Bloomin' Brands Reports 5.2% Revenue Decline and Strategic Sale of Brazil Operations

Bloomin' Brands, Inc. reported a challenging fiscal year 2024, with total revenues declining by 5.2% to $3.95 billion compared to $4.17 billion in 2023. The company's operating income also fell significantly, dropping to $139.8 million from $282.8 million in the previous year, resulting in a decrease in operating margins from 6.8% to 3.5%. The diluted loss per share was $(0.61), a stark contrast to earnings of $2.13 per share in 2023. The decline in financial performance was attributed to lower comparable restaurant sales, which decreased by 1.1% across the U.S. segment, and a significant drop in customer traffic, particularly in casual dining.

In a strategic move, Bloomin' Brands completed the sale of 67% of its Brazil operations on December 30, 2024, transitioning these restaurants to a franchised model. This sale is expected to allow the company to focus on its domestic operations and improve overall performance. The company also reported a substantial impairment charge of $68.3 million related to the Brazil operations, reflecting the challenges faced in that market. Following the sale, Bloomin' Brands now operates 1,172 restaurants and franchises 291 across 46 states and 12 countries.

Operationally, the company faced headwinds with customer engagement metrics, as traffic declined across its brands. Notably, Outback Steakhouse experienced a 4.2% drop in traffic, while Bonefish Grill saw a 7.1% decline. Despite these challenges, average check sizes increased, with Outback Steakhouse reporting a 3.0% rise in average check per person. The company also continued to invest in remodeling efforts, completing 65 remodels in 2024, which is part of its strategy to enhance customer experience and drive traffic.

Looking ahead, Bloomin' Brands aims to simplify its operations and refine its marketing approach to better resonate with consumers. The company plans to focus on improving product quality and operational execution while addressing its asset base and managing costs effectively. The outlook for 2025 includes anticipated commodity inflation of 2.5% to 3.5%, alongside labor cost inflation projected at 4.0% to 5.0%. The company is committed to driving long-term shareholder value through reinvestment in its core business and managing its debt levels, with a focus on maintaining compliance with financial covenants.