Bloomin' Brands plunges 7.7% despite earnings beat on weak 2026 outlook
Restaurant chain forecasts sharp EPS decline as commodity and labor inflation pressure margins, shares sink near 52-week low
Bloomin' Brands shares plummeted 7.7% on Wednesday after the restaurant chain reported fourth-quarter earnings that beat estimates but issued 2026 guidance showing a sharp decline in profitability, sending the stock to its lowest level in nearly a year.
The Tampa, Florida-based company, which operates Outback Steakhouse, Carrabba's Italian Grill, and Bonefish Grill, reported adjusted earnings per share of $0.26 for the fourth quarter of 2025, edging past analyst expectations of $0.25. Revenue reached $975.2 million, up 7.6% compared to consensus estimates, according to earnings data from StreetInsider.
Despite the quarterly beat, investors focused on the company's full-year 2026 outlook, which projects adjusted EPS between $0.75 and $0.90—well below the $1.14 achieved in fiscal 2025. For the first quarter of 2026, Bloomin' expects earnings of $0.57 to $0.62 per share, according to guidance reported by Benzinga.
The stock closed at $5.87, trading just above its 52-week low of $5.86, and has now fallen 13.2% year-to-date. The company's market capitalization stands at approximately $523 million.
Inflationary pressures are weighing heavily on the restaurant operator's margins. Bloomin' Brands reported a GAAP operating loss of $13.3 million for the quarter, including a goodwill impairment charge of $28.2 million. The company faces commodity inflation of 4.5% to 5.5% and labor cost increases of 3% to 3.5%, according to MarketBeat coverage of the earnings.
Restaurant-level operating margins declined compared with the prior year, primarily due to higher commodity and labor costs driven by inflation, along with an unfavorable product cost mix, according to detailed results posted by StockTitan. The company partially offset these pressures through pricing strategies that increased the average check per person, as well as lower advertising and insurance expenses.
There were bright spots in the quarter. Outback Steakhouse recorded its first quarter of positive traffic growth since the fourth quarter of 2021, suggesting the company's turnaround efforts at its largest brand may be gaining traction. The company plans to invest approximately $50 million in 2026 as part of a broader $75 million investment plan through 2028 focused on improving steak quality, service, and marketing at Outback.
"We're making strategic investments to drive long-term, sustainable, and profitable growth," the company stated in its earnings announcement, as reported by the Financial Times.
Analyst sentiment toward Bloomin' Brands remains cautious. Of the 22 Wall Street analysts covering the stock, the consensus rating is "Hold" with a median price target of $7.00, according to data compiled by MarketBeat. Recent moves have been mixed: Goldman Sachs upgraded the stock from "sell" to "neutral" in November with a $7 price target, while Loop Capital maintains a $10 target and Weiss Ratings reiterated a "sell" rating in December.
The company expects U.S. comparable restaurant sales to grow between 0.5% and 2.5% for fiscal 2026, reflecting the challenging operating environment and the need to balance pricing with consumer demand.
Bloomin' Brands' decline reflects broader pressures facing the casual dining sector, where restaurants must navigate rising input costs while maintaining affordability for value-conscious consumers. The company's investment strategy bets that quality improvements and service enhancements at Outback will drive traffic and justify higher prices over time, but investors appear skeptical given the significant earnings decline projected for 2026.