Bloomin’ Brands, Inc. BLMN on Tuesday reported first-quarter adjusted earnings per share of 70 cents, missing the analyst consensus of 74 cents.
Quarterly sales of $1.195 billion marginally missed the street view of $1.197 billion, decreasing 4% year over year.
Quarterly results were affected by a decrease in restaurant-level operating margin, the impacts of the 2023 Closure Initiative, higher depreciation and amortization expense, and the impact of lapping the Brazil value-added tax exemption.
Adjusted operating margin contracted to 7.5% from 9.7%. Adjusted restaurant-level operating margin decreased to 16% from 17.9%.
According to the company, the year-ago period included several high-volume days between December 26 and December 31, which were absent in the quarter under review. This shift had a negative impact of approximately $16.5 million on comparable restaurant sales and $0.06 on adjusted diluted earnings per share.
“We have completed all restaurant closures under the 2023 Closure Initiative and incurred severance and closure charges of $13.0 million during Q1 2024,” the company said.
On March 1, 2024, the company entered into an accelerated share repurchase agreement, in connection with the 2024 Share Repurchase Program to repurchase $220 million of the company’s common stock.
The company announced that David Deno, Chief Executive Officer, will be retiring after 12 years with the company, including the last five years as CEO and a member of the Board of Directors.
Reviewing Strategic Alternatives for Brazil Operations
The company also announced that it is exploring and evaluating strategic alternatives for its Brazil operations that have the potential to maximize value for its shareholders, including but not limited to a possible sale of the operations.
The Board of Directors has retained BofA Securities, Inc. as its financial advisor.
Outlook: Bloomin’ Brands affirmed its FY24 adjusted EPS outlook of $2.51-$2.66 versus the estimate of $2.55. The company expects second-quarter US comparable restaurant sales to be flat to 1.5%, with adjusted EPS of $0.55-$0.60 versus the estimate of $0.69.
Price Action: BLMN shares are trading lower by 2.72% to $24.28 at last check Tuesday.
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