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    BLMN
    Earnings call· Jun 2026(Q2 FY26)

    Bloomin' Brands Q2 FY26 earnings call BLMN

    Aug 5, 2026 Source

    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

    8
    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

    5
    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——

    Operational metrics

    30
    Total Revenues
    $1.02Bup 1% YoY
    Q2 FY26

    Compared to $1 billion last year.

    Adjusted Operating Margin
    4.0%vs 3.5% last year
    Q2 FY26

    The 50 basis point difference was driven by improved restaurant margins.

    Commodities Inflation
    5.7%
    Q2 FY26

    Elevated COGS compared to last year.

    Brazil Equity Method Investment Loss
    $0.9M
    Q2 FY26

    Recognized in Q2 from 33% retained ownership.

    Total Debt Net of Cash
    $636M
    Q2 FY26

    As of the end of Q2 2026.

    Lease-Adjusted Net Leverage Ratio
    3.7x
    Q2 FY26

    As of the end of Q2 2026.

    Net Debt to Adjusted EBITDA Ratio
    2.0x
    Q2 FY26

    As of the end of Q2 2026.

    Adjusted Net Leverage Ratio Goal
    3.0x
    Long-term

    The company's long-term goal for this metric.

    Capital Expenditures
    $44M
    Q2 FY26

    In the second quarter.

    Turnaround Investment (Food)
    $18M
    Q2 FY26

    Amount spent on food investments out of an initial $25 million allocation.

    Mix Investment
    $4M
    FY26

    Expected full-year investment for mix, down from original forecast due to improved trends.

    Total Turnaround Investments
    $36Mdown from $50M
    FY26

    Revised total for 2026 due to improved mix trends.

    Productivity Savings
    $30M
    FY26

    On track for 2026, non-guest-facing.

    Net Turnaround Investment
    $6M
    FY26

    Calculated as total turnaround investments minus productivity savings.

    Average Check Increase
    420 bpsvs 2025
    Q2 FY26

    Pricing partially offset by negative mix, but mix improved compared to original forecast.

    Off-premises Sales Mix
    24%consistent with Q2 last year
    Q2 FY26

    Consistent with Q2 last year for total U.S. sales.

    Outback Guest Scores (Service)
    up 7 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Guest Scores (Atmosphere)
    up 7 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Guest Scores (Value)
    up 6 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Guest Scores (Intent to Return)
    up 5 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Guest Scores (Food)
    up 4 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Guest Scores (Brand Trust)
    up 2 pointsYoY
    Q2 FY26

    Part of overall guest metric score improvement for the fourth consecutive quarter.

    Outback Server to Table Ratio (Peak Hours)
    1:4reduced from 1:6
    Q2 FY26

    New service model successfully rolled out to all Outbacks in Q2.

    Outback Absolute Service Scores (Top Box)
    over 90%increased by nearly 3 points YoY
    Q2 FY26

    Reflects positive guest feedback from the new service model.

    Outback Refreshes Completed
    31
    through July

    Part of the goal to touch nearly all Outback restaurants by end of 2028.

    Outback Refreshes Planned
    around 85
    FY26

    On track for the full year 2026.

    Outback Refresh Cost per Location
    $350,000-$400,000
    per refresh

    Average expected spend for targeted initiatives to refresh interior and exterior.

    Marketing Spend Increase
    $15Mvs prior year
    FY26

    Total increase for all four brands, with $10 million more for Outback, heavily weighted to the second half.

    Marketing Mix (Digital vs Linear TV)
    60% digital, 40% linear TV
    future

    Shifting to recruit more Gen X, Gen Zs, Millennials.

    Sales Mix Improvement
    100 bps
    FY26

    Expected to improve by approximately 100 basis points for the full year.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps230 bpsbps
    Net unit growth development pipeline85units

    Risks & headwinds

    3
    Traffic decline due to strategic decisionsQ2 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 inflationFY26

    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 FY26Q3 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

    5

    Outback traffic trends

    next quarter
    Currentdown 280 bps in Q2 FY26
    Targetnarrowing 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.

    Q&A highlights

    5

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.