Bloomin' Brands Q1 2025: Key Contradictions Surrounding Outback's Value Proposition, Traffic Trends, and Cost Management

Outback value proposition and menu simplification, traffic and pricing assumptions for Q1 2025, customer base and marketing strategy, value strategy and Outback's positioning, G&A expenses and cost management are the key contradictions discussed in Bloomin' Brands' latest 2025Q1 earnings call.



Outback's Performance Challenges and Turnaround Efforts:
- Outback Steakhouse's U.S. comparable restaurant sales were negative 50 basis points, and traffic was negative 390 basis points in Q1 2025.
- The company acknowledges dissatisfaction with its market share performance and underperformance compared to the casual dining industry.
- Turnaround efforts include simplifying the agenda, improving consistency in guest experiences, and addressing the quality-value-price proposition to reverse these trends.

Macroeconomic Factors and Consumer Behavior:
- Bloomin' Brands experienced a choppy macro environment and cautious consumer spending, impacting sales and share.
- Softness was notable during events like Valentine's Day and Easter, especially in households under $100,000.
- The company continues to monitor consumer behavior and adjust its value offerings to meet changing needs.

Earnings and Financial Performance:
- Q1 2025 GAAP diluted earnings per share were $0.50, with adjusted diluted earnings per share at $0.59, within the guidance range.
- Adjusted operating margins were 6.1%, down from 7.8% last year, due to a decline in adjusted restaurant level margin by 160 basis points.
- The company anticipates challenges in maintaining earnings power due to the Brazil tax benefit being extinguished, impacting its 33% ownership in Brazil negatively.

Menu Simplification and Value Strategy:
- Outback Steakhouse reduced its menu by 10% in April, with plans to reduce items by 15% by year-end.
- The simplification aims to focus on high-performing items and reduce complexity for employees.
- The company is iterating on value offerings like the Aussie 3 Course to drive traffic and enhance profitability.