Bloomin' Brands’ 2026 Earnings Call: Marketing Spend Metrics and Traffic Growth Timelines Clash

Date of Call: Aug 5, 2026

Financials Results

• Revenue: $1.02 billion, up 1% compared to $1 billion last year
• EPS: Adjusted diluted EPS of $0.39 per share, up from $0.32 per share last year; GAAP diluted EPS of $0.37 per share, up from $0.29 per share last year
• Operating Margin: Adjusted operating margin of 4.0%, up 50 basis points from 3.5% last year

Guidance:

• Full-year U.S. comparable restaurant sales expected between 1% and 2%.
• Full-year adjusted diluted EPS expected between $0.90 and $1.00, up from prior guidance of $0.75 to $0.90.
• Q3 U.S. comparable restaurant sales expected between 1% and 2%.
• Q3 adjusted diluted EPS expected between negative $0.27 and negative $0.22.
• Full-year tax rate expected to be negative.
• Brazil equity investment loss for full-year expected to be approximately $3 to $4 million.

Business Commentary:

Outback Steakhouse Turnaround and Guest Metrics:

• Outback's guest metric scores improved for the fourth consecutive quarter, with specific increases in service by 7 points, atmosphere by 7 points, value by 6 points, intent to return by 5 points, food by 4 points, and brand trust by 2 points.
• The improvement is attributed to a focus on consistency of execution, enhanced food quality, service, and experience, as well as the implementation of a new service model with a better server-to-table ratio.

Financial Performance and Guidance:

• Total revenue for Q2 was $1.02 billion, reflecting a 1% increase from last year, driven by positive comparable restaurant sales of 230 basis points.
• The company raised its adjusted diluted earnings per share guidance for the full year fiscal 2026 to between $0.90 and $1.00, due to improved mix trends and better cost controls.

Impact of Menu and Service Enhancements:

• Outback's Q2 comparable sales were up 140 basis points, with a notable 60% of guests trading up from the entry price point to higher tiers.
• This was driven by the introduction of premium steak cuts, effective menu design, and the rollout of new service models, which improved the perceived value and guest satisfaction.

Capital Expenditure and Restaurant Refresh:

• Capital expenditures for the quarter were $44 million, with plans to refresh nearly all Outback restaurants by 2028, averaging $350,000 to $400,000 per location.
• The refresh initiative aims to improve guest ambiance and the dine-in experience, with expectations of a traffic lift of 100 to 200 basis points post-refresh.

Marketing and Brand Relevancy:

• Marketing spend is expected to increase by $15 million for the full year, focusing more on digital and social channels.
• The strategy aims to drive brand relevancy and differentiate Outback by emphasizing its Aussie roots and steak offerings, with a balanced mix of digital and linear TV advertising.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in the turnaround strategy, citing 'improved guest metric scores for the fourth consecutive quarter,' 'positive guest feedback from the full rollout of the new service model,' and 'seeing a flywheel effect' from the steak lineup, service model, and affordability offers. CEO stated, 'we are on track with our Outback turnaround... building momentum, and our guest feedback and Outbacker feedback tells us our strategy is sound.'

Q&A:

• Question from Alex Slagle (Jefferies): Are there any notable surprises to how you're seeing the improved performance and experience metrics shake out? Is the improved mix and check performance a direct reflection of service and menu changes?
  Response: Core improvements are broad-based: steak lineup performing well with top-box scores, guests trading up to premium cuts more than expected, combo offerings and non-steak proteins driving mix, service model changes working as planned with positive guest and server feedback, and menu design enhancing premium sides and desserts.

• Question from Aisling (Bank of America, on for Sarah Senator): How should we think about the bridge from better guest scores to actual traffic conversion? Are there any early markets showing higher frequency?
  Response: Success will be cumulative and non-linear over time; focus is on sustainable, profitable traffic growth. Management is confident the strategy is correct based on internal and external feedback but will not over-project near-term traffic outcomes.

• Question from John Ivankoff (J.P. Morgan): Does it make sense to reestablish the core mid-teens price points (like the three-course offer) and pursue a high-low strategy, or focus only on the higher-end menu?
  Response: The current approach already balances both: the three-course offer is the key entry-point for affordability, while premium cuts are seeing strong trade-up. Consistency of execution remains the priority across the board.

• Question from John Ivankoff (J.P. Morgan): Regarding the remodel cost of $350,000-$400,000 per restaurant, would you like to spend more if possible, or is this a multi-stage process?
  Response: The refresh package is comprehensive for the target ambiance and touch points; it is designed to be sufficient for 10+ years. The plan is to refresh about 100 restaurants annually, targeting a 100-200 basis point traffic lift post-refresh.

• Question from Jeff Farmer (Gordon Haskett): What will the menu pricing versus commodity inflation spread look like in the back half, and how will it impact margins?
  Response: Commodity inflation is still 4.5%-5.5%, and pricing is about 4.5%, keeping the spread balanced as the approach has been all year.

• Question from Jeff Farmer (Gordon Haskett): Can you give context on advertising dollars for the back half of the year and how they will be used?
  Response: Full-year advertising spend is expected to be up roughly $15 million versus prior year ($10 million additional for Outback). Marketing will be second-half weighted, focused on brand communication centered on steak excellence, affordability, and the 'Aussie' brand equity, with a mix shifting toward more digital/social channels.

• Question from Allison Arshamon (Piper Sandler, on for Brian Millen): What were any interesting or surprising learnings from hosting the Managing Partners Summit for Outback?
  Response: Partners were highly energized by the turnaround plan, showing strong engagement and accountability. Having a co-founder present reinforced that the team is 'doing the right things' and motivated the group around consistency of execution.

Contradiction Point 1

Remodel Traffic Impact Timeline

Different timelines given for when remodels drive traffic growth.

John Ivankoff (J.P. Morgan) - John Ivankoff (J.P. Morgan)

2026Q2: expecting a traffic lift of 100-200 basis points about 6-12 months after completion. - Mike Spanos(CEO)

Is the $350,000 to $400,000 per restaurant remodel cost appropriate, or would a multi-stage process be considered if finances allowed? - John Ivankoff (J.P. Morgan)

2026Q2: Results show a traffic lift of 100-200 basis points about 6-12 months post-refresh. - Mike Spanos(CEO)

Contradiction Point 2

Marketing Spend Categorization

Contradiction on whether advertising increase is an absolute dollar amount or a percentage of sales.

What were Jeff Farmer's key questions for Gordon Haskett during the earnings call? - Jeff Farmer (Gordon Haskett)

2026Q2: Advertising spend will be up roughly $15 million for the full year (about 3% of sales) - Eric Christel(CFO)

How will advertising dollars be allocated in the back half of 2025? - Jeff Farmer (Gordon Haskett)

2026Q2: Full-year advertising spend is expected to be up roughly $15 million versus prior year (~3% of sales) - Eric Christel(CFO)

Contradiction Point 3

Nature of Traffic Growth and Guest Frequency

Contradiction on whether traffic growth is expected to be linear or cumulative.

What are your key concerns regarding the recent earnings report? - Sarah Senator (Bank of America) – asked by Aisling

2026Q2: The focus is on long-term, sustainable traffic growth. Success is not expected to be linear due to the industry's low average guest frequency (about twice a year). - Mike Spanos(CEO)

How is the improvement in guest scores translating into higher traffic conversion, and are there specific markets or restaurants where this correlation is already evident in increased customer frequency? - Jeffrey Bernstein (Barclays)

2026Q1: Outback's Q1 results were within expectations. The brand saw sequential improvement in March and further improvement in April. Early reads for Mother's Day are positive. - Mike Spanos(CEO)

Contradiction Point 4

Marketing Spend Forecast

Inconsistent guidance on the full-year marketing spend as a percentage of revenue.

Jeff Farmer (Gordon Haskett) – follow-up - Jeff Farmer (Gordon Haskett) – follow-up

2026Q2: Advertising spend will be up roughly $15 million for the full year (about 3% of sales). - Eric Christel(CFO) & Mike Spanos(CEO)

How do advertising dollars compare to the back half of 2025, and how will those dollars be allocated? - Brian Vaccaro (Raymond James)

20260225-2025 Q4: In 2025, advertising was 2.4% of revenue (Q4: 2.2%). For 2026, advertising is expected to be in the mid- to high-2s of revenue. - Eric Christel(CFO) & Mike Spanos(CEO)