Price: $10.61 (8/19/26)
Market Capitalization: $908.4MM
Enterprise Value: $1.6B (excluding operating leases)
What the Company Does
Bloomin’ Brands is a casual dining restaurant company operating Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. As of 2Q26, BLMN’s restaurant footprint totaled 1,448 locations systemwide, comprised of 959 company-owned stores and 489 franchised stores. Approximately 75% of this store count is domestic, while the remaining footprint extends across 12 countries through the Outback and Carrabba’s banners, predominantly via franchise agreements.
Why We Own It
BLMN is showing traction in its management-led transformation aimed at restoring traffic, margins, and brand relevance, yet the shares continue to trade at a compelling valuation on an under-earning asset base. Backed by a revamped management team with turnaround expertise, BLMN is focused on restoring food quality, operational consistency, and guest satisfaction to drive a return to positive traffic growth after 4 years of declines, especially at Outback, which accounts for >50% of company sales. In the near-term, management is prioritizing investments across its existing footprint, centered around a new steak lineup at Outback, service enhancements (servers covering 4 tables in peak hours vs 6 previously), and a chain-wide Ziosk tablet rollout, which should improve customer satisfaction and also provide management with real-time tracking technology to address inefficiencies. Despite continued traffic pressure in 2Q26, underlying brand health appears to be improving under the surface. Outback’s guest satisfaction scores increased Y/Y for a fourth consecutive quarter in 2Q26, a notable leading indicator, which typically precedes traffic recovery, while the ongoing refresh of remaining Outback locations (~300 stores) has historically driven a 100-200bps traffic tailwind post-refresh. Moreover, better-than-expected mix improvements at Outback led to management reducing their expectation for FY26 gross turnaround investments by $14MM to $36MM.
Management expects 5.0% commodity inflation and 3.3% labor inflation to pressure margins this year, but an eventual return to positive traffic comps and $80MM of productivity savings over the next 3 years ($30MM in FY26) should offset planned investments and allow BLMN to build off a near record-low Adjusted EBITDA margin of 8.0% in FY25. Excluding operating leases, BLMN trades at a next twelve-month (NTM) EV/EBITDA multiple of 5.0x, a 63% discount to its casual dining peer group (TXRH, DRI, EAT, CAKE) average multiple. Notably, BLMN’s predecessor, OSI Restaurant Partners, was acquired and taken private in 2007 at a trailing twelve-month EV/EBITDA multiple of 11x, a historical benchmark that remains well above the company’s current trailing multiple (6.8x).
How Management Allocates Capital
Management’s top capital allocation priorities going forward are 1) investing in the business and 2) paying down debt. Management plans to spend ~$375K/location, on average, to finish the remaining Outback store refreshes by the end of 2028 and expects the remaining 40% of its $190MM FY26 capex guide to evenly come from 7 new US openings (gross of any closures) and infrastructure investments. Management remains committed to getting their lease adjusted net leverage ratio back below 3x, compared to 3.7x at the end of 2Q26.
We originally posted our investment case for BLMN on June 9, 2026.
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