Add to your watchlist: BLMN

Bloomin Brands is the parent company of Outback Steakhouse, Carrabba's Mexican Grill (never seen one), and Bonefish Grill (also never seen one). Share price is down from $30 to $6 since early 2024. Earnings have declined and the company is furiously trying to pay down its debt. Even with currently depressed earnings, interest coverage is a tolerable 3.5x. Half the debt matures in 5 years so there is no inevitable debt clock here. The same problem that has hit other restaurant chains (like WEN, another investment idea of mine sadly). Costs are rising. The companies have raised price to adjust and this has driven traffic away. The situation is worse for brands like Outback Steakhouse which is supposed to be a "premium" casual dining brand but it is clearly caught in economic no man's land. Wealthy steak eaters do not go to Outback. They go to Morton's, et al. The aspiring mid-range consumer is struggling to pay what would be a $60+ check for one person. EPS is similar to 2016 when the stock price was around $20 with no meaningful EPS growth. Shares oustanding and debt are down since then so the total value of the company has clearly shrunk. This is NOT an earnings growth story. Earnings have been stagnant for a decade with a post COVID bump from 2021-2023. Management should be able to boost EPS by 50-60c a share with debt reduction and low-performing store closures. This is the same operational story I see happening at WEN. WEN is actually in a better position due to the international franchise growth but BLMN is trading cheaper on FCF. This stock has real value investing characteristics. There is very little downside from here. It could be dead money. The one thing one has to worry about in these situations it the balance sheet but it is getting incrementally better and there is no sign of true financial distress.