Bloomin' Brands BLMN
Bloomin' Brands trades at 5.0x EBITDA vs Darden's 9.5x because of operational execution failures at Outback; Starboard's Darden playbook can narrow the gap and unlock shareholder value.
Thesis
Starboard argues Bloomin' Brands trades at just 5.0x 2024E EBITDA versus Darden's 9.5x and Texas Roadhouse's 10.3x because Outback — Bloomin's flagship concept with 562 US units and $2.3bn in sales — is executing poorly, losing customer traffic (-5.4% in Jun-23) while peers gain. Starboard frames this as the Darden/Olive Garden turnaround in reverse: prior to Starboard's 2014 involvement at DRI, Bloomin' actually traded above Darden at 8.7x, with superior same-store sales at Outback and LongHorn. The fix is operational: better food and service consistency at Outback restaurants, rebuilding brand fun in marketing, scaling Carrabba's into Italian casual-dining whitespace, and monetising the overlooked Outback Brazil crown jewel. Capital allocation is a further lever — Bloomin' generates $526mm in discretionary cash flow, roughly a quarter of its market cap, giving shareholders a win-win between growth capex and returns.
SCQA
Bloomin' Brands is a ~$4.4bn-revenue restaurant conglomerate anchored by Outback Steakhouse (562 US units) plus Carrabba's, Bonefish Grill, Fleming's, and a 148-unit Outback Brazil franchise, with 145 years of combined brand heritage.
Outback is losing traffic (-5.4% in Jun-23) versus Texas Roadhouse (+4.7%) and LongHorn (+7.1%), dragging EBITDA margins to 11.9% versus Darden's 15.3% — yet the brand equity and cash generation remain intact, making underperformance fixable.
Fix Outback operationally (food and service consistency, re-embrace fun branding), scale Carrabba's into Italian whitespace, unlock Outback Brazil, and optimise capital allocation across the $526mm discretionary cash flow through buybacks, dividends, and disciplined growth capex.
Closing the multiple gap from 5.0x toward Darden's 9.5x — plus margin expansion from 11.9% to Darden-like 15%+ — implies substantial re-rating of Bloomin's EV/EBITDA, supported by the current 16.2% FCF yield.
The three reasons
- 1
Bloomin' trades at 5.0x EBITDA versus Darden 9.5x and Texas Roadhouse 10.3x
- 2
Outback traffic -5.4% in Jun-23 while Texas Roadhouse +4.7% and LongHorn +7.1%
- 3
Starboard's Olive Garden playbook at Darden can replay at Outback
Primary demands
- Improve Outback operational execution — food and service consistency
- Re-embrace the 'fun' in Outback branding and marketing
- Scale Carrabba's into Italian casual-dining whitespace behind Olive Garden
- Monetise Outback Brazil as the category leader it already is
- Optimise capital allocation across ~$526mm of discretionary cash flow (buybacks, dividends, disciplined growth capex)
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Darden/Olive Garden transformation under Starboard (2014-2016)
- Papa John's (prior Starboard restaurant campaign)
Notable slides (6)
Notes
Presented at Capitalize for Kids (C4K) conference, October 2023 — filename date '2023-01' appears wrong; cover clearly states October 2023. Classic Starboard playbook: invokes its own Darden/Olive Garden turnaround as template for Outback. Tone is softer than a typical activist deck — no named villain, CEO Dave Deno is quoted supportively. Heavy visual use of brand assets (restaurant photography, Bloomin' Onion, old Outback TV ads) alongside peer-gap bar charts. No explicit stake disclosure or price target in the deck. Final page is a blank Starboard logo closer rather than a demands slide — typical of stock-pitch conference format.