bloomin' brands covid
Bloomin' CEO on reopening restaurants and Covid-19 impact. My ratings on many stocks drop temporarily due the recent economic decline. Market Share for the Taking after COVID-19. Unless you believe that there will be no need for restaurants in a post-COVID-19 world, it’s hard to argue against Bloomin’ Brands’ ability to survive. I would prefer the firm use ROIC improvement when determining executive compensation, as there is a strong correlation between improving ROIC and increasing shareholder value. Over the past three months, insiders have bought a total of 25 thousand shares and sold 41 thousand shares for a net effect of 16 thousand shares sold. This paper compares our analytics on a mega cap company to other major providers. Number of restaurants (at end of the period): The restaurant counts for Brazil are reported as of February 29, 2020 and May 31, 2020 to correspond with the balance sheet dates of this subsidiary. On June 11, the firm reported that ~74% of its U.S. restaurants have reopened with limited in-restaurant dining capacity. The Company has four founder-inspired brands: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Executive Compensation Could Be Improved but Raises No Red Flags. This improved sales recovery, coupled with disciplined cost management, enabled us to generate positive cash flow for the month of June. Recently, there has been a significant increase in reported COVID cases in certain states, including Florida and Texas, where we have a total of 286 company-owned locations. In Q2 2020, Bonefish Grill replaced guest count with entrée count to measure restaurant traffic. RESTAURANT-LEVEL OPERATING MARGIN NON-GAAP RECONCILIATION, (UNFAVORABLE) We assess Cash Flow Impact Of The Covid-19 Recession On Bloomin’ Brands in an interactive dashboard. The rapid growth we experienced in off-premises sales allowed us to keep substantially all of our locations open during this time. The following table reconciles Diluted (loss) earnings per share attributable to common stockholders to Adjusted diluted (loss) earnings per share for the second quarter 2020 (“Q2 2020”) compared to the second quarter 2019 (“Q2 2019”). 2021 estimates follow a similar trend. A study in late March conducted by the National Restaurant Association found that 11% of restaurant owners and operators anticipated they would permanently close within the next 30 days. “We remain committed to servicing our communities as we navigate through the current environment. Historically, Bloomin’ Brands has also returned capital to its shareholders through share repurchases. Reports Strengthening Sales Trends and Cash Flow. FAVORABLE CHANGE Our second quarter results on a GAAP and adjusted basis included $11 million of relief pay (net of credits) provided to hourly employees impacted by the closure of our dining rooms. As coronavirus lockdowns hit the U.S. in March, Bloomin Brands CEO David Deno called an emergency meeting for his 12-member executive team.. We collectively said, What we do today and over the next few months will be remembered forever, so lets be … More recently, the firm’s concepts have grown comparable sales YoY in each year since closing several underperforming restaurants in 2017. or call 888-731-2610, For technical support on the bulk order website, email or call 833-783-9257, Mark Graff If I assume, as does the International Monetary Fund (IMF) and nearly every economist in the world, that the global economy rebounds and returns to growth starting in 2021, BLMN is undervalued. Then, I analyze the implied value of the stock based on different assumptions about COVID-19’s impact on the economy and Bloomin’ Brands’ future growth in cash flows. We are focused on taking care of our people and serving food in a safe environment that protects both our Team Members and customers. more): Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening. stockholders (8), Adjusted diluted (loss) earnings per share (8), Diluted weighted average common shares outstanding (8). No matter the macro environment, investors should look for companies with executive compensation plans that directly align executives’ interests with shareholders’ interests. GAAP and Adjusted restaurant-level operating margin decreased due to: (i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs and relief pay net of tax credits and (ii) higher labor costs and commodity inflation. A return to repurchasing shares once the economy stabilizes, or even returns to growth, would provide additional yield for investors. 100 inventions that changed America. Bloomin’ Brands, Inc. (Nasdaq:BLMN) today announced a business update related to COVID-19 as well as first quarter 2020 financial results. Justice Department places new pressure on immigrants facing deportation . Comparable Sales. In such a scenario, the firm could operate for over 15 months with its available liquidity before needing additional capital. Represents the amortization of the debt discount related to the issuance of senior convertible notes. These risks and uncertainties include, but are not limited to: the effects of the COVID-19 pandemic and uncertainties about its depth and duration, as well as the impacts to economic conditions and consumer behavior, including, among others: the inability of workers, including delivery drivers, to work due to illness, quarantine, or government mandates, temporary restaurant closures and capacity restrictions due to reduced workforces or government mandates, the unemployment rate, the extent, availability and effectiveness of any COVID-19 stimulus packages or loan programs, the ability of our franchisees to operate their restaurants during the pandemic and pay royalties, and trends in consumer behavior and spending during and after the end of the pandemic; consumer reaction to public health and food safety issues; competition; increases in labor costs; government actions and policies; increases in unemployment rates and taxes; local, regional, national and international economic conditions; consumer confidence and spending patterns; price and availability of commodities; the effects of changes in tax laws; challenges associated with our remodeling, relocation and expansion plans; interruption or breach of our systems or loss of consumer or employee information; political, social and legal conditions in international markets and their effects on foreign operations and foreign currency exchange rates; our ability to preserve the value of and grow our brands; the seasonality of the Company’s business; weather, acts of God and other disasters; changes in patterns of consumer traffic, consumer tastes and dietary habits; the cost and availability of credit; interest rate changes; and compliance with debt covenants and the Company’s ability to make debt payments and planned investments. As investors focus more on fundamental research, research automation technology is needed to analyze all the critical financial details in financial filings as shown in the Harvard Business School and MIT Sloan paper, "Core Earnings: New Data and Evidence”. As expected, TTM core earnings took a dive and may get worse before they get better. New Constructs provides unrivaled insights into the fundamentals and valuation of private & public businesses. Short interest is down 3% from the prior month. Second Quarter Diluted EPS and Adjusted Diluted EPS. Figure 6: Bloomin’ Brands’ U.S. All Rights Reserved, This is a BETA experience. The peer group’s market-cap-weighted average invested capital turns have remained unchanged at 1.3 over the same time. See the math behind this reverse DCF scenario. Insider Trading and Short Interest Trends. Valuation: I made $3.5 billion of adjustments with a net effect of decreasing shareholder value by $3.3 billion. Provision for impaired assets and restaurant closings, (Loss) income before (benefit) provision for income taxes, Less: net (loss) income attributable to noncontrolling Its last quarterly dividend, when annualized, equaled $0.80/share and provided a 7.3% yield. The following fund receives an attractive rating and allocates significantly to BLMN: Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, style, or theme. Statement Statement from David Deno, Chief Executive Officer. Firms with cash flows greater than dividend payments have a higher likelihood to maintain and grow dividends. However, one restaurant brand, Bloomin’ Brands, the parent company of Outback Steakhouse, Carraba’s Italian Grill, and other popular chain restaurants has thus far been able to weather the storm in a rather unique way. We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. Balance Sheet: I made $1.2 billion of adjustments to calculate invested capital with a net increase of $425 million. Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. © 2020 Forbes Media LLC. Reports Strengthening Sales Trends and Cash Flow. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. Mount Rainier: Body of missing man found . Represents results through May 31, 2020. GVP, Corporate Finance & Investor Relations We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. Outback Steakhouse parent Bloomin' Brands. (813) 830-5311, 2202 N. West Shore Blvd. As featured in the HBS & MIT Sloan paper, Core Earnings: New Data and Evidence, our superior data drives uniquely comprehensive and independent debt and equity investment ratings, valuation models and research tools. Bloomin’ Brands, Inc. (Nasdaq: BLMN) today announced a business update related to COVID-19 as well as recent sales results and details on cash utilization and liquidity. As coronavirus lockdowns hit the U.S. in March, Bloomin’ Brands CEO David Deno called an emergency meeting for his 12-member executive team. Operations to Consolidated (Loss) Income from An Outback Steakhouse truck sits parked outside a restaurant in New York, Tuesday, May 22, 2007. Bloomin’ Brands Capital Re-Allocation Strategy Is Working. Additionally, the firm’s biggest brand, Outback Steakhouse, has posted the largest YoY sales growth among all of its concepts every year except 2016. Bloomin’ Brands Provides Business Update Related to the COVID-19 Pandemic. Dine Rewards Terms & Conditions | Terms & Conditions, To learn more or sign up for Dine Rewards click here, Elizabeth Watts See Non-GAAP Measures later in this release. Bloomin’ Brands Provides Update on Sales and Cash, Describes COVID-19 Effects Sales appear to be recovering gradually moving into April. Includes trading day impact from calendar period reporting. Bloomin’ Brands, Inc. (Nasdaq: BLMN) today provided the following update in response to the COVID … I recently highlighted two separate restaurant operators poised to excel during the widely-expected economic recovery. Includes two and one fast-casual Aussie Grill locations as of June 28, 2020 and June 30, 2019, respectively. Furthermore, in its 1Q20 earnings call, the firm noted that it could be cash flow neutral with revenues down 20% to 25% from the prior year. Jump forward to June 19, and consensus estimates for Bloomin’ Brands’ 2020 EPS have fallen to -$1.44/share. These decreases are partially offset by: (i) reduced operating, advertising and utilities expense and (ii) cost savings from waste reduction initiatives. How one fast casual is re-thinking its menu for the COVID era; Grubhub reveals top food orders of 2020; How First Watch’s Shane Schaibly is evolving and energizing the menu for 2021 ; Food Line extensions blossom from Outback’s iconic Bloomin’ Onion The chain’s signature appetizer inspired a riff on ribs and chicken. Comparable restaurant sales at these locations were down 10.7% from the prior year. However, BLMN’s current share price implies that Bloomin’ Brands will never see revenue rebound from these levels. The Company operates more than 1,450 restaurants in 47 states, Puerto Rico, Guam and 20 countries, some of which are franchise locations. Franchise and other revenues, which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income. During its 1Q20 earnings call, the firm estimated that its daily cash burn was ~$6 to $8 million per week. IN ADJUSTED QUARTER TO DATE. As coronavirus lockdowns hit the U.S. in March, Bloomin' Brands CEO David Deno called an emergency meeting for his 12-member executive team. This chain, whose famous Bloomin' Onion item shares a first name with the restaurant’s parent company, faces a 13.2% chance of defaulting. Shares of Dave & Buster's (NASDAQ:PLAY), Bloomin' Brands (NASDAQ:BLMN), and The Chefs' Warehouse (NASDAQ:CHEF) all dropped roughly … IN ADJUSTED YEAR TO DATE. Over that time, the firm generated far more in in free cash flow ($773 million) than it paid out in dividends ($161 million), or an average $122 million surplus each year. TAMPA, Fla. -- (BUSINESS WIRE)--Apr. To agree with the stock’s current valuation, one must ignore the strength of Bloomin’ Brands’ concepts, particularly since 2017, and the firm’s ability to attract and retain customers. Bear Case Assumes Restaurant Industry Is in Permanent Decline. Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period. Statement from David Deno, Chief Executive Officer. Our priorities remain unchanged as we continue to address these challenging times. As of July 19, 2020, 928 company-operated restaurants (approximately 92% of U.S. restaurants) have reopened with limited in-restaurant dining capacity. Bloomin’ Brands’ profitability was growing at a faster rate than its competitors before the crisis, and the firm is well-positioned to grow profits when the economy recovers. This peer group consists of 12 other full-service restaurants including Darden Restaurants, Inc. (DRI), Brinker International, Inc.(EAT), Cracker Barrel Old Country Store, Inc. (CBRL), Texas Roadhouse, Inc. (TXRH), and more. RECONCILIATIONS, Severance and other transformational costs (2), Restaurant relocations and related costs (3), Restaurant and asset impairments and closing costs (4), (Loss) income from operations adjustments, Adjustment to provision for income taxes (6), Redemption of preferred stock in excess of carrying value (7), Diluted (loss) earnings per share attributable to common The following table includes estimated comparable restaurant sales by concept for our U.S. company-owned restaurants for the periods indicated: As of yesterday, our total liquidity position was $502 million, which includes approximately $138 million of domestic cash and $364 million of capacity on our revolving credit facility. These decreases are partially offset by cost savings from our restructuring and transformation initiatives. Here’s a quick summary of what noise traders are missing: The Yield Is on Hold, but Should Come Back. As announced on March 20, 2020, the Company withdrew its 2020 financial guidance for the fiscal year ending December 27, 2020. The firm increased its core earnings margin from 2.9% in 2017 to 3.2% in 2019. Bloomin’ Brands has repurchased $975 million (101% of current market cap) since 2015. Statement Bloomin’ Brands, Inc. (Nasdaq: BLMN) today announced a business update related to COVID-19 as well as first quarter 2020 financial results. Figure 7: Bloomin’ Brands’ Average Weekly Off-Premise Sales per U.S. Bloomin’ Brands, Inc. is one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. The paper empirically shows that my firm’s data is superior to “Operating Income After Depreciation” and “Income Before Special Items” from Compustat, owned by S&P Global (SPGI). Many restaurants have not survived the current crisis. Bloomin’ Brands’ long-term incentive plan rewards executives with performance share units for meeting a three-year average annual adjusted EPS growth target.
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