Bloomin’ Brands (BLMN) by Miller Value Funds

( note: I put the flair as Basics / Getting Started because it is good to see how professional funds assess a turnaround restaurant stock. Imagine if all posts in this subreddit were written like this…. Disclosure: I don’t own any of the stocks here. )

Bloomin’ Brands (BLMN)

BY: JACK METZGER, CFA

JUNE 9, 2026

Price: $7.81 (6/2/26)

Market Capitalization: $668.7MM

Enterprise Value: $1.4B (excluding operating leases)

WHAT THE COMPANY DOES

Bloomin’ Brands is a casual dining restaurant company with a portfolio of chains that includes Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. As of 1Q26, BLMN’s restaurant footprint totaled 1,452 locations systemwide, comprised of 962 company-owned stores and 490 franchised stores. Approximately 75% of this store count is domestic, while the remaining footprint extends across 12 countries through the Outback and Carrabba’s banners, predominantly via franchise agreements.

WHY WE OWN IT

BLMN owns a portfolio of established casual dining brands and is executing a management-led transformation aimed at restoring traffic, margins, and brand relevance, yet the shares continue to trade at a compelling valuation on an under-earning asset base. Backed by a revamped management team with turnaround expertise, BLMN is focused on restoring food quality, operational consistency, and guest satisfaction to drive a return to positive traffic growth after 4 years of declines, especially at Outback, which accounts for >50% of company sales. In the near-term, management is prioritizing $50MM of investments across its existing footprint, centered around a new steak lineup at Outback, labor model enhancements (servers covering 4 tables in peak hours vs 6 previously), and a chain-wide Ziosk tablet rollout, which should improve customer satisfaction and also provide management with real-time tracking technology to address inefficiencies.

Despite continued traffic pressure in 1Q26, underlying brand health appears to be improving under the surface. Outback’s guest satisfaction scores increased Y/Y for a third consecutive quarter in 1Q26, a notable leading indicator, which typically precedes traffic recovery, while the ongoing refresh of remaining Outback locations (\~300 stores) has historically driven a 100-200bps traffic tailwind post-refresh. Improving sales trends in March, followed by further acceleration in April, reinforced management’s confidence in reiterating FY26 US comparable restaurant sales growth guidance of 1.5% at the midpoint.

Management expects 5.0% commodity inflation and 3.3% labor inflation to pressure margins this year, but a return to positive traffic comps and $80MM of productivity savings over the next 3 years ($30MM in FY26) should offset planned investments and allow BLMN to build off a near record-low Adjusted EBITDA margin of 8.0% in FY25.

Excluding operating leases, BLMN trades at a forward (FY27) EV/EBITDA multiple of 4.3x, a 58% discount to its casual dining peer group (TXRH, DRI, EAT, CAKE) average multiple. Notably, BLMN’s predecessor, OSI Restaurant Partners, was acquired and taken private in 2007 at a trailing twelve-month EV/EBITDA multiple of 11x, a historical benchmark that remains well above the company’s current trailing multiple (6.3x).

HOW MANAGEMENT ALLOCATES CAPITAL

Management’s top capital allocation priorities going forward are 1) investing in the business and 2) paying down debt. Management plans to spend \~$375K/location, on average, to finish the remaining Outback store refreshes by the end of 2028 and expects the remaining 40% of its $190MM FY26 capex guide to evenly come from 7 new US openings (gross of any closures) and infrastructure investments. Management remains committed to getting their lease adjusted net leverage ratio back below 3x, compared to 3.8x at the end of 1Q26.