Bloomin' Brands (NASDAQ:BLMN) reported fourth-quarter earnings that slightly exceeded Wall Street's expectations, but a revenue shortfall and weaker-than-expected guidance for the first quarter of 2024 sent its shares down 0.8% in trading. The company, known for its Outback Steakhouse brand among others, posted adjusted earnings per share (EPS) of $0.75, which was $0.06 above the analysts' estimate of $0.69. However, revenue for the quarter was $1.19 billion, falling short of the consensus estimate of $1.2 billion.
The company's CEO, David Deno, attributed the quarter's performance to strong holiday sales and emphasized a continued focus on enhancing the guest experience. The total revenue increase was largely due to an extra week in the fiscal year, favorable foreign currency translation, and the net impact of restaurant openings and closures, offset by the prior year's tax exemptions in Brazil.
Despite the EPS beat, Bloomin' Brands' first-quarter adjusted EPS guidance ranged from $0.70 to $0.75, missing the consensus of $0.76. For the full year 2024, the company forecasts an EPS of $2.51 to $2.66, with the midpoint below the analysts' consensus of $2.58. The guidance reflects expected U.S. comparable restaurant sales ranging from flat to a 2% increase.
The company's restaurant-level operating margin saw a slight improvement from the same quarter last year, credited to an increase in average check per person and various cost-saving measures, which were partially offset by commodity and labor inflation and higher advertising expenses. The GAAP operating income margin, however, decreased due to the 2023 Closure Initiative, which includes restaurant closures and other restructuring efforts.
Bloomin' Brands' stock movement, although modest, indicates investor concern over the revenue shortfall and cautious outlook for the upcoming quarter. The company's shares edged lower as the market digested the mixed results and forward guidance.
In his statement, CEO David Deno said, "The fourth quarter was a good finish to 2023, especially the holiday season. As we head into 2024, we remain focused on elevating the guest experience that in turn will drive sales and profit growth at Outback Steakhouse and all of our brands." This reflects the company's strategy to navigate through a challenging and competitive restaurant industry landscape.