Bloomin’ Brands announces workforce reduction

Published 20/02/2025, 15:14
Bloomin’ Brands announces workforce reduction

Today, Bloomin’ Brands, Inc. (NASDAQ:BLMN), a $1.04 billion restaurant operator trading at $12.20 per share, disclosed a significant workforce reduction at its Restaurant Support Center in Tampa, Florida.

The company, known for its portfolio of restaurant brands, is set to cut approximately 100 jobs, which represents about 17% of its support center staff. According to InvestingPro data, the company has been facing profitability challenges, with 5 analysts recently revising their earnings expectations downward.

This decision comes as a result of a detailed analysis to align the company’s cost structure with its current business scale, following the strategic re-franchising of its Brazilian operations in December 2024. With a significant debt burden reflected in its debt-to-equity ratio of 9.97x, Bloomin’ Brands also cited ongoing industry challenges and a sharpened focus on prioritizing growth opportunities and operational efficiencies. Get deeper insights into BLMN’s financial health and 12 more exclusive ProTips with InvestingPro.

The company anticipates incurring around $7.5 million in pre-tax costs for severance and related termination benefits. These costs are expected to be recorded primarily in the first quarter of fiscal 2025.

However, these workforce reductions, along with other administrative changes, are projected to yield annualized cost savings of approximately $22 million. Despite current challenges, the company maintains a notable dividend yield of 7.87%, offering shareholders significant returns.

In tandem with the workforce reduction, Bloomin’ Brands is also reorganizing its Executive Leadership Team to better align with its new operating model. Lissette Gonzalez has been appointed as Executive Vice President and Chief Commercial Officer, and Kelia Bazile has been promoted to President of Carrabba’s Italian Grill. These changes follow the recent promotion of Patrick Hafner to Executive Vice President and President of Outback Steakhouse, effective January 20, 2025.

Bloomin’ Brands is scheduled to release its fiscal fourth-quarter results for the period ending December 29, 2024, on February 26, 2025, followed by a conference call to discuss the financial outcomes.

With annual revenue of $4.55 billion and analysts predicting profitability for the year ahead, investors can access comprehensive analysis and Fair Value estimates through InvestingPro’s detailed research reports, available for over 1,400 US stocks.

The company, in its SEC filing, cautioned that the statements regarding its restructuring plans are forward-looking and subject to risks and uncertainties that could cause actual results to differ materially from expectations.

This report is based on the latest 8-K filing with the Securities and Exchange Commission by Bloomin’ Brands.

In other recent news, Bloomin’ Brands has expanded its Board of Directors by appointing James Dinkins, CEO of The Honey Baked Ham Company, as a new director. This addition increases the board’s size from ten to eleven members, with Dinkins bringing extensive experience from his leadership roles at The Coca-Cola Company (NYSE:KO). Meanwhile, BofA Securities downgraded Bloomin’ Brands stock from Neutral to Underperform, adjusting the price target to $13.00 from $18.00. This decision reflects concerns about the company’s long-term transaction growth and market share competition within the casual dining sector.

Goldman Sachs also initiated coverage on Bloomin’ Brands with a Sell rating and a $13.00 price target, citing challenges for the Outback Steakhouse brand and the need for significant changes to the labor model and store investments. The firm noted that the proposed sale of a portion of Bloomin’ Brands’ Brazil operations could impact net income projections for fiscal year 2025. Piper Sandler reiterated a Neutral rating with a $16.00 price target, emphasizing the importance of the upcoming fourth-quarter 2024 earnings call for insights into the company’s strategy for Outback U.S.

These developments come as Bloomin’ Brands continues to address strategic challenges under CEO Michael Spanos, who took over in September 2024. The company is focusing on reversing a downward trend in customer traffic and making strategic investments to improve performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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