By Dean Seal

Bloomin' Brands said it now expects to record a loss for 2024 amid shaky trends in casual dining, sending shares sharply lower.

The stock fell 13% to $14.65 after the report was released premarket. Shares closed the market Thursday down 40% year-to-date.

The Outback Steakhouse parent company is now guiding for a net loss of 16 cents to 26 cents a share this year, rather than a profit of 25 cents to 45 cents a share. It also cut adjusted earnings guidance to $1.72 to $1.82 a share from a prior range of $2.10 to $2.30 a share.

Comparable restaurant sales--from stores that have been open at least 18 months--are still expected to fall up to 1%, though the restaurant operator now projects at least half a percentage point decline. It previously said comparable sales could come in flat year-over-year.

This is the first quarterly report for Chief Executive Mike Spanos, who took over for the retiring David Deno in early September. Spanos said Friday that the outlook cut reflected near-term trends and that the company is working to improve performance.

For the third quarter, revenue was down 3.8% at $1.04 billion, about in line with the consensus estimate of analysts polled by FactSet.

Comparable restaurant sales were down 1.3% at Outback, 1.5% at the Carrabba's Italian Grill chain and 4.1% at its Bonefish Grill brand. Traffic at all of its chains was down a combined 4.4%, though customers were spending 2.9% more on average per check.

The company turned a profit of $6.9 million, or 8 cents a share, narrowed from $44.5 million, or 45 cents a share, in the same quarter a year ago. Stripping out one-time items, adjusted earnings were 21 cents a share, clearing analyst forecasts by a penny, according to FactSet.

Restaurant-level margins slimmed during the quarter from the drop in restaurant sales, along with higher labor and operating costs, Bloomin' said. Some of that weakness was offset by customers spending more per trip.

The third quarter has been tough for casual dining chains as demand for eating out remains weak. Dine Brands Global said Wednesday that comparable sales at its Applebee's chain was down 5.9% during the quarter and down 2.1% at IHOP.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

November 08, 2024 07:48 ET (12:48 GMT)

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