Technology Integration And Remodeling Will Transform Guest Experiences

Key Takeaways

• Menu optimization and enhanced guest experiences, supported by operational improvements and remodels, are positioned to drive sustainable revenue growth and stronger margins.
  
• Technology upgrades and executive changes are streamlining operations, bolstering innovation, and strengthening the company's adaptability to evolving dining trends.
  
• Deteriorating market share, persistent cost pressures, slow brand turnaround, and overreliance on U.S. operations threaten earnings growth, margins, and long-term competitiveness.

Catalysts

Through its subsidiaries, owns and operates casual, polished casual, and fine dining restaurants in the United States and internationally.

• Streamlined menu reductions and experiential value offerings like the Aussie 3 Course are driving higher guest satisfaction, increased traffic, and improved execution efficiency; these efforts, along with ongoing enhancements to steak quality and service models, are expected to support future top-line revenue growth and operating margin improvement as dining trends favor more experiential, value-forward out-of-home meals.
  
• Technology integration-such as Ziosk tablemates, handheld devices for servers, and AI-driven scheduling tools-is boosting labor efficiency, improving table turns, and enhancing guest experience, which should contribute to improved net margins and potentially higher average revenue per customer as digital adoption rises in the industry.
  
• Strategic remodeling of restaurants (prioritizing asset condition over new unit development) and targeted capital allocation are designed to refresh brand perceptions and align with consumer demand for superior in-restaurant dining experiences, likely supporting long-term revenue growth and asset productivity.
  
• Expansion of off-premise channels (24% of sales for U.S. brands, with figures like 26% for Outback and 35% for Carrabba's) leverages digital platforms and addresses shifts in consumer dining behavior, opening up incremental revenue streams without a proportional rise in fixed costs.
  
• Executive team restructuring-including additions with deep experience in technology, marketing analytics, and operational transformation-should accelerate the company's ability to innovate, optimize cost structures, and capitalize on favorable shifts in consumer discretionary spending and experiential dining, leading to improved earnings and long-term competitive positioning.

Bloomin' Brands Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Bloomin' Brands's revenue will decrease by 1.0% annually over the next 3 years.
• Analysts assume that profit margins will increase from 2.0% today to 3.6% in 3 years time.
• Analysts expect earnings to reach $145.9 million (and earnings per share of $1.42) by about August 2028, up from $77.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 7.2x on those 2028 earnings, up from 6.9x today. This future PE is lower than the current PE for the US Hospitality industry at 21.6x.
• Analysts expect the number of shares outstanding to grow by 0.08% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Bloomin' Brands Future Earnings Per Share Growth

Risks

• Bloomin' Brands continues to lose market share according to industry benchmarks like Black Box, signaling the company is falling behind sector peers despite incremental improvements in traffic and execution-this could lead to ongoing revenue stagnation or decline if not promptly reversed. (Revenue risk)
  
• Outback Steakhouse, the company's flagship brand, is only in the early stages of a multi-year turnaround and leadership explicitly acknowledges that major change "takes time," implying extended periods of elevated costs and uncertain returns, which may restrain earnings growth, prolong margin weakness, and impede near-term financial performance. (Earnings and margin risk)
  
• Persistent labor inflation (running ~4% annually and viewed as a continued headwind) and negative product cost mix coupled with higher operating, supply, and insurance expenses have already compressed adjusted operating margins by 250 basis points year-over-year-such cost pressures may persist industry-wide, constraining net margins even if sales recover. (Net margin risk)
  
• The company is heavily dependent on U.S. operations, with limited international presence after refranchising Brazil, exposing Bloomin' Brands to domestic economic slowdowns or regional consumer shifts without geographic diversification to buffer revenue streams. (Revenue diversification risk)
  
• The company's extensive dine-in infrastructure, high fixed costs, and ongoing need for asset refreshes and remodeling (including capital redirection from new units) increase exposure to demand volatility and marketplace shifts toward digital ordering, ghost kitchens, and lower-overhead concepts, potentially limiting operational flexibility and compressing returns on invested capital. (Earnings/ROIC risk)

Valuation

• The analysts have a consensus price target of $8.771 for Bloomin' Brands based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $12.0, and the most bearish reporting a price target of just $7.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.1 billion, earnings will come to $145.9 million, and it would be trading on a PE ratio of 7.2x, assuming you use a discount rate of 12.3%.
  
• Given the current share price of $6.2, the analyst price target of $8.77 is 29.3% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.