Bloomin’ Brands, Inc. (NASDAQ:BLMN) is a predominantly domestic based, multi-concept restaurant owner whose properties include Outback Steakhouse, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar, and Carrabba’s Italian Grill. The company lagged along with the restaurant group, which was the weakest industry within the Consumer Discretionary sector this quarter. The company is in the process of selling its owned real estate and buying back its stock. There is the potential to unlock significant value by monetizing a concept and continuing to sell stores to franchisees. While the international Outback stores in Brazil continue to perform very well (+12.6% in the second quarter of 2017), domestic traffic and sales growth have been roughly flat. Most recently, the company reduced the number of domestic new store openings focusing instead on remodels. Despite these data points, we believe that the stock remains relatively inexpensive as it trades at less than 7x EBITDA.
From Keeley Small-Cap Value Fund's third-quarter 2017 shareholder commentary.
