Seeking Alpha

Confidence fades in Bloomin' Brands

  • Shares of Bloomin' Brands (BLMN -18.8%) are in a steep fall after a weak Q2 report and soft guidance from the restaurant chain operator.
  • The company sees EPS of $1.05-$1.10 for FY14 vs. $1.23 consensus.
  • News of the company's expansion into Brazil for the Cabbarra concept hasn't helped to stem the selling pressure.
  • During the firm's earnings call, execs seemed surprised that sales didn't recover after harsh weather kept traffic down in Q1. Some restaurants analysts would say a shift in consumer preferences toward fast-casual was more at play.
  • Earnings call webcast
Comments (2)
  • efuerter 1
    , contributor
    Comments (6) | Send Message
     
    These are the same issues the company was facing back in 2006 / 2007 before they went private. The major year over year growth for this company may be over. The company has bet big on its enhanced Brazilian footprint and it appears the World Cup foot traffic wasn't enough to offset the company's overall domestic flatness. That coupled with increasing food and labor costs does not paint a very optimistic picture going forward, especially if the theory that people are shifting to casual fast food (Pei Wei, PDQ, Red Elephant are examples in Tampa, FL) is true.
    5 Aug, 12:20 PM Reply Like
  • Oneslip
    , contributor
    Comments (61) | Send Message
     
    No doubt BLMN has experienced higher costs hurting margins but the recent sell off has lowered valuations to the point where the stock is a buy. There may be a current trend towards casual fast food but BLMN's portfolio is more geared towards upper middle class to wealthy with Flemings, Roy's and more middle class with Carrabas, Outback. The trouble with casual fast food is that the price points are virtually same and it is still fast food.
    If BLMN can successfully open new stores and draw new customers in with revamped menus. lower operating costs then the current price is way undervalued.
    6 Aug, 07:31 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector