Miller Value Partners: Bloomin’ Brands ($BLMN) Investment Case

In their Q1 2026 investor letter, Miller Value Partners’ Deep Value Strategy, managed by Dan Lysik, CFA, introduces a new position in Bloomin’ Brands ($BLMN), a casual dining company the firm views as being in the early stages of a multi-year transformation. Miller, whose Deep Value Select strategy returned +8.39% net of fees in Q1 versus +0.19% for the S&P 1500 Value Index, focuses on significantly mispriced turnaround situations and cyclicals. The firm believes Bloomin’ Brands represents a compelling opportunity where the current share price reflects trough-level expectations and limited confidence in management’s turnaround plan — conditions the firm sees as setting up meaningful long-term upside.

Investment Highlight: Bloomin’ Brands, Inc. ($BLMN)

Business Overview

• Bloomin’ Brands generates approximately $4 billion in annual revenue, operating primarily in the casual dining segment of the restaurant market
• The firm notes the company’s two largest banners — Outback Steakhouse and Carrabba’s Italian Grill — hold leading positions in the steakhouse and Italian dining segments, respectively
• Smaller, growing brands in the portfolio include Bonefish Grill and Fleming’s Prime Steakhouse

Catalyst for Investment: Starboard Value and Strategic Parallels

• Miller highlights that activist investor Starboard Value took a 9%+ equity stake two years ago, drawing parallels to Starboard’s prior successful turnaround in the casual dining space
• The firm notes Darden Restaurants — which operates a highly comparable portfolio including Longhorn Steakhouse, Olive Garden, and Capital Grille — serves as a relevant benchmark for what Bloomin’ Brands could achieve
• Miller points out that Darden’s former Chief Operating Officer has recently joined the Bloomin’ Brands board, bringing direct relevant operational expertise to the transformation effort

Turnaround Execution

• Miller notes the company hired a new CEO who has embraced Starboard’s turnaround plan, with a focus on improving the Outback banner, strengthening the balance sheet, and reinvesting in the asset base
• The firm highlights that management has been investing in new systems and guest-facing technology designed to reduce checkout times and improve consumer feedback loops
• According to the letter, late last year management rolled out a new steak lineup at Outback and has since reported improved consumer feedback and an inflection in restaurant traffic
• Miller notes the upcoming year’s plan involves using productivity savings to reinvest in food quality, server experience, and new marketing initiatives
• The firm also highlights a remodel program targeting a refresh of all Outback locations by end of 2028

Valuation and Upside Potential

• Miller notes Bloomin’ Brands’ share price is approximately 80% below its all-time high, with the company operating near historically low EBITDA margins relative to industry peers, which the firm sees as being in the low-to-mid teens
• The firm views current valuation as reflecting trough earnings expectations, with forward EV/EBITDA below 4x and price-to-earnings (FY2) below 6x
• According to Miller’s analysis, success on the transformation plan could drive normalized EBITDA above $500 million; with only ~$60 million in long-term maintenance capex, the firm estimates normalized annual free cash flow could approach the company’s current market capitalization
• Miller believes the long-term potential upside for Bloomin’ Brands could be multiples of the current share price

Risks

• Miller acknowledges near-term headwinds from adverse weather and rising beef costs as ongoing revenue and margin pressures
• The firm notes that the current low valuation appears to already reflect these concerns and limited confidence in the turnaround’s success

Miller Value Partners views Bloomin’ Brands as a significantly mispriced turnaround opportunity, where a depressed share price and trough EBITDA margins embed minimal expectations for management’s ability to execute on a credible transformation plan backed by an experienced activist investor, a newly strengthened board, and a new CEO aligned with the strategic agenda. The firm believes that success on the multi-year plan — including operational improvements, a full Outback remodel cycle, and reinvestment in the guest experience — could unlock equity value multiples above the current share price.

Click here for the full Pro Investor Letter.