancy, reigniting a culture of ownership, and investing in restaurants. These are supported by non-guest-facing productivity savings and balanced capital allocation. The company is on track to refresh nearly all Outback restaurants by the end of 2028, with 31 refreshes completed through July and 85 planned for FY26, at an average cost of $350,000-$400,000 per location.

Sales Mix Improvement and Turnaround Investment

Improved sales mix trends at Outback, driven by enhanced menu design, guests trading up to premium steak cuts, and momentum from non-alcoholic mocktails, have positively impacted the required turnaround investment. The allocated $25 million for food investments now includes only $4 million for mix, reducing the total turnaround investment to $36 million from an initial $50 million. Productivity savings of $30 million remain on track, resulting in a net investment of $6 million for 2026.

Marketing Strategy Shift

Bloomin' Brands is increasing its marketing spend year-over-year in the second half of FY26, with a total increase of approximately $15 million for the full year, $10 million of which is for Outback. The marketing mix is shifting towards social and digital channels (targeting 60% digital, 40% linear TV) to recruit Gen X, Gen Z, and Millennial customers. Brand communication will be steak-centric, reinforcing steak excellence, affordability (via the Aussie 3-course offer), and brand equity.

Restaurant-Specific Performance

Beyond Outback, Carrabba's achieved its sixth consecutive quarter of positive comp sales, up 170 basis points, driven by in-restaurant experience and wine dinners. Bonefish Grill saw strong performance with comp sales up 810 basis points and traffic up 450 basis points, benefiting from day-of-the-week offers. Fleming's recorded its eighth consecutive quarter of positive comp sales growth, up 160 basis points.

Capital Allocation and Debt Management

The company's capital allocation priorities are to invest in the base business and pay down debt. Capital expenditures for Q2 were $44 million, with full-year expectations between $185 million and $195 million. Total debt net of cash stood at $636 million at the end of Q2, with a net debt to adjusted EBITDA ratio of 2.0x, and a long-term target for lease-adjusted net leverage ratio of 3.0x.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.